Dr Robert Seely MBE is author of ‘The New Total War’, ConservativeHome foreign affairs columnist and a former Conservative MP.
Will Russia collapse? Will Russian President Vladimir Putin suddenly keel over, and when will the Russian economy implode?
Since the start of the 2022 invasion of Ukraine, there’s a been a strain of thought – ‘hope’ might be a better description – predicting the imminent demise of Putin, his regime or the Russian economy.
To answer these questions succinctly. Is Russian heading for imminent collapse? It is unlikely. Additionally; Putin is not dying – beyond the fact that he is getting older – and despite sanctions, international isolation and military setbacks, the Russian system has shown more resilience than many Westerners foresaw.
The bad news for Russia is that the war in Ukraine, aligned with Putin’s aging dictatorship, is weakening his state; socially, economically and politically. The problems that Russia is facing are becoming more deep rooted and more intractable every month. It’s potentially brewing a perfect storm of regime decay, an ineffective security services, inflation and social unrest.
But, as Adam Smith said, there is a lot of ruin in a state.
For sure, ending the war will enable Putin to stabilise his economy, but he’s damned if he does and damned if he doesn’t. Russia needs a peacetime economy, but its wartime economy has stimulated demand, created jobs and now has whole new classes of apparatchiks and businessmen who have grown wealthy because of the war. Ending it is as dangerous as continuing. As Shakespeare’s Macbeth said: “I am in blood stepped in so far that, should I wade no more, returning were as tedious as go o’er.”
By way of a declaration, I’m writing about this subject this week because there is a major report out from the Russian-focused think tank, NEST – and I am on the think tank’s advisory body. But it’s a great report and a good peg to discuss Russia. It’s here for those who want to read it.
But first, the positive leger; over the years the officials who have run Russia’s economy have arguably been much more sensible – conservative is the right word here – than many profligate governments in the West. Russia has low external debt. It’s dependence on hydrocarbons – oil, gas and their by-products – remains significant, but is declining, so that fluctuations in oil prices are less likely to trigger fiscal collapse. The current high energy prices are drawing in billions of dollars of additional revenue.
On the downside, Russia’s war problems are growing. It is becoming technologically isolated. Finding chips from China and successfully avoiding sanctions is very different from permanent access to advanced equipment and investment. Russia’s inability to produce semiconductors threatens competitiveness in telecommunications, artificial intelligence and biotechnology.
Russia’s infrastructure is creaking. The break with the collective West has shifted trade routes to the Far East, dependent on overstretched rail networks (a long-range target for Ukraine, perhaps?) and a less sophisticated pipeline infrastructure. Electricity generation is struggling to meet future demand and ageing industrial equipment is becoming difficult to maintain. Civil aviation is particularly exposed, as sanctions have deprived airlines of spare parts and certified maintenance. China, despite its new strategic partnership, is not investing sizeable amounts in Russia. Beijing wants Russia as a raw materials colony, not a rival.
Politically, Russia’s elite remains tightly consolidated. Intensified repression has eliminated most dissent. Almost all political parties are controlled by the Kremlin to present a picture of ‘managed’, i.e., controlled, democracy. Therefore, Putin is very unlikely to be overthrown. Putin appears to be undertaking a controlled transition. Two governance models coexist. The first is Putin’s oligarch court system based on loyalty and informal control. The second is a more technocratic model associated with Prime Minister Mikhail Mishustin, which is institutional and, relatively speaking, meritocratic.
Yet rather than transferring power to a successor, Putin seems to be replacing the ageing elites around him with younger, highly loyal officials – some even the offspring of loyal oligarch parents – while retaining final authority. This “collective Putin” would allow him to act as an arbiter and strategist whilst standing back from routine administration.
Control of Russia’s secret services, police and national guard remains key to ensuring a peaceful transition. Putin maintains control through fragmentation and competition. While this reduces the risks of a coup, it also impairs efficiency and coordination. But these relationships are ossifying. The Federal Security Service (FSB) occupies a uniquely powerful position – it is the inheritor of the old KGB – but its actions increasingly undermine economic and social cohesion. Internet shutdowns, restrictions on digital communication and the confiscation and redistribution of assets all strengthen the state’s ability to intimidate potential rivals, but damage the system at the same time.
So the picture now is of a rigid system, where dissent – with the slight exception of the war bloggers and pro-war elements – has been stymied. The economy is returning almost to a version of the Soviet system, based on raw material extraction and armaments, whilst the productive civilian economy is in decline. The security services keep an eye on dissent – and each other.
Russian society fears mobilisation more than any other development. The partial mobilisation of 2022 generated widespread anxiety, administrative chaos and class tensions. A repeat could stoke social unrest, especially if accompanied by an economic shock of some kind. At the same time, demobilisation poses significant risks. Returning veterans are already contributing to rising crime, political extremism and violence. Their integration into law enforcement or nationalist movements will strengthen radical currents, especially given many come from criminal backgrounds and have been extraordinarily brutalised by the war.
This is a system incapable of reform, just like in the latter years of the Soviet Union. It is outwardly stable, but becoming steadily more brittle. The greatest danger is not one crisis, but a series of shocks that the state would be unable to respond to.
So the system is weakening, whether the war continues or not. The Russian state is – probably – heading towards a reckoning. But it is a fool’s errant to predict when and where that might be, or what it may look like.