Inside Russia, as Putin escalates, elites count devastating cost of war

When Vladimir Putin launched missile attacks on Ukrainian cities and critical infrastructure this week, the move appeared to earn the Russian president a reprieve from hardliners who have been demanding more decisive action.

“Run, Zelensky, run,” cheered Ramzan Kadyrov, the Chechen leader who had sent militias into Ukraine to fight, referring to Ukraine’s president. After weeks of slamming Russia’s military leadership over the recent disastrous retreat, Kadyrov declared he was “100 percent satisfied” with how the war was going.

But some of Russia’s top officials and business elite are exhausted and depressed – and the political and economic environment is expected to deteriorate. If Putin’s military escalation is intended in part to quell unrest caused by the mismanagement of the war, its impact may be temporary, several officials and business executives said in interviews.

“There are other issues on the battlefield,” said an influential Moscow businessman who, like others interviewed for this report, asked not to be named for fear of personal safety. “I don’t think that will relieve the pressure,” referring to the missile strike.

In addition, business executives and officials say that even if the strike succeeds in disrupting more of Ukraine’s power and energy grid, the fighting will continue into the cold winter, There are questions about how many missiles Russia has left and how long it can sustain bombing operations. Missiles are in production. but in a single unit. The old reserves are exhausted,” a state official said.

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Putin has been scrambling since Ukrainian troops began reclaiming large swathes of southern and eastern Ukraine, forced to send hundreds of thousands of barely trained reservists to try to bolster Russia’s exhausted military — a move that has sparked protests across Russia, And sent at least 300,000 Russian men across the Russian border to avoid conscription.

As signs of discord within Putin’s inner circle began to surface, Saturday’s humiliating attack on the Kremlin’s prized Kerch Bridge to Crimea appeared to be the final straw.

“No one is satisfied with the status quo,” the Russian state official said. “Obviously, a victory, military or political, is impossible. But neither is a loss. It becomes a chess situation called zugzwang, where every move is worse than the next, but it is impossible to move.”

Summer optimism has completely faded, with many in the country’s elite thinking “we’re going to turn everything around and find a way out,” according to another state official. “People think there is no future,” he said.

The Moscow businessman said forced mobilization had already hit Putin’s popularity, one of the main foundations of his legitimacy as president, and could worsen when the bodies of reservists began returning from the front.

“In a few months, there will be a very negative dynamic in Russia: social sentiment deteriorates,” he said. “Everything is on the front line.”

“Putin’s possible actions are very limited,” said Sergey Alexashenko, a former deputy governor of Russia’s central bank now in exile in the United States. “In addition to striking civilian infrastructure, he has no choice but to use tactical nuclear weapons. The question of what to do next remains before Putin if the Ukrainian counterattack continues.”

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Despite the Kremlin’s statement, few in Moscow say Putin will resort to a tactical nuclear strike because “then he won’t have any trump cards” and China can prevent such an escalation, the Moscow businessman said. “It’s a Pandora’s box [the Chinese] Don’t want to open,” he said.

Saudi Arabia’s support for production cuts this winter appeared to have emboldened the Russian president, the Moscow executive, who maintains ties with political officials, said. Even if energy prices remain at the same level, Putin “thinks that Europe will be in crisis and will not have time to go to Ukraine”.

“It’s still a war of attrition until one side cannot continue the war,” he said.

Gazprom CEO Alexei Miller warned on Wednesday that “whole cities” in Europe could freeze, saying there was no guarantee Europe could survive the winter at current levels of gas reserves.

Sanctions are starting to hit Russia’s economy harder, budget cuts already in place – along with proposed price caps, economists and business executives say Levi Group of Seven It will be a further blow to Russia’s oil sales starting in December. The Russian president “will run out of cash… He needs cash to pay Iran and North Korea for weapons. But we will see a whole new reality in December,” said Sergei Guriyev, provost of Sciences Po.

A second member of Moscow’s business elite said every piece of bad news on the front lines was a new blow to Russia’s economy in anticipation of more and tougher sanctions.

“All businesses are suffering from what is happening. Everyone has frozen their investment plans,” he said. The belief that Russia could divert trade flows away from the West through China, Kazakhstan and India is rapidly fading, two business executives said. Kazakhstan has started blocking shipments of European goods to Russia, while China has also started stopping some supplies.

“Everyone is very upset. The mood is very bad,” said a third senior Russian businessman.

Members of Moscow’s elite are starting to talk about a potential leadership change not seen in Putin’s more than 20 years of rule – although no one can say how or when that will happen.

“We have begun to enter a revolutionary situation,” said the first state official. “Everyone is waiting for something different than what’s happening now: different leadership, different war. The hawks want tougher action. The deaf don’t want war at all. The time is ripe to change the political system. But how it will happen, I do not know.”

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