How Ukraine is bringing the war home to Russia

This is the sound of a Ukrainian drone hitting Wildberries, the Russian equivalent of Amazon. Ukraine has targeted dozens of the company's warehouses and logistics hubs in recent weeks, destroying billions of dollars of merchandise. It's now taking aim at Ozon, Russia's second largest online retailer, too. >> Large Ozon logistics complex has been struck in Dagestan, covering a an area of approximately 130,000 square meters. >> Ukraine says it's targeting these companies because they've been providing supplies to soldiers on the front line. But, is something else going on here? Ukraine wants to bring the war home to everyday Russians, disrupting the convenience of 21st century life. So, are they hoping the Russian people will turn on their president? And how realistic is that? I'm [music] Justin Bergman, international editor of The Conversation Australia, and this is The Conversation Weekly, >> [music] >> where experts explain how we ended up here. I'm joined today by Russia expert Matthew [music] Sussex, an associate professor at Griffith University, and a visiting fellow at the Australian National University. >> [music] >> Matt, welcome. So, who is Tatiana Kim? >> [music] >> Well, Tatiana Kim is Russia's richest woman, and she is the head honcho for Wildberries. Wildberries is, I guess, Russia's answer to Amazon. It's Russia's biggest online retailer, and Russians use it all the time. It's estimated to account for something like 10% of of all Russia's retail sales. Um so, it's a very large business and one which Kim herself has struggled to maintain control over against her ex-husband. Her husband previously wanted to take the company away from um relationships with um the Russian state. And when there was uh a merger announced, he showed up at one of the Wildberries offices with a bunch of armed Chechens. There was a gunfight and two people were killed. She then probably divorced her husband and remained in charge of Wildberries, which about half of all Russians estimated use at least once per month. >> Okay, so wow, she's got a colorful past. I mean, this is somebody whose story is really remarkable. And she's also incredibly wealthy, I take it. >> Yeah, she's worth over 8 billion US dollars. Although recently she will have lost uh a bit of that given that Ukraine have been targeting Wildberries warehouses. Um it's been reckoned that in the 25 or so Wildberries sites that have been hit by Ukrainian drones, about 6 billion US dollars worth of goods have been wiped out. >> So, why is Ukraine doing this? Why are they targeting this company in particular? >> Well, it's an extension of what President Volodymyr Zelenskyy referred to as long-range sanctions, uh which is basically targeting Russian infrastructure. Now, of course, we know that they've been attacking Russian oil refineries that have caused nationwide shortages of petrol and diesel. >> Across many parts of Russia, cars crowd around fuel pumps, while others sit in long lines waiting in some cases hours for a chance to fill up. >> And attacking Wildberries is another way to get inside the heads of Russian consumers. Because for a long time this war really hasn't hurt um many of the people who live in places of wealth and power in Russia. And mostly that's Moscow and St. Petersburg. And when it doesn't affect your daily lives, you tend to assume that it's either all going well or it's not something you need to worry about. But when you have to line up for hours to pay for petrol at the petrol pump and when you put in an online order that can't go through because the merchandise has been blown up by Ukrainian drones, that starts to put indirect political pressure on people like Vladimir Putin because it hits the everyday Russian consumer. >> [music] >> And of course Wildberries sells just about anything. They have millions of square meters worth of warehouses >> [music] >> full of stuff. And and part of the reason also that Ukraine has been going after these sites is because they say Wildberries participates in sanctions evasion. So effectively what Wildberries does is it purchases up goods from Western companies and then resells them in Russia after importing them through third parties. But more than that, Ukraine charges that Wildberries has been involved in directly aiding Russian forces at the front. And in fact, if you went online and searched Wildberries just a few days ago and you put in the search term things for the special military operation, you'd find body armor, helmets, drones, cable for first-person view guided drones, and even little components you can attach them to drop explosives. >> [music] >> So, you know, it may be the free market that's been hit by Ukraine, but nonetheless that free market in Russia has effectively been aiding the Russian military. >> Yeah, okay. So, uh I guess I was curious about Tatiana Kim and her relationship with Vladimir Putin. Are they tight? Has he offered to help her out with all of these attacks on her warehouses and the company? >> Kim is probably closer to the Prime Minister Mishustin. He's regarded as as one of her key backers than Putin himself. But, of course, when these attacks do happen and they take out a large amount of Wildberries stock, prompting people to to flee to other smaller, less developed retailers, it causes a shock to the Russian economy. And this is why there have been suggestions that the Russian government might have to bail Wildberries out by giving it a cash injection so they continue to operate. >> And how is Wildberries responding? >> Wildberries has said that it's looking at diversifying its infrastructure. There is another online retailer in Russia called Ozon, which people have been flocking to, which has much smaller sites. Wildberries model is the you know, the great big warehouse. So, it's looking at doing that, but that won't happen overnight. There's something like, you know, nearly 100,000 pick-up points for Wildberries merchandise across Russia with the idea being that you really don't have to travel too far outside your apartment to be able to pick something up. Um now, it is a fairly wealthy company, so it can probably keep going for a while, but not when its warehouses keep going up in smoke, and that's already a third of them that have been lost and more to come presumably as the Ukrainians [music] step up their attacks. >> [music] >> After the break, as the economy falters and the death toll mounts, can anyone put pressure on Putin to end the war? >> [music] >> I was saved by God to make America great again. >> [applause] >> An autocrat loves a crisis. A crisis is the way that they mobilize their base. >> Well, America is under invasion from within. We're under invasion from within. >> He's testing the boundaries of what he can get away with. >> We should use some of these dangerous cities as training grounds for our military, National Guard, but military. >> We've asked six of the world's preeminent scholars how we can measure the make of an autocrat. It's a recipe of sorts, tried and tested by the most infamous leaders in history. >> Hugo Chavez in Venezuela. >> Vladimir Putin in Russia. >> Joseph [music] Stalin and Adolf Hitler. >> Viktor Orbán in Hungary. >> He's basically bulletproof in terms of criminal prosecution. >> Join us from December 29 as we explore Trump, The Making of an Autocrat from The Conversation. >> Matt, what is the mood like in Russia right now? How much do we know? >> Well, I think people are heartily sick of the war. It's now estimated that about 1 in 25 Russians will know someone who has been killed in the war and something like 1 and 1/2 million to well, possibly even more than that have been either killed or injured in this war. So, I I don't think it's a popular thing at all in Russia. The question is then, well, what do you do about it if anything? And Russians typically when the government does things they don't agree with, simply go into apathy mode. If you ask Russians what they think about the special military operation, they just say they have no opinion or they try to stay out of politics, so don't really have a view. And look, partly that's self-preservation instinct because if you hold up a white piece of paper outside of Moscow metro station, you can potentially be jailed for 10 to 15 years. So, there are very, very heavy penalties that come with protesting in any way against the war and it's something that the central government has continued to tighten the screws on. Whereas the Ukrainian strategy may be effective on one level in getting into the minds of everyday Russians, whether or not that actually transfers to political pressure with the exception of the economic damage is something I guess we'll have to wait and see. >> We've read a lot about these military bloggers during the war. Is pressure starting to ramp up from that circle? >> Yeah, Russia's mill bloggers are supposed to sort of a a pressure release valve for those either in the military or connected to the military. And for a long time, they've been saying that the war has been going very badly. But interestingly enough, they've have tended to side much more with a more aggressive approach by the Russian military. They say Putin's been too soft, that he should be the basically carpet bombing Kiev uh to cow the Ukrainians into submission. Um so, you know, this is certainly not a sort of end the war movement. There are some who say that the war needs to come to a close and that Russia needs to be able to rearm so that it can do the job properly. But generally speaking, the mill bloggers are not very close to the power center in the Kremlin. >> And what about Putin's inner circle? >> Russia's oligarchs have been putting subtle pressure uh on the Kremlin for a while, but of course they can't go too far. Uh and that is because Putin basically did a deal with Russia's richest people and that was that they could continue making money and he wouldn't go after them but they stayed out of politics and that's often been the case. So there's no real groundswell of a real anti-war movement that people or powerful Russians could coalesce around and that's of course entirely by Putin's design because he also plays a revolving doors when it comes to people who are favored within his inner circle. There are those who will speak out. For instance, the chief economist of one of Russia's biggest banks recently said that Russia is losing the war with the West but also losing competition with China, economic competition and losing the competition with Ukraine as well and for that he was fired. So again, you can speak out but there are consequences. There's one political party called Yabloko which means apple in Russian. It's been around for forever since basically the emergence of the Russian Federation and that's the only really anti-war party and it's been precluded from running in elections. It's also had its members arrested, labeled as foreign agents which has a particularly pejorative meaning in Russia and also been imprisoned for some length of time. So the state has many many levers it can pull to get people if not singing from the government's song sheet then at the very least saying nothing. >> How bad is the economy right now and could things change if the economy really does take a a major hit? >> Yeah, I think that the mistake we often make is assuming that the types of economic pressure that would affect us and would change our behavior would change behavior in in Russia, and that's often not the case. Uh and the Russian economy has an also nasty habit of being able to keep ticking along. It is true, I think, that having a war economy for a significant period of time, and of course, after the full-scale invasion in February 2022, Russia's war in Ukraine has now gone on longer than World War I. Having a war economy for that long does put significant pressure uh on things like consumer spending, particularly on things like jobs, which have started to dry up, and overall Russian economic activity is declined significantly, along with inflation going up, which is the breeding ground, of course, for stagflation. And that means real problems for the economy. So, I think a combination of those things, plus Western sanctions, partly effective though they are, uh having an impact on Russia. So much so that it can't continue its war in Ukraine indefinitely, and at some point will need to find a face-saving way out. The problem with that, of course, is there's no sign from Putin yet that he's prepared to consider that option. >> So, with all of this in mind, do you think Putin is at all vulnerable? >> I mean, I've said for a little while that I think it is the beginning of the end for Vladimir Putin, but that may be a very long time coming. Essentially, Putin really, I don't think, can see any way of leaving power unless it's in a box or out a window. So, that means either revolution from uh his inner circle, which is kind of unlikely, um or revolution from below, from the people. And that's also unlikely given all the constraints they have and all the potential things the government can do to make their lives miserable. Um I don't think the situation with the Russian economy is going to be salvageable over the short term, uh or even over the medium term, and that will continue to cause real problems for the Russian government. So, it may be that we will reach a situation where either Putin dies in office, or there is some kind of palace coup. Um but the risks of doing so you're toying with your life. So, things have to get pretty bad, and I suspect things will have to get worse before there's any real change. Mind you, if there is change, it will happen very, very quickly, and virtually no one will have predicted it. >> So, why does he push on in Ukraine with all of this going on, with the economy faltering, with public opinion against the war, and the negative views back at home? Why continue? What's his mindset at this point? >> Well, I think he still thinks he's going to win. Um Putin's raison d'être, if you like, is to communicate to others that he has the higher risk threshold. Um that it doesn't matter what adversaries do to him, he will stay in the game. That doesn't mean he hasn't backed out in the past when it's been, you know, sort of fairly obvious that he's been losing, but I think he really has staked his legacy on this invasion of Ukraine, and that's something that's really hard for him would be really hard for him personally to back away from, uh but also in terms of his view about his political longevity and his place in Russia's history books. He's given no sign that he [music] wants an off-ramp, but the pressures that will build on him to seek one will continue to grow. Uh so, it is not beyond the realm of possibility that Putin within the next year or so decides to seek an [music] end to the conflict. There are whispers that privately there have been some contact between the Russians and the Americans to say that we you know we'd like to find a way out. But ultimately if Putin [music] isn't prepared to compromise and it'll take some time before it gets to that place and he'll have to weigh the risks in doing so. It's basically very much dependent on him. As [music] President Volodymyr Zelenskyy says the war could be over tomorrow if Putin pulls the troops home. >> Matt, thanks for your time today. It's been really great getting your insights on all of this. >> Thanks very much for having me Justin. >> That's it [music] for this week's episode of the conversation weekly. You can read more expert analysis of the Russia-Ukraine war from Matthew Sussex [music] at the conversation.com. We'll also put a link in the show notes. This week's episode was written by me Justin Bergman. >> [music] >> Isabella Podwinski was the executive producer. Sound mixing is by Lloyd Barrett and our theme music is by Nita [music] Sarol. Gemma Ware is head of audio. Ashley McGee is head of editorial innovation and Misha Ketchell [music] and Stephen Khan are our editors in chief. The conversation is a non-profit news outlet dedicated [music] to sharing the work of academic experts with a wider audience. If you like what we do, please support [music] us at donate.theconversation.com. Thanks for listening. >> [music]