Browder: Russia Funding Military at Civilian Expense

(LONDON) – Russia is facing growing financial strain as it continues its full scale invasion of Ukraine, with the Kremlin likely to prioritise military spending over civilian welfare, according to financier Sir William Browder.

Speaking to Times Radio’s Frontline programme, Browder said Russia’s economy is already constrained and warned it could move further towards a model similar to North Korea, where state resources are directed almost entirely towards sustaining the military.

“Russia will be financially constrained, is financially constrained,” he said. “The question is what they spend what money they have on. It is more likely we see a continued North Korea style model where they fund the military and starve everybody else.”

Browder argued that official Russian economic statistics are unreliable and present an overly optimistic picture. He cited assessments from Western intelligence, including Sweden’s military intelligence, suggesting that Moscow’s reported figures do not reflect reality.

He questioned how Russia could sustain economic growth amid declining energy exports, reduced international travel and the departure of large numbers of working age men seeking to avoid mobilisation.

According to Browder, Ukraine’s strikes on Russian oil infrastructure have compounded the pressure. Ukrainian forces have targeted refineries, terminals and export facilities, reducing Russia’s ability to generate revenue from its key export sector.

“These attacks are significantly impacting Russia’s ability to export oil, which is its main source of revenue,” he said, adding that satellite imagery has confirmed damage to facilities including the Tuapse refinery and sites in the Primorsk region.

Despite mounting economic pressure, Browder cautioned against expecting a rapid collapse. Drawing on his experience during Russia’s 1998 financial crisis, he said the Russian population has historically shown a high tolerance for economic hardship.

However, he noted that financial constraints could still affect Russia’s ability to sustain its war effort at current levels. Reduced income may force the Kremlin to scale back certain operations.

Russia’s access to international capital markets remains limited due to sanctions, leaving it reliant on domestic borrowing. Browder said this approach is becoming increasingly difficult to sustain, while potential support from China would likely come at high cost.

“China is not going to lend cheaply,” he said. “Any lending would be on very high interest rates.”

At the same time, European support for Ukraine is set to increase. Browder highlighted the significance of a €90 billion package, equivalent to approximately $98 billion, expected to be approved by the European Union following political shifts in Hungary, Slovakia and the Czech Republic.

He described the funding as “completely existential” for Ukraine, enabling it to maintain government functions, pay soldiers and continue developing its domestic defence industry.

Ukraine has demonstrated an ability to defend itself with limited resources, Browder said, pointing to its expanding drone capabilities and effective targeting of Russian forces and infrastructure.

“If Ukraine had not received that money, Russia could have regained the advantage,” he said.

Looking ahead, Browder expects Russia to continue diverting resources towards the war, even at the expense of civilian sectors. He also warned that Moscow is likely to intensify attacks on Ukraine’s energy infrastructure, particularly during winter.

He suggested that further Ukrainian strikes on Russian oil assets could play a decisive role by cutting off the Kremlin’s access to hard currency.

“If they eliminate Russia’s ability to export oil, then the leadership will have to make difficult decisions,” he said.

Browder also described Russia’s political system as a tightly controlled environment with no room for dissent among elites. He said any internal challenge to the Russian dictator Vladimir Putin would likely have to come from public unrest rather than within the ruling circle.

“There is nobody among the oligarchs or inner circle who will speak against him,” he said. “The only risk comes if public anger overtakes fear.”

He noted signs of tightening domestic control, including internet restrictions and discussions around further mobilisation, which could indicate concern within the Kremlin about potential unrest.

Despite recent geopolitical setbacks, including weakened alliances, Browder warned against underestimating Putin’s ability to endure.

“He does not operate in a democracy,” he said. “He can wait out pressure in a way other leaders cannot.”

In the near term, Browder expects limited changes on the battlefield, with Ukraine continuing to hold defensive lines while targeting Russia’s economic infrastructure.