The Economic Consequences of Putin’s War

This article addresses the issues related to the sanctions that the United States, along with the European Union, the United Kingdom, Canada, Australia, Japan and a few other countries have imposed on Russia in retaliation for its invasion of Ukraine. We will highlight how the decision taken by Vladimir Putin risks plunging Russia into isolationism and into a cycle of impoverishment that could cause it to revert to the miserable levels it was at 30 years ago with the end of the Soviet Union. We will also try to perceive what geopolitical order is emerging and evaluate all these factors  from the perspective of the Church’s social doctrine.^[1]

We are facing two unequal wars

After months of Ukraine’s iron resistance, it is less and less surprising that the country is managing to resist valiantly and has dashed the prospect of a rapid victory by the Russians. The extinct Soviet Union, ruled by Leonid Brezhnev, found its Vietnam in Afghanistan. The Russian Federation under Putin seems to have repeated the mistake in invading this significant former Soviet republic.

The military potential of the two adversaries on the ground is manifestly unequal, with a striking imbalance in Russia’s favor. Both armies derive from the Soviet Union’s Red Army and have inherited its arsenals, structure and tactics. But Ukraine had to hand over its nuclear weapons to Russia, and the Kremlin chose to take over the port of Sevastopol, in Crimea, after the division of the fleet. Today, the Russian army seems to be modern, agile and mobile. Since the Cold War, it has focused largely on long-range attack systems. Both contenders have powerful land forces, but Moscow’s troops are more numerous and have more modern weapons than those of Kyiv.^[2] According to data provided  by Janes Intara,^[3] one of the most important specialized media involved in the defense sector, these are the force ratios between the two countries: budget (in billions of dollars): Ukraine 4.1, Russia 45.3; soldiers (active, not counting reservists): Ukraine 219,000, Russia 840,000; combat aircraft: Ukraine 170, Russia 1,212; attack helicopters: Ukraine 170, Russia 997; tanks: Ukraine 1,302, Russia 3,601; self-propelled artillery and anti-aircraft batteries: Ukraine 2,555, Russia 5,613. The disproportion between  the military forces is so evident that it led some to think that for the Russians the invasion would be a blitzkrieg, a lightning war, a short and overwhelming offensive to be concluded in the space of a week at most. Recall that the Nazi invasion of the Soviet Union began on June 22, 1941, and by June 30 the Wehrmacht had already taken Kyiv.

As far as economic power is concerned, Ukraine is the second largest state in Europe, with 603,628 sq. km. of territory, smaller only to Russia, and a year ago had 41.4 million inhabitants, with a modest standard of living reflected by its GDP, 57th in the ranking of countries.^[4] Russia has an area of 17,098,250 square kilometers and is the largest country in the world; its population amounts to 146,171,000. Surprisingly, its economic power does not match this. Its GDP in figures is 1.7 trillion dollars, slightly higher than that of Spain, and is equivalent to 10 percent of the production of the EU. In the world ranking of annual per capita income, with 8,846 euros Russia in 2020 was ranked 67th.^[5]  

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