September 25, 2022

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Sanctions Russia, USA: Moscow’s existing economy, and its implications in 2023

Sanctions on Russia do not “harm” enough. Administration sources have admitted to CNN that there has been frustration and disappointment that the restrictive measures imposed on Moscow over the war in Ukraine have so far not had a greater impact on the Russian economy, and now expect the effects to be more than likely. To be realized no later than the beginning of next year.

But the Russian economy has proven much more resilient than many top Biden administration officials expected when they decided to punish the country in February, thanks in large part to the record revenues it reaped in the spring and summer thanks to higher energy prices. According to the Finnish Center for Energy Research, Russia generated record revenues of 93 billion euros in the first 100 days of the war from oil, gas and coal exports. However, the Russian economy contracted by about 4% between April and June compared to the same period the previous year. But the US broadcaster notes that it cannot be compared to the 15% drop that some had expected earlier this year.

“We were expecting that things like Swift and all the sanctions against Russian banks would completely destroy the Russian economy, and that basically, in September, we would deal with Russia much weaker economically than we are dealing with,” he admitted. A senior US official pointed to the decision of the United States and Europe to exclude some Russian banks from the SWIFT international banking system.

Another senior administration official echoed the claim, arguing that many in Washington had hoped to see the Russian economy suffer more at this point, given the unprecedented weight of Western sanctions. However, a third source noted that the officials who prepared the sanctions in the months leading up to the war always believed that the strongest consequences would not be felt immediately. “I think from the start we thought that when Russia invaded Ukraine and we imposed sanctions, those sanctions were likely to be a mid-term sanctions regime – and that’s his logic – that’s because we wanted to keep pressure on Russia in the long run, while waging war against Ukraine. , and we wanted to weaken Russia’s economic and industrial capabilities. So we always saw this as a long-term game. “There were some ‘initial shocks’ for the Russian economy, like when the ruble fell, and Russia was able to recover quickly thanks to energy sector revenues. However, his conclusion along with that of Western intelligence officials, in the long run, would end the Russian economy in huge suffering, both from the costs of the war itself and from efforts to cut it off from world trade. “There will be long-term damage to the Russian economy and to generations of Russians – CIA Director William Burns predicted in recent days – that Russia will pay a heavy price, I believe, for a long period of time.”