Putin’s war in Ukraine has been greatly prolonged, past the 26-month mark, with the Russian dictator showing no sign of giving up the bloody conflict.
Now, American experts from the Carnegie Endowment for International Peace think tank claim that Putin will face a “political trilemma” in 18 months, and it is impossible to solve, apparently suicidal.
Russia’s economy could begin to experience major challenges in the next year and a half, Washington analysts say, as the nation moves into its third year of war with Ukraine, according to Business Insider.
Russia’s economic power could last another year and a half before it begins to fade, according to experts at the Carnegie Endowment for International Peace.
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The Washington DC think tank highlighted the nation’s show of defiance amid the Ukraine invasion, with the Russian economy still strong despite rising military costs and Western trade restrictions. The International Monetary Fund has predicted that the country will grow faster than all other developed economies, including the US, this year.
That’s partly because Russia has been able to find ways to avoid sanctions, Carnegie Endowment researchers said, such as selling its oil to its allies while importing Western goods through third countries.
“A paradoxical situation has emerged: Russia’s economy is now stable both despite and as a result of Western sanctions,” Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center, wrote in a report. “But this hard-won stability is not eternal. In the best-case scenario, the current arrangement will likely begin to unravel within eighteen months due to growing imbalances and possible social problems,” Prokopenko warned.
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Russia faces a political “trilemma,” with three major issues facing the nation as it navigates its third year of war in Ukraine. For Putin, the issue boils down to funding Russia’s military, maintaining living standards for Russian citizens and keeping the economy stable — three goals that are becoming increasingly difficult for Russia to achieve, according to Prokopenko.
Signs of weakness have already begun to surface. The Kremlin plans to spend a record amount on its military this year. That could hurt the nation’s economy because defense spending is “generally unproductive” and it’s unclear whether the Russia-Ukraine war will end soon, Prokopenko said.
Living conditions may also begin to deteriorate. While economists say Russians are leading normal lives for now, inflation has risen, prompting the central bank to raise interest rates to 16 percent. If the central bank succeeds in reducing inflation, that will hurt workers’ incomes as the economy begins to contract.
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Falling incomes could also hurt Russians’ ability to repay their loans, increasing the risk of debt defaults, the think-tank said. “This increases the risk of social discontent: no one will be happy to accept a pay cut,” added Prokopenko.
And while Russia has the tools to keep its economy stable and avoid a recession for now, economists have warned of a bleak future ahead given the nation’s labor shortage, falling productivity and growing isolation from the rest of the world .
“In an economy subordinated to political imperatives, there is little incentive for sustainable development. Sooner or later, this will affect the well-being of ordinary Russians. In other words, temporary fixes and a drop in living standards will add to the level of political and economic headwinds the Kremlin faces,” Prokopenko said.
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