August 16, 2026: The Ukraine War, now in its fifth year, has finally caught the attention of Russian civilians. Recent opinion surveys found that the most pressing issues were high prices (18 percent), low wages (24 percent), and the war in Ukraine (33 percent) . In late 2022, about half of the respondents cited the war as their major concern. A year later, declining salaries and rising problems were the main problems. Over the last few years, increasing Ukrainian attacks on the Russian economy have led Russian civilians to realize that their economic problems were not going away until the war ended. Russian leader Vladimir Putin insists the war will go on until it is won. He does not believe that and is seeking a way out of the war without admitting defeat.

The war in Ukraine disrupted Russian manufacturing activity as production shifted toward military needs. The large number of Russian men mobilized for the war caused labor shortages. Then there were over a million Russian men lost, killed, disabled, deserted, or who fled the country to avoid military service.

The labor shortage is exacerbated by the shortage of high school and university graduates with technical training. Too many of those grads concentrated on the humanities rather than industrial and software engineering. As a result, firms that manufacture products requiring extensive technical skills cut production. The government has responded by proposing laws that would limit enrollment for humanities students. It would offer bonuses and other benefits to students studying technical subjects.

Most of these measures can be attributed to the war in Ukraine. This conflict caused enormous economic damage to both countries. Ukraine's GDP declined by 30 percent in 2022, while Russia’s declined by about 3 percent. Russia was hit hard by economic sanctions in 2014 for taking Crimea and parts of eastern Ukraine, and sanctions for its 2022 invasion made it even more isolated from the global economy. Russia’s only arms imports now come from equally poor North Korean artillery shells and rockets and cheap Iranian missiles. Payment is by barter. North Korea gets badly needed food and oil supplies while Iran receives modern jet fighters and other military tech. China and India help fund it by purchasing heavily discounted Russian oil and natural gas.

Three years ago, Western sanctions were expanded, blocking Russia from obtaining much industrial equipment for factories or establishing new ones. Russia now has a harder time getting machine tools and components needed to build weapons. These include motors and other drone components, as well as lithium-ion batteries that power most drones. Many of these banned components for weapons are also used in non-military items. These are called dual-use items, and the new sanctions also ban them to help ensure no supplies are available to build weapons. This includes complex systems such as missiles, which require specific chemicals to fabricate solid-fuel motors.

Alternative sources for sanctioned items exist, but they cost more, take longer to deliver, and don't guarantee regular shipments. Using smugglers to circumvent sanctions is expensive, but Russia must pay more to keep essential wartime industries running.

Dealing with sanctions also requires substantial funds, and Russian government debt is more expensive to raise because lenders charge higher interest rates on what they call high-risk default debt. That forces Russia to be selective in what military equipment it purchases. For example, the government won’t buy many new rifles for its combat troops because it still has lots of older weapons in storage. That does not always work as intended because many of these old rifles were so poorly maintained that they were often visibly rusty and barely operational. The newly mobilized troops complained, but the federal government recognizes that most of these poorly trained and equipped soldiers won’t last long in combat. Local governments in the places where many of the new troops came from suffered most of the blowback and often organized efforts to raise local funds to buy new weapons and other equipment for locals now in the army.

Foreign suppliers were few and provided low-quality weapons. This included Iranian Shaheed propeller-driven small drones armed to perform as slow-moving cruise missiles. They also used cheap, often aging North Korean 152mm artillery shells to keep the fighting going. The Iranian missiles were not as useful as predicted because the Ukrainians shot down most of them. Debris from intercepted missiles that exploded on impact still caused damage. When Russia used a lot of cruise missiles in an attack, most crashed in urban areas, where the wreckage damaged Ukrainian infrastructure.

By early 2024, Russia’s enormous pre-war artillery munitions stocks were depleted, and its production facilities couldn't expand. Before 1991, much Soviet-era 122mm and 152mm ammunition was produced outside post-1991 Russia. That includes Ukraine, Belarus, and other countries that have halted production and dismantled production facilities. Russia was not expecting a long war in Ukraine and did not have sufficient artillery munitions to supply all the artillery it deployed in Ukraine over the past three years. On the front lines, Ukrainian troops have noted much fewer Russian shells fired at them. Ukrainian artillery, a combination of old 152mm and new 155mm guns, also used more effective tactics than the Russians.

Russia has used up its own supplies of ballistic and cruise missiles; the few remaining were not enough to reverse the progress Ukraine was making in rebuilding its production capabilities. Ukrainian reconstruction was focused on keeping the lights on, along with other utilities such as water, sewage disposal, and heating. Because so much housing was damaged or destroyed, twenty percent of Ukrainians had temporarily left the country, leaving enough unoccupied housing for those needing temporary shelter until their bombed-out homes were repaired or rebuilt. Some of the foreign aid consisted of building supplies to speed the restoration of war-damaged housing. Russia experienced a smaller population exodus. Most were military-age men avoiding mobilization or unemployed Russians with skills who could get jobs anywhere. These refugees were sufficiently numerous to cause labor shortages inside Russia, forcing the government to import North Korean workers to deal with the problem.

Neighboring Belarus was technically an ally, but the relationship was more like Belarus being an unwilling donor of resources to Russia, which makes no secret of its plan to absorb Belarus once it conquers Ukraine. Most Belarussians are pro-Ukraine and want to maintain independence from Russia. The pro-Russia Belarusian leaders and their security forces, reinforced with some Russians, keep Belarus from more actively supporting Ukraine.

Central Asian nations that also became independent of Russia in 1991 see themselves as on the Russian acquisition list too, and adopted wary neutrality towards the Russia-Ukraine war while supporting Ukraine. This limited Russian economic opportunities in Central Asia. China accelerated its efforts to replace Russia as the Central Asian states' major foreign trading partner.

China has generally avoided increasing its pre-war trade with Russia because of all the sanctions but has quietly increased its trade with North Korea and Iran. China does not give things away but is willing to sell to anyone who can pay. Iran has oil and North Korea has coal and minerals plus whatever its hackers can steal. China allowed these hackers to operate from China as long as they paid their own way and did not hack Chinese targets. The North Korean hackers have become quite good at stealing cryptocurrency that China or Russia accepts as payment.

By 2026, widespread Ukrainian air attacks against economic targets and major cities brought the war home to millions of Russians. Despite government censorship efforts, cellphone photos and videos of the attacks reached most Russians. The more desperate Russia's economic situation became, the more they had to improvise to survive. That’s an old Russian tradition that must be relied on more often than most Russians want.