Home Business amount In Russia, the elite counts the destructive cost of war as Putin intensifies

In Russia, the elite counts the destructive cost of war as Putin intensifies

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When Vladimir Putin this week launched missile strikes targeting Ukrainian cities and critical infrastructure, the move appeared to earn the Russian president a reprieve from hardliners who were calling for more decisive action.

“Run, Zelensky, run,” cheered Ramzan Kadyrov, the Chechen leader who sent militias to Ukraine to fight in the war, referring to the Ukrainian president. Kadyrov said he was “100% satisfied” with the conduct of the war after weeks of castigating Russian military leaders during recent disastrous retreats.

But some senior Russian officials and members of the business elite are burnt out and depressed – and the political and economic climate is expected to worsen. While Putin’s military escalation was partly aimed at ending the seething unrest over war mismanagement, its impact may only be temporary, several officials and business executives said in interviews.

“On the battlefield there are other problems,” said an influential Moscow businessman who, like other people interviewed for this report, spoke on condition of anonymity due to fears for his personal safety. “I don’t think it will build up the pressure,” referring to the missile strikes.

In addition, business leaders and officials said that while the strikes succeeded in further damaging Ukraine’s power and energy grids, with the fighting dragging on into the freezing winter, one wonders how many missiles Russia has left and how long it can sustain a bombing campaign. The missiles “are in production. But in individual units. And the old reserves are running out,” a state official said.

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Since the Ukrainian military began retaking swaths of territory in southern and eastern Ukraine, Putin has scrambled, forced to send in hundreds of thousands of barely trained reservists to try to fortify the depleted Russian army – a move that sparked protests across Russia and sent at least 300,000 Russian men fleeing across the country’s borders to avoid conscription.

As signs of discord within Putin’s inner circle began to surface, Saturday’s humiliating attack on the Kremlin’s prized Kerch Bridge to Crimea seemed like the final straw.

“No one is happy with the status quo,” the Russian state official said. “It is clear that a military or political victory will not be possible. But a loss is not possible either. This turns into a chess situation known as a zugzwang, where each step is worse than the next and yet it’s impossible not to move.

The optimism of the summer when, according to a second state official, many in the country’s elite believed “we’re going to turn it all around and find a way” has completely evaporated. “People see there is no future,” he said.

The forced mobilization has already dealt a blow to Putin’s popularity, one of the main foundations of his legitimacy as president, and when the corpses of reservists start returning from the front, the situation could worsen, said the businessman from Moscow.

“In a few months there will be a very negative dynamic in Russia: a worsening mood in society,” he said. “It all depends on the front.”

“Putin’s arsenal of possible actions is very limited,” said Sergei Aleksashenko, a former deputy governor of Russia’s Central Bank who now lives in exile in the United States. “In addition to hitting civilian infrastructure, he only has the ability to use a tactical nuclear weapon. If the Ukrainian counterattack continues, the question of what more to do remains with Putin.

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But few in Moscow say Putin will resort to deploying a tactical nuclear strike, despite Kremlin statements, the Moscow businessman said, because “then he’ll be out of cards,” while China could block this kind of escalation. “It’s a Pandora’s box [the Chinese] don’t want to open,” he said.

Saudi Arabia’s support for oil production cuts this winter appears to have emboldened the Russian president, said the same Moscow executive, who maintains contacts with politicians. Even if energy prices remain at the same level, Putin “believes that Europe will be in crisis and will not have time for Ukraine”.

“It is always a war of attrition, until one side is no longer able to continue the war,” he said.

Gazprom chief executive Alexei Miller warned on Wednesday that ‘whole cities’ in Europe could freeze over and said there was no guarantee Europe could survive the winter at current levels of reserves. gas.

Economists and business leaders say sanctions are starting to hit the Russian economy harder, with budget cuts already imposed – while a proposed price cap collected by the Group of Seven Nations on Russian oil sales from December would be a further blow. The Russian president “will run out of cash…He needs cash to pay Iran and North Korea for arms. But we will see in December a completely new reality,” said Sergei Guriev, the provost of Sciences Po University in Paris.

As tougher sanctions are expected, every bad news on the front lines is another blow to the Russian economy, said a second member of Moscow’s business elite.

“All businesses are suffering from what is happening. Everyone froze their investment plans,” he said. Previous beliefs that Russia could redirect trade flows from the West to China, Kazakhstan and India are rapidly fading, two of the business executives said. Kazakhstan began to block shipments carrying European goods to Russia, while the Chinese also began to stop some supplies.

“Everyone is completely frustrated. The mood is very bad,” said a third Russian businessman.

Members of Moscow’s elite are beginning to talk about a potential leadership change in a way they have never done before in more than 20 years of Putin’s rule – although no one can say how or when it could happen.

“We started to enter a revolutionary situation,” the first state official said. “Everyone is waiting for something different than what is happening now: a different direction, a different war. Hawks want tougher action. Doves don’t want war at all. The time for a change of political system is coming of age. But how it’s going to be, I don’t know.