Russia is not doing well militarily and economically, and it has also lost the technological war

 

Despite Vladimir Putin's assurances that "the regime in Kiev will be over in a year at the most", and that "Ukraine will be liberated" by the middle of 2023, this not only did not happen, but the situation on the ground is such that the military shifts practically imperceptible.

On the other hand, the Kremlin's war adventure cost Russia partial international isolation, hundreds of billions of dollars in losses for its companies, and the most important one - great uncertainty in the country's further development in the short and medium term.

Although even Western economists considered at the end of last year that the Russian economy suffered a big blow, but not a fall, in recent months the Russian ruble has experienced a real downturn - currently on the world stock exchanges, 95 rubles are needed for one US dollar. In practice, this means that one ruble is now worth almost as much as one US cent.

 

Good old propaganda

Although the Kremlin and Putin himself have been assuring Russian citizens for years of the existence of fantastic "invincible" weapons, the development of aircraft with characteristics like those from science fiction films, and the possession of "secret" weapons that can "subdue NATO", it turned out that it was an "old good" Russian propaganda (also known as maskirovka). Just two years ago, Putin announced at a press conference in Moscow the production and deployment of new ballistic missiles, based on the Avangard system, which "can break through any defense of NATO countries." In June of this year, Putin stated in an interview on national television that "there are certain problems in the supply of equipment and drones." Those "certain problems" are most likely related to the figures from the field and the front lines in Ukraine.

Although the Kremlin tried for more than a year to reduce and hide both human and technical and equipment losses, the real situation still reached the Russian public. The numbers still "do not agree", so independent sources on the ground and international experts state that at least 11,000 pieces of various weapons were lost, which is almost 15 to 20 percent of the total arsenal of the Russian armed forces. Of this number, 7,450 were completely destroyed, according to Ukrainian security forces, 450 were significantly damaged, while over 2,400 were abandoned and captured. The most destroyed were tanks, 2,136 of them (models T-62, T-62MV, T-72, T-80), armored vehicles and transporters – 922, artillery systems – 846, and even 34 completely new mine-resistant vehicles (MRAP ). 244 connection and communication systems and over 300 engineering vehicles were also destroyed. Also, 83 Russian aircraft were completely destroyed – MiG-31BM, Su-24M, SU-30SM, Su-34, as well as one Tu-85MS aircraft.

Components that no longer exist

Although the Kremlin still maintains the position that "these funds will be compensated", and that the military factories work continuously, this is simply not possible in practice. Even before the start of the aggression, the MiG and Sukhoi concerns had constant problems with the procurement of parts and electronic components. Namely, most of the active airplanes and helicopters were designed during the USSR and used components that were then produced in the former Soviet Ukraine and Czechoslovakia. Those factories are long gone or they no longer sell technology to Russia (especially in the case of NATO member countries: the Czech Republic and Slovakia).

 

Over the years, Russian aeronautical engineers have tried to produce new "replacement" components, as well as to develop new avionics and guidance electronics, but this has been very slow due to financial problems. For practically two decades, both concerns were concentrated on the maintenance of "existing products", i.e. of active aircraft, which are still in the composition of numerous armies around the world.

 

The development of new technologies and aircraft was an "accompanying activity", because not even the military planners and creators of Russia's military budget expected the "Ukrainian challenge". A series of sanctions by the US and the European Union, as well as their partners around the world, means that even if a company or factory were willing to sell technology or components to Russian conglomerates, they simply could not be delivered. The Canadian companies cPunto and Electronic Network Inc. "made sure of that". Their shipments were stopped and seized in March, and the companies were also on the US Commerce Department's sanctions list.

 

It is also interesting that the Iranian drones "Shahed 136", which Russia uses in Ukraine, also contain Western technology. The Mado MD-550 engine is practically an identical copy of the German Limbach 550 engine. That's how the Mado company, based in the city of Shokuhieh, in Qom province, found itself under attack from Western sanctions.

 

Who will make Russian chips?

A recently published European Parliament document states that the autonomy of the Russian technology and internet sector has been greatly reduced. According to the EU document, since 2014, Russia has been increasing the import of chips, processors and micro-controllers for various purposes, primarily for installation in domestically developed systems. Sanctions practically marked the end of such a "strategy".

 

Although many analysts believe that Russia will, sooner or later, completely turn to China for the development and import of chips, this is not entirely possible. Although China has not imposed any sanctions on the Russian Federation, and is also a member of the BRICS alliance, on the other hand, it has to watch out for the interests of a large number of Western (primarily American) companies from the technology sector. The largest world markets for smartphones, computers and other electronics are the USA and the EU, and on the other hand, the domestic Chinese market itself is one of the largest buyers. Thus, Chinese people in large numbers prefer Apple iPhone and MacBook computers, and smartphones from Chinese manufacturers, such as Xiaomi, Oppo and Huawei, respectively use the Android operating system of the American Google. In such a complicated technological-financial symbiosis of the American and Chinese technology sectors, there is simply no place for Russia.

 

Beijing will certainly not jeopardize its exports of electronic equipment and finished products to Western markets, just to help Russia. To make the irony even greater, iPhone smartphones were at the top of sales in Russia last year as well, despite the war and sanctions, even though they are now purchased outside the official distributor channels.

 

So far, the technology sanctions have hit Russian banks and its financial sector the most. Until last year, most banks in Russia relied on Western business management software (standard in the banking sector, such as Oracle and SAP). After the introduction of sanctions, Russian banks were also expelled from the SWIFT international business system. This caused major problems for clients, especially regarding the use of credit cards. Although (in theory) it is possible to switch to other systems and software, this requires a lot of time and large investments, for which there are no funds due to the fall of the ruble and the interruption of trade with foreign companies.