War economy in Russia nourishes Rustbelt Revival

Russian retailers are rushing to create a store in Rustbelt in the country, and benefit from a new wealth flowing from the bonuses of soldiers and widespread military production.

The stores, restaurants and chains of the gym in the most deprived areas in Russia, which work as gatherings to employ Vladimir Putin. Ukraine invasion. The country’s war economy created jobs, increasing the salaries of factory workers and achieved unprecedented amounts of money in cities and cities historically poor.

Jeanis Klog, expert in Russian economy With the German Institute for International and Security Affairs. “It gives a lot of money to people who at a time of peace do not have a lot of possibilities and people who do not have education and live in deprived areas.”

With the transfer of the war in Ukraine to its fourth year, the state’s orders to provide army With weapons and clothing, the jobs of a paid factory were given to the residents of poor industrial cities in Russia. Recruits – those who tend to attend from the disadvantaged areas – get high rewards to join the army, and their families receive payments if they die.

“The demand appears in new areas that was not before, because people were simply very poor to go to a large retail store,” Klog said.

Russian retailers and entertainment companies have acquired this trend, as it was called an expanding campaign at a time when Western sanctions and high local interest rates were wet commercial activity.

The X5 Group, which has some of the most prominent supermarkets in Russia, said it is expanding in the Far East of the country, a recently supported area by import partners in Russia who are looking for alternative circulation methods that circumvent Western sanctions.

The number of retail and hospitality jobs announced in the southeast of Kabarovsk almost in the year until January 2025, according to the Financial Times analysis of the vacancies published by a sample of Russian companies.

SuperMarket Pyaterochka, Rostic’s Rostic’s Roskic and M.Video-Eldorado series from the fast food chain, among the Russian companies that employ new employees.

Last year, M.Video-Eldorado opened 100 stores that enter 25 new sites such as Kachkanar, Solikamsk and Volzhsk-all cities with a population of less than 100,000 people in the center of the central Russian industrial heart.

The unemployment rate in Russia decreased to 2.4 percent in the winter of 2024, from 4.3 percent in the same period in 2021, as the state poured money in new vacancies in the prosperous defense sector in the country as well as the auxiliary industrial sites that make clothes, food and fuel for the army.

Salaries also increased in non -relevant industries, as the narrow labor market is already exposed to pressure from workers who are recruited in the army or fleeing from abroad to avoid recruitment – despite undermining these wages due to high inflation.

The Central Russian Republic of Mary (35,600 dollars) offers a reward for the start of the new army recruits, which is more than three times the annual salary in the region. The nominal income in the deprived republic has traditionally grew by 80 percent of December 2021 to 2024, compared to an increase of approximately 60 percent in Moscow, according to Rosstat Agency, the Russian State Statistics Agency.

“The (army) payments are giant, so those who do not think about buying a sophisticated smartphone before can do this easily now,” said Sergey Bolovenikov, head of content review in Russia, a market analysis group.

A local person in the Central Russian city of Cheboksary, who asked not to be named, told FT that he saw a remarkable difference in the number of people who get ready -made meal coffee in his city.

“These days, you can spend half an hour in a standing menu in a fast food chain,” he said. “In some beautiful restaurants, you need to book a table a week ago, and it was certainly not the case here.”

He pointed out that the rise in the available income has doubled through the fact that loans to buy large tickets still feel far from the reach of many Russians, while the central bank in the country increased interest rates to 21 percent in efforts to reduce stubborn inflation. Russian consumer prices increased by 9.5 percent last year, an increase of 7.4 percent in 2023, and official statistical data shows.

He added: “I have a good income, but I can’t buy an apartment or a car, so I may eliminate better quality than groceries, and I eat often a little more.”

A woman from the neighboring town of Shomerlia, with a population of less than 30,000 people, noticed more beauty salons that open in her neighborhood: “Almost all women get nails now (…) There are more nail professionals, places that offer cosmetics for devices or even some basic injections.”

“We have received a special service to deliver dogs in our town, and now this is a real indication,” she said.

The largest regional cities began to attract companies that were previously confined to the Ramiyat of Moscow. Spirit Fitness, a gym chain where the monthly membership costs up to $ 70, last year opened a branch in Chelyabinsk in Ural.

“People now have money to spend on themselves,” said Mikhail Richajov, a spokesman for the Association of Shopping Centers in Russia. “They can push more to maintain their health, and the growth of the fitness industry confirms this.”

Another factor in the family’s income was another factor. One of the widow on Instagram shared that she had bought a property in Vladivostok with money that she got for the death of her husband. “How much life is … 12 million rubles,” she wrote – or more than $ 140,000.

Laura Solanko, from the Institute of Economics at the Bank of Finland, expected that the soldiers would be the first to lose their income at the end of the Russian war, but some transformations in the regional countries economy It will remain.

She said: “The areas that benefit from changes in the geography of foreign trade will not disappear quickly.” “In addition to those who suffer from increased production and military industry, as Russia will need to be deported for many years.”

Additional reports from Chris Cook