The most obvious catastrophe that Putin has brought about by invading Ukraine is and will be economic. Scholars at Yale Business School reported that more than a thousand international companies had curtailed or shuttered their businesses in Russia by the eighth week of the war. And many have followed after.
Russians have been rendered international pariahs, unable to travel abroad easily and suffering under the heaviest sanctions ever imposed anywhere in world history.
The burden of Putin’s war on Ukraine will be borne by average Russian citizens for decades, if not longer. The damage done to Russian society, the economy, its military, its political development, and its international reputation will far out live Putin.
Thirty years ago this spring, Russia was at the beginning of what would be a dramatic, although uneven, economic recovery following the collapse of the Soviet Union in December 1991.
At the moment of the Soviet collapse, Russia inherited a budget deficit that was conservatively estimated at 20 percent of GNP, it faced the threat of hyperinflation, economic growth was negative, there were shortages throughout the economy, foreign reserves were virtually nonexistent, and it was racking up a mountain of international loan commitments.
The state faced the realistic threat of famine and bankruptcy. In the decades that followed, however, Russia traveled a long way down the road of economic and social modernization. This was partially due to high global prices for its exports.
The country also benefited from good macroeconomic policy and the stewardship of Elvira Nabiullina, the smart and surprisingly independent chairwoman of the Central Bank of Russia (CBR) since 2013.
Despite Vladimir Putin’s propensity to use public assets for his own personal benefit and that of his former KGB cronies, by 23 February 2022, the day before Putin’s invasion of Ukraine, the country had paid off its debts, built up sizeable foreign reserves, and for the most part maintained a budget surplus.
To be sure, Putin’s hardening autocracy, especially after his return to the Kremlin in 2012, worked against further socioeconomic gains rather than in their favor. After 2014 and the annexation of Crimea from Ukraine and just as the global pandemic began in 2020, real wages were dropping, wealth inequality was rising, and foreign investment had fallen to levels not seen since 2003.
But if thirty years of uneven postcommunist recovery had seen Russia’s resurgence, we are now seeing its ruin. Vladimir Putin’s autocracy has not just wrought havoc on Ukraine, it has wrecked Russia, too. In a little more than five months, Putin’s unjust and ill-conceived war has erased the gains of the last three decades.
Due to the Ukraine war, average Chinese is becoming better off than average Russian.
