Its influence is floundering overseas as the part of the world it formerly held in its iron
grip turns its back on the once mighty nation. As it is increasingly isolated on the world stage,
the West only grows stronger. Its military expedition into a neighboring nation has
gone catastrophically wrong, proving to the world that the military of the once feared superpower
is a largely hollow, poorly led and poorly trained force. Now thousands of casualties
and even more wounded veterans are adding to the growing voices of dissent from within.
But this isn't Russia today, this is the Soviet Union in 1989,
just two years before its official collapse. The question is, will modern Russia collapse
as its predecessor did, and what would it take to collapse this once mighty nation?
The question of collapse is a difficult and tricky one to discuss in relation
to Russia. It's almost impossible that the Russian state will simply dissolve,
as while there are regions who would make a bid for independence if given the chance,
internal cohesion is strong amongst most of the republics that remained within Russia after the
end of the Cold War. A collapse of Russia is thus more likely to mean a significant economic crash,
along with the end of the Putin regime and any possible successor that he may appoint.
But how do we get there? For Russians, a possible collapse
is a lot more terrifyingly close than state media would ever let it be known.
Firstly, the war in Ukraine is going to be the chief catalyst in any possible collapse
of the current Russian regime. In the 1980s, the Soviet Union's invasion of Afghanistan led to a
decade long quagmire that sucked up resources and men. Unlike the United States in its own
follys in the middle east, the Soviet Union didn't have the benefit of incredibly deep
pockets and partner nations to fund and support failed military adventurism for years on end.
Today, Russia's invasion of Ukraine is increasingly looking like another Soviet
Afghanistan- but only much worse. In the Soviet invasion, the United States helped provide
training and light weapons to mujahideen fighters fending off Soviet troops. This resulted in a
stalemate where the Soviets controlled the cities while the mujahideen controlled the countryside.
But there's several fundamental differences between the Afghani mujahideen and modern Ukraine.
The first is that Ukraine already had an organized,
western style national military when the war began in February 2022. By comparison,
the mujahideen were an asymmetric, decentralized force that was largely impossible to coordinate-
while this had its strengths in combating the superior Soviet war machine, Ukraine's ability
to field a professional military allows it to fight a coordinated national campaign
that has been incredibly successful so far in slowing, if not stopping, the Russian offensive.
It's exactly because Ukraine fields a professional military that heavy weapon
assistance can be provided to its armed forces, something that would have been
impossible or impractical in Afghanistan. At the start of the war it was feared that
Russia's superior military would quickly overwhelm Ukraine's defenses. This would
have made supplying the country with modern military weapons a futile act, as they would
simply be surrendered or destroyed- or not even reach the battlefield in time to matter.
However, as Ukraine scores tactical defeat after tactical defeat on Russia's forces,
and even launches counterattacks to reclaim territory, it's become clear to the West
that Ukraine has the expertise and numbers to actually stand up to Russia long enough for heavy
weapons to make an impact. At first this meant supplying Ukraine with cold war systems sourced
from unaligned parties or stockpiles of some nato members, but now the floodgates are increasingly
opening on the supply of modern western firepower. US HIMARS, Harpoon anti-ship missiles,
and counterbattery radars for instance have all inflicted disasters upon the Russian military.
As other nations join in providing modern equipment to Ukraine,
Russia is going to face an increasing number of modern weapon systems. This is something
it is woefully unprepared for, both because its military training is woefully inadequate
for modern war and because as the war drags on, it is increasingly relying on
Cold War era weapon systems that simply cannot compete versus western weapons.
But new western arms isn't Russia's only strategic problem, because it is also facing a morale
crisis amongst its troops. As casualties mount and progress on the battlefield is measured in meters,
Russian troops- many of which are conscripts- are becoming increasingly difficult to manage,
at times even to the point of outright sedition. This has forced senior officers to the front lines
as their troops are no longer trusted to operate without direct and immediate supervision- and in
turn this has led to staggering numbers of casualties amongst its senior officer corps,
with as many as 14 generals and 56 colonels killed since the war began. As senior military echelons
are thinned out, Russia's military loses what little expertise it had to begin with,
leading to increased breakdown in command and control and increasingly deficient performance.
It's difficult to get unbiased polling from Russia as the nation has banned nearly all independent
media when the war began to turn for the worse, but while the majority of Russian people seem to
support the war right now, as it continues to drag on and military disasters pile on, their support
will only last so long. Vladimir Putin will also soon have to deal with thousands upon thousands
of returning veterans- many of them wounded and maimed- who are deeply unhappy with the
war. This should sound like a familiar scenario to Putin, as it is exactly how the Bolsheviks
helped launch their own revolution which saw the imperial government ousted from power.
But if there's a silver lining to this scenario for Putin, it's that there is
no major dissenting political power within Russia. A student of history, Putin has
purged any would-be opponents and dismantled any political opposition to his rule for over
two decades. What remains is a small movement for true democracy, but without an influential
leader to help coordinate it and fan the flames of revolution. By murdering and imprisoning his
opposition without mercy, Putin may have helped avert his own overthrow from power.
Yet Russia remains a pressure cooker, and the pressure is only piling up. Even as you watch
this episode, Ukrainian troops are being trained in the west to use modern weapon systems being
provided to them in increasing numbers. The US has even helped finance the training of new
Ukrainian soldiers in western nations, where they can receive expert western training in
complete safety from Russian attack. As the war drags on, Ukraine's proficiency only increases,
while it's obvious that Russia's own is in continuous decline. Even its stockpiles of
smart weapons are all but depleted, with only those held in reserve in case of war against
NATO remaining. To punctuate the point, it's been reported that Russia has been
using S-300 air defense missiles in ground attack mode, a move of sheer desperation.
If mounting casualties isn't enough to collapse public support for the war, then a military defeat
is sure to. Ukraine is currently incapable of inflicting such a defeat on Russia, but
if the war continues for years as many predict it will, the probability of Ukrainian victory becomes
ever greater. If Putin's war machine suffers a humiliating defeat and forced retreat in Ukraine,
it will mean the political end of Putin and his regime- and he knows this, which is why some
fear that he may resort to weapons of mass destruction if such a defeat seems likely.
But using a nuclear weapon or large numbers of chemical weapons in Ukraine may mean a
collapse of the Putin regime anyways. If Russia were to launch such an attack,
the nation will be completely isolated internationally as it becomes a pariah
state. As damaging as current sanctions are, they will pale in comparison with the
economic and political price to be paid for using weapons of mass destruction.
On the topic of sanctions, these too might pave the way for a political collapse of the Russian
government. To date, Russia has seen some of the toughest sanctions placed on a nation in
recent history- yet the Russian economy seems to be weathering these sanctions very well. In fact,
in July the Russian ruble hit its strongest level since May 2015, when it hit a high of 52.3 versus
the dollar. This resurgence after the collapse prompted by sanctions actually led the central
Russian bank to try to weaken the ruble on purpose so as to keep their exports competitively priced.
As Russian President Vladimir Putin said,
“The idea was clear: crush the Russian economy violently. They did not succeed.”
But is that true? Are sanctions failing and is Russia actually flourishing?
Russia's largest source of revenue is its exports of energy, including oil, gas, and coal. With oil
prices at historic highs, Russia's exports to the very people trying to sanction it are leaving the
country flush with cash. In just the first 100 days of the war in Ukraine, Russia raked in $98
billion in revenue from energy exports, with $60 billion coming from the European Union. Russia
is raking in the money hand over fist, giving it the ability to artificially prop up its economy.
For the time being, Because the EU is dedicated to curbing its imports of
Russian energy. In 2020 the EU relied on Russia for 41% of gas imports and 36% of oil imports,
but these figures are set to plummet dramatically as the bloc passed a sanctions package in May
aimed at massively cutting imports from Russia by the end of 2022. The United
States is helping the European Union wean off Russian energy by finding alternative sources,
and even began the process of lifting sanctions from oil superstate Venezuela
to encourage diplomatic talks aimed at fully lifting sanctions. The US has also worked with
OPEC members to increase oil production and help relieve pressure on the EU.
As the world moves away from Russian energy and into alternate sources, including renewables,
its ability to bring in foreign money is going to drop year over year. If this war lasts for years-
as it seems set to- Russia could see a major source of foreign revenue dry up over time,
and this will be particularly harmful to the Russian economy because the unprecedented
sanctions levied against Russia leave it largely unable to conduct international
trade. Further damning Russia is the fact that its economy has never been well diversified,
relying on the energy sector for the majority of its GDP.
The enactment of strict capital controls also helped limit damage to the Ruble from western
sanctions. By limiting the ability for Russian money or foreign reserves to leave the country,
the ruble has remained artificially propped up. Yet this is a temporary measure at best,
as it literally strangles an economy and cuts it off from global markets.
There is also the matter of Russia's currency reserves- which numbered at over 600 billion
when the war started, though approximately half of that was frozen in overseas accounts
in retaliation for the invasion of ukraine. This war chest has been built up over the
years from profits made by energy trade, and been held in strategic reserve for exactly the
situation Russia finds itself in today. Now the money left in its reserves is helping prop up
the economy artificially, and continue to help pay for the war in Ukraine. Yet these reserves
will eventually run out, and when they do Russia will find itself in dire straits.
All of these factors have led many to call the ruble a 'Potemkin currency'. Named for
the fake villages made to create the illusion of prosperity for Russian Empress Catherine
the Great, a potemkin currency is one who's real value is being artificially propped up,
and which will inevitably collapse when those supports are no longer available.
But the ruble's value is not a good indicator of economic health anyways,
as Russia faces unemployment rising to 7% this year. With thousands of international
companies pulling out of the country, foreign investment in the nation has
plummeted to the lowest levels since the end of the Cold War. This has left many
Russians without jobs and struggling to find one amidst a stagnant economy.
The pullout of international companies however comes with even greater repercussions, as Russia
now faces a massive shortage of many goods and services that modern life relies on. Boeing and
other commercial jet aircraft manufacturers like Airbus have stopped supplies of spare
parts for the nation's air fleets, and canceled maintenance contracts. This is quickly leading
to a collapse of Russia's airline industry as it is forced to cannibalize planes for parts
in order to keep an ever shrinking fleet in the air. It is also creating a massive safety hazard
that could soon see Russian air travel the most dangerous in the world, because it's not just cut
off from critical replacement parts, it also lacks the ability to manufacture them itself.
Russia's poorly diversified economy is its own worst enemy, and as the nation has been cut off
from international markets for high technology products, it is struggling to maintain modern
tools and equipment. We already have reports from Ukraine that Russian missiles are being
equipped with scavenged microprocessors from civilian appliances due to an embargo by Taiwan,
the world's largest manufacturer of electronic components. Just two months into the war Russia
was forced to close down the Ulyanovsk Mechanical Plant, a facility responsible for producing
surface to air missiles. Because Russia imported nearly all of the electronic components required,
production ground to a halt as supplies ran out. Its workers were given a choice:
go home on unpaid, indefinite leave, or join the Russian war in Ukraine at a
salary of $600 US a month. This is typically quickly followed by a permanent retirement.
It’s a story playing out all over Russia in both the military and civilian sectors. We know that
supplies of western sourced medicines are at critical levels, and in some places completely
out. Some Russian families have been forced to accept that there is no treatment available for
life-threatening conditions due to the sanctions. Consumer prices on the whole have risen nearly
20%, with inflation expected to hit as high as 23% as estimated by Russia's central bank.
There will likely be some stabilization in certain segments of the Russian economy as
the shock of sanctions is absorbed and markets readjust, but Russia's economy is doomed to
shrink significantly. As it stands, the economy is expected to shrink by a whopping 15% this year,
wiping out 15 years of growth, with a further 3% reduction in 2023. Eventually it will stabilize,
but without a doubt Russia will be a shadow of its former self as a result.
Perhaps one of the most difficult effects to measure in the near-term however is Russia's
demographic problem. The first part of this problem is Russia's ongoing brain-drain,
intensified in the last few months by its invasion of ukraine and the exodus from Russia
of intellectuals, artists, professionals and youth. By mid-March, an estimated 200,000 Russians
had left the country due to fear of reprisals for not supporting the war or of how bad the domestic
situation would get in the long-term. Since then an accurate number is difficult to source,
but some estimate that as many as a million may have left the country- and the exodus continues.
Russia's problem is that many of those fleeing the Putin regime are exactly the people that a modern
economy relies on. In the first month of the war an estimated 50,000 to 70,000 IT professionals
left the nation, and up to 100,000 followed soon after according to a Russian IT industry
trade group. Hospitality, legal, consulting and real estate professionals are also leaving the
nation in droves, causing an unprecedented brain drain that will make it increasingly difficult
for Russia's economy to remain competitive. A if that wasn't bad enough, it's expected that 15,000
millionaires will leave Russia by the end of the year, taking their investment capital with them.
So will the Russia government collapse? It's quite possible given the way the die has been cast so
far. Yet Vladimir Putin has spent two decades preparing the Russian people for a confrontation
with the West, and has so far spun all the consequences for his own actions as attacks
by the west against Russia and “russophobia”. In the end, as the situation deteriorates in Russia,
it may end up only consolidating his power base and ensuring the survival
of his regime. Putin may end up dictator over a backwater, second-world nation that's broke,
internationally irrelevant, and politically isolated, but at least he'll remain in power.
Now go check out What Will Ukraine Do After The War With Russia,
or click this other video instead.