scale of military spending is significantly higher. russias nearly 560,000 armed internal security troops, many of whom have been deployed to occupied ukraine, are funded outside the defense budgetas are the private military companies that have sprung up across russia. reducing these enormous defense expenditures will inevitably lead to an economic downturn. if the kremlin scales back the armed forces to a sustainable level, large numbers of traumatized veterans and well-paid defense workers will find themselves redundant. experiences from other societiesespecially european states after world war isuggest that hordes of demobilized soldiers and unemployed defense workers are a recipe for political instability. the extent of the postwar russian recession will be even worse because russias civilian economyparticularly small and medium-sized businesseshas shrunk due to the war. in a phenomenon familiar to economists, high defense spending has driven up wages and drawn workers away from non-defense companies. the russian central banks policy of raising interest rates, currently at 21%, has made it much harder for non-defense companies to obtain capital through loans. in postwar russia, a shrunken civilian sector will not be able to absorb the soldiers and workers cast out of the military and defense sectors. therefore, russias leaders face a difficult set of self-inflicted dilemmas. russia cannot continue the ongoing war beyond the end of 2025, when they will begin running out of critical weapons systems.
Finland