The notion that peace is inherently better than war is widely accepted, especially from a humanitarian standpoint. However, the logic of geopolitics often flips conventional wisdom on its head. In Russia’s case, continuing military operations in Ukraine may appear to be the rational choice – at least from the perspective of the current political and economic order. Paradoxically, ending the war, or even pausing it, presents systemic challenges for a country that has become deeply embedded in a wartime economy and society.
Russia’s leadership is not unaware of these contradictions. While society would certainly welcome the end of hostilities on moral and emotional grounds, the practical consequences of peace – including economic dislocation, social unrest, and political uncertainty – are likely shaping the Kremlin’s calculations far more than popular sentiment. In this context, it becomes clear why the road to peace is not just long and difficult, but potentially threatening to the Moskow status quo.
PART I: THE ECONOMY OF WAR – AND THE PRICE OF PEACE
A War-Driven Economy with Millions of Stakeholders
Any major policy decision regarding the conflict in Ukraine inevitably rests on some level of domestic support. And despite appearances, such a support base does exist – particularly among those who have become the direct or indirect beneficiaries of Russia’s militarized economy. According to estimates from economist Igor Lipsits, as many as 20 million Russians may fall into this category. This includes active military personnel and their families, employees of defense-sector enterprises, and logistics and trade workers who have profited from sanctions-busting operations.
A second group of beneficiaries includes the “new business elite” – those who acquired foreign-owned assets at bargain prices after Western companies exited Russia, as well as those who took over businesses from anti-war proprietors. Many companies now thrive on government defense contracts or serve the gray-market logistics infrastructure that circumvents international trade restrictions.
As resources have flowed into defense and logistics, civilian sectors such as healthcare, education, and social services have suffered. Inflation has eroded pensions and public-sector salaries, and the majority of the population – especially retirees and state employees – has become even more vulnerable. The wealth generated in wartime Russia is thus both highly concentrated and politically dependent.
The Hidden Costs: Inflation and the Hollowing Out of Civilian Growth
War, by its nature, generates inflation. The early months of the conflict saw Russia’s central bank sharply raise interest rates to contain the initial economic shock. While the economy has since adjusted, the cost of this adaptation has been profound.
In 2024 and 2025, Russia’s GDP growth – officially reported at around 4% – is largely driven by defense spending. Simultaneously, inflation hovers near 10%, though independent experts argue that the real rate, as experienced by consumers and businesses, may be twice as high. This disconnect between reported and lived economic realities creates an increasingly fragile situation.
As the military sector expands, it cannibalizes civilian development. Investment, labor, and innovation are redirected toward weapons manufacturing and wartime logistics, undermining long-term economic resilience. The state’s ability to pump money into the economy – through sovereign wealth funds and energy revenues – is nearing its limit. Once those war-time fiscal buffers are exhausted, the economy could face a severe correction.
Dependency Shift: From Europe to China
In the wake of sanctions, Russia quickly pivoted from West to East. On the surface, this appeared to be a strategic realignment, reducing dependency on Europe. In practice, it has created a new dependency – this time on China.
Whereas trade with Europe granted Russia access to cutting-edge technologies and high-margin markets, China offers basic goods and a buyer’s market for cheap energy. Beijing now holds considerable leverage over Moscow, dictating terms and pricing. Russian consumers are flooded with Chinese products, and Chinese firms are slowly replacing Western suppliers. This new dependency is arguably more precarious than the one it replaced.
And this new dependency raises yet another uncomfortable question: how interested is China, really, in seeing an end to the war? With its growing leverage over the Russian economy – and, by extension, over the Kremlin itself – Beijing now holds a position of influence that would have been unthinkable just a few years ago. But China’s role should not be viewed in isolation. Rather, it must be understood as part of a larger geopolitical chess game – one in which Russia is no longer a player, but a piece. In the broader context of U.S. - China rivalry, Moscow may well serve as a useful card for Beijing to hold, especially as tensions between the two superpowers continue to escalate. Peace in Ukraine, under these circumstances, may not align with China’s strategic calculus.
The Return of Western Brands – and the Coming Clashes
As whispers of a possible ceasefire grow louder, some foreign companies are considering reentering the Russian market. This prospect is bittersweet. On one hand, it signals a return to economic normalcy. On the other, it pits new wartime business owners – who acquired assets during the exodus – against legacy brands and foreign investors. What’s at stake is not just property rights, but the very structure of Russia’s post-war economy within which the new class of owners is unlikely to welcome a return to the pre-war model of the Russian economy.
A Tale of Two Russias: Regional Disparities and Wartime Prosperity
The Kremlin has managed to shield much of urban Russia from the visible consequences of war. Cities continue to function in consumerist routines, and daily life often appears untouched. But in rural regions – especially poor and economically depressed areas – the impact has been far greater.
These regions have borne the brunt of military losses. In exchange, the state has offered monetary compensation. Families of the fallen have used these payments to move out of poverty: buying homes, cars, and improving their standard of living in ways previously unimaginable.
Defense industry towns, once crumbling relics of the Soviet era, are now flush with jobs and cash. For many in these areas, the war economy has brought tangible improvements – despite the cost.
Therefore, if one sets aside the moral and ethical judgments surrounding the war – or chooses simply to ignore them – the prospect of peace may not appear all that bright or desirable for those in Russia’s depressed regions who have grown wealthier during the conflict. For many, the war economy has provided what peacetime never could: stable income, upward mobility, and a sense of personal advancement. In that context, peace risks disrupting a new status quo that, however paradoxical, has brought tangible benefits to some.
A Demographic Time Bomb
Russia entered the Ukraine conflict with a fragile labor market, especially in terms of working-age men. War has exacerbated this problem dramatically. When peace returns, the economy will face an even sharper labor shortage – likely requiring a new wave of labor migration.
Yet public opinion remains deeply hostile to large-scale immigration, creating a paradox with no easy solution. The economy needs workers, but society may reject them. Therefore, the transition – or return – to a new peacetime reality in Russia may reignite underlying tensions rooted in ethnic intolerance and religious differences. In the absence of a unifying wartime narrative, long-suppressed social fractures could resurface.
Oil, Gas, and the Illusion of Stability
For years, Russia has relied on oil and gas revenues to maintain economic stability. After 2022, the spike in energy prices helped cushion the initial shock of war. But global energy prices are now showing signs of softening.
Without another commodity boom or a fresh source of state revenue, the Russian economy will struggle to transition out of its war footing. Sovereign wealth funds have already been significantly depleted. In the absence of a peace dividend or foreign investment, recovery may be slow and uneven.
Moreover, it may further deepen economic contradictions and fuel social tensions – especially at a time when the state will have far fewer resources to contain them than it did during the war. With shrinking fiscal reserves and waning wartime subsidies, the government’s ability to buy social stability will diminish, exposing unresolved inequalities and sharpening public discontent.
PART II: SOCIETY AFTER THE GUNS FALL SILENT
Crime, Fear, and the Return of the Soldiers
One of the darkest prospects facing Russian society is the mass reintegration of soldiers, many of whom have experienced extreme violence – or, in some cases, have criminal backgrounds. A significant portion of early recruits were prison inmates offered amnesty in exchange for military service. Some of these individuals have already returned to civilian life and committed serious crimes.
This trend is alarming. The fear is that, after the war, Russia could face a surge in violent crime reminiscent of the chaotic 1990s. The state has recognized the risk, rolling out plans for veteran rehabilitation. But whether these programs will be sufficient remains to be seen.
Post-War Euphoria and the Inevitability of Questions
Surveys suggest that Russian society is tired of the war. Even among those who support the Kremlin’s actions in Ukraine, there is a growing desire for the conflict to end. If and when peace comes, it is likely to produce a brief wave of euphoria.
However, this honeymoon will not last. Soon, society will begin to ask hard questions: What was the war for? What was achieved? And at what cost? These questions are currently suppressed by censorship and propaganda, but in a post-conflict environment, they may become impossible to ignore.
Veterans as Catalysts of Political Change?
There is speculation that returning soldiers could become a political force in their own right – either co-opted into a new elite or, alternatively, marginalized and resentful. The government has made rhetorical gestures toward elevating veterans, but institutional resistance remains. Many civil servants and business elites view the “militarized class” as alien and undeserving of special privileges.
For now, the emergence of a new political elite from within the military ranks is uncertain. But it cannot be ruled out – especially if peace leads to political instability.
A Dangerous Peace
Peace is, without question, preferable to war. But for today’s Russia, peace comes with its own set of risks – economic dislocation, social unrest, political volatility. The war in Ukraine has created a web of interests deeply invested in its continuation, from defense contractors to regional beneficiaries and wartime business elites.
Ending the conflict would not only unravel this system, but also force the Kremlin to confront a population newly emboldened to ask uncomfortable questions. And while the regime may succeed in framing peace as victory, it cannot escape the structural consequences of demobilization.
In this sense, peace is not just an end to violence – it is a new beginning, fraught with uncertainty. And that may be precisely what the Kremlin fears most.
