Russia’s War in Ukraine

Understanding the conflict four years on.

Pity Russian savers. In June, the Russian Finance Ministry announced its support for draft legislation to transfer nearly $40 billion in private pension savings into government coffers. Later that month, Russian Communist Party leader Gennady Zyuganov encouraged President Vladimir Putin to make the most of the almost $1.8 trillion that Russian firms and individuals hold in bank accounts to support state finances. According to Zyuganov’s calculations, “that is three state budgets … sitting there and enriching bankers.”

Pondering whether the Russian economy will collapse is in fashion these days—but that may be the wrong question to ask. The better question is which sources of politically affordable money the Kremlin can still tap to finance military expenses while maintaining social stability. True, many Russians got richer during the war’s first two years—wages surged, military factories created plenty of jobs, and signing bonuses for new soldiers flowed to the poorest regions. Yet that redistribution machine is now grinding to a halt as the Kremlin is fast exhausting all the money pots it can easily access.

Pity Russian savers. In June, the Russian Finance Ministry announced its support for draft legislation to transfer nearly $40 billion in private pension savings into government coffers. Later that month, Russian Communist Party leader Gennady Zyuganov encouraged President Vladimir Putin to make the most of the almost $1.8 trillion that Russian firms and individuals hold in bank accounts to support state finances. According to Zyuganov’s calculations, “that is three state budgets … sitting there and enriching bankers.”

Pondering whether the Russian economy will collapse is in fashion these days—but that may be the wrong question to ask. The better question is which sources of politically affordable money the Kremlin can still tap to finance military expenses while maintaining social stability. True, many Russians got richer during the war’s first two years—wages surged, military factories created plenty of jobs, and signing bonuses for new soldiers flowed to the poorest regions. Yet that redistribution machine is now grinding to a halt as the Kremlin is fast exhausting all the money pots it can easily access.

Private capital was the first money pot that Moscow turned to in order to finance the war, starting with confiscations. A tally from Cedar, an outlet run by exiled Russian economists, shows that prosecutors filed claims to seize assets worth........

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