If you want to receive ‘Perspectives From Westminster’ emails that offer expert analysis straight to your inbox, sign up for them today. Despite international sanctions meant to ruin Russia’s economy, the country continues to thrive. Despite public pressure demanding a negotiated settlement with Ukraine, Russia’s economy has largely remained stable since President Vladimir Putin ordered the invasion. While the ruble initially fell, it soon rebounded, and Russia capitalized on rising oil and gas prices caused by its own aggression. Imports fell temporarily but have since returned to pre-war levels. Although Russia suffered a military setback and lost a significant number of its troops, life for most Russians remains the same, and calls for a withdrawal have not grown due to Putin’s crackdown on domestic dissent.
Despite the intended crippling effects of the sanctions, Russia’s economy continues to fare well, and its people continue to enjoy the improved living standards of the past two decades. However, the US government has predicted that the economy will shrink by up to 15 percent, and over 400 multinationals have exited the consumer goods and hospitality industries in Russia. This exodus denies Russians the goods and luxuries that they once took for granted.
Sanctions have been imposed multiple times since the 2014 invasion of Crimea, with the 11th round of punitive measures set to take place at the G7 summit. Various countries and international organizations impose these sanctions, including the US, EU, UK, Switzerland, Canada, Australia, and New Zealand. However, Russia still has access to half of the world’s trade as bans have not been put into place by the UN or the rest of the world. Countries that have not imposed sanctions have sandwiched their own products in place of currently banned products, and there has been an explosion of “parallel” imports from Western countries, illegally sold to Russia via third countries.
While sanctions have not achieved the desired results, they have had some impact. They are inconvenient, and Western companies will miss access to the Russian market, while oligarchs do not have the full freedom they once had. Increasing sanctions may prevent Putin from expanding his military push and keep him stuck in a stalemate. Although sanctions are not a silver bullet solution to the issue at hand, they may be the key toward eventually ending the conflict.