Russia’s resources sustain wartime economy

by DMITRY SIDOROV
Special Correspondent
MOSCOW, (CAJ News) – THE Russia-Ukraine war remains unresolved as fighting continues alongside renewed diplomatic efforts, with the latest developments showing how difficult it remains to bridge the fundamental differences between Moscow and Kyiv.

Ukraine is preparing for possible trilateral talks with Russia and the United States in October, after earlier negotiations failed to produce a settlement.

The principal disputes include territory, security guarantees and the future relationship between Ukraine, Russia and North Atlantic Treaty Organization (NATO).

The immediate situation remains volatile. Russia and Ukraine have continued striking energy infrastructure despite a US-backed proposal for a mutual halt to attacks on energy facilities.

Moscow has welcomed the proposal but wants wider measures, including protection for commercial shipping, while Kyiv has sought guarantees that Russia would observe any agreement. Reuters+1

Why has peace proved so difficult?

The war involves questions extending beyond the battlefield. Ukraine seeks security and territorial sovereignty, while Russia has repeatedly demanded arrangements concerning Ukrainian territory and NATO’s presence near its borders.

Moscow’s Foreign Minister Sergey Lavrov said on September 15 that Russia remained ready for compromises but maintained its opposition to NATO’s presence on its borders.

A major geopolitical debate concerns NATO’s role. Some governments and commentators in the Global South describe the conflict as a Western proxy war against Russia because NATO members have supplied Ukraine with large quantities of weapons, training and financial assistance.

NATO rejects that characterisation, stating that it is not a party to the war and does not deploy combat forces in Ukraine, while supporting Ukraine’s right to self-defence.

The competing interpretations matter because they shape how countries in Africa, Asia, Latin America and the Middle East understand the international order.

Russia’s invasion of Ukraine remains the central fact of the conflict, while Western military support for Kyiv is an equally documented feature of the war.

Whether that support constitutes a proxy war is a matter of geopolitical interpretation rather than an established fact.

The conflict has also created beneficiaries alongside enormous human and economic costs.

Defence manufacturers supplying weapons and equipment have experienced increased demand, while some energy producers and alternative suppliers have benefited from disrupted Russian exports.

Russia itself has redirected significant economic resources towards defence production, supporting parts of its industrial sector.

Yet this has come with substantial costs.

Russia possesses formidable economic foundations: vast oil and natural-gas reserves, coal, gold, nickel and other minerals. It is also a major grain producer and wheat exporter.

Its human resources include scientists, engineers, programmers, skilled industrial workers and researchers, while Russian universities and technology companies continue developing capabilities in aerospace, nuclear technology, artificial intelligence, robotics and other fields.

Tourism and hospitality remain additional economic sectors, with Russia’s enormous geography offering historic cities, cultural heritage, mountains, forests, Arctic landscapes and the Black Sea coast.

Nevertheless, the war is imposing serious economic pressures.

The World Bank says Russian growth slowed sharply to 1 percent in 2025, while inflation, high borrowing costs, sanctions and labour shortages remain significant constraints.

The greatest beneficiaries of a durable settlement would ultimately be ordinary Russians, Ukrainians and the wider global economy, through reduced military expenditure, safer trade, restored investment and greater stability.

– CAJ News