Endspiel: Russlands Kriegswirtschaft stößt an ihre Grenzen

SS:

The Kiel Institute has released a report on its analysts‘ review of the current state of the Russian economy. They note that Russia is growing lopsidedly dependent on China for economic trade while at home Russia’s government is „constrained“ by an inability „to access to people, technology, and productive capacity“, despite in theory being able to provide access to money.

This „create[s] a window of opportunity for more effective Western policy measures“, the report concludes.

the capital allocation problem is what makes this interesting. russia can print rubles or tap its sovereign wealth fund, but money without the inputs, skilled labor, and tech to actually deploy it just becomes inflation fuel. it’s the classic resource curse playing out in slow motion.

the china dependency angle is the one i’d keep watching. beijing is more than happy to be the buyer of last resort for russian hydrocarbons, but those trade terms aren’t going to get friendlier over time. russia is essentially trading strategic autonomy for short term revenue, and that math gets uglier every quarter the war drags on.

that vassal state take from the other commenter isn’t far off if current trends hold. the window the kiel report identifies is real, but it requires sustained western coordination, which has historically been the harder part.