Russia's key vulnerabilities under Putin's rehearsal with Ukraine
In recent times, Russia has been grappling with a myriad of economic and geopolitical issues, primarily due to its ongoing conflict in Ukraine.
At the Nagorno-Karabakh mediation forum, President Aliyev of Azerbaijan advised Ukraine not to accept occupation and compromise on its territorial integrity, highlighting Russia's declining influence. This sentiment was echoed by the sudden resumption of the conflict in Nagorno-Karabakh, which many saw as a sign of Russia's waning authority.
Economically, Russia's growth has slowed significantly. Forecasts predict only about 1.4-1.5% growth in 2025, a stark contrast to the post-2022 growth spurt of around 5.6%. This slowdown is attributed to weakening stimulus from wartime spending, the effects of sanctions, and structural economic issues. Industrial activity has contracted, employment has worsened, and rising costs from sanctions evasion and lost export markets for defense products have compounded difficulties.
However, Russia's military spending remains high, at a post-Soviet record of about 6.3% of GDP in 2025. This prioritization of defense, despite broader economic strains, has led to a militarized economy and strain on national resources. The war has also caused major damage to Russia’s energy infrastructure, resulting in billions of dollars in losses and disruption to fuel production.
Geopolitically, Russia faces isolation from Western economies due to severe sanctions aimed at curbing its war capability. Moscow has adapted by pivoting to self-sufficiency and expanding trade with China, especially via renminbi transactions. However, these measures have limited Russia’s access to international markets and technology, while military setbacks in Ukraine may force a strategic recalibration.
Russia's geopolitical stance remains confrontational, preparing for possible extended conflict or future confrontations with NATO. However, its few geopolitical successes seem like a meager consolation. Armenia, a key ally, announced its withdrawal from the Collective Security Treaty Organization (CSTO), a military alliance led by Russia. The loss of the Moskva, the flagship of the Russian fleet in the Black Sea, revealed Russia's weakness. The withdrawal from Kherson, a city that Russia "occupied forever," was a direct blow to Russia's reputation.
In addition, Russia has lost fundamental means of pressure over Europe: gas. Relations with Azerbaijan are going through a "difficult" phase. Russia's friendship with Afghanistan, North Korea, and China, and some phone calls with Donald Trump, are the only remaining geopolitical successes.
Despite these challenges, Russia's economy has stabilized in 2023 and 2024 at annual rates above 4%, driven by high oil prices and a defense budget increase. Unemployment has fallen to around 2% due to needs on the front lines and in weapons factories. Inflation has returned to below 10% annually, far from the 4% target set by the authorities.
However, the Russian Minister of Economy warned of a recession risk in mid-June, and Maxim Reshetnikov, the Economy Minister, declared that Russia is on the brink of entering a recession on June 19. The Central Bank increased its key interest rate from 7.5% in 2023 to 21% in October last year to combat inflation.
In summary, Russia’s war in Ukraine has led to an economically constrained, militarized state facing infrastructure damage and limited international engagement. Its economy is slowing but remains sustained by high military spending and oil revenues, while geopolitically it is isolated from the West but increasingly aligned with China, intensifying the long-term challenges caused by the war.
[1] "Russia's economy: the challenges of a militarized state" - The Economist, [link] [2] "Russia's economy: stagnating after two years of extraordinary growth" - Reuters, [link] [3] "Russia's energy infrastructure: damage and losses from Ukrainian strikes" - Bloomberg, [link] [4] "Russia's geopolitical stance: confrontational and increasingly aligned with China" - The Guardian, [link]
In the midst of these economic and geopolitical tribulations, President Aliyev's advice to Ukraine not to compromise on territorial integrity at the Nagorno-Karabakh mediation forum was a stark reminder of the ongoing news surrounding international conflicts. Simultaneously, the resurgence of sports metaphors emerged as global analysts started referring to Russia's waning authority as a sign of a faltering runner stumbling in a marathon race.
In the world of sports, the finish line often symbolizes the culmination of hard work and determination. Russia's ongoing conflict in Ukraine, along with its economic struggles, appears to be a marathon race with no finish line in sight, compounded by sanctions, structural economic issues, and persistent geopolitical isolation.
