Russia’s economy has proven remarkably resilient, despite years of sanctions and economic statecraft. But that doesn’t mean there aren’t deep cracks in Russia’s unstable economic foundation, with only a thin veneer masking increasingly severe shortages — especially of workers.
Russia is in a desperate labor bind. The country has a shrinking, aging population — a fact it ignores as it sends its young men into the meatgrinder of the war in Ukraine. To generate military manpower, Russia has gotten creative, recruiting criminals out of prisons, North Koreans, and mental health patients. Regardless, the endless need for fresh troops on the front line has taken bodies away from industry just as Russia’s military-industrial needs are expanding rapidly.
Russia now desperately needs to fill jobs on assembly lines that make war materiel, but it has a plan: exploiting the Global South, including its so-called friends.
BRICS members India, Brazil, and South Africa have all been recruitment targets for what appears to be forced labor. Russia issues to their citizens a siren song against which many young women are unable to steel themselves, with devastating results.
For at least two years, Russian company Alabuga Special Economic Zone has been luring young women from developing countries with the promise of good jobs and educational opportunities. When they arrive, they are pressed into drone production. They are made to work with corrosive chemicals for long hours, with restricted communications and few or no rights. The women have faced sexual harassment and seen “deductions” taken from their already meager pay for things like rent.
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Educational institutions in Uganda and Burkina Faso have hosted Alabuga recruitment drives; economy-focused civil society organizations in Zambia, Zimbabwe, Cameroon, and Madagascar have met with Alabuga officials; and diplomats from African and Latin American states have visited and some have promoted Alabuga sites.
Alabuga SEZ has targeted 84 countries, prioritizing recruitment in Africa and Latin America. Although some countries have called out Russian labor fraud, it has been too little, too late. South Africa’s warning and investigation, which began in August, does little to help women already taken to these sweatshops.
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Infrastructure spending? This is Russia we are talking about. From every ruble spent by the government, at least 75% disappears if not more. The systemic corruption in Russia will obliterate any supposed advantage they have by ending the war.
And those foreign assets are only partially government assets. These include investment accounts of normal Russians, payment to companies that have been held back, etc... We are talking billions but Russia is bleeding billions every month now, and the release of those assets will only partially mitigate the unfolding souffle like collapse of the Russian economy. It's not a sudden crash, just a general return to poverty.
A return of fossil fuel sales to prewar income would help, but I don't see that happening as long as they occupy the Donbas and Crimea. Some sanctions will be lifted in case of a peace agreement but not even regime change will roll back all of the sanctions.
We are talking about $200B of Russian government assets in the EU. That is enough to pay the soldiers and workers in the military industry for some time until the economy can recover. Even if a lot is lost and lets be real that is happening with military spending as well.
Right now Russia has massive fuel shortages all over the country, the coal industry is collapsing, there are rolling black outs in some regions and high inflation. The base for recovery is pretty low. Add fossil fuel exports to the West at global higher prices and it goes a long way. Nothing some good propaganda can not handle.
It's estimated russia spent $145 billion for the military in 2024, and the budget for 2026 is about the same - 2025 was around that as well. So that 200 billion pays for roughly 15 months of the currently 44 month war.
Exactly enough money to bridge the period between ending the war and having created enough jobs in the civilian economy. Right now unemployment is basically zero and given all the dead Russian soldiers that is going to be rather possible.
I think you vastly underestimate the catch-22 Putin has steered Russia in. They're not recovering from this economic disaster this century. They're damned if they do (continue the war) and damned if they don't. That's also why NATO considers Russia a significant threat to regional stability even if the war were to end where they get everything they wanted. It's a lose-lose situation for Russia, but continued aggression to keep the war economy going is currently the path of least resistance.