#WTH: Ukraine, four years in

And new thinking about the why behind Putin's invasion

Let’s dispense with the easy part: Peace between Russia and Ukraine didn’t happen in 24 hours. Get that out of your system, because the only people it satisfies are Trump obsessives. The important questions are not simply why it hasn’t happened, but when it will happen? And what circumstances will force Putin to concessions he clearly does not wish to make.

The current state of the conflict will be the subject of gallons of proverbial ink today, but what is actually happening on the ground? I rely on my colleague Fred Kagan, his Critical Threats Project team at AEI, and the invaluable Institute for the Study of War, to understand the reality.

What’s the current state of the conflict?

Russia is pounding the hell out of Ukraine. February 21-22, per CTP/ISW, Russian forces launched 347 drones and missiles against Ukraine, 297 Shahed-type, Gerbera-type, Italmas-type, and other strike drone types – of which roughly 200 were Shaheds, 50 missiles, including four Zirkon hypersonic cruise missiles, 22 Iskander-M/S-400 ballistic missiles, 18 Kh-101 cruise missiles, and two Iskander-K and four Kh-59/69 cruise missiles. 19 Ukrainians were killed, and Russia has widened its attacks beyond energy infrastructure to water and railways. It’s not advancing lines of control in any meaningful way; this is about inflicting suffering and eroding will.

Is Russia taking Ukrainian territory?

Meter by meter, at excruciating cost. In 2025, ISW assessed that “Russian forces seized 4,831 square kilometers in Ukraine and regained roughly 473 square kilometers that Ukrainian forces had taken in Kursk Oblast in 2025.” This totals about Russian 0.8 percent of Ukraine’s territory, at the cost of 416,570 casualties throughout 2025, for an average of 78 casualties per square kilometer. The video below lays out Russia’s incremental progress. You’ll need to squint.

Is Russia winning?

No. This is not what victory looks like. Russia is advancing a bit, and inflicting pain on Ukrainian civilians. It is spending money it doesn’t have, eating foreign exchange, and losing troops at a grinding pace. Here’s ISW’s Russia Team Lead George Barros writing on omnipresent Russian propaganda:

A prominent example is the false claim that Russian troops captured Kupyansk, an operationally significant town in northeastern Ukraine, roughly 40 kilometers from the Russian border. The Kremlin publicized this claim ahead of Putin’s Dec. 2 meeting with U.S. negotiators in Moscow. In fact, Kyiv never lost the town. On Dec. 12, Ukrainian President Volodymyr Zelensky posted a selfie from Kupyansk.

Ukraine isn’t winning either, but right now the conflict is stalemate plus.

How are negotiations going?

There’s no question the Ukrainians are ready for peace, even at a heavy price. Simply put, they will stop at the existing lines, accept a completely demilitarized, non—Russia controlled DMZ, if backed by robust U.S. security guarantees. Absent those, the war isn’t ending. What does Russia want? Also simple: It wants the slice of Donetsk it can’t win, and keeps lying about; it wants a DMZ under its control; it wants recognition of Russian sovereignty over captured Ukrainian land; and it wants meaningless security guarantees for Ukraine. Note, that slice of Donetsk is the jewel, an industrial heartland, critical to Black Sea access. And Russia hasn’t been able to win it in four years.

What’s Steve Witkoff up to?

That’s unclear. Apparently he has been persuaded absent any reliable data that Russia is winning the war. It is clear that Witkoff is exceedingly open to a Russian narrative. Here’s the entire play by play, if you want to see the granular level reporting. The CLIF notes version is pretty straightforward: Russia assesses it cannot win militarily, and therefore must win at the negotiating table. It seeks to weaken Ukrainian and American resolve with a combination of lies and blandishments that are falling on moderately — though not completely — receptive ears. Russia’s insistence on Ukraine ceding all of Donetsk is weakness. Russia blocking all security guarantees is ironclad indication of bad faith ahead.

Does the President understand this?

Yes and no. He understands the need for security guarantees, and continues to support Ukraine with weaponry and intelligence, all of it far superior to the aid received by Kyiv from the Biden administration. But he loathes Zelensky. We can rail at this all we want, but it won’t change the fact. We can correct the President’s misperception, and underscore Putin’s lies, but it won’t change the mind of the man in the Oval. That said, the United States continues to support Ukraine. And Donald Trump wants the war and the killing to end. That’s not a bad thing.

What is needed to get to yes?

Ukraine needs the necessary weapons to make Russia pay. Heavier, longer range, more consistent deliveries, and more more more. Better defensive equipment to sustain the civilian population. (And yes, we can’t make that stuff fast enough.) The Iranian regime needs to be under siege. And China needs to decide Putin isn’t worth the effort. All of these elements are within the President’s power, and he is using some (more sanctions on Russian oil), but not all. Europe needs to rearm with a seriousness not currently in evidence. Russian elements currently at work all over Europe must be pursued, and crushed. It’s all doable, but it requires leadership. Trump could do it. He still needs to be persuaded Russia isn’t winning. But he listens, and there are credible people close to POTUS who continue to make the case.

Why won’t Russia let go?

Here’s my teaser: Marc and I recently talked to Michael Tory, a British banker, about the economic underpinnings of Russia’s invasion of Ukraine. It’s fascinating, and it gives you a different dimension of the war that’s critical to understand. Because Russia is poor, and shrinking, and the rest of the former USSR is growing. Putin is destroying his country, and that is almost irreversible. Knowing that should deepen our thinking about how to win. Because win we must.

Listen to the pod here. We’ll have a new pod with Fred Kagan up tomorrow.

TRANSCRIPT

Q: Can you share your economic theory on Putin’s motivation to invade Ukraine?

MT: I’ve lived in Europe for the entire time since the collapse of the Soviet Union in 1990. And I’ve observed the dramatic evolution of the standard of living of the people in the former Soviet block countries, the actual Eastern European countries that were not technically part of the USSR, and of course the countries themselves that were part of the USSR. And I’ve watched these steady increase in improvement, dramatic improvement, but not only that, the disparity between the countries that used to be part of the Soviet Orbit call it, and those few remaining countries in the southwest corner of Russia and the dramatic difference in the way people live and the standard of living.

And I woke up each day since the full-scale invasion waiting to read in the newspaper somebody writing what I wrote because I thought it’s just so obvious when you look at this massive disparity between them, but no one did. And I think one day we will find that there was a recognition that this was an incredibly severe threat to the stability of the regime inside Russia.

Q: And what is that threat?

MT: Well, if you think about the border and if you think about the standard of living difference between the countries, effectively Russia itself, but most particularly if they go Georgia, Moldova, Ukraine, and Belarus, and then go just across the border and the way people live, it’s not just a little bit different and we’ve actually crossed these borders. It is actually, it is order of magnitude different in terms of the infrastructure, in terms of the way people dress, the way people eat, the cars they drive.

And of course, if this border, this stark differential then stretches right across, then at some point within Russia, the people who travel and people live in the border regions will actually begin to work out the problem isn’t NATO, the problem isn’t the ideology, the problem is that the failure of the system in Russia, particularly to deliver. And if every country that used to be part of the Russian orbit is prosperous and the only one that isn’t is Russia, then at some point this would build a powder keg in my view.

Q: Dive into the facts you lay out in your piece on this powder keg.

MT: The essence of the piece is to track the disposable income, the per capita income of all the countries that used to be part of the Soviet Union. And it’s the countries like the Baltics that were actually part of the Soviet Union technically, and the countries like Poland, Hungary, Czech, et cetera, that weren’t part of the USSR, but they were in the Soviet block in effect.

And then to take the income in those countries with the base of 1990 and the income in those countries with a base of today, effectively 2025, very simply to divide one by the other, 2025, divided by 1990, and the uplift as a multiple of the income in the base year. And then to compare that with the four remaining countries on the border, if you will, that did not join the EU, the ones that mentioned Moldova, Ukraine, Georgia, and Belarus, and then look at the difference between them.

And it’s very graphically laid out in the piece. And from reasonably good memory, the countries in aggregate, there’s an average, if you will, that have joined the EU and left the Soviet orbit have increased their per capita income by a multiple of four.

Q: You mention that the combined economic weight of the countries that escaped the Russian orbit now exceeds that of Russia itself. Share more about just how badly they are losing.

MT: If you project forward far enough, the GDP of Poland itself will eventually exceed that of Russia. So if you think about, just to zoom out, Russia has lost all of the big contests that matter. So for example, the US accounts for 25% of global GDP. And if I asked you to guess what percent Russia represents, you can take a guess, but I’ll tell you it’s 2%. 2%. So just to put that in context, 2% of global GDP is actually the same as the state of New York, . California is 4%, state of New York is 2%. So just try and imagine the governor of New York swaggering around the world pretending to be a great power with 2% of global GDP. It makes no sense.

Q: How have Putin’s choices built this economic reality?

MT: So probably the most fundamental choice or the one that’s had the biggest impact, Dany, is to remain an extraction based economy. If you look at the resource extraction, think about two very wealthy cities, St. Petersburg and Moscow, that the per capita income is actually very, very, very healthy. And on average, again, the data is a little bit fuzzy, but basically three to four times the average per capita income of the rest of Russia.

And effectively, there’s a few outliers in the oil provinces, but the way you have to think about it’s an extractive economy where the elites, as I mentioned in the piece, the elites in these two cities, basically extract rent from the resources in the eastern part of the country, in Siberia. And to your point, it’s interesting about choices, and there are parallels with Venezuela and Iran, for example, countries of massive resource endowments.

And I think that the most fundamental choice they’ve made is basically not to redeploy the wealth generated by the oil into the development of education, the wellness of the population. You look at all the human life indicators into infrastructure, into technology, and to effectively build a manufacturing base in the middle class around it. 60% of their exports are oil and gas, and that’s a choice, to your point, and something like less than 5% is manufactured goods.

So I think that almost everything flows from that, because you have a resource-based economy, you don’t actually need a big educated middle class because you just export the resources and you then capture the wealth. And if the wealth is then either dissipated, taken outside the countries, we know huge amounts of that wealth has ended up in places like London, for example, then of course that wealth is stolen from future generations in the country.

And that is a choice that they have made. And that is why the vast majority of the people in Russia are poor and why I have to empathize. The poorest people in the country are those who are doing the fighting and dying in Ukraine.

Q: Based on these economic factors, hasn’t the invasion backfired?

MT: Economic and geopolitical problems are much worse. You have them in the list, you have to add in two big new NATO neighbors on his border, particularly Finland. So no, in every respect, and I don’t know if you saw the prime minister of Finland last week at Davos, and he went through exactly the list of all the things that had failed in this. And so, no, it’s catastrophically failed, actually.

If you look at 2013, Ukraine was on the verge of signing what they called an Association Agreement. Association Agreement is basically kind of a baby step towards EU membership and it sets a kind of four or five year process in motion and you have to then meet certain criteria and hurdles.

And this was, if my theory is valid, then of course it’s not a coincidence that in 2013, ‘14, first Russia tried to prevent them from joining the EU by putting in place a different kind of agreement with effectively the Russian block, if you will. But then more importantly, the people of Ukraine rebelled. And you’ve probably heard the reference to the Maidan Revolution.

Q: Tell us about it.

MT: In Ukraine, they call it the Euromaidan Revolution, because they actually were hell-bent as a country on joining the EU because they’d seen the prosperity in the countries, and it was not a coincidence in my view that then when Yanukovych, who was basically the one who forsook the EU membership in favor of the Russians, he then fled to Russia, not surprisingly. And in January 2014 or February, Putin invaded Crimea and also the East, and your listeners may not be aware, there is a custom in the EU in terms of admitting new members that it’s a criterion called Territorial Integrity, and it’s basically not possible to join the EU while you don’t have full control of your territory.

So if we’re trying to impute a motive to 2013 and ‘14, it’s successfully by bringing contested territory, significant parts of Ukraine was contested at the time, and actually did successfully prevent Ukraine from joining the EU. And the exact same thing happened in 2017, ‘18. They joined a new association agreement with a four or five year plan to become an EU member, and that intensified in ‘20 and ‘21. There was an energy agreement. There was some other technical agreements that were precursors to EU membership, and the invasion happened in February 2022, right on queue.

Q: Will Putin and Xi Jinping’s relationship save Russia?

MT: No, no. In fact, the people I speak to, either Russian exiles or people in Russia, they see one of the consequences of the many adverse consequences, Marc, that you listed, is this growing dependence on China, which this war has created, will absolutely come back to bite the Russians. And talk about transactional, their approach to relationships, the Chinese absolutely will view this transactionally. And in time, this will be massively to Russia’s disadvantage.

Q: Putin has made the case that Ukraine is really Russia, so if Ukraine is more successful than Russia, people will understand his government is the problem. Do you think that’s at play here?

MT: I agree, Marc. And I think, again, growing up, it loomed so large in our consciousness and the Berlin Wall was the best illustration, living proof illustration of the failure of the economic system in the East. And I believe, who knows which factor, but I think the stark contradictions between East and West Berlin was one of the factors of many.

Let me add one other thing that will again be surprising to your listeners. If you look at that, called the minuscule economic weight of Russia at 2% of global GDP, obviously that’s a function of what you asked about earlier, Dany, the choices they’ve made in terms of staying as an extractive based economy.

Q: What about the population?

MT: So, just to pick a date in the mid ‘60s, the population of the Soviet Union was 240 million people. Today, the population of Russia is 140 million, and that’s a combination of the loss of all the other countries in their orbit, if you will, but also very, very poor demographics in terms of life expectancy and birth rates.

So if you then think about the growth of within Russia, the population that’s growing is actually in the caucuses and it’s mostly Islamic and it’s not Slavic. And then you think, “Hmm, there’s 40 million Slavic Christian Ukrainians that if we’re added to 140, they’d get back to 180 and they’re heft.” And of course, that’s why they say it’s not a country because their goal was, I think, was to erase it completely. And then at a hop, skip and a jump, they go from 140 to 180 and they begin to crawl the way back to being relevant to economic things.

I think they’ve worked out that having 2% of global GDP stretched across whatever, 10,000 kilometers, it doesn’t actually work. And that the population of Ukraine being Slavic and Christian and white, dare I say it, actually was simply too tempting a prospect.

Q: Could Russia recover if there were a different government in place?

MT: It’s a very good question. I would reframe it slightly, Dany. While Putin is at one level is the cause, I believe he’s also a symptom in the sense that he represents a system, if you will, a system of elite rent extraction and dissipation and capture in these two cities. And he’s the appointed guy that basically holds it all together, but he represents a system, but it’s a system that has failed the Russian people.

So if you look at what’s the education that is actually a good remnant of the Soviet Union, if you look at the energy, the creativity, look at the culture, to your point, the music, the literature, it is a great civilization actually in that sense, laid low by basically an extractive elite, if you will. And so one of the real sad consequences of the last five years particularly since the war, four years, whatever, has been so much of the, called the human richness of the country has left.

And if you look at the ultimate adverse selection, the people that have left have been educated, entrepreneurial. A lot of them are here in London. They are incredibly talented, highly educated people that we would welcome into our own countries actually for their ability to generate wealth and to build things, to grow things.

So the qualified answer to your question is yes, but there’s a degree, there’s a tipping point where the human wealth of a country like that, the human talent that drives the middle class and the growth of an economy gets depleted past a certain point and therefore it becomes irretrievable.

Q: So if peace happens and the bombs stop falling, then Ukraine is going to take off economically. Is that why he's so resistant, no matter the cost?

MT: It’s a good point. I wish I had an answer to that, Marc , because you’re absolutely right. Now, because of four years of war and the marshaling of resources, the heft of the US, the reconstruction funds, the end of the war will mean an accelerated version of what we saw over the last 30 years in Eastern Europe. It will happen much, much faster. The wealth creation and the improvement standard of living in Ukraine. And I believe you just look at the geography of Ukraine, Georgia, Moldova, and Belarus.

And if Ukraine starts to boom economically in a peace scenario, then you got to believe the gravitational pull of that. Those other three countries will just be just like dominoes, right? A version of the domino theory, but it will happen because Ukraine will become prosperous. Ukrainians will return, that have left, the diaspora will return as well. And it will be one of the strongest economies.

If you look at technologically, I don’t know if you’ve been to Ukraine, but it’s extraordinary the level because they’ve skipped several generations of old technology and the engineering skill, the software, the ability to adapt technology, modern technology, well beyond some of the things that we do in this country and in America. So I think you’re right. I think the end of the war is a nightmare scenario.

And that’s one of the things I worry about is you have a situation where the Ukrainians, of course, they have no choice. This is their country, this is their survival. And this is where I’ll welcome your views on this, is President Putin has no choice in the sense that this was his creation, but the Russian system actually does have a choice. And so there’s a degree to which this standoff that you described here, where the end of the war actually brings this about for Ukraine, it actually could also be a catalyst to bring it about for Russia as well.

Q: So, would offering some economic incentives to Russia be a part of a good peace deal? Or no?

MT: It’s a really good question. It comes back to this question of who benefits from that because you have such a concentration of benefit in elites in Russia. So if it was to generate broad prosperity across the Russian population, it would be a really good thing if to further enrich a very narrow lead in the two cities, then it actually strengthens a system which is basically not delivering for the people, which I describe in my article. So I continue to be baffled at this strand of it actually a little bit because with 2% of global GDP, and there isn’t really very much of interest to America, America could give us the whole 2% and we’d go from 25 to 27. It wouldn’t really make any difference.

Look, to his credit, I’ll just say this, you didn’t ask this question, but he’s done a lot more for Ukraine than Biden did actually in terms of if you look at it. They allowed deep strikes, which Biden never would, because he was worried about the refining and it was just rubbish during election year and stuff. He has stopped the tankers, the shadow fleet, which never happened during the four years of Biden. And he’s also put sanctions on the Russian oil companies, which Biden also didn’t do.

So I was really, really worried on election night in November ‘24 that this would be bad for Ukraine, but in fact, in terms of the things he’s done for Ukraine in substance have been actually much, much further than the Biden administration is willing to go. So these other things are, they’re not noise, but they’re these commercial opportunities and prospects. In the light of the discussion we’re having here, you can see they’re rounding errors in the grand scheme.

Q: Shaping this hypothetical ceasefire, how harmed is Ukraine by the loss of productive territories? How does rump Ukraine manage after a ceasefire economically?

MT: I challenge the characterization as rump in the sense that obviously it depends on where this lands, but if you look at the existing, these maps are pretty accurate by now, the ISW maps, Institute for Studies of War maps are brilliant, 80% of the Donbas region is currently occupied by the Russians. And then there’s a belt, which is the remaining 20%, which is all at issue now in these negotiations. It actually is still the core of the industrial heartland.

If you look at the mining, if you look at the... obviously the 80% they’ve lost is not nothing, I’m not going to suggest that, but the 20% that is now contested as the subject of these negotiations is a vital part of the industrial heartland of Ukraine. And if you look at the map of Ukraine, it’s actually because of the access to the Black Sea and if you look at the rest of the country and a lot of the productive capacity that used to be in Donbas, they simply moved West to Western Ukraine.

So I think you’ll find the Ukrainians are extraordinarily adaptable. The people I feel sorry for are the people in Donbas who will have been occupied and some of the stories from occupation are just absolutely just heartbreaking. And it’s probably not known to your listeners, but every single region of Ukraine, including the Eastern, the Donbas and Crimea all voted more than 50% for independence in 1991 across the country. They all voted for independence. So I think the prospects for Ukraine will surprise everyone, even if they end up having to cede some territory.

Listen to the pod here.

Full transcript here.

SHOWNOTES:

Ukraine’s Zelenskyy Says His Repeated Warnings to Europe Feel Like ‘Groundhog Day’ (AP News, January 22, 2026)

Despite Davos Claims of Peace Progress, Russia Maintains Hard Line on Talks (The Washington Post, January 23, 2026)

Fresh Russian Strikes Cut Heat to Thousands in Ukraine’s Freezing Capital (NYT, January 20, 2026)

‘Stupid’: Trump Gives Update on Putin, Zelensky Ending Russia-Ukraine War (Newsweek, January 21, 2026)

Ukraine War Latest (The Kyiv Independent, January 20, 2026)

Ukraine Racks Up Big Shootdown Score vs Latest Russian Mass Missile/Drone Strikes (Kyiv Post, January 20, 2026)

Why Putin Can’t Afford to Let Ukraine Prosper (Michael Tory, WSJ, September 20, 2025)

Michael Tory: From Lehman’s ashes, a banker is reborn (The Globe and Mail, December 14, 2012)

3 Years Later: What Russia’s Aggression in Ukraine Has Cost It and What It’s Gained (Russia Matters, February 24, 2025)

The (Projected) Cost of Russian Aggression (Centre for Economic Policy Research, July 27, 2026)

Russia’s War in Ukraine: The Next Chapter (CSIS, September 30, 2025)

The Kremlin can Afford the Luxury of a Second Anti-NATO Front (The Royal United Services Institute, October 9, 2025)

The Russian Economy in 2025: Between Stagnation and Militarization (Atlantic Council, December 12, 2025)

East Europe Faces Weakening Public Finance Prospects in 2026, Fitch Says (Reuters, December 9, 2025)

The Economic Effects of the Vietnam War (The Collector, October 7, 2023)

Putin Bluffed Biden. It Won’t Work on Trump (Marc Thiessen, Washington Post, October 16, 2025)

Trump Should Build a Wall Between Russia and Ukraine (Marc Thiessen, The Washington Post, May 1, 2025)