With the war in Ukraine entering its second year, will Russia continue to face sanctions?

Questions remain about the ability of the Russian economy to continue facing Western sanctions and the repercussions of the war with Ukraine, even with the confrontation between Moscow and Kiev entering its second year, and assurances by Russian economists that Moscow has succeeded in adapting to the conditions of war and sanctions.

On the other hand, the “myth” that prevailed in Russia during the nineties of the last century, which says that politics and economics - in relation to the West - exist in two parallel worlds, has fallen. Western countries launched the most violent economic attack on Russia for purely political reasons, as many have now confirmed. Russian observers.

Because of the Russian war on Ukraine, the reserves of the Russian Central Bank in dollars, euros, and the pound sterling were frozen, monetary institutions were banned, and many foreign companies and services announced their departure from the country, causing the Russian ruble to suffer a heavy blow.

The sanctions and the difficulty of importing equipment and technologies complicated the implementation of economic development programs, which were linked at the same time to raising the standard of living of citizens.

Although Russia is the largest country in the world in terms of area, its economy ranks only 11th in size in the world, and represents only 2 to 3% of the world's GDP.

Also, its role in comprehensive global trade is not very large. In 2020, it provided less than 2% of global merchandise exports and its market was a destination for about 1.4% of global merchandise imports.

However, Russia has great importance in the production and export of various raw materials, as it is one of the largest exporters of oil and its products, coal and natural gas.

According to March 2022 data, Moscow provided about 35% of the gas consumed in Europe and just under 20% of the oil.

It alone provides about a sixth of the raw materials in the world, in addition to producing more than 40% of palladium, which is used in the automobile industry, and its role in the production and mining of metals such as nickel, aluminum, iron ore and steel is also important, as it provides nearly 6 to 10% of the world's supply of these metals, and about 30% of the nickel consumed in Europe.

repercussions of sanctions

An expert at the Higher Institute of Economics, Vladimir Olichenko, confirms that Western sanctions against Russia began long before the war with Ukraine.

He points out, in his interview with Al-Jazeera Net, that at a time when the Russian army was fully prepared for the events, the country's economy and financial system lagged behind, although it was clear that the economic clash with the West was inevitable.

This was evident - in Olichenko's opinion - clearly in the central bank's delay in reducing the share of reserves in "unfriendly" countries, which reached last February - one month before the war - the maximum in its history ($643.2 billion).

The same applies to the stock market, when the focus was on complaints about restrictions on the purchase of foreign currency etc., while immediate decisions had to be taken to limit the withdrawal of foreign currency from the country, and at the same time the stock exchanges were closed for holidays as the military operation began in Ukraine, according to Olichenko.

Nevertheless, the Russian economist believes that the state has succeeded to an acceptable extent in preserving the exchange rate of the ruble and curbing inflation, and has neutralized - so far - the repercussions of the sanctions on living conditions, despite his acknowledgment at the same time, of the noticeable rise in prices and the decline in the purchasing value of the ruble.

For his part, international affairs expert Dmitry Kim believes that the sanctions have contributed greatly to disrupting the country's integration into the global economy, by "blocking" trade and export channels, financial flows and even travel, after many Russian industrial sectors were subjected to sanctions, and Russian banks were separated from The SWIFT system, as well as closing the skies to Russian planes and preventing the import of Russian products, starting in 2014, but the "severity" of the last wave of sanctions - in his opinion - was not expected.

In parallel, however, the Russian expert indicated that the bet of Western sanctions on a resounding fall of the economy did not succeed, and as an example of this, he explained that many Western companies that left the Russian markets exaggerated their confidence that other companies - whether local or from "friendly countries" - could not "- to replace them on the Russian market.

In his opinion, the logic of these measures is far from trade. These decisions have stimulated "friendly" Russian and foreign companies to "fill the void", but technological isolation will take time to address, due to Russia's dependence for many years on Western programming techniques.

However, Kim did not rule out - in this context - that Russia would go at a later time to abolish the penalty for using pirated software, as part of a means to face the repercussions of the withdrawal of European and American companies from the Russian market, regardless of the effects of this on the issue of intellectual property and patents.

Who shouts first?

International affairs expert Dmitry Kim confirms that talking about the impact of sanctions on Russia is also related to the repercussions of these sanctions on other countries, including those that imposed the sanctions, or participated in joining them.

According to him, the European Union found itself in a more difficult situation, after it was "swept" in the stream of sanctions and threats, which gave reason to perceive what is happening as its "trade war" against Russia.

He evidences this by pointing out that the European Union entered into a confrontation with Russia that led to the aggravation of relations with it in an environment that is not favorable to it, as the price of natural gas increased by more than two thousand dollars per cubic meter, and more than once this winter, as well as the prices of oil, minerals, foodstuffs, and commodities. Others are there, and signs of protest against these policies have begun to emerge within the European street itself.

And he goes to the conclusion that Washington, London and Brussels must realize the inevitability of Ukraine's collapse in the war and the formation of a new political system in it - according to his opinion - "but they are still betting that Russia will not be able to bear the pressures of the military operation economically, and therefore, they will continue to strike one after the other." ruble, to prolong the state of attrition of the Russian economy.