#WTH: Russia is weak

And how Ukraine can buy American weapons itself

During the election, Democrats warned stridently about the likelihood of Donald Trump abandoning Ukraine. They may not have understood the President very well, but one man was listening: Vladimir Putin. He too is convinced that he has Trump in the palm of his hand, and is acting accordingly. The tone was set days after the election in a phone call between the two leaders in which Trump warned Putin against escalation in Ukraine. Putin denied — no really — that the call ever took place.

Trump administration efforts to bring Putin to the table since his inauguration have been largely fruitless, with Putin insisting he will not negotiate with Kyiv, and only with Washington, effectively denying Ukraine agency. That Putin believes he can continue to stonewall until Trump comes around is a testament to the power of anti-Trump propaganda and to Trump’s own history of admiring comments about the Russian dictator. But it appears Trump’s patience is running out. Late last week, he posted this on Truth Social:

What Trump is — one hopes — beginning to understand is that it is he who holds most of the cards in his hands. Putin holds very few. Indeed, Russia is far from the great power Putin pretends. Nor is it by any standard a peer of the United States. Recently on the pod, we talked to the Institute for the Study of War’s George Barros about just how strong Russia is. The picture is not pretty. We’ve actually put his very detailed answers verbatim in what is usually the “highlights” section, and you’ll need to jump to the full transcript for the remainder.

Long story short, the war is inching in Moscow’s direction, but at tremendous cost in lives and treasure. It’s not sustainable. Don’t get me wrong, this isn’t a cakewalk for Ukraine either, and Kyiv still needs support from Europe and the United States to continue to defend its sovereign territory. Which brings me to the other critical topic….

General Jack Keane and Marc Thiessen had an outstanding piece in the Washington Post last week addressing Ukraine opponents’ biggest concern: the money. The United States taxpayer has footed north of $150 billion in support for Kyiv. Most of that money has been spent in the United States rebuilding America’s defense industrial base. But in truth, the Ukrainians have the wherewithal to begin to become, as Marc and Jack write, defense consumers.

There are three elements to Ukraine’s self-support arsenal: Russia’s overseas frozen sovereign assets (a cool $300 billion, $200 billion of which is in… wait for it… Brussels). Those assets could be transferred into a fund at the Defense Department to buy U.S. defense articles. Or Kyiv could take out foreign military financing loans, underwritten by its vast mineral assets. Or, there’s a Lend Lease program that could be similarly underwritten.

One thing is clear: There are options for Ukraine beyond relying on the U.S. taxpayer. Zelensky has said he is willing to come to the table. Donald Trump wants Ukraine and Russia to come to the table. Only Putin is the outlier, and he has much less capital than he believes.

HIGHLIGHTS

What is the state of Russia’s capabilities and how are Russia and Ukraine performing in the war?

GB: The Ukrainians are facing some really serious challenges internally, externally with the resourcing. The Ukrainians need to be kept alive and in this fight. And I think a lot of ink has been spilled on the challenges facing Ukraine. But I've been really disappointed with the lack of coverage about all the problems that are facing Russia and in particular over the last three years, all the accumulated risk that the Russians have taken in fighting a protracted war that Putin did not plan to become a protracted war. I think when we talk about Russia now, it's really stretched further than it has been since the early 1990s.

The analogy that I like to use is that Russia is sort of like this sitting a perch of this three-legged stool and the stool is becoming increasingly wobbly. The three elements of this stool are, number one, Russia's defense industrial base, and their historical legacy access to all of the Soviet-inherited military equipment, which is a finite resource. The second one is Russia's demographic problems and how the Russian generation system for our new forces is starting to fail. And then, the third one are economic problems and they're all sort of connected. I'll take you, run you through these really briefly, but suffice it to say, the bottom line up front is that these problems get worse with time.

This is a vise of Russia's own creation that gets tighter over time. And really if we want to support the Ukrainians in a negotiated settlement, we really should do so from a position of strength and this leverage becomes more potent with time. So let's go into these really briefly. Look, Russia is on track to run critically low on Soviet-era, heavy mechanized equipment, vehicles, armored personnel carriers, infantry fighting vehicles. The Soviet-era stocks of these equipment is on track to be depleted by late 2025.

I can't provide a specific date, but all the good analysis of these storage vehicle sites indicates that by this time next year, Russia is going to be having a lot of problems. And it's not only the storage, but it's Russia's organic capacity to produce them. The Russian defense industrial base is also atrophied. There's a grand total of two rotary forges in Russia that make new tank and artillery barrels. Meanwhile, the Russian military loses about 320 tank and artillery barrels per month. The Russian ability to produce that is only 20 tank barrels per month. We know that Russia's single tank factory, Uralvagonzavod only produces between 20, maybe 35 new tanks per month of serial production.

Russia's artillery advantage over Ukraine in recent months has been reduced from five to one, to just 1.5 to one. So look, the Russian defense industrial base, if we continue treating the Russians at the current tempo, it's just going to get hairier and more precarious. Second leg of the stool, the Russian force generation system. The Russians have been able to offset what they suffer in Ukraine so far for about the last two and a half years. The Russians lose about 30 to 45,000 casualties killed and wounded per month. The system for generating these forces is essentially this form of neo-feudalism where Russian governors pulled together a series of volunteers, that they're called volunteers in Russian law, to go fight in Ukraine.

And the Russians achieved that by offering these financially huge incentives to go fight in Ukraine. There was actually a new record that was just set by Samara Province. Now, you can get four million rubles for a one-time sign-up bonus to go join and volunteer to join the Russian military. Meanwhile, the average Russian annual salary is 1.2 million rubles. The four million rubles, it's about $36,000 for a one-time lump sum cash payment. And over time, you can look at how these bonuses and incentives have increased. And you can actually see how the Russian system for pulling these guys has had to become even more costly, and it's actually not working.

You can continue to raise the prices, but you are eventually going to start running out of people. For the first time in last quarter, we observed reports of Russian governors beginning to petition the Russian Ministry of Defense and asking that their monthly quotas be lowered because they're increasingly becoming delinquent at actually meeting them. And this sort of segues to the final leg, which is the Russian economy. Look, Russians can either serve on the front lines in uniform or they can work in the domestic economy and provide labor, but you can't do both at the same time. Russia has a labor shortage of about a million people, which they are not able to offset.

When you continue to lose 30 to 45,000 people per month, it just gets even worse. We know that Russian inflation is out of control. Back in October of '24, inflation was up by about 8.5%. Back in October, the Russian central bank also raised the overnight lending rate up to 21%, which is insane. The liquidity portion of Russia's sovereign wealth fund, which the Russians have been using to bail out their war industry and keep them afloat, has decreased precipitously since 2022. The liquidity portion of the sovereign wealth fund is now just down to about 5.5 trillion rubles or about 56 billion dollars as of last November. And that's down from the original total of about 140 billion dollars since before Russia invaded Ukraine in '22.

And of course, within Russia consumer products, markets have become really, really hairy with the cost of butter up by 25% widespread egg shortages, the ruble trading less than one cent on the dollar, et cetera, et cetera. So Marc, what's the big picture? Suffice it to say, so long as we can keep the Russians on this collision course over the next six months, 12 months, 18 months, 24 months, the likelihood of us getting some sort of breakthrough either on the battlefield as the Russians run out of equipment economically with breaking the back of the Russian economy similarly to how we did in the 80s or the end of the Cold War or diplomatically with a breakthrough ... As Putin really wants to these hard challenges he's facing.

Especially as the specter, him having to call another round of mobilization becomes much more prominent. Really, we are served by these dynamics that work in our favor.

Why is Russia performing so poorly? How effectively has Putin navigated the war?

GB: Vladimir Putin has made the strategic decision that he wants to sacrifice on the altar of tactical small gains, territorial gains in Ukraine, Russia's combat power at the strategic level and Russia's economic health at the strategic level and the economic growth that Russia has made since the 2000s. This is really a good thing that we should lean into, I would argue, because it is degrading Russia's ability to threaten NATO conventionally. So insofar as Ukraine continues to saturate Russia's bandwidth, I mean just recently right after Thanksgiving, we saw how the Russian position in Syria crumbled.

We were also concerned about Russia's foray and entry into the Syrian Civil War in 2015 and how that could usher in a new symbolic era of Russia, geopolitical resurgence with them doing their first expeditionary deployment to the Middle East since the Cold War, with the war in Afghanistan. The Russian positions in Syria have been crumbling, and right now, it's an open question whether or not they even maintain their base in Tartus and Khmeimim. We have Ukraine to thank for that. These are all positive and good things. And so look, it would be a really big shame if we spent the last three years of sanctions building up the international Coalition against Russia, seizing the Russian assets, isolating Russian diplomatically, destroying their economy and their combat power in Ukraine, just sort of at the final couple yards down to the line here to then say, okay, we're going to let Putin off the hook. We're going to have some sort of ceasefire or operational pause that actually reduces the tempo of the fighting. And then Putin won't have to grapple with these really difficult decisions that he's going to be forced to face, by simply saying, you're saved by the bell. And I think if we want to serve American interests and keep the Russians down, the best shot of actually doing that is leveraging the current pressure and ideally ratcheting it up as time goes by.

I mean, now is a better time as any with the Russian gas deals to supply Europe just expiring over the new year and there being no clear Russian replacement for that income.

What is the Russian strategy in Ukraine right now?

GB: They've been running this marathon for so long, to get to the tactical situation for the sit rep. I mean, over the last quarter, the Russians really tried their hardest to project strength. They drastically increase the tempo of operations in southeastern Ukraine. And what did they get in exchange for it? Well, they managed to seize a couple of thousand square kilometers worth of fields and small villages, at the expense of losing tens of thousands of people.

And five mechanized divisions worth of equipment just over the course of a year near Avdiivka and Pokrovsk which is Russia's primary area of focus for the entirety of the last year. That's not good performance. In fact, that's actually really horrific performance. But Putin leans into this because he wants to create the impression that the map is getting worse for the Ukrainians, that Russia is moving forward, but really no one's talking about the scale, the scope, the actual size of these gains, the cost at which the Kremlin is making it. And Putin wants us to think that he can just lean into this forever, when in fact, he can't. The Russians won World War II in significant part due to the fact that the United States was allied with the Soviet Union, we had Lend-Lease.

Putin doesn't have that now, and Putin's defense industrial base has also atrophied since the 1990s, as has the Western defense industrial base. And actually I would argue that President Trump can extract a much better deal and actually get the Russians to make some concessions that benefit American interests. The more that we leverage this positive momentum for us, it's working against Russia.

If you had 3 minutes to brief President-elect Trump about how to approach ending the war in Ukraine, what would you tell him?

GB: So I think I'd tell the president, Mr. President, look, you've built your professional reputation on making good deals. I think we all like making good deals. And I know that you also said that you want to end this conflict quickly. Well, I'd argue that you can actually make the best deal by running the Russians towards these problems that are on their periphery and that they're going to have to reconcile in the 12 to 18 to 24 month period. And so you should not subordinate the quick deal to the best deal. And actually, if Putin doesn't want to make concessions when you go and talk with him, then that's absolutely fine.

Just tell him, "Okay, Vova, we'll see you in six months. We'll keep the Ukrainians in the fight. We'll continue supporting them, and we'll see how your economy and your tank supplies and your inflation is doing, and basically have a good two quarters."

Listen to the podcast with George Barros here.

Read the transcript here.

SHOWNOTES

Russian Efforts to Centralize Drone Units May Degrade Russian Drone Operations (Kateryna Stepanenko, Institute for the Study of War, December 13, 2024)

Russian Offensive Campaign Assessment, January 6, 2025 (Institute for the Study of War and Critical Threats Project)

Russian gas era in Europe ends as Ukraine stops transit (Reuters, January 1, 2025)

Russian Offensive Campaign Assessment, December 31, 2024 (Institute for the Study of War and Critical Threats Project)

Russia Taps Soviet-Era Stockpiles as Armored-Vehicle Supply Dwindles (Wall Street Journal, December 21, 2024)

Kyiv reveals total Ukraine casualties in Putin’s war for first time (Politico, December 8, 2024)

DOD: Russian Weakness Fuels China’s Rise in the Arctic (Air and Space Forces Magazine, December 5, 2024)

The Ukrainian Defense of Pokrovsk Has Compelled Russia to Change Its Approach in Eastern Ukraine (Angelica Evans, Institute for the Study of War, November 17, 2024)

Half of Ukrainians Want Quick, Negotiated End to War (Gallup, November 19, 2024)

Putin issues new nuclear doctrine in warning to the West over Ukraine (NBC News, November 19, 2024)

Russia lacks munitions, troops for big Ukraine offensive, says NATO official (Reuters, July 9, 2024)

Thread On Ukrainian Advances (George Barros on X, January 5, 2025)

Bad news mounts for Ukraine across the frontlines. But Russia is under pressure too (CNN, November 16, 2024)

Biden Gives Putin a Sanctuary (George Barros, Wall Street Journal, July 18, 2024)

Putin Is Throwing Human Waves at Ukraine but Can’t Do It Forever (Alexey Kovalev, Foreign Policy, November 25, 2024)

North Korea Joining Russia’s War Is a Sign of Weakness (Kori Schake, Foreign Policy, November 5, 2024)

Ore to Ordnance: Disrupting Russia’s Artillery Supply Chains (Open Source Center and RUSI, October 10, 2024)