Kremlin official warns Russia’s economy could spin out of control

Russian official Boris Titov has warned that the Russian economy risks "going berserk" if it prioritizes the military-industrial complex, according to Reuters. The statement, made on September 1, 2024, reflects growing concern among Kremlin circles about the slowing economy. Titov, appointed in 2024 as Putin's special representative for international organizations for sustainable development, is a wealthy businessman who previously owned a major sparkling wine producer. He has previously run for president and is a member of a powerful business lobby.

Titov stresses the importance of balancing the military and civilian economies, emphasizing that many technical innovations useful for all have originated in the military-industrial sector. However, he cautions that maintaining this balance is crucial. Russia has implemented tax increases, ownership redistribution, and sought business support to finance the war. The country has also threatened owners who have failed to protect their assets from Ukrainian drone attacks.

Some supporters of the war and government officials draw parallels between Russia's current situation and the reorganization of the Soviet economy during World War II under dictator Joseph Stalin. However, Titov warns that this approach is facing resistance from various sectors, who argue that it is not a sustainable model. Titov states that this "berserk mode" can only persist for a limited time and should be approached with caution.

The Russian economy is projected to expand by only 0.4% in 2024, while civilian sectors are either stagnant or contracting. Despite this, some in Moscow, such as technocrat mayor Sergei Sobyanin, have echoed similar sentiments, suggesting that "killing a normal economy is equivalent to killing the whole country."