I’ve always liked, and believed in, the phrase: follow the money.  Almost every good and bad thing that happens in geopolitics has a dollar sign behind it.  It isn’t always obvious but money, and people scheming how they can get it, or how to keep it, is usually lurking in the background.  Money is the hand-in-glove of power.  Just ask the WEF.

The Russian invasion of the Ukraine places at risk the highly centralised system to control the country and dispense favours (ie. money) that Russian President Vladimir Putin has nurtured and maintained.  In turn, that begs the question whether Putin has gone too far this time and whether those with huge vested interests, such as the oligarchs, will move to protect their interests (money) if they perceive the structure is in real danger of collapse.

In other words, could the oligarch’s harness their obvious self-interest to subtly generate the conditions that displace Putin?  At first pass the answer must be ‘no’ but as billions of dollars vaporise before their eyes, not to mention the accompanying lifestyle, the power of money can make strange bedfellows.

Be assured that Putin’s power is absolute today.  He controls a collection of factions and institutions that compete for power to command the country’s security structures, government bodies and economy whilst he has positioned himself as the arbiter among these groups.  Not unlike a Tsar or King of yesteryear, Putin dispenses favours that distribute, or redistribute, wealth and positions of authority among the elite (his court).

While the balance among the most favoured has been relatively stable, that stability is under direct threat due to western sanctions which will undoubtedly change the country.  Stagflation is a possibility and its destructive impact may further unsettle a population who are already wary of the war with Ukraine.  Most Russians know ‘why’ the war has commenced but that acceptance may wear thin as an economic firestorm eats their living standards and savings with accelerating inflation coupled to a recession.

Russia’s relatively narrow reliance on energy and wheat to drive the economy, competition within the elite, potential regionalisation and even demographic shifts are all potential pressures.  The cost to the nation in terms of replacing lost war materiel will see an imbalance as some oligarch’s profit, whilst others will see the continued erosion of their influence (and money) due to international sanctions.  All of this may initiate a fragility not previously witnessed and only a decisive and heavy hand by Putin will suppress those pressures.

But that suppression may only be temporary before events spiral.

The average Russian citizen is watching their purchasing power collapse as the ruble goes into freefall.  Taxation revenue will contract and there is a real danger that as revenues fall, the Russian government will naturally drift to prioritising the remaining funds to bolster the federal coffers rather than those of regional centres.  A reduction in financing for the regions will inevitably lead to a consequent loss of amenity which may spark public protests.

We should also note that the proportion of adults born after the fall of the Soviet Union is a growing segment of the population.  Those individuals, whilst currently loyal to the Federation, may be less than pleased at rising costs, stagnant wages and the loss of local services when they have young families to feed.  Without the lived experience of the deprivations of communism, those same individuals are a relatively small but growing pressure group.  Moscow will undoubtedly crack down – creating even more fault lines.

The reasons for the invasion of Ukraine have been fully examined but it is self-evident that geography and demography will always compel Russia to prioritize its European frontier.  We can expect the USA to continue to lead the charge to promote instability and economic challenges via subtle and not-so-subtle methods which will whittle away at Putin’s Russia.  On their own, the sanctions will not dissuade Putin from the current path but even with Chinese assistance, the impact of the sanctions may grow to a malignancy that will eat away at the core of the nation and Putin’s grip on power.

Over time this may present itself as unrest in the Caucasus and Central Asian regions as they are destabilised by a mixture of domestic and external influences.  The US State Department must salivate at the long term prospect that the Russian Federation may fracture into independent Republics in a localised version of the collapse of the Soviet Union.  We can be certain the CIA are already war-gaming differing options and opportunities to cause internal Russian havoc.

Putin has bet everything on the invasion of Ukraine – from his status as President to the international reputation of Russian forces, the national economy and wellbeing of the Russian people to the very survival of the Russian Federation.  To Putin and his closest confidants in the government and the military, failure in Ukraine is not an option.  Nothing but complete achievement of the objectives will be acceptable.

However, whilst it is very probable that the Russian military will win the shooting side of the conflict, particularly once the supply of arms to Ukraine is choked off at the western border, winning the battle for the Ukraine does not mean Putin will win the economic war.  Sanctions will remain as the world largely refuses to accept that Ukraine sued for peace on anything approaching equitable terms.  Zelensky will make sure the world knows Ukraine was beaten into submission making the withdrawal of sanctions highly problematic.

The elite may wish to protect their positions by initiating and encouraging Putin’s replacement with someone from their cadre but they don’t hold all the keys.  Alternatively, if widespread population unrest and a flailing economy weakens Putin sufficiently, perhaps a more moderate politician will be able to harness the oligarch’s resources, particularly if promises to restore their personal treasuries appears realistic.

It may seem implausible (and even suicidal) today and none of it will happen in the short term, but will the undoubted power of money cause the oppressed, pauper and oligarch alike, to rise up?