When the world gets closer.

We help you see farther.

Sign up to our expressly international daily newsletter.

Already a subscriber? Log in .

You've reached your limit of one free article.

Get unlimited access to Worldcrunch

You can cancel anytime .


Exclusive International news coverage

Ad-free experience NEW

Weekly digital Magazine NEW

9 daily & weekly Newsletters

Access to Worldcrunch archives

Free trial

30-days free access, then $2.90
per month.

Annual Access BEST VALUE

$19.90 per year, save $14.90 compared to monthly billing.save $14.90.

Subscribe to Worldcrunch

Vladimir Putin's Two Economic Bets

By deciding to invade Ukraine, the President of Russia did so believing that money would protect his country. By trying to prove him wrong, the West is facing its own potential crash.

 On March 2, 2022, the Russian rouble hit record lows.

Ruble exchange rates against the euro and the dollar. The Russian ruble hits record lows this week

Jean-Marc Vittori


It is not the economy that wages war. It is primarily men, with weapons and ideas, visions and strategies.

Stay up-to-date with the latest on the Russia-Ukraine war, with our exclusive international coverage. Sign up to our free daily newsletter.

However, for more than a century, the economy has played an essential role in war development. Vladimir Putin knows this, even if he doesn't usually care much about the subject.

By deciding to invade Ukraine, the Russian president made two economic bets. Two wagers that could not only determine his triumph or defeat but also lead to disasters in the Western world.

Storing financial reserves

The first bet comes from the lessons learned in Moscow in 2014 when the annexation of Crimea by Russia led to sanctions from Western countries. Though not perfect, these measures had a certain impact on the Russian economy.

The lesson Vladimir Putin learned from this reaction is the same that Asian countries drew from the 1997-1998 Asian financial crisis, which was caused by short-term capital flight. To respond, the International Monetary Fund (IMF) imposed an inappropriate rigor on the affected countries in East and Southeast Asia (Thailand, Philippines, South Korea, etc.), which deepened the recession.

These countries, and others like China, came to a simple conclusion: if you want to protect yourself from the IMF, you have to accumulate trade surpluses to build up a financial reserve.

Rising oil and gas prices

Also after 2014, Vladimir Putin bet that Russia could break free from its dependence on Western capital. Accounts were kept with an iron fist with positive results: public finances were in balance last year, public debt was less than 20% of GDP and foreign exchange reserves exceeded $600 billion.

Higher-priced oil and gas, which account for more than half of the country's exports, were of great help to the Russian president. The money flowed. In the past five years, Russia's GDP has registered a growth roughly similar to the United States in volume (9% against 10%) but superior in value (42% against 23%, according to IMF figures). Enough to fill a substantial kitty!

But having cash in stock is not enough. You need to be able to use it. At first, the Europeans showed no agreement on the subject. While Italy wanted to maintain the export of its luxury goods, Germany won the gold medal with an environmental minister refusing to consider any measures that could deprive the country of Russian coal.

Annihilating Putin's efforts

President Putin meets with Aleksander Shokhin, Head of Russian Union of Industrialists and Entrepreneurs

​President Putin meets with Aleksander Shokhin, Head of the Russian Union of Industrialists and Entrepreneurs

Russian Look via ZUMA Press Wire

Zelensky is not an oligarch

In a second step, the Europeans eventually agreed on measures that would have formidable effects: the eviction of Russian banks from the international payment system Swift and blocking the assets of the Russian central bank. If they are really implemented, they could annihilate the efforts of Vladimir Putin to avoid the financial strangulation of his country.

The second wager is of a different nature. Vladimir Putin believed his adversary would put the economy first. He thought the President of Ukraine, Volodymyr Zelensky, was an oligarch like those around him, or a leader of a former Soviet republic like many others. A man driven by money, with billions sheltered in a Swiss bank, and ready to flee his country at the first sign of trouble.

Zelensky's thing is not economics, it's politics.

But Zelensky did not leave. His thing is not economics, it's politics. He is not fighting for his fortune, but for the freedom of Ukraine. If he dies in this fight, he will become a martyr whose memory will long galvanize opponents of Russia. Putin thought he was arriving in Abkhazia (recognized by most countries as part of Georgia), but he landed in Afghanistan.

Of course, Vladimir Putin probably still has the military means to win the war. He might be able to appoint a puppet government. And he may succeed in making Ukraine a satellite of Russia again.

But it also becomes possible that Putin will be swept away by the very storm he has created. The billionaires who support him may not appreciate seeing their fortunes blocked. The military could not bear being ridiculed in Ukraine like the Americans in Vietnam. And even Russians might grow weary of the price to pay — dead soldiers and increasingly expensive lives.

Two dangers for the West

The storm will not stop at the borders of Russia. With unprecedented and courageous measures, the West runs the risk of amplifying the effects. Two dangers are already in view.

The first danger is commercial. One way or another, Russia will no longer be able to export its gas, its oil, its wheat, and its metals like aluminum or titanium.

On already very tense markets, where the pandemic delivered a gigantic blow to supply and demand, prices are likely to soar even more. And to embed inflation even more in people's minds.

The second even greater danger is financial. Even if Russian finance only represents a tiny part of global transactions, blocking it could cause formidable side effects to fragile markets, which have been puffed up by very low-interest rates for a long time and weakened by their recent rise.

If he loses his bets, Vladimir Putin could precipitate a huge financial crash. The same crash other enemies of Western civilization dreamt of by sending planes to hit the two tallest towers in New York, a stone's throw from Wall Street, on September 11, 2001.

You've reached your limit of free articles.

To read the full story, start your free trial today.

Get unlimited access. Cancel anytime.

Exclusive coverage from the world's top sources, in English for the first time.

Insights from the widest range of perspectives, languages and countries.


Look At This Crap! The "Enshittification" Theory Of Why The Internet Is Broken

The term was coined by journalist Cory Doctorow to explain the fatal drift of major Internet platforms: if they were ever useful and user-friendly, they will inevitably end up being odious.

A photo of hands holding onto a smartphone

A person holding their smartphone

Gilles Lambert/ZUMA
Manuel Ligero


The universe tends toward chaos. Ultimately, everything degenerates. These immutable laws are even more true of the Internet.

In the case of media platforms, everything you once thought was a good service will, sooner or later, disgust you. This trend has been given a name: enshittification. The term was coined by Canadian blogger and journalist Cory Doctorow to explain the inevitable drift of technological giants toward... well.

The explanation is in line with the most basic tenets of Marxism. All digital companies have investors (essentially the bourgeoisie, people who don't perform any work and take the lion's share of the profits), and these investors want to see the percentage of their gains grow year after year. This pushes companies to make decisions that affect the service they provide to their customers. Although they don't do it unwillingly, quite the opposite.

For the latest news & views from every corner of the world, Worldcrunch Today is the only truly international newsletter. Sign up here.

Annoying customers is just another part of the business plan. Look at Netflix, for example. The streaming giant has long been riddling how to monetize shared Netflix accounts. Option 1: adding a premium option to its regular price. Next, it asked for verification through text messages. After that, it considered raising the total subscription price. It also mulled adding advertising to the mix, and so on. These endless maneuvers irritated its audience, even as the company has been unable to decide which way it wants to go. So, slowly but surely, we see it drifting toward enshittification.

Keep reading...Show less

The latest