How much is the Ukraine war costing Russia?

Business Daily

BBC

News, Business

4.4 • 796 Ratings

🗓️ 11 March 2022

⏱️ 18 minutes

🔗️ Recording | iTunes | RSS

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Summary

Munitions, equipment losses, sanctions, isolation - Vladimir Putin's decision to invade has come with a rapidly increasing price tag. Just the cost of prosecuting the war is proving astronomical, as Edward Arnold of military think tank RUSI tells Ed Butler.

Then there's the economic blowback - the freezing of the central bank's reserves, the exclusion from international finance, the boycotting by key international companies. Over the coming months, Russian industry could grind to a halt, while citizens could face food shortages, according to economist Maxim Mironov of IE Business School.

Take the example of aviation - soon half the planes in Russia could be grounded for lack of spare parts, says consultant Rob Watts of ACC Aviation. But will this be enough to convince Putin and the political elite around him to pull out of Ukraine? The Ukrainian political scientist Olga Chyzh says don't hold your breath.

Producer: Laurence Knight

(Picture: Troop train carrying Russian tanks; Credit: Russian Defence Ministry\TASS via Getty Images)

Transcript

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0:00.0	Hi there. My name's Ed Butler. Welcome to Business Daily from the BBC. Today, what it really costs
0:07.0	Russia to wage war in Ukraine, is there a chance that the Kremlin can run out of money?
0:13.9	When the state starts running out of money, I imagine they're going to stop paying their retirees,
0:19.5	stop paying their doctors and stop paying their teachers, but they're going to wait for as long as they can to stop paying their retirees, stop paying their doctors and stop paying their teachers,
0:21.7	but they're going to wait for as long as they can to stop paying their military.
0:25.9	But if the conflict drags on, some reckon this could be a battle of economic endurance.
0:30.9	If they want to continue this operation, the levels of investment that are required are going
0:37.4	to increase very, very quickly.
0:39.6	There are so many financial costs to Russia that I don't think anything along these lines
0:44.5	was thought of for the duration that the operation is likely to take.
0:48.4	That's coming up on Business Daily from the BBC.
0:56.8	The sound there are Russian smatch missiles being launched, part of the daily barrage
1:02.5	hitting the country's cities every single day now.
1:07.5	The physical and human toll of this bombardment is across every news outlet these days,
1:13.9	personal tragedies and, of course, economic devastation too.
1:18.7	So it's easy to forget the cost for those who are waging this war.
1:23.1	Every one of these exploding missiles represents tens of thousands of dollars worth of investment.
1:30.1	There's the lost tanks, too. Trucks, APCs, spent fuel. Running an army at war isn't a cheap business,
1:38.2	according to Ed Arnold. He's a former NATO military officer who's now a research fellow at the Royal United Services Institute.
1:45.3	They've had to stockpile a significant amount of ammunition, obviously fuel to feed the Russian
1:51.0	war machine and also feeding all of those troops in the area.
1:54.8	And what's clear only just two weeks into this war that actually the logistical preparation
	...

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