Ukraine’s Economic Playbook for Defeating Russia

Ed D'Agostino
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March 28, 2025
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Modern history is rife with examples of wars that grind on needlessly, only to end with no clear winner. If they had ended sooner, all sides would have avoided needless casualties, and their treasure could have been put to more productive use. This happened to varying degrees in Korea and Vietnam, and with the Soviet-Afghan War.

There is a risk this will happen with Ukraine, though President Trump is eager to force a settlement. The US has a financial interest in ending a war that has already cost it $66.5 billion, not to mention the compelling humanitarian reasons for reaching a resolution, however imperfect it might be.

Marko Papic, Chief Strategist at BCA Research and my guest today on Global Macro Update, believes the war has to end: “And that's not a normative statement, it's just a statement of physical reality.” (He also believes we would have reached this point naturally, albeit six months down the road.)

So, what happens next?

Russia has gained varying degrees of control over sizable portions of Ukraine…

Source: BBC

Any settlement will likely involve retaining some portion of that. Yet as Marko notes in our interview, many Ukrainians do not want to live within a Russian sphere of influence. And in the long run, he says they won’t have to. Why?

West Germany.

Recall how East Germany floundered under four decades of Soviet occupation. West Germany was wealthier, its people lived longer (2.5 years on average by 1989), and oranges weren’t considered a luxury item.

You could argue that today’s Russia isn’t the Soviet Union—which is true. But its political and economic systems still don’t breed the prosperity possible under Western-style market capitalism.

Here’s Marko again: “I think there is a playbook for defeating Russia. It's worked in the past. It's called West Germany. The reason that Ukraine can eventually reconquer these territories is that on a 10, 15, 20-year time horizon, we have a proven track record that Western capitalism does better than whatever Russia does.”

In the interview, we also discuss how a settlement could reduce the need for foreign investors to hold US assets and open greater investment opportunities in Europe. You’ll hear about the influence of Russia’s oil and gas on global markets, and where the US stands in the new multipolar world.

Click the image below to watch my interview with Marko Papic.