The War in Ukraine Came Close to Me

The war between Ukraine and Russia came unusually close to me last night, as I observed strange light phenomena in the southeastern sky—things I had never seen before in my life.

In the morning, I checked the news feed and noticed that Ukraine had carried out a strike on Russia’s Luga Bay, not far from Finland, where its drones—according to Russian officials—ignited Novatek’s terminal specializing in natural gas production. It seems clear that the light phenomena I saw in Finland were connected to that very event.

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During the night, the Ukrainian armed forces had also struck an oil refinery in Syzran, in the Samara region—further continuation of the attacks against Russia’s energy infrastructure in recent weeks. Best of all, these strikes appear to be having consequences for Russia and the Russian people.

Namely, wholesale gasoline prices have risen on the St. Petersburg exchange by nearly ten percent just this month—and over the course of this year, the price has increased by as much as fifty percent. This price surge is also being felt in the wallets of Russian consumers and worsens the already high inflation, meaning the general rise in the cost of living.

And that’s not all: production disruptions at oil refineries have also affected the availability of gasoline in Russia. This too has an impact on ordinary Russians’ daily lives—which, I hope, will lead them to realize the harmfulness of Vladimir Putin’s war policy for themselves and for the Russian people as a whole. And to rise up against his government and its imperialist policies.

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Russia’s Economy Set to Slow, Says Bank of Finland

The Bank of Finland has predicted that Russia's economic growth will slow from last year's four percent to about two percent this year and then further decline to around one percent.

However, Russia's economy is not currently undergoing a crisis, but there are extremely high risks associated with its development as long as the country continues its war of aggression against Ukraine.

Russia's economic growth has been based on pumping money into the market—that is, increasing government spending and expanding military-industrial production. However, this approach is reaching its limits, as labor shortages are emerging, prices are rising rapidly, and sanctions are hampering Russia's foreign trade. Additionally, the country's production capacity is nearing full utilization, making further expansion difficult.

Russia's public finances are also in deficit, and inflation has accelerated to the point where consumer prices had already risen by ten percent at the beginning of this year compared to the previous year. However, it remains to be seen how the Russian people—who have historically been accustomed to hardship—will react to this.

From the perspective of world peace, it would of course be beneficial if they became frustrated with their government and ultimately brought it down. However, Vladimir Putin is a dictator who does not shy away from violence, making this scenario unfortunately unlikely.

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Germany Then and Now Resemble Each Other

In the early years of the Weimar Republic, during the 1920s and the early 1930s in Germany, power was held by the Social Democrats. Nevertheless, the far-left caused unrest and incited workers to go on strikes. Eventually, they even attempted a violent revolution, inspired by Vladimir Lenin.

As a result of all this, a backlash arose among the German populace, which was temporarily interrupted when moderate parties formed governments in the mid-1920s. However, the far-left increased its popularity towards the end of the decade, as the runaway inflation caused by war reparations made life increasingly difficult for the people.

For the same reasons and due to the unrest caused by the far-left, national socialism—or the Nazi Party—also gained traction, ultimately taking power in January 1933. This led the country, after various developments, into two interlinked catastrophes: the Second World War and the Holocaust.

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This came to my mind when I read that in Germany, thousands of leftist protesters gathered on Saturday in front of the party congress of the far-right Alternative for Germany (AfD) party. As a result, the start of the congress was delayed by two hours because the protesters blocked party members from entering the venue.

A large police presence was also on-site, dispersing a sit-in protest that had partially blocked an intersection. They also intervened to stop acts of violence, as some protesters launched fireworks at the police.

It would be worth asking these protesters whether they have any understanding of what happened in Germany between the world wars, and whether they realize that their current actions bear an unsettling resemblance to the behavior of the German left during the Weimar Republic era, which, as a backlash, resulted in the rise of the Nazi regime.

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Western Nations Should Act Decisively On Two Fronts Against Russia

The CEO of Russia's largest bank, Sberbank, stated that the country's economic outlook is weak. According to him, "we see significant signs of an economic slowdown."

The reason for Russia's economic woes is Vladimir Putin's war of aggression in Ukraine, which has resulted in enormous amounts of money being spent on military expenses. Additionally, foreign trade has become significantly more difficult due to sanctions imposed by Western countries.

According to the CEO, the weakening of Russia's economy is particularly evident in the construction sector. Inflation is also at a high level, leading the country’s central bank to raise the interest rate to as much as 21%.

Moreover, it is expected to continue raising interest rates later this year. However, the Sberbank CEO emphasized the need for caution in these adjustments to allow for the possibility of boosting economic growth.

It remains to be seen, however, whether—and at what point—Russia's economic troubles will hinder Putin's war efforts in Ukraine. Therefore, it is crucial for Western nations to act decisively on two fronts in this situation.

The first is to more resolutely support Ukraine's military efforts, and the second is to accelerate measures that contribute to Russia's economic decline. Hopefully, this approach is understood by the leaders of the world's largest economies—namely the USA, Germany, the UK, and France.

This is particularly important right now, as Russia's own economic developments are providing an opportunity to significantly impact its war-making capabilities. This, in turn, could pave the way for peace, not only for Ukrainians but also for the hundreds of thousands of Russians who have lost family members to the war's grinding machinery.

Previous thoughts on the same topic:
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Bad News for Vladimir Putin and His Imperialistic Dreams

The Russians have recently received multiple pieces of bad news. The latest, which surfaced through social media, reports that in September, Russia experienced the highest average wartime losses: 1,271 soldiers killed or wounded daily.

Additionally, also according to information from social media, the Russian army has lost the equivalent of five divisions' worth of armored equipment in the Pokrovsk area of Eastern Ukraine over the past year. This information was gathered by compiling all recorded instances of Russian equipment destruction for which there is video evidence: a total of 539 tanks and around 1,020 armored vehicles.

If losses continue at this pace, it is possible that the Russians will eventually have to abandon their gradually successful offensives in the Pokrovsk area and retreat to defensive positions.

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Another drawback for Putin comes from the Russian economy. Namely, Russia's state budget for next year includes a 12% increase, mainly due to a quarter rise in military spending from this year.

Military expenditures will amount to 6.3% of the country’s GDP. Additionally, it is likely that more military expenses have been concealed, related to the ongoing invasion of Ukraine.

However, Russia’s economy has not developed, as the government has simply shifted more costs onto citizens and businesses. For example, the corporate tax rate is rising from 20% to 25%, and personal taxes will become progressive. In addition, the costs of housing, services, and public transport will also be increased.

As a result, inflation is expected to accelerate to at least 5.5%. Therefore, Russia’s central bank was shocked by the budget and plans to raise the key interest rate from the current 18% to 20%, but even this is considered insufficient to keep inflation in check.

Thus, next year’s Russian budget brings three pieces of bad news: the budget growth comes solely from businesses and citizens’ pockets, despite structural balance, the budget will increase inflation, and there is no end in sight to the negative trends as the invasion continues.

However, it remains to be seen how all of this will ultimately affect Putin's army's ability to wage war in Ukraine. The possible loss of its fighting ability would be really bad news for Vladimir Putin and his imperialistic dreams.

Previous thoughts on the same topic:
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