{"id":137674,"date":"2025-05-12T13:53:19","date_gmt":"2025-05-12T10:53:19","guid":{"rendered":"https:\/\/pozirk.online\/en\/longreads\/137674\/"},"modified":"2025-05-12T13:53:21","modified_gmt":"2025-05-12T10:53:21","slug":"russias-economic-struggles-to-impact-belarus","status":"publish","type":"longreads","link":"https:\/\/pozirk.online\/en\/longreads\/137674\/","title":{"rendered":"Russia\u2019s economic struggles to impact Belarus"},"content":{"rendered":"\n

The Russian economy is at a crossroads: one path leads to further militarization, the other to gradual and wrenching market-oriented reform. The choice will directly impact the Belarusian economy. Since 2020, and especially after 2022, Belarus has seen its economic dependence on Russia deepen.<\/strong><\/p>\n\n\n\n

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\n\n Russia's 2C43 Malva artillery system\n <\/div>\n \n
\n (Russia's MoD)<\/span>\n <\/div>\n <\/figcaption>\n<\/figure>\n\n\n\n

Russian civilian sectors struggling<\/strong><\/h2>\n\n\n\n

After Russia\u2019s full-scale invasion of Ukraine in February 2022, the Russian economy underwent several phases of adaptation.<\/p>\n\n\n\n

In 2022, it experienced the shock of sanctions and a war-related transformation. In 2023, the Russian government focused on redirecting trade and financial flows from the West to the East.<\/p>\n\n\n\n

By 2024, the economy was recovering, benefiting from budgetary infusions into the military industry. However, by 2025, it reached a turning point\u2014a moment of critical choice. The civilian sector began to show signs of stagnation, including rising inflation and declining production, especially in industries unrelated to defense.<\/p>\n\n\n\n

The redistribution of government funding in favor of the military-industrial complex (MIC), which is attracting both personnel and resources, has created structural imbalances. Civilian enterprises now face tight competition for labor, forcing them to raise wages at the expense of profitability.<\/p>\n\n\n\n

The financial system has adapted to the new realities by circumventing restrictions through cryptocurrencies, gold, and informal payment systems resembling Iran\u2019s \u201chawala.\u201d Nevertheless, the financial market remains under strain as resources are funneled into the MIC, leaving civilian sectors increasingly starved of investment.<\/p>\n\n\n\n

Slowdown<\/strong><\/h2>\n\n\n\n

With limited access to modern technologies due to sanctions, many civilian sectors have reached their expansion limits, making further upgrades nearly impossible.<\/p>\n\n\n\n

Inflation remains high, with the Central Bank of Russia\u2019s elevated interest rate suppressing both investment and lending. At the same time, individuals and businesses are trying to benefit from high deposit rates, further draining investment from the real economy. As a result, the economy has slowed.<\/p>\n\n\n\n

For example, in the first quarter of 2025, according to Rosstat, real disposable income rose by 8.4 percent, while retail sales increased by only 3 percent.<\/p>\n\n\n\n

The production of buses fell by 41 percent; washing machines, by 29 percent; television sets, by 26 percent; bulldozers, by 20 percent; and elevators, by 10 percent.<\/p>\n\n\n\n

The food industry is also in decline: sugar production dropped by 31 percent; sunflower oil, by 16 percent; flour, by 7 percent; and fish, by 3 percent. Even natural gas extraction declined by 4 percent.<\/p>\n\n\n\n

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