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How is Russia not Financially Crippled? (lemmy.world)

submitted 9 months ago* (last edited 9 months ago) by Art3sian@lemmy.world to c/nostupidquestions@lemmy.world

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When the war started it was seizure-this and sanction-that. I’ve read that $350B in Russian assets were seized and held, while major companies exited the Russian market, the ruble crashed, and inflation rocketed.

Meanwhile the cost of the Russian war must be astronomical to maintain, imports/exports have halted with Europe, there’s no financial aid to Russia (that I’m aware of) and multi-billion dollar resource supplies were cancelled.

All this, and Russia seems to still be having a good old time. Russians are on holidays en mass, the country is buying up arms and fossil fuels like its church Sunday, and their war machine still powers away and is prepared to keep fighting for a decade if it has to.

How? How does a country take that much of a financial beating and still be thriving? Where is the point of being broke and not being able to fund a war anymore?

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[–] Badeendje@lemmy.world 12 points 9 months ago

There is also a Perun Video that talks about war economies more in general and the Russian and Ukrainian economies specifically.

war economics 101.
There are few things people have been keener to predict throughout history than 'quick' wars. Pro Russian commentators after February 24th 2022 expected a rapid victory - while Western media was quick to suggest that Russia's economy was collapsing soon after sanctions were implemented.
Instead, both Ukraine and Russia show signs of increasing their wartime production and scaling up their armed forces. That should not come as a surprise. Historically, the process of converting from a civilian to a wartime economy has yielded more than enough results to overcome even significant trauma inflicted on the industrial base (for example, strategic bombing attacks).
Russia's economy is suffering, it's long term economic prospects have been badly wounded by a collapse in international trust, market denial, and a barrage of sanctions. Ukraine's economy is likewise under immense pressure - primarily from physical attacks by the Russian armed forces. But it would be naïve to think that either is likely to collapse in the coming weeks and months. As long as the will to go on (and foreign support) remains in play, there is every reason to think that both nations will find a way to keep their economies going.
In this episode, we look at the basics of war-economics, industry conversion, and try to understand why 'short wars' are so hard to win between peer opponents, once the economic struggle begins in earnest.