A Blog by Jonathan Low


May 12, 2024

Putin's Third Annual Victory Day Without A Victory

Two days ago, at Russia's annual Victory Day parade in Moscow, there was one tank, a WWII era T-34. While some claim this was homage to the past, the reality is there were no modern tanks because they have mostly been destroyed in Ukraine while those few that remain serve fitfully at the front - as long as they can survive FPV drone attacks. 

Putin has no way militarily of ending this war on his terms. He hopes political interference in the US and Europe may create opportunities, but he cannot end the war as it stands without risking his own demise. This is not the 'victory' he promised nor one he can survive. JL 

Lawrence Freedman reports in Comment Is Freed:

We have now reached the third ‘victory day’ of this war (with) Putin marking the end of the ‘Great Patriotic War’ in May 1945. (But) Putin has no obvious way to bring the current war to a satisfactory conclusion. This is why a vital part of his strategy from the start has been to put pressure on the West to abandon Ukraine through energy shortages to persistent information campaigns, a pattern of sabotage, acts of violence, cyber and electronic interference. Russia’s big push on the battlefield has not yielded decisive results and its position could worsen towards the end of this year. So for the third year in a row Putin has celebrated a famous victory eight decades ago while being unable to claim a new victory.

We have now reached the third ‘victory day’ of this war. Once again Vladimir Putin has presided over the annual military parade that marks the end of the ‘Great Patriotic War’ in May 1945. This day was endowed with added significance after the full-scale invasion of Ukraine because of the contrast between the heroic achievements and sacrifices of 1941-45 and this miserable and calamitous special military operation. To make the comparison look slightly more favourable there were reports in both 2022 and 2023 that the 9 May date had been set as a deadline for a significant military advance to demonstrate that progress was being made in this new war. Failing that, Putin’s speech at the parade was anticipated as an opportunity for an announcement about some new initiative to improve an unsatisfactory situation. In the event neither event lived up to expectations.

Thus in the build to 9 May 2022 there were reports that Putin might announce mobilization or ‘an intent to annex Donetsk, Luhansk and Kherson.’ When the day came it was all a bit lacklustre. Putin repeated the standard, contrived explanations for the aggression but offered little on how the war might end. The main Russian objective of the time – the port city of Mariupol – had still not been taken.  It did fall a couple of weeks later. The mobilization and annexation announcements eventually came late September, after Russia had experienced more setbacks, with the addition of Zaporizhia as one of the annexed territories.  

By the time of the next parade in 2023, and despite partial mobilization, Russian forces were still not steamrolling through Ukrainian defences. Progress still depended on gruelling attritional fights, which meant that whatever was taken by Russian forces was first destroyed by artillery fire. That year’s parade was generally considered to be a poor show. With stocks of weapons and reserves of manpower depleted anything spare had been sent to the front. There were fewer troops marching (12,000 compared to 15,000), and fewer vehicles (51 compared to 131: in 2021 there had 197). Ukrainian defenders at that year’s intended prize – Bakhmut – hung on to deny Putin a timely victory. It was not occupied until the next month. Putin’s speech was short, certainly by his standards, repeating familiar themes about the threat from the West and a ‘state coup’ in Ukraine. Once again he offered no way out of the conflict.

The weather for this year’s parade was foul. The parade itself was as insipid as last year’s with the same solitary World War Two vintage tank leading the way. In his second major speech of the week – the first being his inauguration on 7 May – he had nothing to say about the course of the war or its potential conclusion except to acknowledge that Russia faced a ‘pivotal’ moment. In both speeches he largely ignored Ukraine to talk about the West. In the first he said that his did ‘not reject dialogue with the West’, so long as it was based on ’equal terms and mutual respect’. It was up to the West to decide on whether it wanted to ‘continue limiting Russia's development or seek cooperation.’ In the second, he reminded the west of Russia’s great strength and that it will not be pushed around. ‘Russia will do everything to prevent a global clash …But at the same time, we will not allow anyone to threaten us. Our strategic forces are always in a state of combat readiness.’

That was it.

Russia With The Initiative

A year ago Russian forces were bracing themselves for an enemy offensive. New equipment was being delivered to Ukraine from the West, and new units were completing their training. A lot had been invested in the counter-offensive. I noted then that it was being viewed in Ukraine with a mixture of ‘apprehension and hope’ and that whatever was achieved it was probably still prudent to prepare for a long war.  In the event Ukrainian gains were limited. The offensive petered out last autumn and Russia retook the initiative. In turn it has made some gains of its own, doing so as before by battering Ukrainian defences with fire (now with the added impact of glide bombs) and throwing extraordinary numbers of troops in their direction.

This time the supposed target for the 9 May deadline was the small eastern town of Chasiv Yar. This is on a ridge close to Bakhmut. Its fall would have more than symbolic significance. It would make it easier for Russian forces to bombard towns in the Donbas and also key Ukrainian supply routes. Ukraine’s overstretched air defences means that Russian aircraft can now fly closer to the frontlines, increasing the accuracy of their bombing. They are pushing hard against a range of targets and in some areas have been able to make modest advances. Once the US assistance bill was passed by Congress it was reasonable to assume that Russia would step up its attacks while it enjoyed the advantage, although with the foot already flat down on the accelerator there is only so much extra pressure that can be applied.

The Russian manpower advantage will last for a while. The force assembled in Ukraine by the start of 2024 was larger and more organized than available a year earlier (470,000 troops compared with 360,000). This allowed for units to be rotated out of the line as their casualties reached 30% so that they could be regenerated. By contrast Ukraine was slow in sorting out its new mobilisation law, which was only passed by the parliament last month after extensive debate and political dithering. The bill, as passed, offers recruits better pay, with a variety of bonuses, including for destroying Russian equipment, and longer leave periods but no deadline on the time to be spent at the front lines.

There have also been delays in preparing fortified defensive lines of the sort that served Russia well in blunting the Ukrainian offensive. The new packages of western aid are only starting to have an impact. The big Czech initiative on ammunition for example will see its first deliveries next month. New Patriot air defence missiles are starting to arrive but there are still huge gaps in air defences. The F-16s promised last year may appear latrer in the summer. While Ukraine can take more risks with existing stocks because conservation is no longer so essential front-line forces are still badly outgunned. The coming weeks will be difficult.

Building on an earlier analysis co-authored with Nick Reynolds, Jack Watling has recently warned in Foreign Affairs that the issue is not whether Ukraine will lose ground to Russia this summer but how much. His concern is that late this year Ukrainian forces will be so drained of munitions and personnel that they will be stretched thin while Russia can rotate its troops for a big push. The main priority therefore has to be one of blunting persistent Russian attacks, and limiting the impact of any breakthroughs that are made. Russian forces still lack the mobility and leadership to manage rapid manoeuvres. Shortages of armoured vehicles have led to the bizarre spectacle of troops trying to advance on buggies and motorcycles.

Opportunistic breakthroughs by Ukrainian forces cannot be precluded, given the high losses already experienced this year by Russian forces, but when US national security advisor Jake Sullivan, talks of the next counter-offensive being in 2025 there was an implicit warning not to rush into one in 2024. Meanwhile Russia is hitting Ukrainian settlements close to the front line, as well as the city of Kharkiv, which has taken a terrible battering, and Odesa. Victory Day was marked by more strikes against Ukraine’s energy suppplies.

Russia’s Economy

Russia’s seemingly endless reserves of manpower and missiles encourages the view that Russia has the capacity to slowly grind Ukraine down. This view has been reinforced by the reported strength of the Russian economy. From the start of the full-scale invasion the safe assumption was that Russia could cope economically over the short-term but was storing up trouble for the long-term. Russia more than coped in 2024 because it benefitted so much from the energy crisis it had intentionally unleashed. This generated greatly increased revenues. Now the economy appears strong because of the rapid, substantial rise in military expenditure.

As a study from the Carnegie Endowment noted, the country’s top economic policymakers have a core competence that puts them ‘a breed apart from the military’s top brass.’ They have been helped by the readiness of China and India to import Russian hydrocarbons and export goods and technology once sought from the West. Levels of debt are not excessive, certainly compared with those of many Western countries, and are adequately covered by financial reserves. De-dollarisation has reduced the economy’s vulnerabilities to external shocks.

The big boost to growth has come from the defence budget rising by 70%, now representing 30% of Russia’s budget and 6% of its GDP. The impact can be seen in the Russia's economy ministry expectations for GDP growth for 2024, which have risen from 2.3% to 2.8%, as did those of the IMF (from 2.6% to 3.2%).

Perhaps stung by accusations that the extensive economic sanctions agreed by the US, UK and EU have lacked the advertised impact, Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy  published an extensive analysis of the state of the Russian economy. The aim was to demonstrate that

‘the sanctions have already significantly weakened the Russian economy, and the future of the country becomes bleaker each day as Russia continues its war of aggression against Ukraine.’

The core of his argument is that Russia is following a policy of 'wartime Keynesianism.' Money is pouring into the economy but with unhealthy consequences. The rouble has been depreciating, adding to the cost of imports. Inflation has now reached 8%, with food inflation even higher. The Russian Central Bank has sought to stabilise the economy by putting up interest rates, which are now 16% a year, while borrowing rates are on a premium at 14%.

With unemployment at barely 3%, the problems are aggravated through labour shortages. These are the result not only of the incessant demands for manpower from the front, and the determination to keep defence factories working around the clock, but also an aging population, and the flight of hundreds and thousands of people, many skilled. Bonuses offered by the military are siphoning people away from the oil and gas sector, which has historically paid well, while defence contractors are poaching staff from each other. One way to meet the extra demand would be to encourage immigration from Central Asia, but that now meets resistance following the terrorist attack on Crocus City Hall.

The problem with a booming defence economy is that it is largely geared to producing things that go boom without any lasting benefit to the economy. The opportunity costs are high, with far less available for education, health, welfare, and all forms of infrastructure. The boom has put money into the economy but not enough Russian goods are being produced to meet a growth in consumer demand. They have to be met by imports. Despite its proud scientific traditions, Russia is now out of the running when it comes to advanced technology development, such as quantum computing and AI. For Russians of a certain age, who can recall when the Soviet Union was the No 2 economy and China an upstart to be kept in its place, it must be galling to now be so dependent on China, which now provides 50% of Russia’s imports.

The illegal annexation of chunks of four new provinces, in addition to Crimea, adds to the economic pressures. Russia has to repair the damage it has inflicted upon them to make them functional. It has taken on a population which needs subsidies, including pensions, because the bulk of the able-bodied have fled. This requires diverting even more expenditure away from Russian needs.

Because there is no spare capacity in the economy, and no evident productivity gains, non-energy exports cannot rise and may start to fall. So revenue is even more dependent than before on energy prices. Income went shooting up in 2022, fell back by 50 percent in 2023, and now is expected to rise by about a third in 2024. So long as prices stay high then the economic managers will be happy but if they go down there could be trouble. Difficulties really start if the price of Urals Crude goes below $60 a barrel  – it is currently $76. In addition, the loss of the European market for gas, the long-term decline in fossil fuel use because of climate change, and the lack of spare funds and technology for investment offers a disturbing long-term prognosis for this vital industry.

Nothing is therefore going to happen in the near term to force Russia to make fundamental changes to its Ukraine strategy. Nonetheless, the economy is vulnerable and a limiting factor over the long-term. Funding the war, maintaining living standards, and sustaining macro-economic stability will be a challenge. There could well be a hard landing when the time comes to try to turn back into a peace-time economy. These are all factors that should worry any policy-makers concerned about the future of Russia’s society and economy, but so long as the leadership is determined on its current political course they will cope.

There is not, however, much scope for expanding defence production. Some high-end components are still hard to source because of sanctions but there are many older components around that they have been able to access, and more is now coming from China. It remains more straightforward for Russia to reproduce older systems than produce more of the complex newer systems. Vast quantities of armoured vehicles and artillery pieces have been lost since the start of the full-scale invasion, and are still being lost. To fill the gaps Russia has brought refurbished replacements out of storage, as well as repaired damaged kit. Although, as Watling and Reynolds point out, industrial output has been increased to 1500 tanks and 3,000 armoured vehicles, some 80 percent of these are not new production but are refurbished and modernized from Russian war stocks. This may suffice for 2024, but as the old stocks are run down then new vehicles will need to be produced and there will be fewer of these. Similarly with ammunition rounds. The gap between what the front-line forces need and current production can currently be met from stores and North Korea (although neither offer great quality). Over time the situation is not going to get any easier.

Time Pressures

All this helps explain why Putin may not feel that he has all the time in the world. He was encouraged last last year because he felt that his forces had seized the initiative back from Ukraine and that support in the West was palpably waning. The importance of the Congressional vote, therefore, was not only in providing much-needed relief to embattled front-line forces but as a long-term commitment to Ukraine. Of course, more will be needed at the end of the year, and a Trump presidency remains a possibility, but Putin cannot assume that the former president will ride to his rescue. Europe has also been stepping up its effort, and while the delays to gear up production, especially for artillery shells, has been frustrating the position is steadily improving,

Ukraine has been building up its own defence production, with significant increases (from low bases) in armoured vehicles and anti-tank weapons. It has become an innovative developer and producer of a range of drones (over 100 different models) and has shown how these can be used effectively. Although expenditure on military procurement has gone up from a pre-war $1 billion a year to $10 billion, there remains a serious funding problem. It is unable to work at full capacity. According to one calculation Ukraine’s defence companies could produce $18bn worth of armaments this year but government appropriations only covered half of this. worth only $9bn. There are now moves from European countries to pay for more production inside Ukraine. Western manufacturing plants are already being built in western Ukraine. BAE Systems, for example, is repairing battle-damaged systems in Ukraine, so that they don’t have to be taken out of the country to be fixed.

While it will be difficult for some time for Ukraine to take back large chunks of occupied territory it is showing itself to be more effective in hitting targets behind the front-line. The Black Sea campaign has been a substantial achievement and removed one source of Russian pressure. Most of the fleet’s vessels moved have been obliged back from Crimea to Novorossiysk, while Ukraine is now able to sustain the passage of 200 ships a month entering and leaving its ports.

When it comes to Russia proper there are still restrictions on using long-range Western systems (although the UK has recently taken a more relaxed attitude on the use of Storm Shadow missiles) but Ukraine has been using its own long-range drones effectively to hit Russian refinery capacity. Unlike other military-related targets these are vulnerable to the limited payloads carried by drones. More than a dozen refineries across nine Russian regions have been hit this year. The attacks thus far have led to increases in diesel and petrol prices for Russian consumers, and Moscow scaling back its fuel exports to near-historic lows. The pressure on Crimea is also growing.

Moscow has for some time being insisting that its real fight is with NATO which is using Ukraine as a proxy. If the West sustains its support for Ukraine then Putin has no obvious way to bring the war to a satisfactory conclusion. This is why a vital part of his strategy from the start has been to put pressure on Western elites to abandon Ukraine through every mean possible – from energy shortages to persistent information campaigns. A pattern of disruptive led to a statement by the North Atlantic Council warning of ‘Russian Hybrid activities’, by which they mean disinformation, sabotage, acts of violence, cyber and electronic interference across the alliance.  A recent report by Chatham House provides examples jammed satellite signals affecting an aircraft carrying the UK Defence Secretary Grant Shapps back from Poland. There are now regular reports of Russia jamming of GPS navigation systems, affecting flights close to Russia’s periphery.

The promise of drills using tactical nuclear weapons close to Ukrainian territory was put down to President Macron’s statement about the possible value of Western forces being deployed in Ukraine as well as UK Foreign Minister David Cameron’s readiness to see British systems used against targets in Russia. This is all consistent with Putin’s established position of  use of nuclear threats to deter NATO countries intervening directly. There is not going to be a direct commitment of Western forces to the fight but these moves remind Putin that Western countries understand the stakes, and the dangers of abandoning Ukraine. They also reveal the problem with establishing red lines when they are likely to be breached by incremenetal steps. It is one thing, for example, for Russian forces to find themselves face to face with troops from NATO countries, but what about relatively small numbers of personnel supporting training? Hardly worth a world war.

Inevitably the prospect of many more months of deadlock has led to the revival of calls for peace negotiations. At the end of April US Secretary of State Blinken observed that ending the war ‘depends mostly on Vladimir Putin and what he decides,’ but ‘the minute that Russia demonstrates that it’s genuinely willing to negotiate [in line with the principles of the UN Charter], we’ll certainly be there, and I believe the Ukrainians will be there.’ I’ll look at the possibilities for negotiations more carefully in a future post in the context of the ‘peace conference’ scheduled to take place in Switzerland next month. But for now it remains hard to see how even a cease-fire can be negotiated in current conditions.

For Putin deadlock is preferable to defeat but victory would be better. He had reason to believe at the start of this year that he might have a path to victory as his forces pressed hard against Ukrainian positions along the line of contact while the US Congress was paralysed by Republican Party splits. This led to concern that we had reached a turning point in this war, with Russia having the more reason to be optimistic. The pendulum has yet to swing in the other direction but Russia’s big push has not yielded decisive results and its position could worsen towards the end of this year. So for the third year in a row Putin has celebrated a famous victory of almost eight decades ago while being unable to claim a new victory.


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