A-Infos (en) Italy, UCADI, #181: Russia: the stability of the internal front (ca, de, it, pt, tr)[machine translation]

Suddenly the regime press and the big newspapers seem to have realized 
that the war in Ukraine is not going as it should have gone. Not only 
did the Ukrainian offensive fail, but the Russian army held on and 
indeed on many occasions went on to counterattack: they noticed it too! 
It is therefore natural to ask what is happening, since it appears that 
Russia is winning the Ukrainian war . The key to understanding what is 
happening is not the events taking place on the front, because in fact 
this is, as a whole, rather immobile due to the winter, the frost and 
the ice which block military operations, but rather from what is 
happening on the Russian domestic front: this is where Russia is winning 
its battle.
The West, in launching the sanctions, had thought through this 
instrument of bringing the Russian economy to its knees, severing its 
relations with the markets, depriving it of capital and technology 
contributions, creating an economic and "cordon sanitaire" that would 
have suffocated the country. This was not the case and not only because 
Russia found other markets for its oil and energy sales, albeit having 
to pay the price of renouncing to profit from the use of structures such 
as gas and oil pipelines that were cost enormous investments, but 
because the country was able to reorient its oil and gas exports towards 
the Chinese market and economy which is so in need of energy and the 
Indian one which is equally so. Of course, it will take time for the new 
oil and gas transport plants to become fully operational, but the 
direction taken promises generous profits and a more secure allocation 
of the product. The development of the BRICS initiative has supported 
Russian choices and has successfully increased their number and their 
economic and political weight, despite Argentina's latest defections, 
and Russia has also benefited from its policy within the OPEC and the 
relations it maintains with the oil-producing countries which have 
allowed it to exceed the production and sales quotas assigned to it, 
finding support and complicity for
sales triangulations in its product, despite having to tolerate selling 
it at a lower cost or by paying commissions.
But that's not all: the Russian economy as a whole is doing well. The 
country led by Vladimir Putin seems to have recovered after the fall in 
GDP in 2022 (-2.1%), caused by the sanctions approved by Kiev's allies 
after the invasion of Ukraine. The Russian recovery in 2023 is the 
result of the robust growth that occurred already in the first half of 
the year in the retail, construction and industrial production sectors, 
due to a strong fiscal stimulus decided and organized by the President 
of the Central Bank Elvira Nabiullina. What was unexpected was the 
overall development of
Russia's GDP: from a very recent document from the International 
Monetary Fund, dedicated to Russia (Article IV Staff report of 14 
December 2023) the Russian GDP in 2023 is quantified at 129,182 billion 
rubles, equivalent to 1.702 billion dollars; inflation continues to bite 
in Russia and the consumer price index may have reached 8% in 2023, 
while in the United States and Europe it has tended to be 6% (the real 
one). The banking situation is more difficult: the Russian central bank 
raised rates to 15% in October. However, the increase in inflation goes 
hand in hand with the recovery of Russian GDP. After the (just 
mentioned) drop of 2.1% in 2022, in 2023 Moscow's economy showed signs 
of resilience, despite Western sanctions to the point that in the third 
quarter the rebound was 5% compared to the same period of 2022, when a 
decline of 3.5% was recorded. This year, growth could exceed 3.5% - 4% 
according to Russian sources, while the IMF estimates the 2023 increase 
at +1.5%, in any case more than Italy and Germany.

The growth of the real economy

But how to explain the growth in retail trade, construction and 
industrial production. It was certainly facilitated by strong fiscal 
stimuli and by the policy of the Central Bank, which conducted 
intelligent credit management, realizing the weight of a structural 
phenomenon that characterizes the Russian economy: the desire for
enterprise. To understand what happened, we must take into account the 
fact that before the start of hostilities, Russia had opened up to the 
markets and the country had seen the growth of investments in services, 
in the restaurant industry, in the civil economy (by this we mean the 
non-military one) which has always been neglected by Russian rulers. For 
these reasons, the country is becoming a promising market in which to 
make profits through the supply of consumer goods and services. The 
sudden withdrawal of Western companies, imposed by sanctions, has 
produced at least two phenomena: some Western investors have sold their 
businesses to local frontmen and continued their economic activities, 
others have sold their production and commercial networks to local 
entrepreneurs and oligarchs built during the years of commercial 
economic penetration in the country. When the shortage of goods 
necessary to carry out these activities appeared, the Russian production 
system managed to respond by producing the goods requested by the market 
at an indigenous level.
An example: it is known that in recent years a network of Italian 
restaurateurs has been created in Russia or at least restaurants that 
serve Italian cuisine for which certain products are necessary, such as 
pizza for which mozzarella is necessary. Well, the Russian dairies have 
decided to cover that market segment, producing what is requested, 
making investments and purchasing plants, acquiring technologies and 
professionalism. This mechanism has been repeated almost everywhere in 
the country and in every sector, producing a flourishing of investments 
that have stimulated industrial production and trade.
Furthermore, the recruitment and sending of thousands of men and women 
to the front led to the payment of wages 10 times higher than those paid 
to a worker living in the peripheral regions, so we can speak of the 
presence of "war capital". " which was invested by those who stayed at 
home in investment activities.
Naturally, the war economy also grew, seeing an increase in investments 
of 70% and returning to the levels of the 1980-1990s, reaching the 
figure of 10,800 billion (equal to 109 euros), equal to 6% of GDP. 
Russian, used to revive the production of ammunition, tanks and drones, 
(considering that only in 2023 the army
Russian used more than two million artillery shells (double the previous 
year) and replaced more than 10,000 destroyed or damaged vehicles. But 
what is most interesting is that a large part of these resources is 
intended to remunerate the soldiers and compensate the families of the 
fallen, transforming themselves into "widespread capital."

Consent to war

It is certainly true that despite everything there is widespread 
resistance to the war which, however, mainly concerns young people from 
the cities and members of wealthy classes. As is known, the opposition 
to Putin is very weak in the country and the repression is heavy and 
takes place according to differentiated methods in the sense that 
gatherings are hindered and repressed through careful monitoring of 
online calls for demonstrations, arrests are carried out with 
discretion, avoiding creating victims or underlining the role of some 
opponents such as musicians and rappers who could represent points of 
reference for other young people. However, when repression hits, it is 
very harsh and can last up to 7 years of stay in the penal colonies, 
located in the most remote parts of the country.
It is obvious that in these conditions the opposition to the war is 
scarce, also because we must add to the coercive force of the government 
the propaganda carried out by the Russian Orthodox Church present in a 
widespread manner throughout the country which, as Patriarch Kirill did, 
leaves no opportunity to underline the ethnic and religious nature of 
the ongoing conflict, highlighting the persecutions carried out by 
Ukrainians against the canonical Ukrainian Orthodox Church, linked to 
the Patriarchate of Moscow. Despite this, many people left the country 
for Georgia,
crossing the Finnish border before it was closed, and using economic 
resources that are not the prerogative of many. It is certainly true 
that recruitment patrols circulate around the country, enter public 
places frequented by young people and on many occasions force compulsory 
conscription, but it is also true that the regime draws not only on 
prisoners, promising them forgiveness in exchange for service in the 
army, but it has at its disposal a pool of 144 million inhabitants, many 
of whom live in remote centers of the country, to whom it can send the 
invitation to join the army,
sometimes accepted for patriotic reasons, but often for economic reasons.
It should also be added that the popes present widely in the Russian 
province function in fact as recruitment offices for those most 
disadvantaged sections of the population who can see the provision of 
military service as an economic opportunity to make a change in their 
living conditions, investing in the war. In other words
due to the very size of the country and its configuration, Russia has a 
pool of recruits from which to draw to feed the front. From this point 
of view, the passage of time and the duration of the war, contrary to 
popular belief, work in Putin's favor and certainly not in Ukraine's 
favor because the Russian army needs time to recruit and educate, to 
prepare for combat enormous masses of men and women that he can pour 
onto the battlefield.
The agreements with North Korea and Iran for the supply of armaments 
have strengthened the Russian production apparatus which has been able 
to pour further fresh capital into the development of the war industry 
which has fueled its capabilities, inducing it to innovate and refine 
the war apparatus with increasingly advanced production, intended to 
meet the needs of the front. Conversely, Western countries and the 
European Union, by investing in armaments, have taken enormous resources 
away from economic and social investments, proof of which is that
the agricultural sector is entering a crisis which is suffering the dual 
effects deriving from the increase in taxes necessary to cover the 
budget gaps, and the competition that Ukrainian production, especially 
of cereals sold on the community market, have caused, causing 
significant damage to the budget of the peasant world.
From these sets of elements we obtain a picture of the substantial 
stability of the Russian internal front, while the Ukrainian one is 
progressively crumbling under the blows of a physiological and natural 
reduction in funding coming from the West, of the growing decrease in 
the number of men and women mobilizable for fight, of a Western 
production of munitions not capable of meeting the needs of the front. 
Add to this the contingent economic and political situation of the 
United States where, due to internal clashes, funding for the war in 
Ukraine seems to be declining. In this situation only Great Britain 
remains engaged in war until the mounting disasters of its economy and 
social situation engulf the country.

The Editorial Staff

Ukrainian war and the arms market

It is not often that anarchist communists appreciate a Pope of the 
Catholic church, but this time we must join him for a reflection on the 
arms market.
We agree with him that war represents good business for arms 
manufacturers who make enormous profits from their activity. But having 
said this, it is appropriate to ask ourselves what is happening on the 
arms market, today when the Ukrainian war constitutes a formidable 
advertising spot for these sellers of death.
Commentators on the progress of the war point out that the production of 
bullets and weapons in the West is having difficulty keeping up with the 
competition of Russia and its allies in having deadly weapons to fuel 
the massacre. However, things are not exactly like this: on the Russian 
side there is no doubt that, with the passage of time, the production 
capacities of the war industry have grown and will grow even more, 
therefore the longer the war lasts the more the Russian production 
system will be in capable of pouring weapons onto the market. Russian 
production was joined by that of North Korea and
Iran, supplier of drones; China would collaborate - it is said - by 
triangulating high-tech components for missiles and intelligent weapons. 
This production is such that it overwhelms that of Western countries, 
especially as regards the production of ammunition.
In the Western field, the largest producers of weapons are notoriously 
the United States, followed by France and in a good position by Great 
Britain. Well, taking advantage of the war, the industries of these 
three countries took over from Russian producers on the arms market, 
supplying weapons systems to countries that requested them, alerted and 
alarmed by Russian initiatives. In fact, if we look at the budgets of 
the various states, demand has grown and all or almost all of them have 
increased their budgets in relation to the resources allocated to the 
purchase of deadly devices. Western industries are
taking advantage of this to market their goods and take over from 
Russian producers, taking away their customers and market shares and 
therefore do not have sufficient production to feed the Ukrainian 
customer who, all things considered, is a poor, subsidized customer , 
which depends on the red budgets of the European countries and of the 
rebellious US ally which, finding itself in the contingency of the 
elections, pays the bills with difficulty.
However, there is no need to worry: the Ukrainians can continue to go to 
the massacre calmly and now the war can even end because a new 
slaughterhouse has been opened in Gaza and Israel is a good butcher and 
pays for the supplies it receives either directly or through through the 
Americans.
It's a shame that the Ukrainian and Russian peoples have to pay the 
price, pushed into a fratricidal war in the name of the geostrategic and 
economic interests of the United States and Great Britain to put Europe 
in economic crisis.

Rocco Petrone

https://www.ucadi.org/2024/01/23/russia-la-tenuta-del-fronte-interno/
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