Footage shows Russian Chelyabinsk Tractor Plant explosion
Vladimir Putin could be faced with widespread “social discontent” over his new rumoured “austerity package.”
Putin is expected to demand eight “non-ethnic Russian republics” rein in spending if they want to continue receiving cash from Moscow as he faces increasing funding pressure to continue his war in Ukraine.
The Institute for the Study of War (ISW) has suggested the move to target eight Moscow-controlled territories could be an attempt to shift the blame to local administrators for cuts Putin is expected to make in the coming months.
Putin loyalist Ramzan Kadyrov is now believed to have until December 18 to agree to reduce the gap between income and expenses alongside counterparts in Dagestan, Ingushetia and Tuva.
Four unilaterally annexed Ukrainian territories – Luhansk, Donetsk, Zhaphorizhzhia and Kherson – will also need to cut spending even though Russia does not fully control them.
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Commenting on reports of the new measures, the ISW said that “these obligations appear to amount to an austerity package” and could only be the start of “a wider set of measures to cut budget deficits while maintaining defence spending.”
They argued that making local administrators take charge of implementing the cuts could be a ploy to “prevent the Kremlin from bearing the expected discontent for austerity.”
Putin may also be trying to contain discontent among his voters by targeting those eight specific areas in light of next year’s election.
The ISW argued the move could be part of a strategy “to contain social discontent in non-ethnic Russian areas and existing areas of concern ahead of the 2024 Russian presidential elections.”
Analysts have long suggested Putin had hoped for a quick victory in Ukraine and did not expect his invasion would spark the overwhelming response it did in the West.
As Ukraine continues to receive military support from its allies, allowing its defence forces to push forward with its counteroffensive, Russia has suffered severe losses.
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Putin on Monday signed a new three-year budget hiking defence spendings but the economic impact of the sanctions, coupled with a weak rouble and the prospect of missing revenue targets, will likely require him to cut funding elsewhere.
The budget foresees spending in 2024 of 36.6 trillion rubles ($415 billion) with an expected deficit of 1.595 trillion rubles ($9.5 billion).
Record low unemployment, higher wages and targeted social spending should help the Kremlin ride out the domestic impact of pivoting the economy toward the military, but could pose a problem in the long term, analysts say.
Part of the Russian budget is secret as the Kremlin tries to conceal its military plans and sidestep scrutiny of its operation in Ukraine.
But independent business journalists Farida Rustamova and Maksim Tovkaylo said this month that around 39 percent of all federal spending will go toward defence and law enforcement in 2024.
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