Ukraine takes aim at Russia's economy

**Ed Butler** (0:01)
Inside Russia, is the cost of war coming home?

**SPEAKER_2** (0:05)
I calculated the losses and found the total to be just over 1.2 million rubles. Everything burned down.

**Ed Butler** (0:11)
Attacks on gas supplies, warehouses, are they changing the Ukraine war?

**Francis Dernley** (0:16)
It is another example of a war that Putin had promised his people was a special military operation that wouldn't affect them, having major consequences on everyday life in Russia.

**Ed Butler** (0:26)
This is World Business Report from the BBC World Service. I'm Ed Butler and today we're going to be looking at both the wars in Iran and Ukraine and how they're affecting citizens there, as well as the global oil price, of course. We're also hearing what FIFA's chief financial officer said to his boss today in an open letter, it wasn't polite, and how a 24-year-old blew $35 billion of AI investments in just two weeks.
That's the sound of a Ukrainian drone striking a warehouse belonging to the Russian online retailer Wildberries. In the past fortnight, fewer than 16 Wildberries distribution centres have been damaged or destroyed as Ukraine steps up its strikes on major economic targets in Russia. Just last night in the city of Volgograd, another Wildberries factory facility was destroyed, and an oil refinery in the same city owned by Lukoil. My colleague Victoria Holland was recently speaking to a Russian business owner who lost $15,000 worth of herbal tea stocked in a Wildberries logistics centre when it was hit.

**SPEAKER_2** (1:48)
I calculated the losses and found the total to be just over 1.2 million rubles. Everything burned down.

**Christina Philippou** (1:54)
What will happen next to your business?

**Amelia Pollard** (1:56)
Will you be able to survive?

**SPEAKER_2** (1:59)
I'll be able to restock my shop for sure, but it will take time and I probably won't stock such large quantities. I'll put a small amount of merchandise into the new warehouse. I don't have any other alternative source of steady income.

**Ed Butler** (2:13)
The thoughts there of one Russian business owner. Well authorities in Russia have tried to play down the impact of the Ukrainian drone strikes, but it's increasingly clear that they are having an impact. I've been speaking to Francis Dernley about this. He's of the British Daily Telegraph newspaper. Wildberries is also presenter of its podcast Ukraine the Latest. I asked him why Kiev is now focusing on attacking economic targets in Russia.

**Francis Dernley** (2:37)
Well, it's certainly been a pivot. It's been very noteworthy that they've been doing this now for several days. I think we might be on the ninth or tenth day now of these attacks on these warehouses. And the destruction is meant to be in the hundreds of millions of rubles. Ostensibly, it's about drone components. Wildberries was involved in the selling of parts used for drones and other weaponry that had been purchased by Russian soldiers on the front line. And they were perceived by the Ukrainians as being a legitimate target. And hence why they have been such a focus, as well as, of course, impacting ordinary people and being a very costly loss.

**Ed Butler** (3:14)
I was thinking that because obviously they've been targeting refineries affecting the fuel supply for regular Russians for quite a while now, several months, isn't it? And now this. It's about kind of getting in the face of kind of middle class Russia and saying, we're bringing the war to your doorstep.

**Francis Dernley** (3:33)
Well, not just middle class Russia. So Wildberries is also similar to eBay in some ways. It's not just an entity that's used by the sort of the more well off in Russia. So it impacts everybody just as fuel costs do and food costs do. And you're absolutely right. There has been a concerted effort to make this war impact more ordinary Russians in order to put pressure on the regime, which has of course been escalating this war now for the last four and a half years.

**Ed Butler** (3:58)
And how much of an effect is it having? Do we know? I mean, is there any, what's the picture?

**Francis Dernley** (4:03)
In terms of the impact on ordinary Russians, there have been some very severe consequences in terms of the cost of living. There have been many reports of people forced to shut down businesses, effectively put them on deep freeze because of the cost of fuel and energy, particularly in the agricultural sector.
And it's very frustrating for, I think, many ordinary Russians to suddenly lose access and having to be queued for hours and hours at petrol stations in order to go about their everyday business. But I think that this is not going to be a game changing campaign in the sense that we're going to see a major strategic shift as a consequence. But nonetheless, it is another example of a war that Putin had promised his people was a special military operation in a very far away country that wouldn't affect them, having major consequences on everyday life in Russia. And of course, if there is another mobilisation this year, as is widely speculated, that too will have major consequences. That would be hundreds of thousands more people effectively conscripted to the front.