Economic Statecraft
'Cyberpunk', Unpreparedness for the Wars Before the Absence of "Magic Wands": The Economic Lessons of the Conflict in Ukraine
Valdai Club Conference Hall, Tsvetnoy boulevard 16/1, Moscow, Russia
List of speakers

On April 17, the Valdai Club hosted an expert discussion titled “The Conflict in Ukraine: Lessons for the Economy and Industry”, which was timed to coincide with the publication of  the report "Economic Statecraft: Lessons from the Conflict in Ukraine”. Discussion moderator Ivan Timofeev, Programme Director of the Valdai Discussion Club, noted that when the world was preparing for conflicts, they were projected to be completely different: local and of relatively low intensity; these prevailing perceptions have since faded into the past. He invited participants to consider the lessons of what is happening from the point of view of economics, technology and industrial organisations.

Alexander Yermakov, junior researcher at the Center for International Security at IMEMO RAS and co-author of the report, pointed out that the world had forgotten about the last wars, and as a result, faced the problem of industry being unprepared to replenish stocks in the event of the high-intensity conflict typical of the last century. “We see that the arsenals of even major powers like the United States can be exhausted almost instantly,” he said. In his opinion, the United States can use its assistance to Ukraine as a pretext for "building up" its military-industrial complex, which needs to be modernised in the context of preparing for a possible conflict with China. Europe, in turn, has to rebuild its military-industrial complex from scratch, and against the backdrop of the emergence of new players on its market, such as South Korea and Israel.

Dmitry Stefanovich, researcher at the Center for International Security at IMEMO RAS and co-author of the report, described the current situation as “real cyberpunk”: a mixture of high and low technologies - a combination of a picture reminiscent of the First World War and the ubiquitous information systems and unmanned platforms. At the same time, advanced solutions often come not from the military, but from civilian industries. He also considers it important to realize that there are no "magic wands" and that even the best weapons work only in combination, but do not change the course of events by themselves. Stefanovich added that the conflict is forcing a change in priorities: against the backdrop of a huge need for people and relatively simple weapons, countries will direct resources not to new development, but to restoring production. The winners will be those who have enough resources for both.

Prokhor Tebin, Head of the Sector of International Military-Political and Military-Economic Problems at the Center for Comprehensive European and International Studies of the Higher School of Economics, noted that before getting carried away by the issues of military power that have restored relevance, one should note that that this power is not an end in itself and that both it and its military-industrial complex  are tools for solving problems of state and national policy. In addition, the military-industrial complex needs a powerful base, which can only be a civilian economy. In addition, he emphasized that people remain the main priority and key resource. In this regard, Tebin called it important to increase the attractiveness of work in the Russian military-industrial complex and take care of technical education, including secondary specialised education.