Course of the War
The outcome of the war in 2022 was marked by Ukraine’s successful offensive campaigns in Kyiv region during the first months, followed by successful operations in Kharkiv and Kherson regions. These operations allowed for the complete liberation of the right bank of the Dnipro River, the elimination of the Izium offensive enclave, and the prevention of Russia’s planned offensive campaign for the total isolation of Donbas, where a large concentration of the Ukrainian army is stationed, from the rest of the territory.
During the winter of 2022-2023, Russia launched a counter-offensive near Bakhmut, which led to the depletion of Russian resources. By the end of spring, Ukraine regained the initiative, transitioning to counter-offensive actions in the south with simultaneous strikes in Donbas. However, the Russian army, through covert mobilization efforts, managed to rebuild its strength and not only defend in the south but also launch limited attempts to advance in the Lyman direction.
The main challenge for the Ukrainian Armed Forces (UAF) was the time lost, allowing Russia to fortify defensive lines and expand minefields. Among the negatives were insufficient quantities of necessary equipment, including counter-battery and aviation assets, due to slow assistance from allies. In such conditions, UAF employed methods targeting enemy infrastructure and artillery, which, despite being time-consuming, yielded evident successes (primarily in limiting ammunition supplies to enemy artillery).
Russia resorted to one of its two ultimative means (besides nuclear weapons) – initiating a so-called partial mobilization. However, this led to significant internal tensions within Russia and the emergence of limited protest movements (especially pronounced in Dagestan). Nevertheless, reinforcing mobilized combat units did not yield significant results in terms of freezing the front line.
Ukraine’s declared results include reaching its state borders as of August 24, 1991, including the liberation of occupied territories, Crimea, and Donbas, over a period of nine years. Russia’s undisclosed objective of the “special military operation” remains the complete elimination of Ukrainian statehood. Neither of these objectives has been achieved within a year and a half, both sides being sufficiently exhausted by active front-line actions. Russia attempted a winter offensive in Donbas by deploying a significant number of mobilized forces, but with considerable effort, it was only in May, and with substantial losses among its own forces, especially among the recruits of the Wagner Private Military Company, that Russia managed to capture Bakhmut.
Ukraine exploited the concentration of enemy forces around Bakhmut to prepare fresh forces for a summer counter-offensive, which began in June. However, within half a year, Russia also substantially fortified its defensive line in the southern sector, mainly through over-saturation of minefields. Consequently, UAF’s counter-offensive actions progressed slowly and resulted in significant equipment losses. Simultaneously, significant achievements were made in destroying enemy infrastructure and artillery.
Trends Emerging Today
By the end of spring 2023, Ukraine managed to regain the initiative on the front lines. The autumn mobilization of Russia was depleted near Bakhmut. Therefore, the main challenge now is to avoid directly confronting the Ukrainian mobilization potential in frontal attacks. Otherwise, Russia risks facing an enemy advantage that would initiate a new wave of its own mobilization.
The main objective for the Ukrainian army in 2023 is to break through the Russian defense in the south during the summer-autumn campaign and to clear the enemy from Kherson and Zaporizhzhia regions without losing the army in the process.
This task is carried out with a significant advantage in air superiority and firepower. To this imbalance, the long-range artillery of Russia is added. The role of drones and guided munitions is growing, so the side with more UAVs and guided munitions, as well as effective electronic warfare countermeasures, will prevail. All of this is effective under conditions of constant maneuvering, camouflage, and effective protection of weaponry and personnel.
Furthermore, there is an increasing issue with personnel who are fatigued from a year and a half of intense combat. On the other hand, civilians had overly high expectations of quick victory, leading to gradual disillusionment fueled by enemy misinformation. This compounds the issues with mobilization, which is necessary for replenishing and rotating troops.
Russia has lost a significant amount of military equipment, which may limit its ability to conduct large-scale ground offensives. This may be one of the reasons why the Russian government and President Putin increasingly view this war as a long-term endeavor necessary for Russia’s security.
Sanctions create a shortage of foreign components of the highest class and force Moscow to search for import substitutes, although these attempts are mostly unsuccessful. This ultimately affects Russia’s ability to produce, maintain, and deliver advanced weapons and technologies to the battlefield in Ukraine. While Ukrainian military equipment is improving thanks to Western assistance, the quality of Russian weaponry is continuously degrading. However, the Kremlin maintains a significant level of adaptability to Western sanctions through pre-war stockpiles of older equipment and assistance from countries willing to supply Moscow with dual-use goods and technologies through illegal supply chains.
Continuation of the prolonged struggle, which slowly depletes Ukrainian weapon reserves while reducing Western assistance, is the main part of Russia’s strategy in the war against Ukraine.
At the same time, transforming this war into a slow, exhausting campaign provides time for the sub-sanctioned defense industry to find necessary solutions and employ alternative methods. For instance, significant advancements by the enemy in drone production, particularly the “Lantset” type, have been achieved. This is caused not only by assistance from Iran and China but also by the continuation of semi-legal supplies from Europe (including Czech components).
At the outset of the hot phase, a relevant forecast was issued that Russian rockets would quickly run out, given the existing quantities. After some time, the number of rockets used per month decreased. However, it was unclear whether Russians could quickly produce enough new weaponry. Nevertheless, Russia was able to partially mobilize its military-industrial complex to meet the regular needs of its army. However, this was done with minimal reserves and obvious unpreparedness for a conflict with a state possessing a more serious air defense system. Of course, all of this was achieved with great difficulty – strikes on energy infrastructure wouldn’t have had such an impact without the mass use of Iranian Shahed drones (fortunately, Ukraine is building its own drones).
At the beginning of the war, significant attention was paid to Russia’s attempts to purchase microchips from leading global companies. Numerous investigations point to the difficulty of maintaining full control over the supply of these technologies to Russia. The acquisition of foreign-made microchips is crucial for the production of Russian military systems, weaponry, and technologies. As confirmed by official sources, the X-101 missiles that Russia fired at Ukraine in August were manufactured in April 2023, containing around 30 foreign microchips.
After eighteen months of full-scale Russian-Ukrainian war, we can observe economic stabilization on both sides. The Ukrainian economy, which experienced a steep decline of over 29% in 2022, has rebounded from the bottom and is beginning to show slow growth. Similarly, Russia is gradually recovering from sanctions and shifting its focus towards new markets.
The aggressor’s economy was not completely devastated, contrary to what many expected. However, its overall dynamics align with economists’ expectations, as there was no immediate collapse. According to international organizations, Russia’s GDP fell by 2.1% in 2022, and in the first quarter of 2023, it even started growing compared to the same period the previous year.
Nevertheless, there’s no reason for complacency. Firstly, evaluating the aggressor’s economic state is difficult due to Moscow’s official statistics likely not reflecting objective data. Secondly, the loss of the Western market implies a significant reduction in Russia’s future potential. By the end of the first half of 2023, Russia lost 47% of its energy export revenue compared to the same period in 2022. This is a direct consequence of sanctions that deprived Russia of formerly reliable sources of income. They are now forced to sell oil to China and India at significant discounts.
Engaging with Asian partners in trade, Russia faces financial issues. Their oil is paid for in non-convertible yuan and rupees, resulting in a shortage of dollars and euros in demand. As a result, the Russian ruble has lost over 25% of its value in 2023, crossing the mark of 100 units per US dollar. This dynamic has a negative impact on business activity, constraining investments. The Central Bank of Russia must resort to extraordinary measures to stabilize the currency and curb inflation. Additionally, Russia’s National Wealth Fund is rapidly decreasing in size, shrinking by several tens of billions of dollars each month.
However, these problems aren’t catastrophic. Despite the pressure of sanctions, Russia managed to transition its economy considerably towards war production, utilizing its military-industrial complex to the fullest extent. The budget expenditures for war in 2023 have increased by 60% compared to 2021. The employment structure in Russia is actively shifting towards military specialties, and the unemployment rate hovers around 3%. Those who were previously unemployed are now either engaged in the war effort or working in support of it. This situation results in underproduction of consumer goods, which will have negative consequences in the future. Nonetheless, the economy is currently successfully fulfilling its primary task: supporting the war effort.
The future situation depends on two factors: the situation on the battlefield and the intensification of sanctions. Ukrainian military successes will weaken the Kremlin’s political power, leading to economic destabilization. However, our partners need to demonstrate greater resolve to cut off Russia from other trade sectors (such as nuclear energy and diamonds) and ensure compliance with previously imposed sanctions. Russia has managed to secure necessary goods through countries that haven’t joined the sanctions regime (Turkey, Serbia) and its allies (Iran, China). A notable example is the breakdown of the so-called grain deal, which allowed the Kremlin to secure concessions for itself without significantly benefiting Ukraine.
In the worst-case scenario for us, sanctions won’t be significantly strengthened, and Russia will adapt successfully to new realities. However, if the restrictions intensify, combined with battlefield losses, they will pose serious problems for Russia. Nevertheless, sanctions alone won’t force Russia to end the war over the next few years.
Unlike Russia, Ukraine hasn’t fully transitioned its economy to a wartime footing. Kyiv aims to maintain conditions similar to those before 2022. Today, this policy is possible only due to external financial and military assistance. Our allies have assured us of their continued support, promising to provide $115 billion over four years. These funds will compensate for the budget deficit, which Ukraine can cover independently by about 50% in 2023. As part of these funds are provided in the form of debt, Ukraine’s national debt has grown rapidly: the debt-to-GDP ratio increased from 49% to 78% in just 2022.
In addition to the deepening debt burden, Ukraine has generally managed to stabilize its financial situation. The exchange rate of the hryvnia has been fixed for over a year, and there’s no need to change it. Inflation has been reduced to 11-14% annually. According to various estimates, Ukraine’s GDP is predicted to grow by 1-3% in 2023, signifying stabilization amidst military uncertainty.
The future of the Ukrainian economy hinges on many factors. The primary one is the situation on the battlefield. The more resources the war consumes, the greater the losses in potential growth will be in the future. Recovering territories and restoring normal life there will strengthen us, while losing them will deplete our strength.
A critical factor impacting the Ukrainian economy is the demographic situation. According to the UN, since the beginning of the full-scale invasion, 8 million Ukrainians have left the country, of which less than 2 million have returned. According to estimates from the Ministry of Economy, every 100,000 emigrants decrease Ukraine’s GDP by 0.5%, a truly catastrophic situation given its scale.
Finally, the most unpleasant factor is the dependence on the goodwill of our allies. If they decide to reduce or cease their assistance, Ukraine will find itself in a situation similar to March-April 2022 when aid was insufficient. Of course, the likelihood of such a scenario today seems relatively low, but it’s essential to prepare for it.
The model chosen by the Ukrainian government provides citizens with economic freedom during the war, without forcing them to work in three shifts in military-industrial enterprises. On one hand, this prevents panic sentiments, but on the other hand, it poses the risk of a shortage of demobilization resources. Today, Kyiv needs to seriously consider transitioning the economy to a wartime footing, as prolonging the war carries significantly more risks for us than for Russia.
As of August 2023, according to UN records, there have been 9,444 civilian casualties (including 545 children) and 16,940 wounded. However, many casualties are not accounted for, especially in temporarily occupied territories, and the actual figures may be several times higher. There is insufficient information about the losses in Sieverodonetsk, Lysychansk. Only in Mariupol, according to the city authorities, up to 20,000 civilians have been killed, but precise figures are difficult to establish. Many have died during shelling and bombardments of cities such as Kharkiv, Chernihiv, Kherson, and others, as well as in mass destruction in the pre-frontline cities of Donetsk region like Bakhmut, Vuhledar, and Soledar.
Acts of genocide have been documented – horrific crimes committed by the aggressor against civilians, including murders and torture in liberated towns and villages, such as Bucha, Hostomel, Makariv, and Borodianka in Kyiv Oblast, and Izyum in Kharkiv Oblast. Occupiers are also abducting Ukrainian children on a massive scale, taking them to Russia (up to 20,000 minors have been identified). This has led to the opening of a legal case against Putin and other implicated Russian officials in the International Criminal Court in The Hague.
In June, due to the threat of a Ukrainian Armed Forces’ crossing of the Dnipro River, Russia carried out another act of genocide and ecocide by detonating the dam of the Kakhovka Hydroelectric Power Station, flooding extensive areas along the Dnipro River. The exact number of victims in the occupied left-bank territories of the Dnipro is unknown, as occupiers hindered rescue efforts.
Against this backdrop, increasing attention is being given to the “nuclear terrorism of Russia” – the occupation of one of the largest nuclear power plants in Europe, the Zaporizhzhia Nuclear Power Plant near Energodar, which poses a threat of nuclear contamination to vast territories.
According to the UN, up to 26 million people have crossed the border, mainly towards neighboring EU states. Of them, about 6.2 million have not returned and remain abroad. Additionally, around 4.8 million people have become internally displaced persons within the country, according to the government (other estimates suggest this number could be twice as high).
The situation remains extremely complex in the occupied territories of the south, where ethnic cleansing continues and a harsh occupation regime has been established.
Negotiations and Diplomatic Configuration
Against the backdrop of the collapse of the “grain agreement” and Putin’s display of weakness during the so-called “Wagner uprising,” Ukrainian diplomatic positions have strengthened. This was demonstrated during the negotiations in Jeddah – with the formation of a negotiation group involving Kyiv and excluding Moscow, with the participation of China.
However, in recent months, there has been an increase in contacts between China and the US, amid numerous serious publications in Germany and the US about the inability of the Ukrainian Armed Forces to achieve swift results. This could indicate intensive negotiations on freezing the conflict.
Concerning is the statement by the head of the NATO Office, Stian Jensen, suggesting the possibility of Ukraine’s acceptance into NATO in exchange for practical agreement on the loss of certain territories. Despite further disavowal, it is evident that a decision has been voiced, privately discussed by parts of Western elites weary of a prolonged war.
The most critical issue related to the “Zelensky plan,” from which they will be demanded to withdraw, is the priority of Russia’s withdrawal from Ukraine before further settlement. Evidently, at the diplomatic level, this is the most significant threat for the autumn and winter. Associations are made with the Minsk Agreements, where Kyiv primarily demanded the withdrawal of Russian forces. Both China and the US currently seek to preserve Russia and prevent its dissolution. The sudden change of the foreign minister may suggest a shift in China’s position.
Impact on Global Processes
Since the very beginning of Russia’s full-scale attack, Belarus has been used as a staging ground for attacking Ukrainian territories. Aircraft take off from Belarusian territory, tanks move, rockets are fired, and supplies are delivered. However, in addition to this, there are constant attempts to involve Belarusian servicemen in the war. Recently, Minsk has openly hosted one of the Moscow-based groups, the Wagner Private Military Company. The presence of Russian forces and the infiltration of Belarusian security structures by Russian intelligence agencies increase the risks of direct annexation by Moscow.
Ukraine, with full justification, could strike military bases in response on Belarusian territory, causing irreparable damage to Belarusian military infrastructure. Ukraine has refrained from such actions out of goodwill, respecting Belarus’ sovereignty. Nevertheless, Russia continues to use Belarus as a platform to divert Ukrainian military forces and to demonstrate a threat to NATO members Lithuania and Poland.
Clearly, Ukraine’s security is unattainable without a free Belarus. Achieving this requires cooperation with the Belarusian opposition, which must unite and overcome internal conflicts, as well as disseminating information within Belarus itself. Belarusian-language radio stations and channels broadcasting into border regions should be established.
In Ukraine, a several-thousand-strong core of motivated Belarusian troops has been formed – the “Pahonia” and “Kastus Kalinouski” regiments. They play a crucial role in preserving Belarus’ sovereignty and act as a force that restrains Lukashenko from erasing Belarusian independence.
However, by the end of the year, there is an escalating risk in the Suwalki Corridor, where Russia, under the guise of Wagner personnel, will test Poland and NATO’s reactions. The possibility of increased nuclear blackmail, followed by de-escalation at Ukraine’s expense, is also likely.
The parliamentary elections in Poland in November pose an additional challenge. These elections carry the risk of exploiting the Ukrainian issue in domestic politics, complicating bilateral relations (as seen with the restriction of Ukrainian grain transit).
Another instrument of Moscow’s influence is exerting pressure on Europe by creating problems in neighboring regions, primarily in Africa. In this context, the coup in Nigeria and the disruption of uranium supplies to France are considered. These actions threaten Europe with an energy crisis in the fall.
By November 2023, the results of a counteroffensive in the south are expected. The stability of both Ukraine and Russia, as well as the future positions of the parties, depend on the outcome. A probable scenario is international pressure and stimulation of negotiations, but more likely, a partial freeze of hostilities for several years, followed by a new phase of the war while preserving the current Russian regime. This outcome hinges on the results of the Ukrainian counteroffensive.
Amid prolonged fighting, which gradually depletes Ukrainian weapon reserves, while surpassing Western aid, this constitutes Russia’s main strategy against Ukraine.
Russian authorities underwent a significant legitimacy crisis during the Wagner PMC rebellion, which compounds with public war weariness. However, there are currently no preconditions for swift revolutionary changes.
Resistance from subjugated populations and Russians against mobilization and loss of life will increase, but in the short term, significant shifts in the political landscape of specific regions are not anticipated. Dissatisfaction with the regime is simmering and is manifested in spontaneous, non-politicized movements. For instance, water supply problems in Dagestan in August 2023 led to mass protests. Additionally, the frequency of technogenic catastrophes is evidently rising, related not only to the conflict zone but also to a general decline in infrastructure maintenance, heavily dependent on Western technologies.
In Ukraine, negative trends are also growing, fueled by corruption scandals and disillusionment with the seemingly ineffective counteroffensive. Moscow will continue to exploit these factors.
Ukraine’s main challenge remains its technical dependence on ally supplies, not only for high-tech components (a factory for artillery ammunition is to be built by next year). On the other hand, successful technological solutions have been demonstrated in maritime warfare, enhancing the potential for substantial restrictions on Russia’s Black Sea trade (primarily grain and petroleum products, as well as sub-sanctioned dual-use goods).
It is evident that the Russo-Ukrainian war can only conclude with a military defeat and the collapse of Russia. Any ceasefire, war freeze, or pseudo-peace negotiations would signify only one thing – preparation for the next, even larger war.
Since neither Ukraine nor our allies currently frame the issue this way, we can only speak of the conclusion of the first Russo-Ukrainian war in the 3rd millennium. At the onset of the major conflict, society was fueled by the anticipation of a swift progression through the hot phase. These heightened expectations of a rapid war’s end have led to the psychological demoralization of both immediate combatants and Ukrainian citizens as the terms extend.
Currently, a different scenario is unfolding – a “war without end,” spanning years, if not decades. Such a forecast horizon of perpetual conflict further demoralizes.
Given the resource potential, by February 2024, under present trends, neither side will be capable of strategic offensives. Therefore, while the minimum objective by the end of 2022 was the complete liberation of the Right Bank, an equally successful minimum for the summer campaign of 2023 for Ukraine would be reaching the Azov Sea coastline at any point. This inevitably would lead to the crushing or expulsion of occupiers from a significant part of the Kherson and Zaporizhzhia regions.
However, even in a frozen state, the war will continue with subsequent hot phases, as the fundamental conflicts remain unresolved.