War in Ukraine: Battleground

Even with sanctions, Russia can afford to feed its war machine: Experts

LONDON • Russia can afford to wage a long war in Ukraine despite being hammered by Western sanctions aimed at crippling its ability to sustain the campaign, defence experts and economists say.

The invasion has driven up the price of the oil, gas and grain that Russia exports, giving it a substantial windfall to fund its "special military operation" - now entering a new phase as Moscow focuses on the eastern Donbass region after failing to break Ukraine's defence of the capital Kyiv.

As the war grinds on, rising casualties and the need to rotate fresh troops into battle may prove more pressing challenges than the financial cost.

"This type of low-tech war can be financed almost entirely in roubles, which means they can continue pouring troops and heavy artillery into Ukraine at least until there's a more general collapse of the economy," said Mr Jacob Kirkegaard, economist at the Peterson Institute for International Economics in Washington.

Mr Johan Norberg, senior analyst at the Swedish Defence Research Agency, said: "The sanctions will not affect this war in the short run, because Russia's military is fighting with tanks it had already built and soldiers already trained."

Sanctions are expected to shrink the economy by more than 11 per cent this year, the World Bank says, but revenues from energy exports are actually increasing. The Russian finance ministry said on April 5 that Moscow expects to earn US$9.6 billion (S$13.1 billion) in additional revenue from energy sales in April alone thanks to high oil prices, which remain around US$100 a barrel.

There is no doubt, however, that Russia's vaunted military machine has taken a huge and costly hit. The United States assesses that Russia has lost about 15 per cent to 20 per cent of its combat power during its invasion of Ukraine, a senior US defence official said.

That includes everything from tanks, armoured vehicles, artillery systems, fighter and bomber aircraft and helicopters to surface-to-air and ballistic missiles, the official said, speaking on condition of anonymity.

According to Oryx, a closely watched military blog which tallies both sides' losses based on verifiable visual evidence, Russia had lost at least 2,770 items of military equipment as at yesterday, including at least 476 tanks that had been destroyed, damaged, abandoned or captured. That, said Mr Yohann Michel of the International Institute for Strategic Studies (IISS), is more than the combined tank strength of Nato members France (222) and Britain (227).

Russia, which had around 3,000 tanks before the war, according to IISS figures, is not about to run out. But experts said some are likely to be old, in poor condition or held for spare parts, so the effective number for combat is lower.

Mr Mathieu Boulegue, a specialist in the Russian military at Chatham House, said Moscow has so far held back its most modern weaponry, which it is reluctant to lose, and relied heavily on more expendable Soviet-era hardware.

He said it could take "a decade or two at least" to rebuild equipment levels to where they were before the war - a task complicated by a host of factors including design and innovation challenges, corruption, the indebted state of defence companies and a lack of access to Western microelectronics because of sanctions.

REUTERS

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A version of this article appeared in the print edition of The Straits Times on April 13, 2022, with the headline Even with sanctions, Russia can afford to feed its war machine: Experts. Subscribe