Before Russia’s war of attrition against Ukraine, Russia’s army was described as the second strongest in the world, behind the United States. It was assumed that a comprehensive modernisation of the armed forces had taken place after the Georgian war in 2008 and the shortcomings that emerged there. And the hybrid form of Russian warfare, also known as the „Gerasmiov Doctrine“ was notorious. Especially after the annexation of Crimea in 2014, which was contrary to international law, a connection of meaning between Gerasimov’s speech from 2013 and Russian actions in Ukraine was made retrospectively. This happened in several countries, but to different degrees. What is common, however, is that the fighting power of the Russian army – both in the classical sense and in terms of its hybrid capacities – was generally overestimated. Some analysts predicted that Kyiv would probably fall in three days. Almost a year after the start of Russia’s war of aggression against Ukraine, which violated international law, one can thus ask the question: What does Russia’s power potential look like today?

For the analysis of Russia’s power potential, a few key factors for the translation into military strength will be singled out and presented in an overview. These include, above all, the geography of the Russian Federation, the demographics, the economic situation and the military means of power, i.e. the available units and types of weapons. This first part of the article will deal with the first three means of power of a state (geography, demography and economic situation). The current situation of warfare and the accompanying „fog of war“, as well as the increasing intransparency of published data, make this undertaking difficult, especially if one has to rely primarily on publicly accessible data. Accordingly, this article can only provide an estimate. Nevertheless, I have tried to be as accurate as possible with the data provided.

Geography – Asset or Liability?:

The Russian Federation (RF) is the largest state in the world with an area of approximately 17 million square kilometres. Approximately 16.3 million km² of land mass and 700,000 km² of water are covered. Russia is thus almost twice as large as the People’s Republic of China or the United States of America. The Russian coastline is about 37,000 km², but Russia does not have a year-round ice-free harbour – unless you count the disgustingly annexed port of Sebastopol. Furthermore, only about 13.1% of Russia’s land can be used as agricultural land (7.3% arable land, 0.1% permanent crops, 5.7% permanent grassland). In most parts of Russia it is either too warm or too cold for agricultural use. 49.4% of Russia’s land is covered with forest. With 22 407km of national borders, the RF is only slightly behind China in terms of the length of its national territory. Without the exclave of Kaliningrad, Russia has 12 neighbouring states, plus the exclave even 14. In the Kremlin, there is almost a collective trauma about the fact that up to the Urals, flat land is de facto geographically dominant and this fact has already been exploited twice by Western invasion armies. In connection with the invasions of Napoleon and Nazi Germany, General Frost, i.e. the extremely cold continental winters, certainly proved to be an ally in this respect. The fact of the „inviting“ Russian plains has probably nevertheless burned itself into the collective memory of the Russian ruling elite and virtually established a mania for the control of a „buffer zone“ towards the West. Even though today, of course, there is no danger of invasion from Russia’s western neighbours, but on the contrary, the Baltic states, Finland and Ukraine see themselves exposed to a constant danger from a neo-imperial Russia and unfortunately also see their fears confirmed in the Russian war of aggression on Ukraine and therefore the decades-long freedom of alliance of Finland and Sweden is now probably being replaced by NATO membership.

Of course, there is also the indisputable fact that Russia is a nuclear power, which again significantly reduces the likelihood of a NATO invasion fantasised by some, but this argument, often put forward by supporters of realism as well as Kremlin apologists, is not valid in my opinion, but it is part of the presentation of Russia’s geographical situation.

Demography – concentrated in the West and strongly shrinking

Russia’s population is heavily concentrated in the western European part of Russia. Due to the war of aggression, the number of people living in Russia dropped significantly last year. For two reasons. Firstly, the number of soldiers killed in Ukraine and secondly, the wave of migration triggered by the mobilisation and the extremely poor economic forecasts due to the economic sanctions imposed by the West and partner states.

Thus, in July 2022, 142 021 981 people live in the RF, with a falling trend. With 9.71 births per 1000 inhabitants and a falling population growth rate of 0.2% per year, with a death rate of 13.4 per 1000 inhabitants and a net immigration rate of 1.7 migrants per 1000 inhabitants. However, these data from 2021 are likely to be outdated again due to the war and are significantly worse.

9.5% of the population is in the age range relevant to militarisation 15-24 (male 6.9 million and female 6.6 million) and 43.88% in the age range 25-54 (male 30 240 260 and female 31 245 104) (see CIA 2021b). Thus, especially in the future, due to the low birth rate, a weakening of the military capability precondition, the population size is foreseeable, in the next 35 years the World Bank predicts a 14% decline in the working-age population. The Russian population is heavily concentrated in the western part of Russia, stretching from the Baltic Sea south to the Caspian Sea and east parallel to the Kazakh border. Converting the population size, the average population density is only 8.31 inhabitants/km². However, there is a clear discrepancy between densely populated regions in the western part of the state territory and the sparsely populated regions in the east of the territory – apart from the two metropolitan regions of Moscow and St. Petersburg – Chuvashia has a population density of 74.4 inhabitants/km² and the Autonomous District of the Evenks (in the meantime incorporated into the Krasnoyarsk region) 0.03 inhabitants/km². 74.9% of the population live in urbanised areas. This is due to the legacy of the Soviet urbanisation policy.

Russia’s economic power – in free fall?

Even though John J. Mearhseimer has rightly shot himself into the sidelines in international relations with his remarks on the Ukraine war, I would like to cite a short quotation here that I think sums up the whole thing well:

Wealth is important because a state cannot build a powerful military if it does not have the money and technology to equip, train, and continually modernize its fighting forces. Furthermore, the costs of waging great-power wars are enormous“. (Mearsheimer 2001: 62f.)

Russia’s economy had undergone major changes since the collapse of the Soviet Union, moving from a system of central administration to a capitalist market economy. However, reforms to this end have stalled badly in recent years and Russia remains a state-oriented economy with a high concentration of wealth in the hands of officials and oligarchs. In the course of economic reforms in the 1990s, most industry was privatised, except in the key sectors of energy, transport, banking and defence. But here, too, the influence of the Russian war of aggression is strongly felt. This is because Russia’s economy is heavily concentrated on the export of oil and natural gas, and the RF is also a leading exporter of metals such as steel and primary aluminium. Accordingly, the Russian economy is highly dependent on the development of world market prices for raw materials. Western sanctions have attacked Russia’s cornerstone of its own economic strength – and its preferred geo-economic instrument of power.

Russia’s economy – highly dependent on energy prizes

The dependence and vulnerability of the Russian economy to the volatile price fluctuations of world market prices due to the economic cycle and to external shocks is clearly reflected in the development of Russia’s domestic product over the last few years. In the period 1998-2008, GDP grew at an average of 7% p.a. to a total of 1 134 billion euros, correlating with the rapidly rising global oil and commodity prices in the same period, the RF is clearly feeling the effects of the world financial crisis and a falling oil price. This is clearly reflected in a negative GDP growth rate of 7.9% (879 billion euros). Between 2010 and 2014, the economy recovers slightly with a growth rate of 3% on average to 1551 billion euros in 2014. Western sanctions in the wake of the Ukraine conflict hit the RF significantly. In 2015, GDP therefore falls by 2% to 1221 billion euros. After a short phase of slight recovery between 2016 and 2018, the global corona pandemic also hits the Russian economy. GDP in 2020 declines by 3.1%, to 1289 billion euros. Before the Russian war of aggression, the World Bank expected Russia’s real GDP to increase by 3.2% in 2021 and 2022. The Russian Ministry of Economy raised its forecast to 3.8% in July 2021, a figure still well below the plus 6% that the International Monetary Fund had predicted for the rate of recovery of the global economy. Already in 2014, after the annexation of Crimea, the first sanctions were imposed on Russia.

Western sanctions have hit the Russian economy hard, even if some Kremlin apologetics claim otherwise. This is evidenced by the massive increase in key interest rates to 20% in the meantime and the conversion to a war economy associated with the war in order to meet the constantly increasing demand for further war equipment – in view of the exorbitantly high loss figures.

„Russia’s gross domestic product shrank by 3.7% year-on-year in the third quarter of 2022, revised lower from preliminary estimates of a 4% contraction slightly lower than the Central Bank of Russia’s forecast of 4%. The result extends the 4.1% contraction from the second quarter, as the Russian economy continued to be pressured by the sanctions from Western states in retaliation to its invasion of Ukraine in February. Output declined for manufacturing industries (-2.4% vs -4% in Q2), wholesale and retail trade (-19.7% vs -14.1%), water supply and wastewater disposal (-10.1% vs -9.2%), utility generation (-0.3% vs 2%), and professional, scientific, and technical activities (-5.5% vs -2.3%). In the meantime, mining production stalled (vs -0.8%). The central bank expects the Russian GDP to contract by 3%-3.5% for the full 2022, while the Ministry of Economic Development projects the GDP to fall by 2.9%.

The effects of the sanctions are also reflected in the development of Russian GDP last year, which even Rosstat puts at -2.9%. The distortions in the real economy are likely to be greater and some of the effects of the sanctions are likely to accumulate, especially since energy prices, which rose sharply due to the war in Ukraine, are falling again and gas prices have even fallen to the level of 2021 and are expected to fall further according to forecasts.

Russia’s geoeconomic power

Russia has enormous energy resources and considerable deposits of minerals and rare earths. Most, if not all, of the fundamental raw materials for modern industry are located within the borders of the RF. The iron and coal deposits are particularly extensive. The RF is estimated to possess more than 30% of the world’s iron reserves and has the second most coal reserves in the world, only behind the USA. The largest deposits are in the remote Tunguska and Lena basins in eastern Siberia and the Far East, but these are largely undeveloped. About three-quarters of Russia’s coal is produced in Siberia, about two-fifths from the Kuznetsk Basin alone, the rest from the Kansk-Achinsk, Cheremchovo and South Yakut basins and numerous smaller sources. The extraction of hard coal (anthracite) in European Russia takes place mainly in the eastern Donets Basin and in the Arctic in the Pechora Basin around Vorkuta . In 2020, Russia’s coal companies produced 40.1 million tonnes of coal, 8.1% less than in the previous year. Exports, on the other hand, rose by 1.6% from 189.8 million tonnes in 2019 to 193 million tonnes in 2020, with shipments to the emerging economies of Southeast Asia more than offsetting falling demand from European countries.

Russia is one of the world’s leading oil producers, producing about one-fifth of the global total. It is also responsible for more than a quarter of the world’s total natural gas production. The RF is estimated to have 17 trillion tonnes of oil and 48 trillion cubic metres of gas. The RF thus has the world’s largest natural gas reserves. Most of the oil and natural gas comes from Western Siberia. Another important source is the Komi Ukhta field in northern Russia. Extensive pipeline systems connect the production sites with all regions of the country, the neighbouring former Soviet republics and, via the western border, with numerous European countries. In 2020, the RF will produce about 8.5% less crude oil (512.8t) and 9.5% less natural gas (694.7 bcm) than in the same period last year.

For the Kremlin, its resources are leverage in political conflicts and a strategic means to achieve its foreign policy goals. Russia’s „petro-power“ is used both to reward allied states and to punish opponents. Moscow uses its asymmetric economic and trade advantage to put pressure on smaller states, especially those in the post-Soyviet space. The RF uses the energy factor in its foreign policy in three different ways: (1) importing its energy resources from the post-Soviet space at a lower price and exporting them to third countries at a higher price, or (2) A carrot and stick policy towards states that are dependent on Russian energy supplies in order to persuade them to shape their foreign policy in the Kremlin’s interests; (3) Ensuring that the routes of the pipelines run either through its own territory or that of friendly countries.

Russia’s Defence Industry – Breakdown of Exports?

Russia’s arms industry is the second pillar, alongside the energy industry, for exerting influence on third countries by economic means:

The Russian defence industry is at the heart of the country’s political system and central to its global aspirations. Its role is to ensure that Russia remains secure, sovereign, able to exert autonomous power in world affairs, but also to be a driver of technological development and innovation.“ (Frolov 2017)

The Military Industrial Complex (MIA) of the Russian Federation represents an important sector of the economy and is responsible for a significant share of GDP. As of 2014, the MIK includes 1339 organisations and companies and employs over 1.3 million people. In 2016, the Russian Ministry of Defence alone received orders worth 1.8 trillion roubles. When other security agencies are included, the share is estimated to be around 3 trillion roubles (€42bn) and 3.4% of GDP. Russia’s dominant defence companies have always been designed as state monopolies to ensure the consolidation of government control over the so-called „strategic industries“, a trend that seems to be intensifying. The possibility of converting struggling defence firms into state-owned enterprises is on the cards. In 2017, Russia’s top ten MIK production companies recorded orders worth 82% of the total defence budget. This corresponds to 96% of the total revenues of these firms.

According to the Kremlin, RF arms exports have not been affected by the economic consequences of the coronavirus pandemic. This makes MIC the only economic sector that has not suffered from the consequences of the pandemic. Dmitry Shugaev, head of the Federal Service for Military-Technical Cooperation (FSVTS) speaks of a range of €42bn to €47bn compared to €43.5bn in 2019 and €47bn in 2018. SIPRI estimates the Russian Federation’s arms exports at 3203 3203 TIV. In 2016-2020, Russia supplied „major arms“ to 45 states at a share of 20% of total global arms exports. Russia is thus the world’s second largest arms exporter, behind only the United States. India remains the main importer of Russian weapons systems, accounting for 23% of the total, followed by China (18%) and Algeria (15%). However, Russian arms exports are down significantly by 22% compared to the previous period studied, 2011-2015. This can be attributed almost entirely to the decline in arms exports to India (-53%) and could not be offset by the increase in exports to China (+49%), Algeria (+49%) and Egypt (+430%), which again underlines the importance of India as the main importer of the Russian arms industry. In 2019 and 2020, numerous new arms deals have been concluded with India, so that a renewed significant increase in arms exports can be expected. At the regional level, Asia and Oceania are the destination for 55% of Russian arms exports in the period under review. This is followed by the Middle East (21%) and Africa (18%). Russia’s main exports are air force goods. These accounted for 49% of Russia’s arms exports in the period 2016-2020, with these transfers including a total of 231 fighter aircraft.

In the course of the Ukraine war, Russia switched to a war economy to compensate for its own army’s need for armaments and the exorbitant losses. It is questionable whether Russia will be able to continue to produce armaments for export – also in view of the Western sanctions – and thus a shortage of high-tech material such as various chips, etc., which are necessary for weapons production, which in turn will further reduce income from one of the most important sectors of the economy.

In conclusion, Russia’s invasion of Ukraine has diminished the country’s economic power and further accelerated its negative demographic development. It can also be assumed that the massive Western sanctions will further worsen the economic situation in Russia in the coming years. The second part of this article will then look specifically at Russia’s current military power resources and how the losses in Ukraine affect them.