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Going Hand in Hand: Ukraine War Will Bankrupt Russia

The prolonged conflict between Russia and Ukraine has been a costly endeavour that the nation's economy can no longer support. Russian insolvency would eventually result from the protracted battle, despite leaked US military records revealing that Moscow has found methods to finance its military actions in Ukraine amid Western sanctions.

The leaked documents, allegedly released by Air National Guardsman Jack Teixeira, who faces jail time if found guilty of the leaks, show that Russia's economic elite are not likely to stop supporting President Vladimir Putin, even if they do not entirely support his actions in Ukraine. The assessments also imply that Moscow is counting on its sovereign wealth fund, increasing imports, and the flexibility of enterprises to help.

Additionally, according to the assessments, Moscow is depending on higher corporate taxes, its sovereign wealth fund, higher imports, and the flexibility of enterprises to lessen the negative economic effects of the sanctions. This is while Russia's economy has been severely harmed by Western sanctions, despite the fact that these actions may have benefitted the nation to some extent.

Moscow has found it challenging to access global markets as a result of the US-led economic assault, which has also seen a steep decrease in foreign investment. Because of the unstable nature of the nation's currency, the ruble, and its decline in value relative to the US dollar, it is now more expensive for Russian enterprises to import goods and services from overseas.

By locating new markets for its discounted oil in Asia, Russia has attempted to protect itself from the effects of the sanctions, but this tactic might not be viable in the long run. Moscow's income has been constrained by the G7's attempts to control the price of Russian crude, and the US is pressuring the other G7 members to approve new penalties that would forbid all exports to Russia. The EU and Japan, however, are resisting these initiatives, further aggravating the situation.

Taken together, the crisis in Ukraine is no exception to the historical trend that all wars result in the financial ruin of those on both sides. Costly and taxing, Russia's military operation in Ukraine has put strain on an already precarious economy. Inflation has increased and the GDP growth of the nation has slowed, making it challenging for average Russians to make ends meet.

The sanctions have also had an impact on a variety of industries, including energy, finance, technology, and agriculture, which has resulted in job losses and worse living standards for millions of people. While the stolen US military records may imply that Russia can continue financing its war in Ukraine, the long-lasting battle will ultimately cause the nation to become bankrupt.

In addition to the expensive cost of keeping a military presence in Ukraine, economic pressure from sanctions will make it harder for Russia to continue its assault in the long run. In the end, the Ukrainian conflict will only cause additional hardship for both Russian and Ukrainian citizens.


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