The economy is going to war

The regime of savings

Putin’s money is enough for the war for a long time , but it becomes more and more difficult to get it. Sanctions against Russian exports begin to give an effect, and oil and gas revenues began to decline. The federal budget will receive less money (oil and gas used to provide a third of its revenues, last year - 42%), and the economy - to compress: the government predicts the fall of GDP by 0.8%, but experts are three times larger.

Given the inflation ($ 60 per barrel now and five years ago-this is different money), oil and gas exports will be 20–34% less than in the second half of the 2010s, the Central Bank (analytical center, which has long been working for the Russian authorities) expects . Then the budget and the whole economy will have to adapt to a much more poor and simple life.

Budget difficulties

A decrease in the average annual oil price by $ 10 per barrel reduces budget revenues by about trillion rubles. So, if oil costs an average of $ 60 per barrel, the budget will be missed by about one trillion rubles of oil and gas revenues (it is a overflow from a price of $ 70 per barrel). Last year, the government solved the problem of budget deficit, taking money from Gazprom: 1.2 trillion rubles - one -time nonpy, plus 0.6 trillion - dividends for a state package, totaling 1.8 trillion. But Gazprom cannot always pay so much, this year he has been issued an additional account of only 50 billion per month, or 0.6 trillion per year.

At the same time, expenses are growing. The price of oil, at which the revenues and expenditures of the budget coincide, according to Alfa-Bank, jumped in 2022 to $ 101 per barrel, without taking into account Gazprom-up to $ 115 per barrel, which is almost half the price of the price of the price ceiling.

What to do in such a situation? Military expenses are untouchable and even grow: for the first time from the collapse of the USSR, they can exceed 5% of GDP. It is impossible to calculate the exact cost of the war: the statistics are now classified, part of the military expenses is disguised as civil-pensions, industry, etc., and the share of secret budget expenditures increased from 16% in 2021 to 22.4% in 2023. From what is revealed, it is clear that the expenses on the military and security have grown from 24 to 32% of the budget, or to 9.5 trillion rubles, there have never been so much. Only payment of mobilized can be 2 trillion. Budget stability has always been a Putin priority, but now is not the time to refuse the military.

It remains to save on civilian costs and knock out more money from the economy. For example, the growth of social expenses will barely cover inflation, although a third of the population depends on the help of the state.

Attacking regime

One budget savings can not be done: it does not increase the amount of money in power. In addition to defensive actions, attackers are needed. It is not without reason that Russian oligarchs fear that the logic of war will push the authorities to nationalization or transfer of a business from less loyal to more loyal owners: something like this happened to Yandex and Tinkoff. A large business, they say , even ordered historians a study on how they treated large private property in the Third Reich and fascist Italy. But it is worth looking at our own experience, which Russian officials are more oriented towards. Moreover, the institution of private property in Putin's Russia is approximately the same simulacrum as elections or judicial system.

The most radical, as the Speaker of the State Duma Vyacheslav Volodin, has already been offered to confiscate property at the Russians who moved abroad, who "publicly pour dirt on Russia." Continuing to think in the same direction, officials will certainly come to the conclusion that it would be necessary to select the business from the owners who do not energetically support the war (deprive the enemy of resources).

Mobilization of income has already begun. Last year, the government took Gazprom’s profit to the budget, and in December it thought about increasing the dividend payments of state -owned companies and a one -time payment to the budget for coal and fertilizer manufacturers. Representatives of the Russian elite quite understand that all this will end badly. The war has already cut off Russian business from world markets, and billionaires from their foreign wealth and property . The next step is profit regulation.

The wartime economy is characterized by centralized planning and mobilization - otherwise it is impossible to force business and people to work for war. Both the United Kingdom and the United States during the Second World War were forced to move on to centralized planning and distribution of both goods and investments necessary for the front.

Russia is inherent in a mobilization approach even more. As historian Oleg Ken showed in the book “Mobilization Planning and Political Decisions (late 1920s-mid-1930s)”, in the first half of the 20th century, the “new understanding of the war as an armed struggle, which includes all national resources and the outcome of which depends on their total use”, was characteristic of the first half of the 20th century.

The country is fighting, so I earned - Share, do not like it - sell it in the right hands, but bargaining here is inappropriate

Therefore, Stalin from the end of the 1920s began accelerated mobilization ("either we will do it or will doubt us"). Organized violence has become the essence of the social order, Ken notes. Mobilization planning was at the Center for Preparation for a Future War, since the tension of all human and material resources of the country was required to ensure hostilities. Stalinist militarism demanded an accelerated violent transformation of economic and social structures-something similar Russia is experiencing now. The USSR was preparing to fight the whole world, and now Russia is trying to present the case as if fighting if not with the whole world, then with its good half.

Since then, the war has become much more technological: the Americans did not need mobilization for the war in Iraq. Putin thought that the war in Ukraine would become something similar, and did not plan a radical breakdown of the socio-economic system. But now this becomes a necessity - exactly to the extent that the Russian government cannot recognize the defeat, having left the Ukrainian territory. Frankly failed preparations for February-2022 only requires even greater tension in order to finally “squeeze the enemy”-Russian military commentators argue something like that.

In the mid-1930s, the Soviet army was considered the strongest in the world. Then there were very offensive defeats, multimillion -dollar losses and victory in the war at the cost of giant victims and with the help of allies. Putin willingly compares himself with Peter I, on occasion, do not mind repeating Stalinist successes.

This story is remembered by both Russian military leaders and businessmen. Therefore, they are quite soberly aware that the continuation of the war, for which it will be necessary to multiply the production of weapons, will not leave a stone-stone-stone business emperor on stone. The country is fighting, so I earned - sharing, do not like it - sell it in the right hands, but bargaining here is inappropriate, approximately such a logic. It will not even be required direct nationalization - it is enough to regulate prices, planned tasks for the supply of goods and high taxes necessary for the VPK or profit, which have already begun to practice. Result: business collapse or transferring to loyal owners - and in fact they become hired managers. Some Russian entrepreneurs were perspicive precisely by such back in 2007, being ready to give everything to the state .

The economy will not come to this immediately. While the state buys products from enterprises at market prices, it is inappropriate to talk about the mobilization economy, said Moscow State University Professor Natalya Zubarevich. But all the logic of wartime and the actions of the authorities practically inevitably leads to this. First, the restriction of profit (it is nonpatriotic to earn a lot on military orders), then - prices (all for the front, everything for victory), and welcome to the mobilization economy.