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Moscow, RUSSIAN FEDERATION: Russian President Vladimir Putin is seen on the TV screen as another TV sets are reflected in it in a shop in Moscow (DENIS SINYAKOV\/AFP via Getty Images)<\/p>\n
AFP via Getty Images<\/p>\n
Call it a tale of two Russias. On the one hand, it\u2019s becoming increasingly apparent that Russia\u2019s war of choice against Ukraine is turning into a financially unsustainable venture \u2013 one that risks bankrupting the country and may even end up imperiling President Vladimir Putin\u2019s hold on power. On the other, Moscow is now mounting a massive propaganda offensive designed to show off Russia\u2019s softer side, woo gullible Westerners and reset the terms of the international conversation. And those two trends are intimately linked. <\/p>\n
To understand the connection, it\u2019s necessary to start with the Russian economy. At home, after years of Western sanctions and economic pressure, the Kremlin is at long last facing serious fiscal headwinds. Top officials in the country\u2019s Finance Ministry and Central Bank are now reportedly warning<\/a> that the cost of the Ukraine war in Ukraine has become unsustainable and proposing cuts to defense spending. <\/p>\n They have good reason to be concerned. Over the past several years, the Kremlin has adapted to widening European and American sanctions by transforming its economy into one heavily dependent on military-related output<\/a> \u2013 and subsequently by hiking war spending to channel capital to those industries. Last year, Russia\u2019s military spending reached a record high of some 15.5 trillion rubles ($190 billion), according to the Stockholm International Peace Research Institute<\/a>. (The projection for this year is pretty much the same<\/a>; 14.9 trillion rubles, or $204 billion at current exchange rates.)<\/p>\n Such a rate of spending is simply unsustainable. As a result of it, the country\u2019s budget deficit is growing, and could balloon to as much as three trillion rubles ($36 billion) this year. <\/p>\n Not long ago, Kremlin officials were still hopeful that rising global oil prices stemming from the Iran war would be a boon to the country\u2019s coffers. But the dividends haven\u2019t been as significant as initially expected, while Ukrainian long-range drone strikes on Russian energy infrastructure are taking a massive toll. Russian crude processing has now fallen<\/a> to a 16-year low, prompting Moscow to ban the export of jet fuel as a conservation measure.<\/p>\n Even so, the Kremlin is balking. Putin and his coterie have invested heavily in their war of choice against Ukraine and are loath to pare it back in any meaningful way. As a result, senior officials are said to be insisting on the projected level of spending, and Putin himself has reportedly asked<\/a> the Finance Ministry to find other areas of the federal budget to shrink before targeting defense spending. <\/p>\n But if Putin isn\u2019t prepared to give up on his efforts to dominate Ukraine, he\u2019s certainly trying to reframe how they are perceived \u2013 particularly in the West. Recent days have seen a veritable deluge of pro-Russian commentary on social media platforms like X extolling the welcoming environment in Moscow and ridiculing the idea that Russia is seeking conflict with the United States or Europe. Some of this is organic, a byproduct of high-profile events like the recent St. Petersburg International Economic Forum and the Kremlin\u2019s courtship<\/a> of influential \u201cinfluencers.\u201d But some of it is clearly inauthentic, aimed at convincing the West to lessen Russia\u2019s its international isolation \u2013 and, by extension, to alleviate its economic problems. <\/p>\n