Will sanctions really cripple the Russian economy?




Moscow business disctrict

New Delhi – To what extent would the economic sanctions against Russia cripple its economy? While most researchers and analysts have said that the stringent sanctions against Russia would deal a “death” blow to its economy, many citizens opine that these measures will have a limited impact on their lives especially since Moscow’s economic engagements with China have only deepened.

Last week, even India and Russia held talks on potential joint projects in the energy sector. The two sides have also been looking at alternative mechanisms for payment and other transactions.

Several countries including Belarus, Myanmar Ivory Coast, Cuba, Venezuela, Democratic Republic of the Congo, Iran, Iraq, Liberia, North Korea, Syria, and Zimbabwe are among those in the sanctioned list. But Russia with its size and natural resource deposits cannot be clubbed with other countries.

With 11% of global oil reserves, sanctions against Russia have become a cause for worry for the West. Russia also accounts for 21% of gas production in the world and is one of the largest exporters of wheat.

Russian President Vladimir Putin during a televised discussion last week said that Moscow’s exports of oil and gas are continuing as usual, including the supplies through Ukraine. Russia supplies more than 40% of Europe’s total energy requirements.

While there are talks of reducing dependence on Russia, it will take time.

“Can the European countries, which are already reeling under economic pressure, after the Covid-19 pandemic take such chances, the pains of the sanctions will hit Europe,” an analyst told India Narrative.

“We are respecting all of our obligations in terms of energy supplies,” Putin said.

Russia’ energy exports to Europe have continued.

“Russia despite the expulsion of some of its banks from the SWIFT inter-bank system. It means that the world cannot completely do without Russia’s resources,” Gulf News said in a report.

“Russia has alternatives not available to many countries that were previously boycotted. This is why many other nations have not made any move on sanctions,” the report said.

Anna Koroleva, a senior Russian journalist at Expert, a local business weekly, told India Narrative that there has been no significant impact yet of the sanctions on the lives of the citizens.

“Banks are working as usual. Now no one is withdrawing anything from ATMs, plastic cards are working, we have our own payment system ’MIR’, which has long been used by all pensioners and those who receive social support,” she said, adding that the initial panic among citizens just after the Russian invasion of Ukraine has not settled.

IANS