Experts Suspect Russia Is Boosting Economy With Prison Labor

The worker shortage in Russia has become so bad that the Communist country is starting to rely on something that it hasn’t done in quite a few years – use prison labor.

A report published in The Moscow Times recently said that last year, Russia was able to bring in roughly 19.1 billion rubles (about $204 billion U.S.) by using forced prison labor. The media outlet cited data from the finance ministry in Russia.

That number exceeded the estimates that the country issued back in 2021, when those in charge of creating the budget for Russia projected that they would be able to bring in roughly 15.8 billion rubles from the forced prison labor.

According to those 2021 budget projection, Russia expects to bring in 15.9 billion rubles from forced prison labor in 2023 and then 16.2 billion in 2024.

According to data released in August of 2023 from the Federal Penitentiary Service in Russia, there are about 26,000 prisoners in Russia who are forced to go into labor in about 1,700 organizations in the country.

That number is about double the number that was reported back in 2022. That year, the Jamestown Foundation – a research and analytics company – estimated that about 9,300 prisoners were made to go to work.

The increase in Russia’s reliance on prison labor has been caused by the workforce shortage in the country, which has reached record levels this year. Much of that, of course, is due to the fact that millions of people have left from the country to either escape the challenging economic situation that the country is facing, or to avoid having to fight in the war against Ukraine.
In a note that he sent back in October, Sergey Sukhankin, a senior fellow at the Jamestown Foundation, said:

“The Russian economy is facing harsh structural challenges, including the lack of a qualified work force. The Kremlin has sought to integrate prison labor with certain sectors of the domestic economy to solve this issue.”

Russia has used forced prisoner labor throughout its history. During the Soviet times, the “Gulag” system was well-known around the world. Under that regime, prisoners were forced to work in what were the riskiest as well as most “lucrative” sectors of the then-Soviet Union economy.

Eventually, prisoner labor could evolve into a new system that was similar to what was used during the Soviet Union. Sukhankin said that could happen if the current leadership in Russia is able to survive the Ukrainian conflict.

As Sukhankin said:

“The recent uptick in the use of forced prison labor in Russia is not merely the transient trend of a post-COVID economically troubled, or war-hurt Russia. In the event that […] Vladimir Putin survives the war in Ukraine, the use of prison labor in Russia might evolve into a system similar to the Soviet period.”

The outlook for Russia’s future is rather grim, according to many economists. Due to the war with Ukraine, Russia’s economy has been taking huge hits, especially as a result of sanctions that western nations have put on them.

Some economists believe that Russia could even become a failed state within the next decade.