Russians’ wellbeing levels surge in face of war, sanctions and repression

Despite being hit with unprecedented Western sanctions, the war with Ukraine has been accompanied by a noticeable increase in the well-being of Russians. A new study has revealed the extent of the domestic feel-good factor, with economists at the Bank of Finland Institute for Emerging Economics (BOFIT) finding the level of Russians’ satisfaction with their household and personal circumstances has hit its highest in a decade.

• To understand how the restructuring of Russia’s economy during wartime affected Russians, economists Sinikka Parviainen (BOFIT) and William Pyle (Middlebury College, USA) used data from the Russian Longitudinal Monitoring Service (RLMS), which has been conducted by the Higher School of Economics almost every year since the 1990s. This research tracks the economic well-being of Russian households and individuals with a sample size of around 6,000-8,000 households and 17,000-21,000 people.
• The economists looked at RLMS data from 2013-2023, scrutinising responses to the questions: “how satisfied with life are you right now?” and “how satisfied with your financial circumstances are you right now?”. They also looked at whether households had made large purchases over the past year, how much they spent on cultural events and how long they could maintain their current lifestyle if they lost their main source of income.
• They concluded that the first two years of Russia’s invasion — 2022 and 2023 — saw the highest levels of general satisfaction, and specific financial satisfaction had also returned to 2014 levels for the first time. That year is seen as a benchmark before Russia was plunged into an economic crisis following the annexation of Crimea, imposition of Western sanctions and an oil price crash.
• Large purchases fell to a minimum in 2022 but demand for non-food goods has since increased faster than inflation and wages, in line with The Bell’s earlier  calculations. There was also a sharp rise in the proportion of households spending money on entertainment: in 2023 this reached 2018 levels, the researchers noted. The number of respondents who said they would be able to last more than a few months on their savings reached a 10-year high.
• These findings correspond with Russia’s official statistics which also point to improved financial circumstances since the start of the war. In 2023, real incomes in Russia not only returned to 2013 levels after a decade of lost living standards, but surpassed the pre-Crimea level by 5%, the researchers highlighted.
• There are no surprises as to the cause — a huge increase in state spending on the invasion and the military-industrial complex that has driven record labor shortages and pushed wages up across the economy. The high salaries offered by the state to people sent to work at the front, as well as those paid to soldiers (from 200,000 rubles a month) have played a big part, and the main winners have been residents of Russia’s poorest regions, which have recorded an unusually sudden increase in bank deposits.

Pourquoi le monde doit-il s'en préoccuper ?

Putin’s regime is unlikely to face any internal threat as long as Russians’ well-being and overall happiness is on the rise.