Russia’s Defense-Based Economy Risks Forcing Putin to Fight Wars

This report examines Russia’s sharp increase in defense spending and military production since 2021, the diversion of industrial and labor resources to the defense sector, and systemic corruption and patronage flows that tie elites’ wealth to defense contracts; it assesses how Western sanctions have reinforced this dynamic and outlines scenarios for the Russia–Ukraine war with implications for European governments, defense, energy, financial, manufacturing, and shipping sectors.