Geopolitical Monitoring Report | September 23, 2022

Russia | Ukraine

Russia Prepares for Mobilization in Response to Ukrainian Counter Offensives

Background:

The Kremlin ordered a “partial” military mobilization following Ukrainian successes in their counter offensive near Kharkiv. Russia’s Duma passed several new laws that increase sentences for crimes committed by members of the armed forces during military mobilization and add new penalties for “voluntarily surrendering” in combat. officials inRussian-occupied areas in the Donetsk, Luhansk, Kherson, and Zaporizhzhia oblasts are holding referendums on formally becoming part of Russia from September 23 to 27.

The results of these referendums are a foregone conclusion and Russia will likely proceed with their annexation immediately after their conclusion. Former Russian President and current Vice Chairman of Russia’s Security Council Dimitry Medvedev stated on Telegram that Russia could use “all the forces of self-defense” to defend the annexed territory.  Medvedev’s ‘all of the forces’  statement would apparently include Russia’s biological and tactical nuclear weapons.

While the Kremlin has sold this mobilization as a “partial” call-up of reserves and those with military service, it has actually been fairly disproportionate. Ethnic minorities from regions like Chechnya and Dagestan appear to be overrepresented in those who are called up, likely a ploy by the Kremlin to ensure these regions do not revolt while Russia is occupied with the conflict in Ukraine. However, there have been signs of resistance from these regions.

Chechen leader Ramzan Khadyrov has already declared that Chechnya is exempt from the draft due to the large number of troops the region has already sent to Ukraine following unrest in the region. Protests have also been reported in Dagestan as well, however, it is unlikely that this  will do more than cause small delays to Russia’s mobilization.

Impact:

While Russian law technically only permits conscript forces to defend Russian territory and does not allow them to conduct offensive operations on foreign soil, the formal annexation of Russian-occupied territory will allow Russia to secure the front lines with conscript forces and use them for logistical work behind the lines. This will naturally free up volunteer troops and troops from private military contractors,  like Wagner Group,  for additional offensives. This will also free up contract troops and mercenaries from securing the front line, logistical tasks and policing occupied territory.

In addition, any domestic backlash to a mobilization might be blunted if conscripts are not engaged in offensive operations and are mostly being used in these roles. These newly-freed up Russian forces would then be able to resume offensives across the country. Given that many of the new draftees do not appear to have military experience – which was suppose to by the primary determination if an individual was draftable – or appear to be in poor health, it could mean that Russia does not plan to use these individuals for offensive operations.

However, it is also equally likely that these conscripts will be used in new offensives and political repression in Russia is likely to increase significantly if that is the case. While the reinforcements from the newly mobilized units will take time to arrive in the country, the announcement that reinforcements are coming will likely boost morale on the front.  New offensives may take the form of a Russian push towards the coastal city of Odessa, which has become a lifeline for the beleaguered Ukrainian conflict as it contains the only major Ukrainian port that they still control.

Even if a renewed Russian offensive ultimately fails at capturing the city, any fighting around the critical port will naturally disrupt shipping out of the harbor. This imperils not only the Ukrainian economy, but also global food supplies, as a Russian capture of Odessa would likely end grain exports from Ukraine shortly after an export plan was negotiated between Kyiv and Moscow by Turkey. Grain prices dropped as a result of that agreement and resumed exports and would rise if Russia moved on the city, thereby disrupting port operations.

Ukraine’s Operational Command South – which oversees the defense of Odessa and other nearby cities – reported an increased number of Russian strikes in the region, including those using Iranian-made Shahad-136 kamikaze drones. Disruption to grain shipments will naturally cause the price of grain to rise, which comes as the U.S. dollar continues to increase in strength relative to currencies like the British Pound, Euro, and Japanese Yen. This could result in countries around the world having similar foreign exchange crises as Sri Lanka had earlier this year, which left the country unable to purchase food and fuel. Developing countries and emerging markets are particularly vulnerable to a strengthening dollar, especially those nations that have a large amount of debt denominated in dollars.

This could put enormous stress on government bonds from these nations and may result in some nations defaulting. A strong dollar may result in decreased consumer spending for products made or sold from the United States in foreign countries, as the decrease in their currency’s value will reduce their purchasing power. This will have a significant impact on US-based manufacturers that export a large portion of their products abroad.

Mitigation:

Russia is highly unlikely to use tactical nuclear weapons or biological agents to defend its newly annexed territory at this time, but the nuclear threats from the Kremlin do indicate that Russia intends to escalate the conflict significantly and is seeking to discourage further Western involvement. Inauthentic coordinated networks working on behalf of Russia are likely to promote the potential threat in order to stoke fear among Western audiences as a way to encourage the populations in these countries to lobby their governments to lift sanctions on Russia and cut off military aid to Ukraine.

Platforms should ensure that they are monitoring these threats and actively working to mitigate them. Organizations should also ensure their third-party intelligence capabilities are able to monitor the economic and political conditions in countries where they operate as a rising dollar and declining  economic prospects may inspire unrest in these countries – similar to what was seen in Sri Lanka – that could threaten the safety of employees and company facilities.

In addition, these two threats could converge if inauthentic networks seek to blame Western companies in these countries for potential economic downturns.

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