In the wake of Russia’s invasion of his country in February 2022, Ukrainian President Volodymyr Zelenskyy pleaded with Western countries to leave Russia. Hundreds of U.S. and EU-based companies heeded his call to “make sure that the Russians do not receive a single penny,” with Western politicians reportedly predicting that the exodus “would help strangle the Russian economy and undermine the Kremlin’s war effort,” while Yale’s Jeffrey Sonnenfeld and his four co-authors declared that “business retreats and sanctions are catastrophically crippling the Russian economy.” Predictions of Russia’s economic meltdown continued into 2023, with the New Republic diagnosing Russia as “going broke fast” and Business Insider editors describing Russia’s economy as “spiraling.” The future has looked dim even to some of the lead players in the Russian economy. One of Putin’s own oligarchs, Oleg Deripaska, predicted in March 2023 that Russia may run out of money in 2024 and would need foreign investment to prevent that. 

Fast-forward to 2024, however, and you will find that Russia’s National Wealth Fund contains 228 billion Chinese yuan, 335 tons of gold and 1.65 billion rubles in what totaled some $135.7 billion as of April 2024. Moreover, this year saw Russia post a consolidated budget surplus of 559.6 billion rubles ($6.3 billion) in January–May 2024, with its national debt under 20% of GDP.   

Not only is Russia far from being penniless, its economy is growing, prompting both the World Bank (WB) and International Monetary Fund (IMF) to revise upward their forecasts of Russian GDP growth. The WB now sees the Russian economy growing by 2.2% this year rather than 1.3% as it has previously predicted. Meanwhile the IMF expects Russian GDP to grow by 3.2% rather than by 2.6% as previously predicted. If the IMF’s forecast holds, then Russia’s economy will have grown faster than all advanced economies, including Germany (0.2% growth expected by IMF in 2024), the U.K. (0.5% growth expected by IMF in 2024) and the U.S. (2.7% growth expected by IMF in 2024).

Estonian Prime Minister Kaja Kallas was quoted on Jan. 17, 2024, as saying that every member of the so-called Ramstein group should channel the equivalent of 0.25% of their gross domestic product to Kyiv annually, which “would raise at least €120 billion ($131 billion) and swing the conflict in Ukraine’s favor,” according to Bloomberg.

In her claim, Kallas did not list members of this group, which is officially known as the Ukraine Defense Contact Group (UDCG), only noting that the group comprised more than 50 countries, including all 31 members of the North Atlantic Treaty Organization. Thus, we contacted Kallas’ staff to ask for the list of members. The prime minister’s office referred us to the Wikipedia page, and advised contacting the press service of the U.S. Department of Defense, which typically hosts the group’s meetings at the U.S. Air Force’s Ramstein air base in Germany (thus, the informal name of the group), for an official list. In response to the RM inquiry, Pentagon spokesman Maj. Charlie Dietz identified 43 countries (44 including Ukraine) as members of UDCG, listed below in Table 1.

Having ascertained the number of group members, as calculated by the Pentagon, we then totaled 0.25% of their GDP for 2022, as measured by the World Bank in constant (and, thus, inflation-adjusted) dollars. The resultant sum equaled €117.87 billion ($128.3 billion) (see Table 1). That comes close to Kallas’ estimate, even though she stated that the group includes more than 50 countries, while Pentagon spokesman Dietz identified only 43 members of the group. For our calculation, we rely upon the number supplied by the Pentagon, as the UDCG is led by the U.S. Given the discrepancy between the Pentagon spokesman’s number and the prime minister’s number, we can posit that 0.25% of the approximately 10 remaining countries’ GDP likely satisfies the gap between $128.3 and $131 billion.  

"Russia becomes Europe’s biggest economy.” That’s the headline that Kremlin-funded RT’s editors put on a story they ran Aug. 4. The story went on to trumpet that “Russia was among the world’s five largest economies and the largest in Europe in terms of purchasing power parity (PPP) as of the end of 2022, despite Western sanctions, the latest World Economics report has revealed.” Three days later, analytical resource bne IntelliNews, which is focused on emerging markets, published an article repeating these two claims. “In these terms Russia has just overtaken Germany to become the fifth wealthiest economy in the world and the largest in Europe, worth $5.3 trillion,” the report said, without citation.

But are these claims accurate? We consulted the World Bank’s and the International Monetary Fund’s (IMF) databases, which both offer the following methodologically different approaches toward measuring countries’ GDP in terms of purchasing power parity: (1) absolute value of GDP, PPP, measured in current dollars, (2) absolute value of GDP, PPP, measured in constant 2017 international dollars, and (3) countries’ shares in world GDP, PPP, also measured in constant dollars. Only the first of these three approaches (GDP, PPP, in current dollars) supports the dual claim that Russia has become Europe’s largest and the world’s fifth largest economy in 2022 (see Table 1). The other two methods (GDP, PPP, in constant dollars and share of world’s GDP, PPP, in constant dollars) ran counter to these two claims, showing that Russia was Europe’s second largest economy after Germany, as well as the world’s sixth largest economy in 2022 (see Tables 2 and 3).¹

Western policymakers are asking themselves whether the billions of dollars in aid to Kyiv have been well spent. Two analysts offer opposing assessments in a debate co-hosted by Russia Matters: Investment strategist and Chatham House fellow Timothy Ash has argued that Vladimir Putin poses such a significant threat to the U.S., the West and the global order that the West has “no option but to support Ukraine”; meanwhile, Trita Parsi, executive VP of the Quincy Institute for Responsible Statecraft, has contended that a prolonged war in Ukraine has dangerous hidden costs—namely, it increases the risk of a “direct Russian-NATO war” and the “use of nuclear weapons.” The key points of their Feb. 24 debate, that RM co-hosted with the Monterey Initiative in Russian Studies, are summarized below, followed by a full transcript.

Why it matters: Since Russia’s full-blown invasion of Ukraine a year ago, the U.S. alone has poured over $75 billion in aid and weapons into Kyiv's war effort, by one count. The assistance has helped Ukraine to stop and reverse much of Russia’s territorial gains, but there is no end to fighting in sight, with neither side close to a victory. Meanwhile, Western public support for assistance to Ukraine has waned, and NATO munitions stockpiles are reportedly dwindling, stoking debate over how much more support the West can and should provide.

Is Russia running out of precision munitions, such as missiles, in its war against Ukraine? That is the question I posed to some of my professional acquaintances and myself last month, hoping some of us would come up with an accurate answer. Three weeks later, I am still searching for that answer, but my efforts have not been completely in vain. What I have found is that, starting as early as the spring, multiple Western officials and experts have announced that Russia was running out of precision munitions, and yet Russia has continued to use scores of attack missiles, such as Kalibr missiles, well into winter. I have also found that most of these announcers did not specify the kinds of munitions Russia was close to depleting, with one proclaiming that Russia was “running low on everything.” Nor have most of these announcers specified when the exhaustion of Russia’s arsenals could occur. That didn’t stop leading American and European media outlets from repeatedly quoting such announcements,  with most of the media reports I have come across showing no effort to either verify the forecaster’s claims or put them into context (i.e. state whether there have been earlier claims of that kind and whether or not they proved to be correct).

One of the first, if not the first, claim that Russia was running out of precision means of attack was made exactly one month after Vladimir Putin launched the invasion of Ukraine on Feb. 24: Russia is running out of precision guided munitions, U.S. Under Secretary of Defense for Policy Colin Kahl was quoted as saying by Reuters on March 24. Kahl did not specify when Russia might fully run out of which precision munitions.

Three months after the Kremlin launched its invasion of Ukraine, economist Anders Aslund wrote that, by starting the war, President Vladimir Putin had “in a single day … wiped out most of the economic gains Russia had made since 1991.” CNBC issued a similar verdict in March. While the word “most” would typically mean more than 50%, Aslund clarified to RM that his assessment wasn’t meant to be strictly quantitative—more a turn of phrase to describe the scale of Western sanctions’ impact on Russia.¹ Nevertheless, we think it is important to determine how much of Russia’s past gains in economic output may be erased by Putin’s war in Ukraine by the end of this year. Would the forecasted losses amount to more than half, i.e., “most”?

Here's what we found: If “economic gains” are measured as growth of GDP—the only metric for which sufficient data is available²—and if the latest projections of changes to Russia’s GDP in 2022 from the World Bank and IMF are more or less correct, then the decline in Russian economic gains this year will total about 16%-24% of the gains accrued from 1992 to 2021, which is far from “most.”

The table below shows the increase in Russia’s inflation-adjusted GDP from 1992 to 2021 by three different measures and the forecasted drop in GDP between 2021 and 2022, including the World Bank’s June 2022  forecast that Russia’s real GDP will contract by 8.9% this year and the IMF July 2022 forecast that Russia’s real GDP growth will total -6%.³

The New York Times’ lead story on the front-page of its Sunday Aug. 21 edition declares: Odesa is “Putin’s Obsession.” Needless to say, this is a big idea. In the midst of a brutal war, after an attempted Kyiv coup failed, Russian aggressors have succeeded in capturing all of Luhansk, 75% of Donetsk, the Zaporizhzhia nuclear plant and most of the southern tier, establishing a land bridge from Russia to Crimea, this proposition—if it were true—could provide a clue about where this phase of the bloody war might plausibly reach stalemate. Recognizing its importance, the editors gave veteran reporter Roger Cohen a rare 6000 words in which to make his case. He uses that space argue that Odesa is “the Russian leader’s obsession”; “the big prize in the war”; “militarily … the highest-value target”; and the “grain port to the world.”

When I read the article, I reacted: say what!? As a long-time student of the Soviet Union and Russia who has been tracking and writing about Putin’s war against Ukraine, I asked: how could I and every other analyst I know in and out of the U.S. government have missed this? Having now reviewed the evidence the article presents to support its key claims, and compared it to what is known from what other experts including Bill Burns (now Director of CIA but formerly Ambassador to Moscow whose 2019 memoir offers the best brief profile of Putin), Fiona Hill (former assistant to Trump and before that the National Intelligence Officer for Russia), Angela Stent (another Russia scholar who earlier serviced as NIO for Russia) and others, our fact-analysis check concludes that each of these claims is false or misleading.

When scanning commentaries on post-Soviet Eurasia from English- and Russian-language sources, certain words or phrases stand out as fads that later fade away. So when RFE/RL described on July 30, 2022, a “bold prediction” by Russia expert Iver Neumann that we are witnessing “the beginning of the end” of Vladimir Putin’s regime, it seemed like one of the newest fads that have emerged after Putin’s decision to (re-)invade Ukraine in February. We decided to reaffirm that hunch as Neumann’s prediction began to gain traction in other media. With no skills or means immediately available for meta-analysis, we searched in Factiva, Google, Yandex and other open sources for “beginning of the end”+ “Putin” and “начало+конца”+ Путин.

The search revealed that proclaiming the beginning of Putin’s end was a trend long before his troops marched into Ukraine on Feb. 24, 2022. In fact, the earliest such proclamation we found was made on Oct. 26, 2002: a column by Moscow-based sociologist Boris Kagarlitsky that asks in its headline whether the Russian authorities’ mishandling of the deadly hostage crisis at Moscow’s Dubrovka theater during the second full year of Putin’s presidency meant the beginning of his political end. 

In total, we have found 38 predictions of the beginning of Putin’s end made from Dec. 31, 1999, (Putin’s ascent to the presidency) to July 30, 2022, including 22 made before the invasion of Ukraine (Table 1) and 16 made after the invasion (Table 2).

Many of the pre-invasion predictions that we found in texts and/or their headlines¹ were made during federal electoral campaigns in Russia or in the aftermath of these elections. Their authors typically accused Putin and whichever party he supported of either campaigning unfairly or winning illegally (or both) when explaining why the beginning of Putin’s end was near. But it wasn’t all about elections. The beginning of Putin’s end was also forecast over his government’s handling of hostage crises (2002 and 2004), the conviction of Mikhail Khodorkovsky (2005), the decline in Russians’ living standards (2011), a faltering economy (2012), Russia’s intervention in Syria (2015) and even Putin’s mysterious disappearance for several days in March 2015. 

As for the post-invasion predictions, all 17 that we found pointed to the invasion as the primary reason behind the beginning of Putin’s end (interestingly, the first was made only hours after Putin announced the launch of his “special military operation” shortly before 6:00am Moscow time on Feb. 24).

Angelina Flood contributed to researching this post.

Despite the latest Western sanctions against Russia approaching their half-year point, Russia’s war effort in Ukraine rages on. How has Russia sustained its campaign in the face of what many major news outlets and at least one academic institution have called “crippling” sanctions? One possible answer: Russia’s economy is not as crippled as people think. Just last week, the IMF revised upward its annual projection for changes to Russia’s GDP, saying it would contract not by 8.5% but only by 6% this year (at the same time, the IMF downgraded its forecasts for global, U.S., EU and Chinese growth). The World Bank has likewise revised its 2022 forecast for Russian economic output, saying it would shrink by 8.9% instead of the 11.2% estimated in April. Russia’s Central Bank, meanwhile, cut interest rates to below pre-invasion levels, another sign Russia’s economy is doing better than anticipated. While the U.S. and its allies are focusing on the long-term impact of sanctions, a number of other indicators show that, despite sanctions, Russia’s economy is doing as well as—or better than—other major economies.

Of course, there is clearly a negative side to the state of the Russian economy, from shrinking imports to plummeting equity indices. But getting a full picture means looking at positives and negatives. Here are some of the positives, which have been underreported in my view, to help our readers have a more complete picture when forming their opinions on Russia’s economic performance in the wake of sanctions.

The Russian invasion of Ukraine that began Feb. 24 has left tens of thousands of people dead, countless others maimed and millions displaced. It’s caused billions of dollars’ worth of damage and its fallout has echoed throughout the global economy. It’s forced European nations to revamp decades-old security policies and has influential voices in foreign affairs warning about the threat of nuclear war. Little wonder that Western policy shapers are keen to better understand their nations’ role in the conflict.

Two prominent American analysts see the U.S. role very differently. On one side of the debate is international relations scholar John Mearsheimer, a professor at the University of Chicago; on the other is national security expert Joe Cirincione, who for many years headed nuclear arms control initiatives such as the Ploughshares Fund and the Carnegie Endowment’s non-proliferation program.

Ever since Russia’s annexation of Crimea in 2014 Mearsheimer, a leading proponent of the realist school of international relations, has argued that the principal responsibility for “the Ukraine crisis” lies with the U.S. and, to a lesser degree, with the allies that have followed its lead. He most recently made this point in a June 16 speech reprinted below. Although Mearsheimer acknowledges that Putin started the war and is responsible for Russia’s conduct of it, his “central claim is that the United States has pushed forward policies toward Ukraine that Putin and other Russian leaders see as an existential threat, a point they have made repeatedly for many years.” Key among these policies has been the U.S. push to bring Ukraine into NATO and make it “a Western bulwark on Russia’s border.” It does not matter, Mearsheimer writes, what the authors of these policies intended; what matters is how Moscow saw them. His second main point in the speech is that Washington’s reaction to the outbreak of war has focused, together with its Western allies, on “decisively defeating Russia in Ukraine.” This, he believes, has prolonged the war there, subjected Ukraine to “even greater harm” and raises the risk of escalation, all the way up to the possible use of nuclear weapons. The key to a peaceful settlement from Russia’s perspective, he argues, “is making Ukraine a neutral state, ending the prospect of integrating Kyiv into the West.”

Cirincione rejects these arguments in an article written for Russia Matters, also reprinted below. While he has long criticized certain NATO policies threatening to Russia—like the initial inclusion of Eastern European countries in the military bloc and the placement of missile systems in Romania and Poland—he argues that the drivers behind them were numerous, mundane and often influenced by the Eastern Europeans’ own security imperatives. Even if the presence of significant NATO footholds in Ukraine did constitute a red line for Moscow, Cirincione feels that the West cannot “militarily abandon Ukraine and … cede it to Russia’s sphere of influence,” as Mearsheimer implicitly suggests. Cirincione also believes that Putin’s fears about Ukraine and other ex-Soviet republics growing “too close to the West” stem from his fears that such closeness would foment “popular resistance to his increasingly authoritarian rule at home.” And he presents thought-provoking evidence against Mearsheimer’s earlier claims that Russia’s actions in Ukraine have been primarily defensive, spelling out the various ways Moscow has been taking control of Ukrainian territory. Cirincione’s final objection to Mearsheimer’s arguments is on moral grounds: that now, amid the blood-curdling brutality of Russian forces’ targeting of Ukrainian civilians, is not the time to analyze which past policies led to the problem; now, he writes, the West’s singular focus should indeed be to “defeat Russia’s invasion.”

As is customary in such debates, we have invited Prof. Mearsheimer to write a rebuttal, but he declined.