Russian soldiers in Ukraine: press service of the Russian Defence Ministry / AP
Almost three years after the start of Russia’s full-scale invasion of Ukraine, the war has turned into a cruel business for many Russian families. State payments for fallen soldiers are becoming not only a way to support families, but also a kind of incentive that forces people to make cold calculations.
Russian economist Vladislav Inozemtsev, quoted by Fortune , estimates that the family of a 35-year-old man who was drafted for a year and died during the mission will receive about 14.5 million rubles ($150,000) in salary and death benefits, according to estimates published in The Wall Street Journal. And this does not include insurance payments and premiums.
“From an economic point of view, a life that ends at the front in a year is more profitable than the prospect of a long life,” Inozemtsev said.
Deposit growth and paradoxical prosperity
This trend is particularly noticeable in regions with high poverty rates, such as Tuva and Buryatia. Bank deposits in these provinces have increased by 151% and 81% respectively since January 2022, coinciding with the escalation of the war. According to the WSJ, total payments for fallen soldiers have reached $30 billion, which has affected overall poverty statistics: the level is now the lowest since 1995.
However, this illusion of prosperity masks deep economic problems. Inflation in Russia exceeded 10% in September, with food prices, particularly potatoes, up 73% since the beginning of the year. The central bank was forced to raise its prime rate to 21% in an attempt to contain financial instability.
Personnel shortage and the shadow of North Korea
According to Western estimates, more than 600,000 Russian soldiers were killed in the war in Ukraine. To replace the losses, Moscow needs at least 30,000 new recruits every month. The depletion of human resources is so critical that the Kremlin has even asked North Korea for help in the form of military reinforcements.
In addition, competition for labour between the army and the private sector only exacerbates the situation. Weapons factories are forced to raise wages to retain employees.
Will the economy hold up?
Despite large-scale military spending, Russia’s economy is showing signs of deep instability. Depleted resources, international sanctions, and domestic economic imbalances lead experts to predict that the war in Ukraine could drag on beyond 2025.
At the same time, questions are being raised in society about the price Russia is paying for continuing the war. Can the “death economy” become the basis for the future, or will it leave the country on the brink of economic collapse?
