The Economic War: How Hard Are Sanctions Hitting Russia?
Mar 5, 2024
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Exploring the complexities of economic sanctions on Russia post-invasion of Ukraine, including challenges in their effectiveness despite oil trade; Former Russian tycoon discusses corruption and pressure in Russia; Impact of sanctions on Putin-connected individuals and society; One individual's caution about returning to Russia amidst bravery shown by others
Western sanctions on Russia have not significantly impacted their economy; loopholes like oil trading diminish effectiveness.
Debates on utilizing frozen Russian assets for Ukraine's recovery persist; challenges in legalities and distribution remain.
Deep dives
Effectiveness of Western Sanctions on Russia
Western sanctions on Russia, including personal and state sanctions, have failed to effectively impact the Russian economy amidst the conflict in Ukraine. The sanctions target key Russian figures and entities, restricting trade and investment flows. However, loopholes in the sanctions, such as continuing oil and gas trade, limit their effectiveness. Suggestions for more impactful measures include designating Russia as a state sponsor of terrorism to tighten financial restrictions and reduce foreign currency access.
Utilization of Frozen Russian Assets for Ukraine
There is debate around utilizing the $300 billion frozen Russian assets to aid Ukraine's recovery. Seizing significant funds like the central bank reserves and National Wealth Fund has hindered Russia's financial capabilities. However, concerns over legal precedents and global financial implications delay the allocation of these funds. The potential use of interest from frozen assets to support Ukraine is under consideration, yet challenges persist in distributing these funds effectively.
Resistance to Russian Economic Sanctions
Despite the economic sanctions imposed on Russia, its economy continues to grow, surpassing most G7 nations. The resilience stems from strategic adaptations, including transforming into a war economy with a focus on military-related production. Russia's ability to manage the impact of sanctions and maintain economic stability contrasts with the expected constraints. The prospect of a protracted conflict and changes in global energy markets pose future challenges to Russia's economic outlook.
Since Russia launched its full-scale invasion of Ukraine, it has been subject to thousands of sanctions from the West - but despite this, Russia’s economy is thriving.
So how is the world’s most sanctioned country getting around them? And what does this tell us about how effective sanctions are? Nataliia Shapoval, Vice President for Policy Research at Kyiv School of Economics and the BBC’s economics editor, Faisal Islam, unpack whether sanctions against Russia are having the desired impact.
Also, we hear from a London-based Russian former billionaire who had his bank accounts frozen following the invasion.
Today’s episode is presented by Victoria Derbyshire and Vitaly Shevchenko.
It was made by Keiligh Baker. The producers were Arsenii Sokolov, Cordelia Hemming and Ivana Davidovic. The technical producer was Ricardo McCarthy. The series producer is Tim Walklate. The senior news editor is Sam Bonham.
Email Ukrainecast@bbc.co.uk with your questions and comments. You can also send us a message or voice note via WhatsApp, Signal or Telegram to +44 330 1239480.
You can join the Ukrainecast discussion on Newscast’s Discord server here: tinyurl.com/ukrainecastdiscord
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