Anders Åslund on Russia's War in Ukraine and US-Ukraine Relations

Russia's Stagnating Economy and War Effort

• 🇷🇺 The Russian economy is experiencing stagflation, with low growth (1-2%) and high inflation (officially 10%, likely higher).
• 💸 Russia's budget is under pressure due to falling oil prices, with the budget counting on $70 per barrel but currently seeing prices below $50.
• 💰 41% of Russia's federal budget is now allocated to the military and security, leading to potential budget cuts of 2-4% of GDP.
• 📉 The Russian economy has seen minimal growth (around 1% annually) since 2008, with structural backwardness increasing as Putin's cronies and the state take over enterprises.
• 💔 Russia faces enormous human losses, with 160,000-200,000 soldiers killed and 600,000 injured, raising questions about the Russian people's tolerance for the ongoing conflict.

Shifting US-Ukraine Relations and Resource Deal

• 🇺🇸 A new Ukraine-US resource and reconstruction deal has significantly improved relations, moving away from a debt-repayment model towards equal partnership.
• 🤝 The deal removed previous concerns, such as Ukraine having to repay $350 billion in grant money and the establishment of a corrupt private company structure.
• 🚀 The agreement allows Ukraine to purchase arms from the US, including parts for F-16s, marking a substantial step forward for both nations.
• ⚠️ The US has seemingly returned to its previous position of supporting Ukraine, after previously voting with Russia on UN resolutions condemning the war.

Economic Support and Future Prospects for Ukraine

• 💰 Ukraine is expected to receive $100 billion in support from the West this year, with a larger portion coming from Europe.
• 🏦 Ukraine needs approximately $200 billion to win the war, with a potential source being the $200 billion of frozen Russian central bank reserves held in Belgium.
• ⚡ Ukraine has developed new, highly efficient arms, including drones, demonstrating its capability to defend itself, as seen in engagements over the Black Sea.
• 🎯 Ukrainian long-range strikes have primarily targeted military factories, oil refineries, and ammunition depots, proving effective without targeting civilian areas.

Putin's Legacy and Repression

• 📈 Putin's first two terms (until 2008) saw economic success due to market reforms and commodity booms, but since then, growth has stagnated.
• ⚠️ Putin's current rule is characterized by increased repression, described as worse than any time after Stalin's death in 1953.
• ⚔️ The war provides Putin with a national purpose and an excuse to increase repression, with Russia's military spending now at 9% of GDP.