Western sanctions on Russia were intended to cripple the economy, isolate its most-powerful oligarchs and bring unbearable levels of domestic unrest to Moscow.
Since Russia’s full-scale invasion of Ukraine began on February 24, the West has passed a variety of sanctions to punish the Kremlin for its unbridled aggression. These include freezing Russian assets in foreign countries, restricting imports of Russian oil, removing some major Russian banks from the SWIFT payment clearing network, and cutting off key exports.
In addition to these government-targeted sanctions, the White House estimates that over 1,000 U.S. and multinational businesses decided to end or suspend operations in the country since February, taking thousands of workers and millions of dollars in productivity with them.
When they were first imposed, policymakers in NATO expected the impact of sanctions to “wipe out the last 15 years of economic gains in Russia.” Their aim was to “cause the collapse of the Russian economy,” said French Finance Minister Bruno Le Maire in March.
And since the sanctions began, the Russian economy has been negatively affected.
Foreign trade has plummeted and poverty rates have risen. Inflation has skyrocketed to nearly 14.5%, with goods and materials in increasingly short supply, as national GDP is expected to shrink by 7.1% this year, according to a poll from Reuters.
But while sanctions have negatively affected select sectors of Russia’s economy, the jury is still out on their overall impact.
When asked whether Western sanctions have been successful, Russian political scientist Ilya Matveev told NPR that it depends on by the criteria applied. To the extent that these sanctions have deterred Putin from military action, she said they have been unsuccessful.
And despite facing a major decline in foreign export volume, revenues from oil and gas, Russia’s biggest trade asset, are up nearly 80% this year, according to the Center for Strategic and International Studies.
At a hearing of the U.S. Senate Subcommittee on Europe and Regional Security Cooperation in June, Senior Advisor Amos Hochstein was asked if Moscow was making more money now off its crude oil and gas sales than a couple of months before the war started.
“I can’t deny that,” he told lawmakers. “It was not anticipated that the Russian current account surplus would actually go up because they would earn so much money from the sale of oil,” he added.
These revenue streams, paired with low foreign debt obligations, have allowed Russia to avoid the worst effects of international sanctions for the time being, said Michael Alexeev, an economist at Indiana University Bloomington. Alexeev said the effectiveness of the sanctions is a function of time in place.
“If the goal is a quick and complete collapse of the Russian economy, then no, sanctions are not working because the Russian economy is still functioning,” he said. “But if the goal is to weaken Russia economically over time, then sanctions are 100% working.”
Unfortunately, some West countries that is reeling.
The Ukraine war and the sanctions related to it have created a host of problems for the West, including stubborn inflation, soaring gas prices at the pump, and uncertainty over the availability of natural gas supplies for the heating season, now just a few months away. Markets are too dependent on Russian companies, Gazprom and Russian oil suppliers. And therefore, the wallets of Europeans are too dependent on how much russia wants to extract from them.
Ukraine many years have been talking about the fact that Europe should not depend on russian energy resources and only united sanctions can do it in time so that the next winter does not become catastrophic. Russia shouldn’t break the lives of everyone in Europe or even in the whole world! This game needs to change!
The Russian invasion in Ukraine is not only war against Ukraine. This is a continuation of Russia’s long-standing of politics to Ukraine by other means and anti-European politics. But did everyone truly realize this, everyone in Europe, in the European Union?