Expert from Think Tank Asserts Russia's Economic Fate Tied to Prolonged Ukraine Conflict

Recent growth in Russia has been notable, yet its economic trajectory is tethered to its military endeavors, a notion underscored by an analyst in the Financial Times.

The International Monetary Fund projects Russia's GDP to surge ahead of Western counterparts, anticipated to expand by 3.2% this year. However, beneath this facade of prosperity lies a precarious reality elucidated by Elina Ribakova.

Contrary to the assumption that economic constraints would impede Russia's military capabilities, the specter of economic downturn might paradoxically propel Vladimir Putin's regime to intensify militarization and pursue further confrontation, even amid a lull in aggression against Ukraine, according to the insights from the Peterson Institute for International Economics.

Since Russia's incursion into Ukraine in 2022, its economic buoyancy has been primarily fueled by the expansion of its military-industrial complex, generously supported by fiscal policies emanating from the Kremlin.

Direct military expenditure has soared, tripling since the conflict's inception, now constituting 6% of GDP, with undisclosed portions likely inflating this figure, Ribakova noted.

This surge in military spending has revitalized regions long plagued by economic stagnation, fostering employment growth, industrial infrastructures, and entrepreneurial ventures.

The proliferation of military-industrial complexes has been staggering, mushrooming from 2,000 to 6,000 during the conflict, providing livelihoods to over 3.5 million individuals.

The current economic framework is entrenched in militarization, necessitating the perpetuation of hostilities to sustain growth, Ribakova argued.

Undoing the structural investments made in militarization would pose a formidable challenge. For decades, Russia has grappled with underinvestment and regional disparities, with only a handful of resource-rich regions contributing positively to the budget.

An end to hostilities could precipitate a recession, compelling Moscow to prolong its military engagements to stave off domestic strife:

"Should the authorities opt to curtail militarization, an economic downturn could exacerbate existing tensions, potentially leading to internal conflicts over dwindling resources," Ribakova cautioned.