Even if the battles stop in Ukraine, the economy her Russia It may never get out of the battlefield, according to Bloomberg.
Massive defense spending of recent years have “trapped” Russia into a state of militarization that has transformed the factories and absorbed hundreds of thousands of workers. This increase has contributed to preventing the shrinking of the economy, making retreat dangerous.
President Vladimir Putin does not show no disposition. He believes that there is a constant need for a well -equipped Russian military force – something that Western leaders fear that he could launch NATO within five years – and wants to incorporate the thriving defense industry into his long -term vision.
While he prepares his plans and Europe spends billions on the modernization of its armies in response, the question is what will happen to the over -supply of battle tanks and missiles produced by Russian factories.
Moscow could turn what is currently a budget for a sustainable source of revenue, selling weapons to allies such as China. However, as they accumulate on the eastern border of NATO, destabilizing relations with Europe, they are in danger of being a burden on an economy already facing sanctions, an unstable banking system and slowing growth.
Putin himself, during a visit last week at Russia’s oldest defense equipment factory, showed looking beyond the possible end of the war, stating that “demand for modern armed forces will not end there”.
The increase in Russia’s military production is impressive. Prior to its complete invasion of Ukraine in 2022, she had planned to deliver about 400 armored vehicles next year. Now it delivers 10 times more.
It is also innovative, as it began its own production lines for drones, as they became an integral weapon in the conflict. It was initially based on imports from Iran, but last year it produced 1.5 million drones – from 140,000 in 2023.
However, the cost of the war was also huge. Defense spending between 2022 and 2024 amounted to at least 22 trillion rubles ($ 263 billion), according to official data available. And spending shows no sign of reduction over the next three years, leading to annual deficits in a budget already pressured by sanctions.
Russia can look at the consequences of World War II to find evidence of how its enlarged military factories are exploited: the transition of the Soviet Union in a state of war in 1941 laid the foundations to become a leading world -renowned weapons after the end of the Ecclesi.
“The war between Russia and Ukraine has become a huge field of testing for new weapons and technologies,” he said. After the war is over or passed through a pause phase, “both countries are likely to export technology and equipment that proved to be more successful.”
Already the second largest weapon supplier on the planet after the US before the attack in Ukraine, Russian sales have only been reduced in recent years, as it used what produced in the campaign against its neighbor. Now, there is evidence that it can recover.
The defense industry is again involved in weapons exhibitions in India, China, the Middle East and Africa. For the first time in six years, Russian weapons were presented at exhibitions in Malaysia and Brazil. Offers cover the full range of military equipment. Technology transfers and common production are also on the table.
Rosoboronexport, state -owned weapons exporter, which manages about 85% of foreign sales, says accumulated demand has led his orders to a record of $ 60 billion, providing factory -guaranteed demand and long -term contracts.
Russia could export military equipment worth $ 17 to 19 billion dollars per year in the first four years after the War in Ukraine, according to estimates by the world’s world -recession analysis center, which highlights the interest of the US countries.
“Demand for Russian weapons has almost disappeared,” said Anna Bobskaya, a senior researcher at the Washington Near East policy. “Officials in the Middle East and North Africa would even consider a limited or temporary agreement with Ukraine as a green light to quickly exploit new supply chains
An incentive, he says, is the price, as the increase in production volume has led to significant scale economies, with some products cheaper than before the invasion.
The strategy is not without flaws. Rosoboronexport’s order book, despite representing a sizable cushion should government spending be trimmed, is still less than half the annual defense budget. And some potential customers could face pressure from the West, akin to Donald Trump telling India to cease purchases of Russian oil.
What’s more, while military plants will continue operating — providing employment and contributing to economic expansion — layoffs and pay cuts are possible, according to Oxford Economics’s Orlova. Exports won’t generate sufficient demand to keep facilities running around the clock as they do now, she said.
Putin insists that Russia spent money on the production of military equipment has not been lost and has stated that he realizes the challenge he has in front of him. To help with the forthcoming transition, it supports not only the increase in weapons exports, but also the closer cooperation between defense and political businesses.
In his view, so -called dual -use production should already be possible for components in areas such as shipbuilding, aviation, electronic, medical equipment and agriculture.
For Putin, however, the dominant factor in making his decisions will be to maintain an army ready for battle, which can be based beyond his current mission – which means that Russia’s upgraded capacity is here to stay.