Vladimir Putin isn’t just losing in Ukraine — he’s set Russia’s economy back 40 years

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You need the will and the means to win a war. I am cautiously optimistic that Ukraine has both in its fight against Russia.

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With each mass grave of slain civilians uncovered and with each liberated Ukrainian village, Ukrainians will rise. For Ukrainians this war is no longer about territory, but about survival as a nation – its aggressor believes that Ukraine has no right to exist (I wrote about ) Here,

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The means of the Ukrainian army have increased significantly in the last few months. In addition to receiving more modern equipment from NATO, the Ukrainian people enjoyed a large arms transfer from the Russian side to the Ukrainian side after NATO pushed Russian forces out of Kharkiv Oblast. Ukrainians know how to use this tool and can start using it right away.

Possible strategies of Russian President Vladimir Putin are weak:

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First, win the war by force – it’s not working so well.

Second, to intimidate the West economically. So far it hasn’t worked. Europe filled up its gas reserves and the economy is confident it can get through the winter.

The last card that Putin has left is the threat of nuclear war. From what I’ve read, tactical nuclear weapons would achieve little from a military perspective, but they do have a significant psychological effect. The West has drawn a red line, telling Putin that if he uses nuclear weapons, the Russian military will face conventional forces. The Russian military is no match for NATO.

mobilization

The military mobilization Putin has enacted could destabilize his regime. When I was growing up in Russia, my parents were scared off when my brothers and I turned 17 and got drafted into the Russian army. The Afghan War was over; Me and the other parents of the boys feared not for our lives but for our sanity. Joining the Russian army then was like serving a three-year prison sentence. The senior soldiers continuously abused the younger ones.

I can only imagine the anguish of Russian parents, fearing that their sons will be drafted and without proper training or equipment, to become cannon fodder for Ukrainian artillery on the front line within two weeks will be sent.

With each grieving parent, the Russian political system becomes a little less stable. Mass protests in Russia could happen tomorrow or a few years from now, but it is much more likely to happen as parents fear for their sons’ futures.

I have many reasons to be grateful to my father for immigrating to America 31 years ago, and today I have a new one: I have to worry about my 21-year-old son, Jonah (who was born in America). No need. The U.S.) is being prepared to die in this senseless war.

, Due to sanctions and the voluntary withdrawal of Western firms from Russia, Russia will eventually freeze over time, like Cuba. ,

Russian economy

This war has set Russia’s economy back by 40 years. On the surface Russia today looks very different from the Russia of the 1980s that I remember. This is beautiful in Russia, modern supermarket which still, for me Wonderare full of food.

Yet due to sanctions and the voluntary withdrawal from Russia of Western firms, Russia will eventually freeze in time. I’m thinking of Cuba when I say this. Cuba looks much the same today as it did in 1959 when Castro came to power and the West imposed a trade embargo.

Yes, the Russians will miss McDonald’s and Coca-Cola, but that’s not such a big loss. More painful is the loss of advanced technology – semiconductors, software, complex manufacturing. Russia has very little of it. Today you cannot make a car or a washing machine without semiconductors. This is why Russian auto production has halved since the war started and washing machines Production From 600,000 units to 100,000 units in a month.

The one wild card here is China. China has some technologies that Russia needs, such as oil drilling equipment and spare parts for aircraft. Would China risk sanctions from the US and Europe by exporting such items to Russia? I don’t know After Visa and MasterCard cut Russia off from their networks, basically preventing Russians from using the ruble outside Russia, China stopped onboarding Russians to its credit card network.

Sanctions have crippled Russia’s ability to produce enough weapons to fight a war. Furthermore, Russia needs every weapon it can get to replace what it has lost. Russia has already started using tanks since 1970s. In conclusion, this war has been a sad infamy for Russian weapons. India used to Import Half of its weapons are from Russia. Now, the US and Europe will likely become the sole providers of arms to India – another favorable wind for defense contractors. After the war ends, Russia will sell its weapons to rogue regimes such as Iran and North Korea, but its arms market has shrunk significantly since February.

The Russian economy was doing fairly well until the war. Russians should not thank their leaders for this, but warmly embrace their neighbor to the east. China’s wild growth (by any modern standard) has increased the demand for all goods (China is a commodity-poor nation). prices Most commodities have risen significantly, and Russia has benefited. Putin jumped straight aboard and took credit for Russia’s economic rebirth.

Yet apart from mastering the production of goods and food with the help of Western technologies, Russia has accomplished little on its own. Russia also imported the steel from Germany that was used to make its tanks.

An important consequence of the war is that Western oil companies have left Russia. In addition to providing capital, they brought technology and knowledge. Both are gone now. Russia is the world’s third largest the creator of oil, producing 11 million barrels a day, behind the US and Saudi Arabia. The recession we are about to get into will reduce the demand for petrochemicals, though not by much. ,historically, the recession has moderated the growth rate of petrochemicals demand but not declined.) Oil and natural gas supplies from Russia will not increase and will likely decline. Europe will have a challenging winter, but it appears the Russian economy will be challenged to survive.

Vitaly Katsnelson is the CEO of the investment firm passed, His recent book, Soul in Sport – The Art of a Meaningful Life, deals with the most important investment you can make – the investment in yourself. For more writing by Catsnelson on investing, life, music and other topics, visit contrarianage.com or listen investor.fm,

More: Why EU sanctions on Russian oil and the G7 price cap won’t guarantee a sustainable rally for oil

Too What Russia’s retreat from the strategic southern Ukraine city of Kherson tells us about the state of war

Credit: www.marketwatch.com /

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