Fresh sanctions are about to be imposed against Putin’s Russia, this time because of the Navalny case. If we look at it, there are now countless sanctions imposed against the country.
Already in 2017, Putin announced: “Russia will use these sanctions to mount a response – a response that will not damage Russia, but instead help us. We will stand by this principle in the future as well. We will do everything that benefits us and try not to do anything that hinders our development.”1
Now, Putin’s press secretary Dmitry Peskov has urged countries that use sanctions to think about the consequences of such actions. He believes sanctions are ineffective and will only damage relations.2
What concerns economic sanctions, they are felt by the country that the sanctions are imposed against, as well as the countries that imposed the sanctions, i.e. they are a double-edged sword. However, sanctions are one of the non-violent tools that allows the international community or a single country to express its attitude towards the actions of another country.
There is no doubt that the country targeted by sanctions will try to make brave public statements that the sanctions give no result, and even if they do give results, they also affect the country that decided to impose the sanctions.
And this is the rhetoric of Putin’s Russia – they keep silent about their problems and actively try to prove that there are adverse consequences to the country that imposed the sanctions.
Considering the media situation in Russia, this is really not that difficult as the state controls everything. Therefore, it would be naïve to expect that the Russian media would report about the problems that have resulted due to the sanctions.
But we can see the real picture if we look at indirect indications.
Putin has urged not to allow the same situation that was present in the Soviet Union when people couldn’t buy produce. He said that back then it was because of a deficit, but now people can’t afford goods because of the prices that are dictated by the market.3 This statement contains two messages. First, although Putin is a huge fan of the Soviet Union, it seems that he’s not a fan of what life was in the USSR. Interesting – Putin praises a state (everyone knows how nostalgic Putin feels for the Soviet Union), but doesn’t like the life conditions that were present in the said state. This could be a signal of his declining mental health. Second, Putin states that people can’t afford some goods due to their high price. And one of the reasons the prices are high is that demand is greater than supply, and the insufficient supply is a result of sanctions. Putin essentially says that because of the sanctions supply is unable to meet demand.
Let’s talk numbers.
In 2019, when asked about the impact of the sanctions, Putin said that from 2014 to 2019 Russia’s losses amounted to roughly 50 billion dollars. And in 2018 Russia’s economic growth returned to the levels of 2008.4
However, the mentioned losses do not correspond with reality, i.e. he mentioned direct losses, but didn’t include the losses that arose collaterally. For instance, the Russian aviation industry had great hopes for the Sukhoi Superjet 100. Already in 2019, it was revealed that Russia will be unable to fulfill the contract it signed with Iran because it’s not possible to complete the production of the aircraft due to sanctions, since a large part of the equipment is produced in the US. Russia was supposed to deliver 40 aircraft to Iran in 2020, and because this didn’t happen Russia lost more than two billion dollars.5 If we look closer at the schedule of deliveries, Russia was supposed to deliver 58 jets by 2020 and an additional 302 by 2026. Only 25 aircraft were delivered by 2020, eight out of which were supposed to be in the batch of jets delivered after 2020.6
There are other areas where Russia has suffered losses because of the sanctions, but Putin is clever enough to keep silent about them.
It should also be noted that due to the lack of equipment Russia is unable to produce it’s own vaccine against Covid-19.
There can be no doubts that sanctions are forcing Russia to adapt its previous plans. Unfortunately, they are not enough to force Russia to change its behavior. Consequently, the issue of imposing sanctions against Russia will remain on the agenda for a long time, as they are directly linked to the course taken by Putin’s Russia.
The conclusion is that while Putin remains in power, the Russian people will have to suffer the consequences of sanctions.
The sanctions imposed against Russia have so far targeted specific spheres, for instance, Russian banks and companies have had access restricted to EU’s primary and secondary markets, there are bans on certain exports and import, as well as arms embargos and a ban on the export of military dual use goods. The sanctions have also hindered Russia’s access to individual sensitive technologies that are used for oil extraction and research. There are also special restrictions on economic relations with Crimea and Sevastopol, including a ban on imports from the peninsula, a ban on the export of particular goods and technology, investment restrictions and prohibition of providing tourism services in the region. The measures implemented regarding economic cooperation have put a halt to any new financial operations in Russia from the European Investment Bank and the European Bank for Reconstruction and Development.
By December 2020, the EU’s individual restrictive measures – a travel ban and asset freeze – targeted 177 persons and 48 entities due to their actions of undermining Ukraine’s territorial integrity, sovereignty and independence. In October 2020, the list was expanded to include two persons and four entities that took part in the construction of the Kerch bridge linking Russia and Crimea.7
There is no doubt that additional individuals should be included in the list of sanctions, but I believe it would be more effective to target specific spheres.
Only this way we can force Putin’s Russia to review its “bully” approach.
Another indication that the sanctions are more worrying than the Kremlin tries to present are the official statements coming from the Kremlin itself. If the Kremlin wouldn’t be worried about something, it wouldn’t waste time talking about it. Keep in mind that Putin’s Russia doesn’t care the slightest about what others think. This means that if the Kremlin is actively talking about lifting the sanctions because of one reason or another, it’s a clear signal that Putin is desperate to fix the situation.
Undoubtedly, sanctions affect the regular people as well. Unfortunately, there are no other options than to strengthen the sanctions against Russia in hopes that it would lead to the elimination of the main reason they were imposed in the first place, i.e. Putin’s regime would finally be replaced.