Eight years into Russia’s war on Ukraine and two months into the present invasion, the perspective of a protracted war and long-term sanctions is increasingly considered on all sides. The invasion has led to significant changes in Russia already, including unprecedented pro-war mobilization efforts and major changes in economic policy, even though economic disruptions, by the Russian government’s own admission, have only just started. Shifting perspectives on the timeline will impact these developments.
1. Depoliticization gives way to mobilization
For years, the Kremlin relied on demobilization and demotivation as means of holding onto power. Turnout in presidential elections and the 2020 constitutional plebiscite had to be high, but in these votes high turnout fulfilled a unique legitimizing function by showcasing the lack of alternatives to Putin and the system that he embodied. In legislative and subnational-level elections, however, the system was built to work best in circumstances where the overall interest in participation remained low for various reasons, while the authorities could mobilize key categories of voters – primarily those relying on the state or on a state-adjacent entity for their jobs and pensions – through administrative means.
Even in 2021, responding to the challenge that Alexey Navalny’s return and his team’s Smart Voting strategy posed for the authorities, they responded, essentially, by forcing people to choose between risky activism and political apathy, recognizing that while a growing number of people were fed up, many of them were not ready to risk getting arrested, having their personal information leaked or losing their jobs, if this was the price of political activism. The way in which the campaign and the vote itself shaped up – from United Russia attempting to project a technocratic image, to an opaque online voting system unrolled in six regions, with plans to introduce it across the country – suggested that the authorities wanted to keep demotivating and depoliticizing voters.
Two months into Russia’s war in Ukraine, this seems to be changing. Instead of passive acquiescence, the authorities are increasingly demanding positive acts from citizens and elites alike. For elites, the example set by Putin’s bizarre public loyalty tests in the Security Council meeting prior to the February invasion seems to have become the norm, as much as one can glean from scarce reporting on intra-elite dynamics and public utterances, such as Dmitry Medvedev’s Telegram diatribes. Citizens are meanwhile encouraged to show enthusiastic support for the war. Some of this is the consequence of elite dynamics: governors, city officials and company managers can show their own loyalty by publicly mobilizing subordinates, dependents or voters (as an alternative to plastering “Z” and “V” symbols everywhere). Ramping up the indoctrination of children by changing school curricula and integrating patriotic rites such as the raising of the flag into school activities fits this pattern as well.
But citizens are also directly prompted by the government. Vladimir Putin has been personally calling them to action against “traitors”, as have the Kremlin’s completely unhinged talking heads who now also have significantly more airtime; United Russia is calling on Russians to report each other for spreading “false information” and is providing the tools.
This kind of mobilization can patch up the state’s coercive capacity if it proves to be insufficient. The Russian authorities significantly ramped up repression in the early weeks of the war when more than 15,000 arrests were made across the country at various anti-war protests; it was always questionable whether the state had the capacity to maintain this level of coercion across the country for an extended period of time, and it appears (read e.g. Sam Greene’s analysis about this) that direct, active repression has since eased somewhat. The hope seems to be that creating legal bases, tools and incentives for citizens to denounce each other can fill in the gap.
For now, this seems to be working. It appears that people have indeed started to denounce one another with increasing frequency: according to a recent report by Agentstvo, sometimes putting up ribbons in Ukraine’s national colors is enough to get a visit from the police. And while there are a lot of questions about surveys measuring public support for the war, by the Kremlin’s own research and estimates people as a whole are supporting the war strongly enough to discourage even considering a negotiated way out of it. Whether this is a misreading of the reactions of a people that has, for years, been strongly conditioned to show performative loyalty for the state in situations like this, and has been strongly intimidated, matters little if the result is that the authorities are not even thinking about toning down totalitarian-style mobilization.
The question that all this leaves unanswered is what form disagreement, dissatisfaction, anger or simply fatigue can and will take under such circumstances. Recent heated debates about an industrial construction bill that would have scrapped some environmental restrictions suggested not only that economic policy remains one of the fields that the war’s totalitarian logic has not conquered yet, but also that the authorities are likely very wary of any issue that may spark protests. And will some Russians turn to more radical forms of protests – such as the torching of military enlistment offices – when other, milder forms are not available?
2. The role of the state and its agents in resource distribution will grow
On April 26 RBK’s sources suggested that the Kremlin would move to scrap direct gubernatorial elections (of which fourteen would be held in September, including in some politically “problematic” regions). The measure would be temporary, officially, but it is difficult to understand what a temporary measure means under the current circumstances. A day later, the Kremlin denied that this was on the table, but the rumor has kept resurfacing over the past weeks and it is worth noting that the Kremlin has several alternative measures to reach the same effect, from postponing the votes, to encouraging regional assemblies, dominated by United Russia, to take the decision themselves.
It is also worth noting that if direct gubernatorial elections were cancelled, this would in no way be some kind of surprising turnaround; this has been in the making for a longer time. In essence, it would replicate the effects of the recent municipal administration reform (and the earlier scrapping of mayoral elections) on a higher level by removing a representative element and thus strengthening the power vertical. Yet, it is not a given.
A month ago, when the possibility was first raised, I wrote an article for Riddle about the arguments for and against cancelling this year’s regional elections, from the authorities’ point of view. I argued that the Kremlin may simply consider holding any election too risky, given the ongoing economic crisis, uncertainties about public opinion as well as doubts about the reliability and professionalism of regional officials. However, it also carried risks. Elections matter, even in autocracies, even if they are closed and rigged, because for many voters they provide a straightforward way to express dissent. There was evidence (that I quoted in the piece) suggesting that an increasing number of Russians looked at elections exactly like this.
What has changed since, it seems, is the Kremlin’s perception of risks and benefits.
The coming months will see major disruptions in a number of industries. The automotive industry and machine building are already experiencing problems. So does the service industry as people are spending less on things like taxi rides. Coal mining will lose export markets and is plagued by transportation bottlenecks. Metallurgy companies are facing financial and supply chain problems. While Russia may benefit from higher oil prices (so long as it does not face a European oil embargo), problems with storage and downstream capacity and the withdrawal of oilfield servicing companies have been causing disruption for the oil industry. Major investment projects have been suspended or cancelled, from Sibur’s Amur Gas Chemical complex to ExxonMobil’s Far East LNG and the Northern Latitudinal Railway (and several others, such as Rosneft’s Vostok Oil or Novatek’s Arctic projects are in jeopardy). These will all have downstream effects over the summer. The government is pumping 3.7 billion rubles into key industries to prevent immediate disruptions in major cities where this can easily lead to bigger troubles, but this will not be enough.
As industries break down, most regions will experience significant drops in their two most important sources of income: profit taxes and personal income taxes. At the same time, they will have to maintain spending on key social services, such as health care, education and social aid, and as per a presidential decree issued in March, they are tasked with mitigating most effects of sanctions, including with ensuring adequate food supply, keeping consumer prices low, communicating with local businesses and reducing poverty. This is similar to how governors were tasked to handle the COVID-19 pandemic in 2020-21, only then governors had the possibility to stimulate local economies by rolling back restrictions; now this is not possible. However, the federal budget and the National Welfare Fund presently have the means to continue scheduled payments for another two years, according to expert estimates (barring an energy embargo).
This means that the role of top-down fiscal transfers will likely grow in most regions (and also that somewhat counterintuitively, the poorest regions will feel these changes less). So far, the government has deferred the repayment of obligations on budgetary loans and will provide more such loans to regions than previously envisaged. Infrastructure loans – a 500-billion-ruble program launched last year – will be repurposed and refocused on roadworks, housing and other projects that use domestic parts and ingredients, essentially a cash injection into industries, which would otherwise suffer. Advance payments on government contracts will go up from 50 to 90 percent. Fiscal grants – budgetary transfers that regions can use at their discretion – will likely be raised, as they were during the first year of the pandemic.
As regional and municipal budgets, the industries that pay taxes into them, and voters themselves increasingly rely on budgetary transfers, the importance of the intermediaries who can ensure the flow of this money and distribute it is likely to grow vis-à-vis (other) local elites. These intermediaries are first and foremost the governors, in many regions Kremlin appointees without local roots (but with their own protectors in Moscow) whose subordination to the president has been significantly strengthened by last year’s public administration reform and who in turn have gained influence over municipal districts and cities. Secondly, they are deputy governors who watch over regional governments on behalf of the security services.
This is the context, in which the Kremlin may feel comfortable enough to scrap direct gubernatorial elections. Local elites may still play a role in approving a Kremlin-backed candidate through the regional parliament, but direct elections that facilitate building a local power base, will be a thing of the past.
3. The perspective of a long war is accelerating shifts
Russia’s aggression and its self-imposed economic crisis put politics and the economy in flux. Two months after the current invasion started, some contours are visible, but it is difficult to make predictions. Where this nascent totalitarian-style mobilization and the increasing role of the state in the economy will take Russia will largely depend on the assumptions that key players – the government, the military, the political and business elite, but also external actors, especially the European Union and China – have on how long the war will last.
From the EU’s point of view, the political calculations behind sanctions that directly or indirectly endanger key trade flows, such as oil, gas or palladium, look very different depending on how long decision-makers expect to have to maintain these sanctions, and how much they think they know about the various costs of the war, some of which can be expressed in monetary terms (e.g. supply chain disruptions or the aid necessary to keep Ukraine’s military winning and its economy afloat), but a lot of which cannot (e.g. destroyed and disrupted lives, or the threat to the rest of Europe).
At the beginning of March, some may have expected that the unprecedented and highly disruptive financial and trade sanctions that the EU and the US have adopted will precipitate the end of the war within weeks. They did not. This does not mean that they are not working, but there is a growing public perception that more has to be done. From Russia’s point of view, maintaining the semblance that sanctions are ineffective for as long as possible – either by keeping up an artificial exchange rate for the ruble or by blocking access to economic data – may break the political consensus necessary to maintain them, especially since they usually also impose costs on the sanctioning party.
These are open questions, but what is already happening is governments shifting their perspectives. The NATO accession of Finland and Sweden is probably the most glaring example of this, but the European Union in general and Germany in particular would not have moved ahead with plans of an oil embargo either, without a credible long-term plan on replacing oil and gas shipments. A credible move to wean Europe off of Russian energy also means that the Russian side can write off the reputational damage of turning off gas now as a sunk cost.
Meanwhile, Chinese exporters are reportedly looking into alternative trade routes that bypass Russia, due to a fear of secondary sanctions. Exporters are sending significantly more goods from Xian by rail through the Caspian and the Black Sea to Europe. Volumes are still slow and the route has capacity problems, but as governments and exporters shift to a longer perspective, these problems will be dealt with. At the same time European companies pulling out of major investment projects, from Khabarovsk to Tolyatti, may make way for Chinese investors to take their place. If the perspective decisively shifts, both developments will have far-reaching consequences
From the Russian government’s point of view, changing assumptions about the duration of the war will also greatly affect which anti-crisis measures it makes sense for the government to take. For instance, reorienting export infrastructure – which right now is heavily oriented towards Europe – towards Asia is a difficult, risky and very consequential project, which nonetheless should be started as soon as possible if the assumption is that trade restrictions with the EU are here to stay. Or is the gasification of Eastern Siberia a safer bet, even though domestic gas prices are heavily subsidized? The picture of course looks very different if there is a chance of ending the war in a couple of months, with the removal of (most) sanctions. The situation is similar when it comes to microelectronics. Should Russia pour billions of rubles into developing a domestic industry, more or less from scratch, or would this money be better used elsewhere?
The technocrats of the government in a wider sense have so far managed to come up with enough band-aid solutions to keep the economy afloat, but these solutions are unlikely to work in the long term. It is unclear how much capacity the government has to stimulate the economy, especially if revenue flows are reduced; according to deputy prime minister Andrei Belousov, the limit of support without risking higher inflation is 7-8 trillion rubles, which the government has almost reached. As soon it seems that the war will last significantly longer and more radical changes are necessary, this may prompt backlash from nationalist hardliners and exacerbate an already existing split between the broader government and security services over the control of executive bodies.
As I mentioned above, the more the war drags on, the bigger the uncertainties will be regarding public opinion and loyalty. So far, the high number of military casualties has not automatically translated to opposition to the authorities or to the war, which is partly the consequence that soldiers are disproportionately drawn from poorer and more isolated regions (such as Buryatia, one of the most affected regions). But this may change, especially if the state proves incapable or unwilling to provide for the families and returning troops, and even without this, the primarily negative emotions driving what Jeremy Morris called “defensive consolidation” now can result in hopelessness and anger down the line. Elites may overwhelmingly support the war now due to an instinct of self-preservation (they know that it is not going according to plan and that someone will have to take the blame) or genuine interests, but as the resource pie keeps shrinking, they may change their minds. There are already reports about animosity between the military and the security elite.
As terrible as it is to acknowledge this, these may be early days and we are only seeing the rough shape of what is emerging. The past two months have wiped away many remaining illusions about the nature of this war and Russia’s trajectory as the state. The challenge will now be to consider the long-term implications and devise long-term strategies – while keeping in mind that others are also coming to this realization.