Russians Are Literally Running Out of Food | Mark Galeotti

[00:00:00]Now, you used the word cannibalizing earlier or cannibalistic, and that's a word that I used during another piece I put out at the beginning of the year uh in the way that the economy seems to be going. And then the economist ironically put something out about the death zone uh a few months ago, but you seem to not think that the economy is that bad. It's not great, but it it's not imminently uh on the verge of of no return. So why if if the economy is showing signs of cannibalism, surely that's a that's a systemic problem that is hard to reverse.

[00:00:37]>> It is just that these kind of systems can last a long time in decline. There's there's a long way down to go. one could say um and and the speed is such look there's no way of getting around the fact that the damage that is being done to the Russian economy is is very severe and more to the point is going to take a long long time again after the war to to recover from.

[00:00:59]That said, there is there is a fair amount of resource slloshing around the system.

[00:01:04]Authoritarian regimes after all can divert resources to where matters. So precisely they they they can essentially make ordinary people pay the price of of fighting the war. Um you know there's obviously and again I don't want to go too much out of my depth on the economy but although the problem is with for the Russians that they can't actually borrow on international financial markets nonetheless their level of debt is certainly by by western standards pitifully low. I think it's about 20% whereas the UK is over 100% of GDP. Um you know I I think that and one one can say that it's it's kind of cannibalizing itself the way that you might say you know a as as human beings if you are putting too much effort and you're not eating enough. You know your body will start to devour itself in the desperate quest for energy to keep you going. Um well that is what's happening to to the Russian economy. I would suggest it's a rather sort of um fasile parallel, but there you go. Um but you know, but it's it starts from a position in which it it has a lot of resource and it has the capacity to kind of modulate and control the the speed and the level of decline.

[00:02:22]Okay. Now, I know you're not an economist, so I'm not going to I'm going to frame the question from a way that ensures it's related to your uh focus, but you know, when when Putin is threatening to cut the pensions or when there is this idea that public services are having to be severely cast in parts of the uh rural Oblasts, uh when state um uh whatever salaries for to try and get signing bonuses and all this are being pushed. And yet it seems very difficult to know where that money is going to come from. Surely there's a there's a there's a limited time frame that you can keep those sorts of policies in place before you have to I don't know cut elsewhere or or or I don't know restructure the whole thing in a significant way which will start making people notice more.

[00:03:11]>> Yeah, absolutely. And look, people are noticing. There's no way of getting around that fact. you know, when 40% of your average person's budget is going on food, >> when you can't get a mortgage because the interest rates remain too high or your existing mortgage is is is proving crippling and there's high levels of of um foreclosures and the like. You know, all all of these these factors people of course are noticing, but again, there is this question of well, what what do you do about it? Um, you know, protest is a very dangerous thing. this is still a thuggish police state and also it's a time of war.

[00:03:46]I mean I don't get the sense that the majority of Russians wanted this war in the first place and are particularly supportive of it and whenever we see these opinion polls they tend to show that you know a substantial majority would rather negotiations and continue conflict. Now negotiations we have to treat that with caution because it doesn't mean we should negotiate everything and and pull out of the occupied territories. I think they more or less mean we should just basically end the war. I think that's what they mean by negotiations and then talk about how we actually sort of resolve that.

[00:04:19]But the point is that at the same time, just as with the elite, actually doing something about it is a very dangerous thing. And do you accept that times are getting harder but hope that it doesn't last for too long and then you have a rebound? remember, you know, actually 2023 and 2024 saw people's quality of lives increase artificially because of high levels of defense spending, but nonetheless, people had more money in their pocket and were spending more. So, it's not like they're yet at a point where they think it's been 10 years now and and nothing is getting better. So, there is still room for a little bit of optimism. And I think that's the point.

[00:04:59]That's that's what the Kremlin is gambling on. The criminal is gambling on the fact that this war will not go on forever.