Today the feeling has changed a lot. Business leaders, officials and ordinary people tell me that the economy has stabilized against Western sanctions that were once expected to have a devastating effect. They say Putin’s regime appears more stable than at any time in the past two years.
Restaurants in Moscow are packed. “The restaurant market is growing not only in Moscow, but throughout Russia, which is the growth of domestic tourism,” said a senior Russian restaurateur. “The quality of the food is also changing for the better. A shock hit the industry in early 2022, but quickly passed.
Real estate prices are increasing, and construction is increasing. In early 2022 Most international brands have left RussiaLeaving empty storefronts in malls and streets. The CEO of one retail chain told me that now the vacancies are filled by Russian comrades. Putin’s spokesman Dmitry Peskov Received recently Russia’s economy has faced “threat of collapse” in the months since the invasion, but the country has now reached its worst stage, he said.
Before the war, Russian business executives generally put their savings in the West. They sometimes buy real estate properties that serve as second homes for their families. Now, a Russian oligarch told me, that door has closed, prompting a boom in investment at home. The only option left for investors is to invest their money locally. Major construction projects are underway in places ranging from the Altai Mountains in eastern Siberia to Karelia on the border with Finland. In September, Bloomberg reported on the Russian oligarchs At least 50 billion dollars returned From the invasion to Russia. According to the people I interviewed, that estimate is very modest.
Russian industry is growing. Defense companies are leading the way, some are expected to show More than 30 percent growth this year. Moscow It continues to sell oil and gas. For foreign buyers – not only China and India European countriesas well as; Most of these customers easily Buy Russian petroleum through intermediaries Like Turkey, Azerbaijan or Egypt. The West may have succeeded in most of its dealings with Russia, but Moscow’s trade with the rest of the world is also important. It’s picking up..
The Cold War isolation of the Soviet Union did not repeat itself. Putin’s Russia can get most of the supplies it needs from China. For many Moscow residents, the most striking change on the streets is the mass replacement of Western cars with Chinese models.
After the invasion, the International Monetary Fund Estimate In the year In 2023, the Russian economy will shrink by 2.3 percent. In January 2023, the IMF revised its forecast; Predicting growth 0.3 percent. He changed his forecast at least two more times during the year; In October, he Finally, it was set at 2.2 percent.
The sanctions have left Russian business leaders with no choice but to stay at home. Even those who wanted to stay in the West and help Ukraine were punished – like the banker Oleg Tinkov He condemned the war. And he even renounced his Russian citizenship, but was hit by sanctions. (He finally They succeeded in making them rise (a few months ago.) The tycoon Mikhail Fridman, founder of Russia’s largest private bank; Criticize the war carefullyIt is only to find himself briefly caught up It was hit by British authorities and American sanctions. A few weeks ago, Friedman gave up, first leaving his London home for Tel Aviv. Then finally return to Moscow.
Friedman’s return had a symbolic effect on the Russian business elite: he convinced them that the West saw them only as enemies. That means the only way to survive is to cooperate with the Kremlin, because unlike the West, Putin has not yet punished any business leaders, even those who oppose the war.
It is the war in the Middle East that has convinced Russian business leaders that Putin is winning. According to them, public opinion in the West is moving away from Ukraine. Putin, on the other hand, will strengthen his position in the Global South. His words are the United States He is responsible for the crisis in Gaza. Talk to millions of people around the world.
As for the war, the authorities are focusing their efforts on the poorest regions of Russia and finding recruits with promising wages. 10 times on average. Putin still has money in his coffers, which means he won’t be running out of cannon fodder anytime soon.
Russian elites are well aware that the regime still has many weaknesses. Russia is still unable to produce many of the goods it needs, and it is difficult to get them from its friends. A businessman told me that airlines are going to shut down soon because they don’t have spare parts for their passenger planes.
Even so, the change in public opinion is undeniable. 20 months ago, Russian pundits were convinced that the long-reticent Putin had finally overplayed his hand and would pay a heavy price for his miscalculation.
Now many seem to have changed their minds. As the Russian president sees it, they have shown that they are here to stay.
