Five takeaways from Putin's speech on war anniversary

On the eve of the one-year anniversary of Russia’s invasion of Ukraine, President Vladimir Putin addressed the Federal Assembly, a body that unites the two houses of Russia’s parliament.

In reality, his speech was intended for a far wider audience, from the government, the business community and the military to regular citizens. For almost two hours, Putin slammed the West, justified Russia’s invasion of Ukraine and boasted of how Russia’s economy had withstood sanctions.

There were no surprises in Putin’s speech, contrary to many observers’ predictions: there was no announcement of a new wave of mobilization, nor any rebranding of the “special military operation” as a counter-terrorist effort.

1. Putin announced almost no new financial support for Russian citizens

Putin largely refrained from dangling carrots in front of the country. In his speech, he limited himself to promising a further 10% increase in the minimum wage, bringing it to $253 starting in 2024 (in Russia, the minimum wage is also the basis for calculating other welfare payments). He also pledged to add annexed Ukrainian territories to Russia’s maternity capital program, which gives families a one-off lump sum on the birth of their first child. In addition, Putin promised to create a state fund to support soldiers wounded in Ukraine. Among its tasks will be providing prosthetic limbs, arranging social and medical support, and resolving issues around sanitorium treatment.

He also proposed to promote discounted rental accommodation for employees of defense sector industries, and promised to invest in upgrading transport and public infrastructure in the regions.

Economists estimate that the new social measures will cost 400-500 billion rubles ($5.2-6.6 billion) from the state budget. Finance Minister Anton Siluanov said that the president’s proposals were “strong,” but they would be funded without increasing the budget deficit or raising taxes.

2. Putin urged Russian businesses to think of the motherland

Putin had a separate “parting word” for big businesses in his address, describing their dependence on the West as a strategic risk for Russia and warning that they would always be regarded as “second-rate outsiders” in the West. The Russian president urged businessmen not to “beg” and “cling to the past,” but to invest in Russia, which he said will enable entrepreneurs to “increase their capital and earn the recognition and gratitude of the people.”

More than once, Putin urged businesses to pull together and focus their operations on the Russian market. But judging by the mood among Russia’s businessmen and officials, while the message may be getting through, it will have little practical impact: the elites are tired of the war and all the stresses it brings, The Bell reported. “Forget about business as usual. Our task is literally to survive and save our business. Or, if a side has already been chosen for you, you need to show your loyalty in order to benefit at all,” one businessman on the Forbes list said.

Many still hope that Western sanctions can be lifted on an individual basis, especially following the unexpected removal of former Sevastopol Governor Dmitry Ovsyannikov and singer Grigory Leps from the sanctions list. In reality, though, the businessmen who spoke to The Bell have enjoyed little success in this regard. One major financier said, with some surprise, that even his longtime contacts in Europe no longer spoke to him and his partners. This silence has been embraced by former European officials and especially those currently in office.

3. Russia exits the New START treaty

In his biggest statement during his two hours at the podium, Putin announced that Russia was suspending its involvement in New START, the last remaining nuclear arms treaty with the United States. The next day, the State Duma approved the presidential proposal, followed by the upper-house Federation Council.

New START, or START-III, was signed in 2010 by then-presidents Dmitry Medvedev and Barack Obama. At the time, this treaty was hailed as the centerpiece of a “reset” in trans-Atlantic relations. The deal imposed limits in the deployment of nuclear warheads and ICBMs on both sides. The treaty expired in 2021, but was immediately extended until 2026. Despite Putin’s statement, Russia will continue to respect the restrictions on its nuclear arms imposed by the treaty, according to the Foreign Ministry.

Although Putin announced that Russia is suspending its participation in New START, the agreement itself has no mechanism for either side to suspend it, said Pavel Podvig, a researcher at the UN’s Institute for Disarmament Research and part of Princeton University’s Science and Global Security program. While the U.S. will probably not accept Russia’s suspension as a legal step, there is no way to force Russia to fulfill its treaty obligations, he explained.

“There is no good news from the suspension of the treaty, but that doesn’t mean the consequences will necessarily be dramatic,” Podvig said. “The nuclear deterrent operates independently of treaties and nothing will change that. The arms control architecture will suffer, but even there, some elements will remain.”

Putin also vowed that Russia would follow suit if the U.S. resumed nuclear weapons testing. Podvig believes this can be seen as a positive signal.

“[Putin] actually said that Russia would not be the first to resume testing,” he said. “Thus, since there are no signs that the U.S. will resume tests, there is hope that the moratorium on testing will continue.”

4. Russia’s economy is apparently withstanding sanctions

During his address, Putin made the point of stressing that Russia was standing up to the onslaught of Western sanctions, and Russian economic indicators only confirm this.

Putin pointed to the latest data on the contraction of Russia’s economy as evidence. Rosstat, the state statistics bureau, was originally due to publish its figures after the speech but, “for technical reasons,” the release of data about the fall in GDP in 2022 was brought forward for Feb. 20, the day before the address.

Putin said that in 2022, GDP fell 2.1%, showing that Russia’s economy was managing the emerging risks. Under last year’s sanctions, the Russian economy performed better than during the height of the Covid-19 pandemic in 2020, when it fell by 3%.

However, these figures do not tell the whole story. For example, the sanctions have taken away Russia’s access to technological products. As a result, the country is simplifying its products. Car-maker AvtoVAZ is now manufacturing “simplified” Lada cars without anti-lock braking systems or airbags. Meanwhile, the slight decline in GDP was driven, in part, by increased military production and redirecting exports to Asian countries.

5. “They started the war”

Putin also attempted to explain why Russia went to war in Ukraine. “I want to repeat: they started the war, and we used and continue to use force to stop them,” the president said. He accused the “Kyiv regime” of trying to obtain nuclear weapons and alleged that NATO and the U.S. were preparing an “enslaved” Ukraine for a “major war.”

Putin did not specify the aims of the war, nor the definition of victory. However, his speeches make it clear that the war is the new normal and a permanent reality for Russian society, journalist Maxim Trudolyubov said. The war is now presented as a way to get a worthwhile job with decent pay (the authorities promise that contracted servicemen can earn at least 195,000 rubles, or $2,565, per month, several times higher than the average Russian salary), and there is now a provision for statutory leave as required. In his speech, Putin pledged to give serving military at least 14 days’ leave every six months.

In Putin’s opinion, there is no longer any way back for Russia because the West is seeking to spiritually destroy the Russian world and deploying “aggressive sanctions,” said political analyst Tatiana Stanovaya. The Russian president made it clear in his speech that the war will be long, but that it can never end with a Russian defeat, she added.

Why the world should care

On the anniversary of his war, Putin could not explain to Russia’s elite, or its regular citizens, why the war in Ukraine was necessary — nor, more importantly, when and how it might end. For Russia, the war is now a permanent reality, the consequences of which still need to be financed in the face of a growing budget deficit and ongoing sanctions.