The war in Ukraine and the regional divergence in Russia:
It will be a long war
Hostilities can be localised or interrupted with ceasefires, that Doesn’t matter. The fighting will resume again. And again
Contrary to the popular opinion, it will be Russia that breaks first.
Russian regime is hard and fragile Regimes in general always consists of courtiers and barons: central and regional elites, Courtiers have the upper hand when the regime is strong, barons – when it’s weak
Many courtiers have personal interest in military victory but barons don’t. You can’t judge official’s view by his public stance. That’s dumb. Only private stance matters
Lots of courtiers over the age of 35 years genuinely support the war
Almost no regional barons genuinely support the war. But there’s a major exception in the Southern part of Russia The war led not only to the general economic downturn, but also to the massive regional divergence in Russia
Most of the regions lose, but they lose unevenly
In the past the center was an arbiter, redistributing resources from winners to losers. Now it won’t. Biggest Losers in European Russia:
Large industrial & machinery cluster on Volga. Tatarstan, Samara, Ulyanovsk
The window to Europe in the Northwest. St Petersburg, Karelia, Pskov The North. Arkhangelsk and the ancient Pomorye country. The old window to Europe.
One of the biggest economic losers in Russia is the major machinery cluster on Volga. Tatarstan, Samara, Ulyanovsk are three regions with very similar economic model. They focused on improving the investment climate and attracting the FDIs. Obviously, they are being obliterated
Another loser is the North, which broadly overlaps with the borders of Pomorye land. Until 1703 it was the richest, the most commercially oriented part of Russia and of course the main taxpaying region. Even now Arkhangelsk was one of the most FDI-dependent regions in the country Finally, it is the modern window to Europe, the Northwest that is especially affected employment-wise. St Petersburg economy was heavily oriented to Europe and those of nearby regions – on Europe and the megapolis of St Petersburg Winners will be Agrarian producers. With the food prices increased agrarian barons of Krasnodar region or Rostov region may have even benefitted. Plus they’re involved in plundering Ukraine
Cannon fodder suppliers. Dagestan or Astrakhan are doing well, because the extra males went to Ukraine.
We see a massive regional divergence in European Russia. Baronial groups that focused on the machinery or the FDI attraction lose massively. However, the barons of the poorest regions may even benefit by selling their surplus population as the cannon fodder to Putin And yet, cannon fodder suppliers group that was interested in prolonging the war were the agrarian barons of the South. First, they obliterated their Ukrainian competitors. Second, they were involved in plundering Ukraine
Third, they benefited from the food prices going into the stratosphere till this month. They had every reason to support the policy of Kremlin. And yet, now food prices are crashing. Which means their export profits will decrease and even worse, expropriated by Kremlin
With prices on almost all commodities dropping Kremlin will be forced to expropriate the export earnings of southern agrarian barons. It could let them cash out when the oil was expensive but now it just can’t afford that. Which means agrarian barons will join the ranks of losers
Which leaves Kremlin with the only baronial group having a genuine interest in supporting its policies. The cannon fodder suppliers. But their loyalty is assured only for as long as the Kremlin can pay them. With the commodities going down, This is far from what putin guaranteed to the people of Russia.
