Within a year, Russia will have to make a “fateful choice” between ending the war and depriving Russians of their remaining freedoms - IISS

Russia is losing economic stability as the war in Ukraine continues, a report from the London-based International Institute for Strategic Studies (IISS) shows. According to the report's author, senior fellow for Russia and Eurasia Nigel Gould-Davies, within a year the Russian authorities will have to either radically increase pressure on society, switch to Soviet methods in the economy and, possibly, declare mobilization, or moderate military ambitions in Ukraine.

Details . The Russian economy has almost exhausted its production capacity and faces a record labor shortage, the report says. The author of the document notes that the shortage of personnel in the economy is 2.3 million people. A situation of “dual economy” is being created, with overheated military production and stagnation in the civilian sector, he notes.

• ️ The current model, in which the state does not force citizens to fight, but attracts them with high market payments, is beginning to fail, writes IISS. Data from Western officials and the Ukrainian Defense Ministry shows that the influx of volunteers over the past four months is not replacing losses on the battlefield, while the quality of recruits is declining, the report notes.
• ️ Quote: “In the coming year, Russia will face a fateful choice: if it wants to continue the war, it will have to make decisions about a much more systematic extraction of the resources needed to fight. Financial incentives alone will not help. Soviet-style administrative measures will be required. Increasingly tough enforcement measures will be needed to sustain Russia's gains on the battlefield,” Gould-Davis said during the report's oral presentation.
• ️ To continue the war, Russian authorities will likely have to switch from market methods to a command economy, which will mean dismantling the last civil liberties, according to IISS. In this case, the authorities will have to limit the freedom to choose a place of work and the right to leave the country. Also, according to Gould-Davis, government control over assets may be strengthened and taxes may increase.
• ️ In addition, Gould-Davis does not rule out that Moscow will need to announce another mobilization.
• ️ The transition to a new economic model and a mobilized society carries risks for the authorities, and they have already begun preparations to suppress potential discontent, according to IISS. As such preparation, the author noted a sharp increase in Internet restrictions and control over VPN.

Context . The International Institute for Strategic Studies (IISS) is a leading think tank on international security, military strategy and geopolitics, founded in 1958 in London. Leading Western media refer to the assessments of this institute and its experts ( 1 , 2 , 3 ).