Material and commentaries published in the past may or may not be helpful in analyzing current economic or financial market activity. Please note publishing date when reviewing materials.  Please email [email protected] for our current thoughts or to reach an advisor.


Russo-Ukraine War: Guest Comments by Byron Callan

David R. Kotok & Byron Callan
Wed May 29, 2024

Capital Alpha in Washington is one of the finest policy and political forecasting research firms, IMO. Byron Callan is their key defense analyst. He is also a friend and Camp K fishing colleague. Byron examines every state vs. state war since 1937 and recites history and astute observations in the piece that follows. He does this in the context of the Russo-Ukraine War. You won’t see the Israel-Hamas War on the list.



Byron has given us permission to reproduce the entire narrative and charts. Here’s his missive.  We thank him for letting us share this with our readers.   
Russo-Ukraine War: The Russian Manpower Advantage and European Defense  
By Byron Callan,  
May 16, 2024  |  DEFENSE  

  • Consensus may be that battlefield initiative has shifted to Russia, though Ukraine could be in better shape later this year once U.S. military aid arrives. Putin’s appointment of Andrei Belousov as Defense Minister underscores that this is a war of industrial bases and mobilization and that Europe faces a fundamentally different security environment in 2024-2030 which should support sustained higher defense spending.


  • Exhibit 1 is a reminder that the Russo-Ukraine War is one of the longest conventional state v. state wars since the 1940s. This is a key distinction. There have been longer wars since 1945, but these were primarily counter-insurgencies (e.g., Vietnam, Algeria, Sri Lanka). There were aspects of the Vietnam War that were high-end conventional fights, notably the air warfare over North Vietnam and 1972-75 when regular NVA units fought against the ARVN. However, other conventional wars were far shorter, lasting days or weeks, though some consumed prodigious amounts of weapons.


  • The closest analogy we can think of to Belousov’s appointment is that of Lord Beaverbrook in 1940 who was appointed Minister of Aircraft Production and was instrumental in getting automotive capacity converted to military aircraft production. Belousov doesn’t have the same background as Beaverbrook, but based on multiple media reports, he has a strong background in organizing and seeing through major projects in Russia. He’s a numbers/data guy. With Chinese, Iranian and North Korean imports, Belousov may offer improved oversight of Russian defense production, though we have seen no assessments to quantify changes.


  • Population differences can be offset by better-trained, better-armed militaries. Israel demonstrated this in wars with Arab states in 1956, 1967 and 1973. Iraq had a population of 13.8 million in 1980 when it invaded Iran. Iran’s population was 39.7 million. Iraq ultimately “won” that war though only with massive imports of mostly Soviet equipment (e.g., 4,360 main battle tanks, 1,000 infantry fighting vehicles and 473 combat aircraft). Iraq also used chemical weapons at scale.


  • Russia and Ukraine could mobilize more manpower, but Ukraine is at an inherent disadvantage given that Russia has 3.4X more males aged 20-29. In 1943-45, the U.S. had 7%-9% of its population serving in the military and the UK, 9%-10%. Per the “Military Balance 2024,” Russia’s total active and reserve military forces were 2% of the total population and Ukraine’s were 3% (using the mid-points of “Military Balance” estimates of the size of Ukraine’s armed forces). In theory, both sides might be able to field larger militaries, but for Ukraine, there may be a question of whether these could be adequately equipped.


  • It’s difficult for us to imagine how Ukraine defeats and ejects Russian forces without substantially more arms to equip engineering and armored/mechanized units. U.S. and European aid may stabilize the war in 2024-25 but it's unlikely that anything is going to come close to what oil-rich Iraq was able to buy to bring the war with Iran to a conclusion in 1988. But we also assess it’s improbable that Russia will be able to decisively win in Ukraine with an occupation of all the territory east of the Dnieper River.


  • There remain some curiosities and read-throughs in the current war: 1) We don’t know why Russia has fielded its own fleet of unmanned surface vessels to attack merchant shipping carrying Ukrainian exports in the Black Sea; 2) Ukraine’s use of drones to strike Russian oil facilities at ranges up to 1,500 km should be a wake-up call to other states of their vulnerability and need for better air defense; and 3) There should be more assessment of why so many people saw Russian fragility in 2023 and how they misread Russia’s military staying power and its ability to generate military power under sanctions and export controls.


  • One final thought is that if Russia “wins” in 2024-26, a U.S. defense industrial base failure to adequately supply Ukraine could stoke a deeper look at DoD acquisition and corporate incentives and behaviors. What this means for capital deployment, operating margins and risk remains to be seen.

Exhibit 1. Length of Some Major State v. State Wars Since 1937

Source: Capital Alpha Partners


Exhibit 2. Comps for Russia and Ukraine

Source: “Military Balance 2024,” Capital Alpha Partners


Again, we thank Byron for allowing us to share his missive.


David R. Kotok  
Co-Founder & Chief Investment Officer  



Links to other websites or electronic media controlled or offered by Third-Parties (non-affiliates of Cumberland Advisors) are provided only as a reference and courtesy to our users. Cumberland Advisors has no control over such websites, does not recommend or endorse any opinions, ideas, products, information, or content of such sites, and makes no warranties as to the accuracy, completeness, reliability or suitability of their content. Cumberland Advisors hereby disclaims liability for any information, materials, products or services posted or offered at any of the Third-Party websites. The Third-Party may have a privacy and/or security policy different from that of Cumberland Advisors. Therefore, please refer to the specific privacy and security policies of the Third-Party when accessing their websites.



Sign up for our FREE Cumberland Market Commentaries



Cumberland Advisors Market Commentaries offer insights and analysis on upcoming, important economic issues that potentially impact global financial markets. Our team shares their thinking on global economic developments, market news and other factors that often influence investment opportunities and strategies.