Russia’s Economy Is Ailing. Its Influence Campaign Isn’t.

BusinessAerospace & DefenseRussia’s Economy Is Ailing. Its Influence Campaign Isn’t.ByIlan Berman,Contributor.Forbes contributors publish independent expert analyses and insights. Ilan Berman writes about the Middle East and Eurasia.Follow AuthorJun 09, 2026, 08:56am EDTMoscow, RUSSIAN FEDERATION: Russian President Vladimir Putin is seen on the TV screen as another TV sets are reflected in it in a shop in Moscow (DENIS SINYAKOV/AFP via Getty Images)AFP via Getty ImagesCall it a tale of two Russias. On the one hand, it’s becoming increasingly apparent that Russia’s war of choice against Ukraine is turning into a financially unsustainable venture – one that risks bankrupting the country and may even end up imperiling President Vladimir Putin’s hold on power. On the other, Moscow is now mounting a massive propaganda offensive designed to show off Russia’s softer side, woo gullible Westerners and reset the terms of the international conversation. And those two trends are intimately linked. To understand the connection, it’s necessary to start with the Russian economy. At home, after years of Western sanctions and economic pressure, the Kremlin is at long last facing serious fiscal headwinds. Top officials in the country’s Finance Ministry and Central Bank are now reportedly warning that the cost of the Ukraine war in Ukraine has become unsustainable and proposing cuts to defense spending. They have good reason to be concerned. Over the past several years, the Kremlin has adapted to widening European and American sanctions by transforming its economy into one heavily dependent on military-related output – and subsequently by hiking war spending to channel capital to those industries. Last year, Russia’s military spending reached a record high of some 15.5 trillion rubles ($190 billion), according to the Stockholm International Peace Research Institute. (The projection for this year is pretty much the same; 14.9 trillion rubles, or $204 billion at current exchange rat...