Page 8 - Russia OUTLOOK 2023

remains a cornucopia of raw materials and fuel, while its military and energy
technology – especially nuclear power – remains advanced and attractive.

The most likely outcome for Russia’s economic development will be
these relations will sustain it and allow Putin to placate the population to
avoid popular unrest. At the same time, sanction leakage and the ability of
regular Russians to continue to travel will mean the shops will remain full of
modern creature comforts and the significant leakage in the sanctions regime
will also keep business ticking over.

All of this will very likely be enough to keep Putin in office until his term expires
in 2024 – and probably longer.

Political outlook

There seems little hope now that Russia can reverse the damage and undo
the sanctions it has brought down on itself. All of Russia’s diplomatic efforts in
the last months of 2022 were focused on reducing the sanctions, but it has
made little progress. During the renewal of the Istanbul grain deal on
November 17 the Kremlin pushed for a reduction of sanctions and shipping of
its own agricultural products, but won few concessions. The Kremlin has little
real leverage and while Kyiv was open to peace talks in March and April,
despite the resurgence of talking about possible talks in November and
December, Ukrainian President Volodymyr Zelenskiy and the vast majority of
the Ukrainian people are committed to fighting the war to the bitter end, unless
talks are forced on them by a weary Europe.

That might happen, as by November it was clear that a certain Ukraine fatigue
was appearing in the West. While the US has been making a profit out of the
war thanks to its capture of Russia’s share of the European gas market with its
record-high LNG exports, the cost to Europe has been enormous. According to
bne IntelliNews estimates Europe had committed some €550bn to support and
relief for companies and consumers by December and the cost of the war to
European economies was on course to top €1 trillion by the end of winter.

Moreover, as any expansion of the war will be fought in Europe, that at a
minimum will unleash a flood of millions of Ukrainian refugees, Nato has made
it very clear its first priority is to prevent an escalation of the war that could pull
Nato members in. Ejecting Russia from Ukrainian territory is a distant second
but ensuring that Russia does not conquer Ukraine is still a high priority and
Nato and Brussels will continue to equip Ukraine to ensure that end.

As for the chances of either coloured revolution or a palace coup in Russia,
both remain very unlikely. Putin has effectively crushed all popular opposition
to his rule and at the same time run a very effective propaganda campaign that
has convinced the vast majority of Russians to rally to the flag.

8 Russia OUTLOOK 2022 www.intellinews.com