RUSSIA MAKES THINGS WORSE

In order to avoid the fallout the September 2022 mobilization generated, with hundreds of thousands of Russian men fleeing the country in a way the State simply had never considered possible, let alone anticipated, Russia has avoided talk or the appearance of, mobilization. Instead its relied on ever increasing financial inducements, both generated by State payments and where possible large bonuses paid by regional governments, at least for the recruitment stage, to acquire contract volunteers.

These initial payments for signing the contract have been in some regions, as high as the equivalent of $31,200 – almost 2.5 time the average income for a year for most Russian men.

With pay averaging around $2,500 per month ($30,000 per year), Russian infantry combat pay is for Russia, a well paid high income job. There’s just the problem of surviving long enough to collect the pay in the first place, the fact that pay is often months late, and what happens if you get injured and invalided out. It’s true that you do have to suffer a very considerable injury and be in the right command area to be treated reasonably humanely. Some commanders just don’t care and many stories of injured and even near immobile soldiers being sent back to the front have been reported.

Russia is said to have paid out no less $34 billion in death and injury benefits in 2023. In 2024 there’s been a move to reduce that figure and as of January 1st 2025 other measures have come into force, sharply reducing death and injury benefits.

From Jan 1st, prisoners are no longer paid a signing bonus at all, in an effort to save money. Additional modifications to the injuries payments that applied to ALL soldiers have also now been slashed from the equal of $28,434 to everyone with an injury to a modified amount of $37,912 only to those who are classed as ‘Heavily Wounded’. However the State didn’t publish what “heavily wounded” meant, suggesting that it will be another bureaucratic nightmare to get the money, probably requiring years of persistence. It also means that injuries the state deems are not ‘heavily wounded’, will get no compensation at all. Inevitably this is going to save the State a huge amount of money. It’s also going to lose it any remaining goodwill. You could argue that if you were one of the lucky ones who managed to survive and get invalided out, having three fingers shot off deserved some kind of compensation. Not any more. Heavily injured seems to imply major limb loss – such as both legs, an arm. Anything less is no longer compensated. It’s the risk you take signing up.

What this shows us is that the economic reality of the war, inflation, cash payments, are becoming unsustainable, especially as the manpower loss and death ins service benefits are soaring. You’re basically better off dead than injured.

Russia has made a rod for its own back with the whole compensation system and the refusal to face the realities of the war it started. Putin admitted his own weakness when he stopped the mobilization effort because it might bring about a popular backlash.

By offering up significant death in service and injury benefits to survivors – and with over 700,000 families to compensate, most of which are in remote parts of Russia where recruitment incentives offered up overwhelming benefits not seen as so attractive in the big cities, it’s created a bizarre compensation economy. The amounts of money being paid out are in our terms more like a sizable lottery win. Wives of Russian soldiers are likely never going to see so much money again as long as they live. And along with most people who never had much money, the tendency is to spend as much of it on luxury goods and services as you can, before the countries inflation rate eats it up.

By slashing compensation payments (something they don’t exactly go around advertising), they’re also bringing to and end a distortion in the economy of many rural areas who never experienced such a mini-boom before and would rather it didn’t end. In the meantime these small local explosions in wealth quickly evaporate, a new group of those who got compensation and those now won’t has been created, and we now have a fast spreading reason as to why you should in fact not be drawn in by the recruitment bonus.

With a stroke of the pen, the government has effectively undermined its own recruitment policy, damaged local remote and mostly poor communities who’ve become dependent on injury and death payments, and created a societal rift of have’s and have nots all at the same time.

This entire scenario is of course a fake economy, short lived and dangerous, but all the time it keeps ordinary Russians on side it’s a plus point for the regime. Take it away so dramatically, and resentment builds.

This is just another part of the rolling disaster that is Russia’s economy and the way it functions.

Another aspect is the way the state has seen increasing death and injury rates passing 2000 per day in the last two months – levels never before seen. The message they are basically sending is that as troop deaths increase the rate at which compensation will pay out is going to drop. You are worth less injured today than you were yesterday. Even if you went to fight on the basis that at least your family would be looked after by the state, that is no longer as true as it was.

It’s also another sign to those watching the economic situation that Russia is weakening by the day. Every erosion, every cost, every increased demand for less monetary return, implies increasing weakness and casts another stone into the grinding cogs of the economic machine. This has always been a game of little by little. Attrition works at many levels. What you don’t expect is that some of it is just as easily self inflicted.

Just one more nail in Russia’s eternal coffin.

The Analyst

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