Russia’s ongoing war against Ukraine serves as a global reminder that economic factors can be even more decisive than military campaigns in achieving long-term victory. Nevertheless, the economic dimension is rarely factored into war planning.
Usually, when states formulate options of war, militaries conduct headquarters planning, including intelligence on the latest situation on the adversary’s side, its order of battle, weapons, air force, personnel and technological capabilities. This data is then compared with one’s own order of battle. Planning groups then form to determine the objectives of a campaign, which can be military or political, and are usually the latter.
During such discussions, military officials will examine two to three main scenarios that could develop, in which the campaign could prove successful, indecisive or end in failure. The planners seek to utilize their own side’s advantages and exploit the enemy’s disadvantages. The end result of this process is the production of a war plan.
Yet states often forget that the military domain is not the only decisive factor when it comes to winning battles. The political and economic elements are very influential—now perhaps more than ever.
While planners seek to account for political factors, they rarely look at the economic-financial dimension of war.
Such calculations touch on the widest of circles, affecting national economies—and in the case of Russia and Ukraine since Feb. 24—the lives of hundreds of millions of people beyond the battlefield itself.
Ukraine is a powerhouse of corn, potatoes and steel exports, as well as sunflower oil, and other agricultural and natural resources.
Since the begnning of the war, Ukraine’s GDP has crashed by 45%—a disastrous figure—while Russia’s has declined by 12%, which is extremely damaging and will be felt in every Russian home. The country could soon be going back to pre-Cold War scenes of empty supermarket shelves. This will have a deep impact on the fabric of society and could undermine support for the war.
Russia and Ukraine combined are responsible for some 30% of the world’s wheat supplies, while much of Europe and beyond became hooked over the years on Russian oil and gas. As the West implements unprecedented sanctions on Moscow, both Russia and the nations that relied on its natural resources will experience severe shockwaves.
None of this economic fallout was planned. Russia was focused on winning military battles and didn’t invest much thought in the economic war. It is clear that Russia failed to plan for such a harsh fallout or for a scenario in which Germany stops importing Russian oil and gas, and the United States halts oil imports as well.
Chinese energy imports from Russia will not be able to compensate for this damage, though the Saudis will pump up their exports by 50% and reap the dividends.
All of this is a warning sign about the consequences of failing to plan for economics in war, even though the longer a war draws on, the more decisive financial factors become. The influence of these factors takes on even greater significance when economics start to impact weapons and ammunition production—something that has a direct knock-on effect on the battlefield.
If war becomes a campaign of attrition, no clear winners emerge and then the importance of raw materials becomes even more influential, affecting a state’s ability to sustain a war effort, including even the production of vehicles.
In Israel’s experience, short wars can lead to periods of economic prosperity, as the Six-Day War did in 1967, ending a period of lengthy stagnation and creating an atmosphere of development, production and the formation of new companies. But the War of Attrition that followed it knocked economic performance back down again.
Today, Israel faces adversaries that have the potential to immediately disrupt its economy, particularly Hezbollah based in Southern Lebanon, which can paralyze the Israeli home front and economic activity with massive rocket attacks.
This means that Israel must stockpile food, medicine and energy sources, and ensure that every sector can function, requiring planning that goes far beyond military strategy and tactics.
It’s difficult for states to plan the military, political and economic domains in an integrated manner, and then sew them together into a single coherent plan.
Most cognitive resources end up being invested in the military side. Russia planned for a three-week war of victory in Ukraine, and the decision-making echelon never accounted for the broad economic chain reactions of a lengthy war.
The lesson to draw is that military headquarters preparations must undergo a revolution. At the state and strategic level, it is vital to ensure that economic experts take an active role in the full military planning process.
This also helps ensure that civilian morale levels in a warring state remain reasonably high—a factor that directly influences the morale of soldiers. If a state fighting a complex war fails to achieve this, it is practically guaranteed to run into serious trouble.
Looking ahead, it’s clear that Russia will feel the pain of economic crisis for a very long time. Even if it makes new military progress in the field, Moscow can still lose because of economics and the influence of economics on politics.
It provides a classic case study of what happens when planners fail to include worst-case scenarios in their possible courses of action. Any life-affirming state that finds itself having to plan for wars should learn from Russia’s costly mistake.
Brig. Gen. Doron Tamir (IDF, Ret.) is a publishing Expert at The MirYam Institute. He served more than two decades in the Intelligence Corps and Special forces as the Chief Intelligence Officer in the Israeli military, where he commanded numerous military units in all aspects of the intelligence field.