2024-01-15 15:47:48
Winter is the time for parties in Moscow, including eye-popping – and two years after the invasion of Ukraine, the residents of the Russian capital have restored their capacity for hedonism. In one of them, stories were exchanged about new avenues of profit due to the sanctions: the difficulty of making transactions in dollars opened up possibilities for transactions in rubles; Construction projects have started; Western businesses want to continue operating in the country; The Russians found new customers in China and India.
The year 2024 has entered and with it Vladimir Putin’s campaign for re-election is heating up, so the regime is eager to spread positive stories about the country’s ability to withstand the hardships of war. Surprisingly, he has quite a bit of evidence to support this narrative – notes Economist.
The Russian economy did not collapse under the unprecedented sanctions imposed in 2022, as many expected. Gas and oil sales to the West fell, but rising prices and finding new buyers in Asia eased the blow. The ruble crashed in 2023 but recovered. Huge public investment in the war created jobs. Inflation is still high and this year a recession is expected due to the high interest rate, but Putin could proudly state that last year there was a growth of 3%.
Russia still has to import new products, which have become more expensive due to the weakness of the ruble – but those who are not poor manage to absorb the price increases, at least for now. When Russian banks were cut off from the international remittance system, supply difficulties arose, but middle-class Muscovites purchase Western products online through third parties. Even in the physical stores in the city you can find a variety of Western luxury brands such as Gucci, Chanel and Louis Vuitton, which are purchased in Europe and brought into Russia as “personal luggage”, even if some of them are second hand.
However, Economist emphasizes, the picture is less bright than it seems. The Kremlin likes to claim that Russia is a nation united around shared values, while in reality the mood in Moscow is one of denial. The letter Z, which was a symbol of support for the invasion of Ukraine, has disappeared from outside the city. Recruitment posters at bus stops, showing soldiers in bright battle uniforms, are the last reminder of the war.
Elsewhere there are signs that the war has hurt the Russian economy more severely than the party scene suggests. “Olivia salad” – root vegetables, cabbage and eggs dipped in mayonnaise – appears on every table during the holidays. This year the price of eggs skyrocketed (probably due to a lack of farm workers due to the widespread recruitment) and some have to make do with single eggs. One pensioner even brought it up in Putin’s year-end public address and the president promised to look into it.
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