Russia’s war economy is facing major obstacles nearly three years into the country’s conflict with Ukraine, but the most painful roadblock to its ambitions could be coming from within its own armed forces.
Russian Prosecutor General Igor Krasnov told state media on Monday that Russia had disciplined more than 30,000 soldiers for corruption, including bribery. Corruption crimes have soared 30% this year compared with 2023, Krasnov said.
Of the 30,000 disciplined for corruption, he added, 500 had been fired for a “loss of trust.”
Corruption, alongside Russia’s economic struggles and a waning defense industrial base (DIB), are being pinpointed by experts as key obstacles to the country sustaining its war with Ukraine.
“Russia’s mounting economic pressures stemming from the war, paired with widespread corruption, labor shortages, and inefficiencies in Russia’s DIB, will likely compound the cost of Russia’s war and further undermine its ability to effectively sustain DIB operations while maintaining economic stability,” said the Institute for the Study of War think tank.
The country’s economy has become increasingly precarious as its war with Ukraine has rumbled on with little sign of a resolution. Donald Trump’s reelection to the White House has given the Kremlin hope that a peace deal favorable to Russia could be ironed out in 2025.
Russia plans to spend a third of its 2025 budget on defense as part of its ongoing efforts in Ukraine, an increase on its 2023 spending. The country has been emboldened by advances in eastern Ukraine in recent months.
To ensure the country is spending that budget effectively, President Vladimir Putin has cracked down on corruption by military officials. In June, the Washington Post reported that Russia had arrested five top officials since April, largely related to corruption charges.
However, it appears corruption runs more deeply, with tens of thousands of troops facing discipline for dishonesty or fraudulent conduct.
Russia’s waning economy
Russia is now in a race against time to conclude the war before its economy starts to go into steep decline.
The ruble went into free fall at the end of November after the U.S. Sanctioned 50 Russian banks. The country managed to largely reverse the slide after halting all foreign currency purchases for the rest of the year.
Herman Gref, CEO of Russia’s state-run Sberbank, said Russia’s economy showed “significant” signs of a slowdown in some sectors, with interest rates leaping to 21% and inflation running at twice the central bank’s 4% target.
On Saturday, U.S. Defense Secretary Lloyd Austin said Russia had suffered 700,000 casualties in its war and “squandered” more than $200 billion in spending.
“Russia has paid a staggering price for Putin’s folly,” Austin said.
In November, academics in Foreign Policy magazine pointed out Russia was losing 320 tank and artillery cannon barrels a month against a production rate in Russian factories of 20 per month. This could lead to the country running out of barrels in 2025 as it harvests old Soviet stockpiles, they said.
“Russia cannot continue waging the current war beyond late 2025, when it will begin running out of key weapons systems,” the authors wrote.
