WORLD WORLDWIDE ITALY News Journal Update - (en) Italy, UCADI, #181: Russia: the stability of the internal front (ca, de, it, pt, tr)[machine translation]

Suddenly the regime press and the big newspapers seem to have realized
that the war in Ukraine is not going as it should have gone. Not only
did the Ukrainian offensive fail, but the Russian army held on and
indeed on many occasions went on to counterattack: they noticed it too!
It is therefore natural to ask what is happening, since it appears that
Russia is winning the Ukrainian war . The key to understanding what is
happening is not the events taking place on the front, because in fact
this is, as a whole, rather immobile due to the winter, the frost and
the ice which block military operations, but rather from what is
happening on the Russian domestic front: this is where Russia is winning
its battle.
The West, in launching the sanctions, had thought through this
instrument of bringing the Russian economy to its knees, severing its
relations with the markets, depriving it of capital and technology
contributions, creating an economic and "cordon sanitaire" that would
have suffocated the country. This was not the case and not only because
Russia found other markets for its oil and energy sales, albeit having
to pay the price of renouncing to profit from the use of structures such
as gas and oil pipelines that were cost enormous investments, but
because the country was able to reorient its oil and gas exports towards
the Chinese market and economy which is so in need of energy and the
Indian one which is equally so. Of course, it will take time for the new
oil and gas transport plants to become fully operational, but the
direction taken promises generous profits and a more secure allocation
of the product. The development of the BRICS initiative has supported
Russian choices and has successfully increased their number and their
economic and political weight, despite Argentina's latest defections,
and Russia has also benefited from its policy within the OPEC and the
relations it maintains with the oil-producing countries which have
allowed it to exceed the production and sales quotas assigned to it,
finding support and complicity for
sales triangulations in its product, despite having to tolerate selling
it at a lower cost or by paying commissions.
But that's not all: the Russian economy as a whole is doing well. The
country led by Vladimir Putin seems to have recovered after the fall in
GDP in 2022 (-2.1%), caused by the sanctions approved by Kiev's allies
after the invasion of Ukraine. The Russian recovery in 2023 is the
result of the robust growth that occurred already in the first half of
the year in the retail, construction and industrial production sectors,
due to a strong fiscal stimulus decided and organized by the President
of the Central Bank Elvira Nabiullina. What was unexpected was the
overall development of
Russia's GDP: from a very recent document from the International
Monetary Fund, dedicated to Russia (Article IV Staff report of 14
December 2023) the Russian GDP in 2023 is quantified at 129,182 billion
rubles, equivalent to 1.702 billion dollars; inflation continues to bite
in Russia and the consumer price index may have reached 8% in 2023,
while in the United States and Europe it has tended to be 6% (the real
one). The banking situation is more difficult: the Russian central bank
raised rates to 15% in October. However, the increase in inflation goes
hand in hand with the recovery of Russian GDP. After the (just
mentioned) drop of 2.1% in 2022, in 2023 Moscow's economy showed signs
of resilience, despite Western sanctions to the point that in the third
quarter the rebound was 5% compared to the same period of 2022, when a
decline of 3.5% was recorded. This year, growth could exceed 3.5% - 4%
according to Russian sources, while the IMF estimates the 2023 increase
at +1.5%, in any case more than Italy and Germany.

The growth of the real economy

But how to explain the growth in retail trade, construction and
industrial production. It was certainly facilitated by strong fiscal
stimuli and by the policy of the Central Bank, which conducted
intelligent credit management, realizing the weight of a structural
phenomenon that characterizes the Russian economy: the desire for
enterprise. To understand what happened, we must take into account the
fact that before the start of hostilities, Russia had opened up to the
markets and the country had seen the growth of investments in services,
in the restaurant industry, in the civil economy (by this we mean the
non-military one) which has always been neglected by Russian rulers. For
these reasons, the country is becoming a promising market in which to
make profits through the supply of consumer goods and services. The
sudden withdrawal of Western companies, imposed by sanctions, has
produced at least two phenomena: some Western investors have sold their
businesses to local frontmen and continued their economic activities,
others have sold their production and commercial networks to local
entrepreneurs and oligarchs built during the years of commercial
economic penetration in the country. When the shortage of goods
necessary to carry out these activities appeared, the Russian production
system managed to respond by producing the goods requested by the market
at an indigenous level.
An example: it is known that in recent years a network of Italian
restaurateurs has been created in Russia or at least restaurants that
serve Italian cuisine for which certain products are necessary, such as
pizza for which mozzarella is necessary. Well, the Russian dairies have
decided to cover that market segment, producing what is requested,
making investments and purchasing plants, acquiring technologies and
professionalism. This mechanism has been repeated almost everywhere in
the country and in every sector, producing a flourishing of investments
that have stimulated industrial production and trade.
Furthermore, the recruitment and sending of thousands of men and women
to the front led to the payment of wages 10 times higher than those paid
to a worker living in the peripheral regions, so we can speak of the
presence of "war capital". " which was invested by those who stayed at
home in investment activities.
Naturally, the war economy also grew, seeing an increase in investments
of 70% and returning to the levels of the 1980-1990s, reaching the
figure of 10,800 billion (equal to 109 euros), equal to 6% of GDP.
Russian, used to revive the production of ammunition, tanks and drones,
(considering that only in 2023 the army
Russian used more than two million artillery shells (double the previous
year) and replaced more than 10,000 destroyed or damaged vehicles. But
what is most interesting is that a large part of these resources is
intended to remunerate the soldiers and compensate the families of the
fallen, transforming themselves into "widespread capital."

Consent to war

It is certainly true that despite everything there is widespread
resistance to the war which, however, mainly concerns young people from
the cities and members of wealthy classes. As is known, the opposition
to Putin is very weak in the country and the repression is heavy and
takes place according to differentiated methods in the sense that
gatherings are hindered and repressed through careful monitoring of
online calls for demonstrations, arrests are carried out with
discretion, avoiding creating victims or underlining the role of some
opponents such as musicians and rappers who could represent points of
reference for other young people. However, when repression hits, it is
very harsh and can last up to 7 years of stay in the penal colonies,
located in the most remote parts of the country.
It is obvious that in these conditions the opposition to the war is
scarce, also because we must add to the coercive force of the government
the propaganda carried out by the Russian Orthodox Church present in a
widespread manner throughout the country which, as Patriarch Kirill did,
leaves no opportunity to underline the ethnic and religious nature of
the ongoing conflict, highlighting the persecutions carried out by
Ukrainians against the canonical Ukrainian Orthodox Church, linked to
the Patriarchate of Moscow. Despite this, many people left the country
for Georgia,
crossing the Finnish border before it was closed, and using economic
resources that are not the prerogative of many. It is certainly true
that recruitment patrols circulate around the country, enter public
places frequented by young people and on many occasions force compulsory
conscription, but it is also true that the regime draws not only on
prisoners, promising them forgiveness in exchange for service in the
army, but it has at its disposal a pool of 144 million inhabitants, many
of whom live in remote centers of the country, to whom it can send the
invitation to join the army,
sometimes accepted for patriotic reasons, but often for economic reasons.
It should also be added that the popes present widely in the Russian
province function in fact as recruitment offices for those most
disadvantaged sections of the population who can see the provision of
military service as an economic opportunity to make a change in their
living conditions, investing in the war. In other words
due to the very size of the country and its configuration, Russia has a
pool of recruits from which to draw to feed the front. From this point
of view, the passage of time and the duration of the war, contrary to
popular belief, work in Putin's favor and certainly not in Ukraine's
favor because the Russian army needs time to recruit and educate, to
prepare for combat enormous masses of men and women that he can pour
onto the battlefield.
The agreements with North Korea and Iran for the supply of armaments
have strengthened the Russian production apparatus which has been able
to pour further fresh capital into the development of the war industry
which has fueled its capabilities, inducing it to innovate and refine
the war apparatus with increasingly advanced production, intended to
meet the needs of the front. Conversely, Western countries and the
European Union, by investing in armaments, have taken enormous resources
away from economic and social investments, proof of which is that
the agricultural sector is entering a crisis which is suffering the dual
effects deriving from the increase in taxes necessary to cover the
budget gaps, and the competition that Ukrainian production, especially
of cereals sold on the community market, have caused, causing
significant damage to the budget of the peasant world.
 From these sets of elements we obtain a picture of the substantial
stability of the Russian internal front, while the Ukrainian one is
progressively crumbling under the blows of a physiological and natural
reduction in funding coming from the West, of the growing decrease in
the number of men and women mobilizable for fight, of a Western
production of munitions not capable of meeting the needs of the front.
Add to this the contingent economic and political situation of the
United States where, due to internal clashes, funding for the war in
Ukraine seems to be declining. In this situation only Great Britain
remains engaged in war until the mounting disasters of its economy and
social situation engulf the country.

The Editorial Staff

Ukrainian war and the arms market

It is not often that anarchist communists appreciate a Pope of the
Catholic church, but this time we must join him for a reflection on the
arms market.
We agree with him that war represents good business for arms
manufacturers who make enormous profits from their activity. But having
said this, it is appropriate to ask ourselves what is happening on the
arms market, today when the Ukrainian war constitutes a formidable
advertising spot for these sellers of death.
Commentators on the progress of the war point out that the production of
bullets and weapons in the West is having difficulty keeping up with the
competition of Russia and its allies in having deadly weapons to fuel
the massacre. However, things are not exactly like this: on the Russian
side there is no doubt that, with the passage of time, the production
capacities of the war industry have grown and will grow even more,
therefore the longer the war lasts the more the Russian production
system will be in capable of pouring weapons onto the market. Russian
production was joined by that of North Korea and
Iran, supplier of drones; China would collaborate - it is said - by
triangulating high-tech components for missiles and intelligent weapons.
This production is such that it overwhelms that of Western countries,
especially as regards the production of ammunition.
In the Western field, the largest producers of weapons are notoriously
the United States, followed by France and in a good position by Great
Britain. Well, taking advantage of the war, the industries of these
three countries took over from Russian producers on the arms market,
supplying weapons systems to countries that requested them, alerted and
alarmed by Russian initiatives. In fact, if we look at the budgets of
the various states, demand has grown and all or almost all of them have
increased their budgets in relation to the resources allocated to the
purchase of deadly devices. Western industries are
taking advantage of this to market their goods and take over from
Russian producers, taking away their customers and market shares and
therefore do not have sufficient production to feed the Ukrainian
customer who, all things considered, is a poor, subsidized customer ,
which depends on the red budgets of the European countries and of the
rebellious US ally which, finding itself in the contingency of the
elections, pays the bills with difficulty.
However, there is no need to worry: the Ukrainians can continue to go to
the massacre calmly and now the war can even end because a new
slaughterhouse has been opened in Gaza and Israel is a good butcher and
pays for the supplies it receives either directly or through through the
Americans.
It's a shame that the Ukrainian and Russian peoples have to pay the
price, pushed into a fratricidal war in the name of the geostrategic and
economic interests of the United States and Great Britain to put Europe
in economic crisis.

Rocco Petrone

https://www.ucadi.org/2024/01/23/russia-la-tenuta-del-fronte-interno/
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