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Russia officially moves to a wartime economy

Screenshot from the video of the meeting of Putin with the Coordinating Council on the needs of the Russian Army
Russia officially moves to a wartime economy

In the eighth month since launching the full-scale invasion of Ukraine and amid open mobilization, President Putin has moved Russia into a regime of “unprecedented restrictions” with the aim of boosting Russia’s war production, Moscow Times reported.

On 25 October, Russian President Vladimir Putin held the first meeting of the Coordinating Council on the needs of the Russian Army, which included Prime Minister Mikhail Mishustin, six deputy prime ministers, three ministers, and the heads of all security agencies.

Addressing them by video link, Putin said that the country was facing “serious challenges” and that the economy was under “unprecedented restrictions,” all of which required a complete overhaul of how the state is run.

“Life itself pushes us to […] update all procedures, all administrative procedures, everything that is associated with what is called ‘governance’ in the broadest sense of the word,” Putin said.

“This also concerns the economy as a whole, certain sectors of production, the Armed Forces, the provision of the special military operation with everything necessary and so on,” the president enumerated, according to the Kremlin’s press service.

All issues, he said, must be resolved “more quickly and efficiently,” even if this requires changes to existing procedures. “If we work within the framework of standard bureaucratic procedures, hiding behind formalities, we will not get the desired result in any direction,” Putin stressed.

The ministers were tasked with ensuring such mikitary needs as fuel and energy supplies, communication issues, “informatization, databases, analytical support,” outreach to families, creating infrastructure (barracks or training bases, social facilities, transportation and logistics issues), medical support for soldiers, and military salaries.

Earlier, a Moscow Times source in the Russian Financial Ministry explained that this means Russia is moving to a wartime economy, where all war-related expenditures are prioritized, while everything related to development – infrastructure, education, health goes into the background.

Particularly, budget expenditures for “national defense,” which contains the budgets of the Interior Ministry, the Federal Guard Service, investigative agencies, and special services, will increase to a record high in the country’s modern history, up to 4.2 trillion rubles ($68 bn) in 2023.

This move follows Russia’s imposition of martial law in occupied Ukrainian territories and a “high alert mode” in the Russian regions neighboring Ukraine. The latter regime provides additional powers to power structures and local authorities and are the last and penultimate stage of mobilization readiness before martial law.

This article was updated to include more details.

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