In a few days, the war in Ukraine will enter its second year. Despite all the predictions and analyses of Western political and economic centres that confirm that Russia will not be able to move forward in that war for more than a few months, the facts on the ground prove the failure of all those expectations to varying degrees.
Most of the analysis relied on the impact of the Western and American sanctions packages imposed on Russia since the beginning of the crisis. Everyone expected that the Russian state, including its political system, would collapse under the impact of those sanctions. However, contrary to what was expected, Russia was able to withstand pressure. This necessitates a review of not only those analyses, but also the method and pillars upon which these studies were built.
Western sanctions against Russia have failed miserably to stop the war. This is to the extent that the rhetoric of Western leaders since the beginning of the war at the end of last February to today has been completely different. At the beginning of the war, they were talking about “destroying the Russian economy,” but today they speak in terms and in a manner that indicates that Russia has found a way out.
Since the end of February 2022, the European Union has approved 9 packages of sanctions against Russia, which include financial and trade restrictions, in addition to individual sanctions. Currently, the EU’s sanctions against Russia apply to 1,386 individuals and 171 organizations. The European Union decided, a few days ago, to extend the application of its sanctions against Russia for 6 months, due to the crisis in Ukraine, while preparing new measures against Moscow.
The Polish Prime Minister, Mateusz Morawiecki, who is the most hostile to Russia and Putin, acknowledged that European and American sanctions on Russia “have no significant effect.”
In an interview with the local newspaper, Interia, a few days ago, he said, “What is remarkable is that Russia this year and next year will develop faster than Germany, despite the sanctions.” He added, “Russia learned to bypass the sanctions first, and second, the prices of raw materials jumped more,” indicating that “the Russian budget achieves greater profits even from small sales.”
In the same context, The Economist magazine stated that Western sanctions imposed on the Russian energy sector did not harm the Russian economy at all. It indicated that the sanctions imposed in December 2022 did not prevent sales of Russian crude. The sanctions only changed the direction of crude sales from Europe to China and India.
A few days ago, the New York Times also said that the resilience of the Russian economy had thwarted efforts by Western countries to weaken Moscow because of its war in Ukraine.
Earlier, the International Monetary Fund, in a report, improved its forecast for the performance of the Russian economy for the next two years, indicating that in 2024, the Russian economy will grow by 2.1%, which is 0.6% better than the October forecast for the same period.
Russian President Vladimir Putin confirmed that preliminary calculations indicate that the Russian economy contracted by 2.5% in 2022, which is much better than the 33% contraction in the Ukrainian economy last year.
The Washington Post also confirmed that the sanctions against Russia had failed, recognising the validity of the data presented by Putin on the development of the Russian economy. However, the newspaper tries to justify this failure by saying that the goal of the sanctions was not the Russian economy, but rather “impeding the Russian war effort in Ukraine.”
This is although it admits, for example, that the Russian trade deficit for this year is lower than that of the United States.
What is certain is that Western sanctions against Russia have harmed the whole world. Today economic recession looms, as well as inflation that has reached record levels in the US, UK, and many European countries.
This prompted most central banks around the world to raise interest rates to absorb this inflation. The sanctions also led to an increase in the prices of fuel, commodities, freight, and insurance costs, which are now chasing importers and Western governments that are looking for a way out before facing a social explosion if they continue in this way in the future.
It is Western countries, particularly European countries, that are looking for a way out today, not Russia. Despite this, unfortunately, Western countries do not want to be convinced that economic sanctions have not produced any results to stop the war.
Dr Hatem Sadek is a Professor at Helwan University