Barely three weeks ago, despite Russia’s steady reversion to authoritarianism, its people — especially in the big cities — were still closely entwined with the outside world. They bought Swedish furniture, took package tours to Turkey and shared clips on TikTok. At a stroke, Vladimir Putin’s war in Ukraine has upturned their lives and prospects. Whatever the outcome of the war, Russians now face potentially years of isolation, economic struggles and a crackdown on free speech recalling Soviet days. Three decades of fitful progress towards “normal life” have been thrown into reverse.
Sanctions imposed to date could ravage the economy, though that will depend in part on what happens in Ukraine, and if any are rolled back after a ceasefire. Some will be slow-burn. Though half of Russia’s $643bn foreign reserves have been frozen, swift central bank action — doubling interest rates and limiting foreign currency withdrawals — has averted bank runs.
Yet the rouble has slumped by 30 per cent, stoking inflation. Imports will plunge due to shortages of foreign currency and pullbacks by foreign companies. Statistics from Yale University suggest more than 400 international companies have withdrawn from Russia, suspended operations or scaled them back. Shortages of some goods and medicines are being reported.
Formal embargoes on energy exports are still limited but pressure is mounting for more. Russia itself has banned exports of 200 products including telecoms goods, agricultural equipment and machinery, fertiliser, automobiles and planes until the year-end — ostensibly to retaliate for sanctions but also to shore up domestic supplies. Consensus forecasts show Russia’s economy contracting by 7.9 per cent this year; some forecasters project as much as 15 per cent.
If sanctions continue long-term, foreign investment and technology flows will be largely choked off. Either way, western countries are finally determined to phase out imports of Russian oil and gas, the lifeblood of its economy. Airspace closures and bans on western parts are starting to ground its aircraft.
Russians’ lives are changing, too, in more insidious ways. As the Kremlin attempts to control an entirely deceitful war narrative, the last remaining independent media outlets have been closed. A law has introduced sentences of up to 15 years for spreading “false” information about the military. Teachers are being fired for refusing to teach the Kremlin’s version of events.
In a speech dripping with venom this week, Putin said his country needed to “purify itself” by “distinguishing true patriots from scum and traitors”. Some officials are adopting the language of “cleansing”. The “Z” originally used to distinguish Russian vehicles in Ukraine is appearing on clothing, walls and posters as a symbol of support for the war and the Putin regime. In displays with fascistic overtones, young people are being filmed in Z formations. Some critics on social media have nicknamed the stylised symbol a “zwastika”.
Older Russians will shudder at the echoes of some of the darkest days of the 20th century, but few of them will leave. Some young people and professionals are doing so, however; one Russian economist estimates at least 200,000 Russians departed the country in the first 10 days of the war.
An accelerating brain drain will rob Russia of some of its best human talent, just as sanctions squeeze the funding and knowhow the country needs. None of this compares with the human and physical destruction being visited on Ukraine by Putin’s forces. The longer it goes on, however, the clearer it becomes that the president’s war is a calamity, too, for his own people.
Source: Economy - ft.com
