Putin’s war plans in tatters as economy ‘collapsing’ and furious soldiers go unpaid | World | News
Vladimir Putin’s war machine is unravelling as factories and regional administrations run out of money to pay workers and soldiers. The Kremlin has poured billions of pounds into its defence sector to boost production and weapons output.
Research carried out by the Financial Times last year showed that the number of armament enterprises tripled from some 2,000 pre-war to around 6,000. At the same time, many Russians found jobs in the defence sector, helping to reduce the country’s unemployment rate to an all-time low of 2.8%. However, in recent times the military-industrial complex has faced a growing production and employment crisis.
Analysts claim factories are struggling to cope with acute labour shortages, severe cash flow problems and a lack of critical components for weapons.
One firm to feel the heat is the Yaroslavl Shipbuilding Plant, which manufactures landing and patrol vessels. The plant has been unable to pay its 850 workers since late September, as Russia‘s Ministry of Defence stopped settling contract payments. The plant has been placed under sanctions since 2019, further restricting financing.
Putin’s army has relied heavily on Russia’s regions to recruit new soldiers for its horrific war in Ukraine. Many of these new recruits live in impoverished provincial towns and villages, far from the country’s large cosmopolitan cities.
The Kremlin has used generous financial incentives to entice the men to sign military contracts, which are paid out of regional budgets. However, Russia’s regions are facing their own severe budgetary crisis, and are running out of money to pay Putin’s conscripts.
Yakutia has frozen all military bonuses after running out of funds — the first openly acknowledged budget collapse directly caused by mobilisation. Finance Minister Ivan Alexeyev admitted: “Unfortunately, this is indeed our situation.”
The region was one of the main sources of contract soldiers after 2022, offering $29,000 for signing a contract.
Now, officials say they are unable to estimate how much they owe military personnel. Compensation payments have also been frozen — $8,300 for injury and $11,000 in case of death.
Yakutia’s problems are part of a wider pattern of financial chaos in Russia’s provinces. Russian regions were running a cumulative deficit of 724.8 billion rubles (£7bn) as of late September.
In October, regional governments in Tatarstan, Chuvashia, Mari El and Belgorod lowered enlistment payouts, while others cancelled additional bonuses altogether.
