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What will the invasion of Ukraine bring for Russia?

March 5, 2022 12:25 amby Oleg Sukhov
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Russian dictator Vladimir Putin holds a meeting of Russia's Security Council at Kremlin in Moscow on Feb. 21, 2022. (Kremlin Press Office via Getty Images)

The Russian invasion of Ukraine and the ensuing economic crisis caused by Western sanctions have already transformed Russia.

The country's economy is expected to shrink by 20% in the second quarter and by around 3.5% for the full year following intensified sanctions, JPMorgan said on Feb. 28.

However, analysts say that the war is having an even greater impact on Russian society, with the country fast-track turning into a rogue totalitarian state.

There is a major crackdown on dissent, and Russia may also switch to a planned economy similar to the Soviet one.

“The leader becomes a person who never makes mistakes and is always right like the Pope,” Russian political analyst Dmitry Oreshkin told the Echo of Moscow radio station in a reference to Russian dictator Vladimir Putin on March 1.

The semi-independent Echo of Moscow radio station was shut down the next day, along with tens of independent online news sources.

"The leader gradually goes crazy, and his actions lead to the degradation of society and the country," said Oreshkin.

Creating a fake reality

As Russia is mobilizing its resources for its war against Ukraine, it is becoming increasingly totalitarian, intolerant of any dissent.

Since the invasion began, Russian authorities have blocked radio station Echo of Moscow, television channel Dozhd (TV Rain), as well as news sites Current Time, Krym Realii, the Village, DOXA and Meduza, accusing them of extremism and lying about the Russian military.

The Echo of Moscow’s board of directors has liquidated the radio station, and Dozhd has stopped broadcasting.

On March 4, the Russian parliament also adopted a law introducing up to 15 years in prison for publishing material about Russia's war against Ukraine contradicting the state propaganda.

Prior to that, Russia was suspended from the Parliamentary Assembly of the Council of Europe on Feb. 25. In response, Dmitry Medvedev, an ex-president and deputy head of Russia’s security council, said it was a good opportunity to restore capital punishment.

The same day, Russia’s telecommunications regulator started blocking Facebook due to its decision to fact-check pro-Kremlin media and mark them as untrustworthy. On March 1, the regulator started to block Twitter as well, accusing it of spreading false information.

Several Dozhd journalists and the chief editor of the Republic, an independent news outlet, have left Russia for security reasons.

Novaya Gazeta, a major independent newspaper, decided on March 1 to accept military censorship. On March 2, radio station Serebryanny Dozhd caved into censorship too, scrapping all political coverage.

Putin’s regime needs to destroy all independent media to prevent them from covering Russia’s aggression against Ukraine, Sergei Sazonov, a Russian-born political philosopher at Estonia’s Tartu University, told the Kyiv Independent.

“What’s happening in Ukraine is so outrageous that Russia will create a completely fake reality,” he said. “When Russian troops withdraw, they will report the opposite - that Kyiv or Kharkiv have been seized by Russia.”

Sazonov also said that Russia is likely to shut down the Internet too.

“Previously the propaganda of violence (on state TV) was lying but it was optional. A person could believe or not believe in crucified children,” Russian columnist and writer Yulia Latynina said on Feb. 26 on the Echo of Moscow in a reference to the 2014 Russian disinformation campaign that spread fakes about Ukrainian troops crucifying a boy in the Donbas.

“Now this belief will be mandatory.”

Totalitarian military camp

Experts agree that Russia is likely to turn into a “North Korea lite” – a semi-totalitarian or fully totalitarian state.

Speculation is rife that Russia may also announce mass mobilization to boost its war effort and place its economy entirely on a war footing.

“There’s a high probability that Russia will turn into a giant military camp like North Korea yet more advanced,” Sazonov said.

He argued that Russia’s economy is likely to survive but it will turn into a planned economy.

“Russia’s economy may survive similarly to those of Iran and North Korea,” Sazonov said. “They don’t need a civilian economy, the economy will become a gigantic military factory.”

Latynina also argued that Russia’s economy would become more statist as private businesses are being destroyed by the sanctions and the economic crisis that follows.

“All those who are trying to do real competitive business in Russia will die out,” she said, adding that only businesses backed by the state would remain.

Economic crisis

Due to the Russian invasion of Ukraine, the West has imposed devastating sanctions against Russia.

The European Union and the United States have frozen half of Russia’s foreign exchange reserves, which are worth $630 billion, and shut its airspace for Russian planes. Numerous Western companies have also suspended their operations in Russia.

As a result of the sanctions, the ruble has plummeted: the dollar was worth 75 rubles before the invasion and amounts to 110 rubles as of March 4.

However, economists are cautious about the consequences of the sanctions for the Russian economy.

Grigory Bazhenov, an economist at Russia’s Higher School of Economics, said that, despite the sanctions, there would be no collapse of the Russian economy. Yet, the economic situation will definitely become much worse, he adds.

“Inflation will be high (more than 10%), incomes will not increase, and living standards will constantly drop,” he told the Kyiv Independent. “The economy will never be the same again.

Bazhenov argued that some of the free-market elements would be dismantled.

“Russia is a smart autocracy,” he said. “Public finance is balanced, there are reserves, and there is a responsible monetary policy. But something else is needed for development: liberal institutions, property rights, independent courts, etc. Previously there were hopes that these would emerge in Russia sooner or later. Now, these hopes are gone. State capitalism will be strengthened, and militarism will increase."

Konstantin Sonin, a Russian-born economist at the University of Chicago, said on Facebook on Feb. 28 that an economic collapse similar to the 1991 collapse of the Soviet economy is unlikely. However, living standards and manufacturing will fall, he added.

“The sanctions leave Russia no chance for stable economic development,” he said. “There are no examples in recent history when a country developed in the conditions of similar economic isolation.”

Regime collapse?

According to Russian independent political observers, if Putin’s aggression against Ukraine continues for a long time, it is likely to negatively affect his approval rating.

“If news about deaths (on the war front) continues and if there is no certain victory, the president’s rating will drop,” Oreshkin said. “Putin expected to carry out a blitzkrieg but instead faces a long war with an unknown result. The stronger the Ukrainian resistance, the worse for Putin’s rating.”

Some analysts even believe that Putin’s regime may collapse due to the costs of the war against Ukraine and the sanctions.

“This irrational decision (to start the war) has triggered the last stage of the regime’s crisis,” Russian political analyst Georgy Satarov told the Kyiv Independent. “Putin’s regime will not last until the end of this year.”

He believes Putin’s regime is likely to fall due to the economic crisis, sanctions, and potential military defeat in Ukraine.

There may be a split in the Russian elite as these processes develop.

“The elite is diverse,” Satarov said. “There are opponents of what Putin has done.”

Sazonov also said that Putin’s regime may collapse if tries to turn into a totalitarian “military camp.” If people from the top to bottom fail to obey orders, the transition to totalitarianism may fail, he argued.

In an unprecedented move, Russian oligarchs Oleg Deripaska and Mikhail Fridman have criticized Russia’s war against Ukraine. Previously oligarchs in Russia had kept silent about the Kremlin’s policies, fearing that their property would be taken from them if they don’t toe the government line.

Satarov also said that “key changes took place after military defeats” in Russia.

He drew parallels with the Russo-Japanese War, which triggered the 1905 Russian Revolution; World War I, which prompted the 1917 Russian Revolution, and the Afghanistan War, which contributed to the collapse of the Soviet Union in 1991.

“Putin is his own gravedigger,” Satarov said.

Oleg Sukhov
Author: Oleg Sukhov

Oleg Sukhov is a political reporter at the Kyiv Independent. He is a former editor and reporter at the Moscow Times. He has a master's degree in history from the Moscow State University. He moved to Ukraine in 2014 due to the crackdown on independent media in Russia and covered war, corruption, reforms and law enforcement for the Kyiv Post.

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