As the discussion rages about Russia’s capacity to subdue Ukraine, and as protesters in Georgia are struggling to pressure the government into renewing its European commitments, Zaza Abashidze spoke with Vladimir Milov, exiled Russian Economist, Vice President of Free Russia Foundation, about Putin’s Russia and about the experiences of the Russian opposition in confronting the regime.
Milov is a former chairman of the Russian political party Democratic Choice from May 2012 to December 2015. He served as Deputy Minister of Energy of the Russian Federation from May to October 2002. Since 2016, Milov actively participated inย Alexei Navalny’s presidential campaign and was a co-author of his program.
State of Russia Today
Zaza Abashidze: From your perspective, what defines Russiaโs political and social reality today? And what do you believe Vladimir Putin ultimately wants for Russia? Finally, do you think the trajectory he envisions is realistically achievable?
Vladimir Milov: Putin views Russia not as a country consisting of people, but as a material for his power projection and geopolitical games. I think I would not be particularly original here. This has been said by many, but this is a classical mafia state. And it’s not the first, and unfortunately, probably not the last time in the history of mankind when an organized group of people, the mafia, captured, grabbed power, and controlled the state, using its resources for its own benefit. And then it comes as you go: the appetite grows stronger once you establish more control.
Putin views Russia not as a country consisting of people, but as a material for his power projection and geopolitical games
First, Putin wanted to dominate Russia domestically, and completely. When he achieved that, he focused on power projection abroad. So now I don’t think this ambition is really limited to what the Russian elite calls the near abroad or neighboring countries. I believe Putin considers, given Russia’s size, resources, and military capabilities, that Russia can participate in the global competition for zones of influence. Putin has been saying that for quite some time. Some of his lieutenants have publicly said that their ideal world is the โconcert of nationsโ of the 19th century, a world divided into zones of influence by great powers. Putin was openly saying that a few times in his speeches at the Valdai Club.
So that is a power grab, domination, and control over resources. Definitely, this is for personal enrichment, but it is also becoming a perpetual full-circle power game. You need more power, more money, you need to grab more, and you need to compete with others. That’s his worldview, and that of Russia as a country. Unfortunately, he’s a hostage to his ambitions.
Russian peopleโฆ I mean, Putin never ever actually cared about their well-being. It is well over 15 years now since Russia last saw meaningful economic growth. When he first came to power – and he won in a relatively competitive election – his main promise was to stabilize the economy and ensure growth.
Given the turbulence of the 1990s, is it fair to say this narrative proved particularly effective at winning public support?
Yes, but he completely abandoned that. Putin’s consistent message for the past couple of decades is that you will have to suffer, but we will be great. So, enjoy greatness, but economically, we might not be so great.
Putin’s consistent message for the past couple of decades is that you will have to suffer, but we will be great.
Another thing is that Russia is brutally exploiting its resources, not only human resources, but also natural ones. Since the beginning of the full-scale invasion of Ukraine, the Russian government has been massively deregulating the environment: removing environmental protection rules in favor of uncontrolled exploitation by the oligarchy.
So, even as Putin is saying all the time that he is proud of the Russian nature, but nature has been shrinking to a couple of specific exclusive resorts for Putin and his cronies, and otherwise it is being destroyed.
So, really, he never cares about Russia. For us, it’s totally different. We want to make Russia a normal, livable, sustainable country. The one that ensures and focuses on the well-being of its people, on harmonious development, also in sustainable fashion, in balance with its nature, and so on. And we consider all of Putin’s power geopolitics as very harmful, because it mobilizes a lot of Russia’s resources, abilities, and takes them elsewhere, to something which makes life for ordinary Russians only worse.
Before the war in Ukraine, would you say there was a kind of social contract between the Russian state and much of societyโone in which the government provided pensions and basic economic stability, while military operations abroad remained distant and largely invisible in everyday life? Some commentators say the invasion of Ukraine fundamentally broke that arrangement. Do you agree?
Some social contracts between Putin and society did exist when he came to power. But its validity has been shrinking over time, in full correlation with his grabbing more power. The less practical power the Russians had to influence the government, the less Putin cared about fulfilling any kind of contracts.
The less practical power the Russians had to influence the government, the less Putin cared about fulfilling any kind of social contracts.
Initially, yes. When Putin was first elected, some people openly said that there are some things we don’t like, but we want out of the crisis, and he’s giving us the way out, so we kind of step back and let him consolidate power. But he consolidated power, and then the promise of well-being sort of vanished. He didn’t use it for the good of the people. He used it for his own good. And people were already deprived of the ability to influence things.
This was most visible during the famous Russian protests of the winter of 2011-2012. This was actually the first time that the Russians said no. They said, We want to change the course. We don’t like the direction the country is going. But it was crushed quite brutally. After that, 2012 was the year when Putin opened the first criminal case against those who protested his return to power. The social contract was shrinking and diminishing as Putin’s domination over domestic politics progressed.
And the war allowed Putin to completely shrug off any remnants of responsibility. He said: Listen, it’s wartime, it’s our country, right or wrong, we have to mobilize for our country, so shut up. And we no longer talk about the contract. I’m no longer bound to any contract with you. You must obey, plain and simple.
When we look at Russiaโs internal dynamics, is it meaningful to distinguish several major power groupsโthe security services, the criminal underworld, the political elite, and the oligarchs who serve as economic intermediaries? And are these the central forces on which Vladimir Putin relies to govern?
This is a reasonable classification. I would also say there is probably a fourth group, which can also be considered an enabler, namely, public figures who continue to support Putin in large numbers. They obviously receive generous pay, but they continue to calm the society because of their public authority, and they try to translate Putin’s narratives to make sure that even if people do not support them, at least they get an understanding that this is what the government wants, and we should obey. Sometimes these classes are intertwined. This is a more relevant, symbolic classification. But somehow it reflects reality.
Opposition and political fragmentation
Before we turn to economic issues, Iโd like to ask about political fragmentation within opposition movements, which will be of interest to the Georgian audience, as it is in my country today. ย In Georgia, weโre witnessing deep divisions, internal conflicts in the opposition – what some might even call โfriendly fire.โ A similar dynamic existed within the Russian opposition to Vladimir Putin, where political forces that opposed the regime were not always united or even cooperative. Looking back, do you think this lack of cohesion was a mistake? In retrospect, would closer coordination and less internal conflict have made a difference?
We must learn to live with the fact that certain divisions within the opposition to authoritarians are inevitable. If you look across the board, any country like the Middle East, Central Asia, or other dictatorships, the opposition is always quite divided, which is explainable, because there is no success story. The regime dominates and ignores the rules. We try to play by the rules, but the regime has the advantage because it completely ignores them. It has many more instruments to reach people directly, either trying to bribe them or scare them off, to exploit different parts of human nature. The opposition does not nearly have enough instruments. So, there is no clear path forward for them. How do you win? The fight of David against Goliath is very, very difficult. And it is very normal for people to start arguing.
There has been a lot of talk about divisions in the opposition, but people have to learn that in an open democratic society, it is pretty normal to argue among yourselves. People who dare to oppose autocratic regimes are there precisely because they are not the ones who usually line up behind the leader who gives orders. This is not what we do. This is not how we behave.
People who dare to oppose autocratic regimes are there precisely because they are not the ones who usually line up behind the leader who gives orders. This is not what we do.
So, what is essential here is not to waste time trying to bring together people with different views. What is essential, one of the crucial things that modern civilization is built upon, is the division of labor. So, it is important not to focus on this bickering and arguing, but to do your own thing.
Alexei Navalny, the late opposition leader, consistently posted messages to Russians, even from jail, and conducted daily checks. What have you done today to weaken the authoritarian regime and to help bring about change? Just stop looking at how large the opposition is.
When I was a kid in the 1980s in the Soviet Union, people were so enthusiastic about this newly born chance for change. We didn’t even know the names of the leaders. It didn’t matter what kind of presidium they sat in or who the boss was. We had what was called an inter-regional group of deputies, the opposition in the first Soviet parliament, which also included Georgian members of the Soviet parliament. We didn’t even know their names. What we cared about was going out into the streets to protest, putting up posters on walls, campaigning for the opposition forces, and so on.
I think the time will come when the historic momentum switches. Usually, when victory comes closer, democratic forces come together. This is my positive message to the people who are tired of these divisions: there will be a moment when democratic forces will have to come together because the victory will be closer.
There will be a moment when democratic forces will have to come together because the victory will be closer
But those everyday supporters of democracy, what should they do? Should they despair because some of their leaders are unable to find common ground, or should they find grassroots ways to support the pro-democracy cause and build this movement, which the leaders will have no choice but to follow, to answer the call?
There is movement, there are grassroots, there are people who are doing a lot of stuff every day that weakens the autocratic regime. If that wave emerges, the leaders will follow and find a way to unite. So the fact that you’re seeing them divided and bickering with each other is a result of the lack of grassroots momentum. So, the idea here is to create this momentum, and everything else will fall into place.
Russian Economy
I will use your professional knowledge, and letโs move to the economics: without reducing a complicated topic to clichรฉs, could you describe the current state of the Russian economy? In Georgia, it is often challenging to convey this reality to the public: despite numerous analyses, predictions, and discussions about the possibility of collapse, many observers still see Russia sustaining its war effort and keeping the system running. In accessible terms, how can we explain the true state of the Russian economy today?
We’ve had a series of severe economic crises in Russia over the past few decades. If you look back, you will see that one of the features was that just for a short time before the actual collapse, things looked normal. Which means looking at the apparent stability is not the right indicator.
Let’s pick various indicators of economic dynamics. Putin and his lieutenants have been boasting about GDP growth lately. Question: Where is it now? What happened to GDP growth in 2025? What is the projection for next year? It’s close to zero at best. You wait for a few more months, and you will see it sliding into negative territory. ย ย Even Putin, in his September meeting with his minister, said Russia grew by only 0.4% in the second quarter of this year. He was speaking about over 4% last year, but this is how sharply it went downwards.
Second thing, the budgetary deficit. They just published the draft federal budget for the next three years, 2026 to 2028. And this is the first time since the beginning of the full-scale invasion of Ukraine that they have admitted that there is no end in sight for the deficit.
Before, they were saying, we will have to be patient with the deficit for a couple of years, but then we’ll develop our own economy based on import substitution, independent from the West, China will help us, and so on. Now they’re saying no. What they’re announcing is an uninterrupted seven-year period of very strong budgetary deficits, close to 2% of GDP or higher. The last time we experienced seven years of substantial budget deficit was from 1992 to 1999. So there is no money.
They keep increasing the taxes. When economic dynamics are zeroing out of GDP growth, it is not a good thing to increase taxes. Just a few years ago, we had a corporate profit tax of 20% and a VAT rate of 18%. We already have 25% profit tax and 22% VAT. We’re very much moving back toward the figures of the 1990s, when we had 28% VAT and 36% profit tax.
The trajectory is very clear. Inflation. They cannot bring the economy under control. They’ve done everything: Russia was number 12 among countries worldwide by central bank interest rate until very recently, only surpassed by Zimbabwe, Argentina, Turkey, Iran, Venezuela, and others. We still have a 17% core interest rate, which is very, very high. We’re still in the top 20 globally in terms of the cost of money. But they cannot win over inflation. It has started to pick up again in recent weeks, and the central bank has slowed the pace of rate cuts because it says inflation expectations are so high that it cannot cut further. We need to wait until it settles down for several consecutive years. So, when Putin invaded Ukraine, they promised that we’re going to produce everything, Russian airplanes, Russian cars, Russian smartphones.
Inflation is still high; growth is zeroing out. The word โrecessionโ in Russia was unthinkable just one year ago. The official debate now is whether we are already in a recession.
But China is not helping, not providing us money, not bailing us out. As a matter of fact, there were a number of interesting publications recently. The Institute for Emerging Economies of the Bank of Finland does a good analysis. They actually calculated that China has reduced its investment in Russia since the beginning of the full-scale invasion, which was already minimal. A small fraction of a percent of GDP accumulated Chinese FDI, and it has been reduced since. There is no hope, no money. They’re forced to raise taxes to try to balance the budget, even though they still have a deficit. Inflation is still high; growth is zeroing out. The word โrecessionโ in Russia was unthinkable just one year ago. The official debate now is whether we are already in a recession.
Would it be fair to say that the trajectory of the Russian economy is now heading in a riskyโand even alarmingโdirection, especially for those readers who remain skeptical because what they observe on the ground seems to contradict such assessments?
A recession is when GDP contracts for two consecutive quarters compared to the previous quarter. We already had a negative GDP in the first quarter. And in the second, it was under their calculations, which are also pretty questionable, plus 0.37%. So they are now claiming to have avoided the recession by staying just barely above zero. That’s the price of Putin’s economic policy, 0.37%.
So we have a kind of a perfect storm: budgetary deficit, persistent inflation, and expensive money because the central bank maintains prohibitive interest rates. The economy is zeroing out, and all of this comes at once.
I mean, listen to the official Russian debate. It would not leave you much room for optimism. Recently, they have significantly revised the forecast for 2026. Investments, negative. GDP growth is near zero. Real wages grow around 3%, which is next to nothing. Deficit, high. Taxes are increasing. So, you asked about the Russian economy, but give me some good news. I don’t hear them.
Do Russians Want War?
Another question, even if I think I know the answer: from time to time, I read polls, often from foreign institutions, showing that most Russians still support Putin and say theyโre happy with their lives. But given the circumstances, how real are these numbers? Can we trust these polls?
Russian polling is obviously distorted by the totalitarian reality. My one piece of good advice on working with Russian polling data is that you’ve got to work with a whole lot of it: trends over the years, dynamics, and nuances are very important.
In the Russian polling, it’s all full of twists. Usually, it is a large poll with many questions. What commentators usually cherry-pick is: Do you support Vladimir Putinโs Special Operation? Oh, yes! But then they are asked, “Do you wish to end it?” – The sooner the better.
So yes, they say they are supportive of war, but is anyone willing to do something about it? We’re not even talking about people volunteering to fight, no. If you listen to the so-called Z community, the narrow circle of extreme chauvinist, bloodthirsty genocide propaganda folks who want to conquer everybody and so on, they are very vocal because they are in line with government propaganda. One of the things they have been complaining about lately is that the stream of donations for humanitarian causes, like buying some medicines or supplies for the army, has shrunk to near zero. Nobody is donating anymore.
It is just verbal support, like a television viewer’s cheer, but it’s no more than that. It definitely is not the majority of society.
When asked, “Do you prefer peace over war?” Two to one, the majority prefer peace. “Do you particularly care about these occupied territories?” Most people don’t care. And Russians would say that they would easily give them away in return for something really positive.
More people see these occupied lands as a burden rather than an achievement because everybody sees that they lack a sustainable economy, and they’re heavily subsidized. It is a black hole requiring trillions and trillions and trillions from the Russian budget. Nobody wants to give away anything personal to support this war.
So, the Russian answer is like: Yes, we support the war. But we don’t want to be associated with it. This is a kind of standard totalitarian society, with its doublethink.
It is true that some people genuinely support Putin’s policy. I would say like there’s a solid third, maybe 35-40%, which supports imperialism, chauvinism, and so on. The good news is that the majority of them don’t want to do anything about it. It is just verbal support, like a television viewer’s cheer, but it’s no more than that. It definitely is not the majority of society.
And their ability to mobilize and contribute something is limited. These people are essentially conformists, like in the Soviet times. They work for the big state structures. They get indoctrinated every day. They benefit greatly because they receive substantial money from the system. But they’re also opportunists. Would they defend their cause if challenged? Most of them will not; theyโll switch sides.
How to resist authoritarianism?
The dynamics you outlined in Russiaโwhere a committed minority shapes the broader directionโare increasingly discussed in Georgia as well. For my final question, directed to our Georgian readers: economic interdependence between Georgia and Russia has expanded significantly in recent years, both officially and through less formal channels. As Western influence wanes and allegations of sanctions evasion persist, what future path do you foresee for Georgia?
I think it was part of Russia’s deliberate policy to subtly, quietly bring Georgia back under its control through economic means, through corrupting the country generally, economically. And I think the war of 2008 has contributed to this, because if you look at the NDI-Georgia polls, you will see an unusual phenomenon that you don’t see in most countries that have chosen the Euro-Atlantic vector of development.
It was part of Russia’s deliberate policy to subtly, quietly bring Georgia back under its control through economic means, through corrupting the country generally, economically.
In Georgia, you would see majorities saying yes to both questions: do you want good relations with you and NATO, and do you want good relations with Russia. So, I think the war contributed to that, because obviously, people don’t want war.
This is why Viktor Orbรกn’s campaign in the recent elections in Hungary, precisely at the time of Russia’s invasion in March-April 2022, focused on this message: If you vote for our opposition, you’re going to drag us into the war.
The same pattern can be seen in Georgia as wellโIโm quite certain he is relying on the very same methods.
This is very important. Russia is capitalizing on that message. Plus, there are many tactical economic benefits from the opportunity to trade with Russia while it is isolated. That gives Georgian businesses a big boost.
But again, bear in mind that this is all temporary. Coming back to the Russian economy, remember what happened 30, 40 years ago. Russia’s current economic model is unsustainable. It’s going to go down like this big, outdated monster. When it goes down, it’s going to bring everybody around it down. And this will have a heavy impact on Georgia as well.
Russia’s current economic model is unsustainable. It’s going to go down like this big, outdated monster. When it goes down, it’s going to bring everybody around it down.
This economic dependence, the current dependence on Russia, is very risky, but it is in a way also good, because when all these problems happen, it will raise a lot of questions for Ivanishvili. Was it sustainable? This idea of tying Georgia to Russia economically – was it sustainable?
We can now clearly see this in all the countries that have bound themselves to this Eurasian Union. That Union does not generate a lot of benefits in the long run. You [Georgians] will come to this moment [of realisation].
When we talked about divided opposition, I can understand the situation of today, but letโs see tomorrow. There will be a lot of trouble generated by Ivanishvili’s policy of bringing Georgia closer to Russia. There will be a crisis, economic difficulty, because the Russian economy will go down spectacularly, and this whirlwind will also be an opportunity for the opposition to speak up, and to talk to people who are now abstaining from politics.
The crisis is always an opportunity to wake up those who are sleeping. So, that moment will come when the Georgian opposition will have a renewed opportunity to talk to people and say – Listen, we must choose a different path.
