Why is the economic war against Russia failing? | News

Russia has suffered significant losses in Ukraine, but the war is not going well for the West either – at least in one respect, the magazine wrote The Spectator.

When Russian President Vladimir Putin sent an invasion army consisting of 175,000 soldiers and hundreds of armored vehicles to neighboring Ukraine on February 24 last year, NATO refused direct military involvement, fearing an escalation of the conflict.

However, the West had to react. He began to supply Ukraine and still continues to supply it with weapons, ammunition, missiles, drones, tanks and other military equipment, which enabled the attacked country to resist considerable superiority, and even go into counterattacks.

The West has waged an economic war with Moscow by boycotting all imports and exports, seizing luxury yachts from Russian oligarchs, freezing their assets and cutting Russia off from the SWIFT payment system in order to cripple the Russian market and bring the Kremlin to its senses. The West has also banned Russian flights over Europe or restricted imports of Russian oil and imposed a price ceiling on it. These measures caused some damage to the Russian economy, but did not have the desired effect.

Where they went wrong

The magazine refers to an investigation by the German newspaper Bild, according to which Russia has circumvented Western sanctions by diverting trade to neighboring countries. Russian imports of German motor vehicles, chemicals and electronics increased significantly between 2021 and 2022.

The Kremlin has strengthened trade with, for example, Kazakhstan or Armenia. In response to a new analysis by The Wall Street Journal, according to which a large amount of sanctioned goods flow to Russia via the post-Soviet states, she rejected the circumvention of Western sanctions.

In this context, the newspaper mentions Georgia and Kyrgyzstan in addition to Kazakhstan and Armenia. In addition, the sanctions targeted wealthy Russians. However, paradoxically, these are the people who can bypass the sanctions the easiest, The Spectator reminded. These are people with dual citizenship and the ability to travel abroad to buy luxury goods. Due to the limitation of oil and gas supplies, Russia then relied on India and China. Both countries, unclear about the war in Ukraine, bought Russian oil at a discount.

Thus, the Russian economy was not destroyed, but reoriented to the south and east rather than the western world. “The West embarked on its sanctions war with an exaggerated sense of its own influence around the world,” wrote The Spectator.

Russian economy in numbers

Last April, the International Monetary Fund (IMF) predicted a decline in the Russian economy of 8.5 percent in 2022 and another 2.3 percent this year. However, Russia’s gross domestic product (GDP) fell by only 2.1 percent last year, and the IMF predicts an increase of 0.7 percent this year.

As The Spectator points out, the fundamental mistake was that non-Western countries did not join the sanctions. Otherwise, their effects would be more pronounced.

Scientists from Yale University claimed something else last year. According to their study, the sanctions hit the Russian economy much harder than the Kremlin admitted. In Russia, according to a study pointed out by the server Business Insider, imports and exports collapsed, crippling import-dependent domestic production across all industries. According to her, Russia is headed for economic oblivion.

Source: Zprávy – Tiscali.cz by zpravy.tiscali.cz.

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