Russian “Deathonomics” and Belarus’s Economic Vulnerability

The policy brief examines:

• Russia’s transition from wartime adaptation towards a two-speed, military-capitalist economy in which defence and war-serving sectors increasingly shape output, employment and public spending;
• the long-term risks of Russia’s “deathonomics”, including technological degradation, labour shortages, fiscal pressure, weaker civilian investment and growing dependence on coercion;
• why Belarus has not yet developed a comparable military-capitalist model, despite expanding defence-industrial cooperation with Russia;
• Belarus’s multi-channel dependency on Russia through trade, energy, production chains, logistics, finance, debt, payment infrastructure and technological ties;
• the risks of Belarus gradually becoming a military-industrial appendage of Russia as these dependencies deepen;
• the role of post-Soviet economies and intermediary networks in sanctions circumvention;
• China’s growing role as an alternative trade, technology and financial channel, as well as the risk of new forms of technological and economic dependency;
• changes in the social contract in Belarus and Russia under conditions of war, repression and economic uncertainty;
• three policy approaches for the European Union, ranging from broad economic isolation to differentiated pressure and advance preparation for a future Belarusian transition;
• practical recommendations for EU institutions, international partners, research organisations, civil society and Belarusian democratic actors.

The publication argues that Russia’s war economy should not be expected to collapse rapidly. Its militarised model may instead sustain a prolonged period of stagnation while continuing to channel labour, capital and public resources towards military production. Belarus, meanwhile, faces a different strategic danger: not immediate militarisation, but the cumulative effect of deepening economic integration with Russia.

For European policy, this distinction is critical. Treating Belarus simply as an extension of Russia may unintentionally close the remaining legal economic, educational, technological and financial channels available to Belarusian society and private actors, making Russia even more economically unavoidable.

The policy brief therefore calls for a strategy of pressure combined with preservation: maintaining pressure on Russia’s war economy and sanctions circumvention while protecting legitimate civilian channels for Belarus, preserving private-sector and human-capital capacity, and preparing practical transition scenarios for future economic diversification.

It also recommends developing a phased roadmap for reducing Belarus’s dependency on Russia in areas including energy, logistics, banking, payment systems, production chains, debt and technology, alongside a European transition-support package covering market access, trade finance, standards adjustment, SME support and social cushioning of reforms.