Real effect on sanctions on Russia after 5 years

[Tomasz + 1,608]

 

Sanctions against Russia have been under heavy discussion for many years.

Although I would agree that the West and the USA, it would probably have effectively plunged Russia very much down economically if they really wanted it, but I think it would have to be a breach of the rules of the international order more serious than the invasion of Ukraine which, according to world community is probably still in the gray zone.

For example something like  the invasion of Poland as a member of NATO and the EU, not to mention Germany as the economic leader of Europe.

After all, I think that no rational person in the West will impose very severe sanctions on the nuclear power because the effects could be very unexpected and unpredictable.

In the same way  the United States  together with the EU general thought is that probably the more they impose a sanctions on Russia, the more Russia will be dependent on China. After all its nearly 150 milion population biggest commodity base with modern still better than Chinese military technologies a certain resource of civil technologies, including information technology, and what is worth emphasizing with the large resources of quite well educated people.

In the era of the Chinese-American war for global hegemony , forcing Russia more into the role of China's vassal, which is happening anyway, is not particularly in the interest of the West.

I recommend this report because it is a Finnish research institute dealing strictly with Russian matters. The report is short and very succinct so I would highly recommend it.

In general, the most serious agency of those estimating the impact of sanctions after 5 years the International Monetary Fund in 2019, estimated that on average in 2014-2018 their direct effect of the sanctions cost Russia 0.2% of GDP annually.

Additionally, they estimated the costs of an additional, very restrictive budgetary policy, especially taking into account that Russia is the least indebted economy in the G-20 club at 0.3% of GDP and the effect of the decline in hydrocarbon prices at 0.6% of GDP.

In general, the effect of falling oil prices is several times more important than the sanctions.

PS

The aim of my post is not to ridicule the sanctions or the policy of the West as weak but simply to put it in the right context and put the sanctions in the context of falling oil prices in the right proportions

REPORT

https://helda.helsinki.fi/bof/bitstream/handle/123456789/16334/bpb0219.pdf?sequence=1

Edited December 22, 2020 by Tomasz