The Putin regime has long sought to convince Russians that international sanctions imposed over the invasion of Ukraine are actually beneficial for the country. Russia’s propaganda machine has also succeeded in persuading many Western analysts that sanctions measures have been a failure. However, a range of Russian sources tell a different story and reveal the broad extent of the impact.
Economists continue to debate the effect of sanctions on economic growth compared to the impact of other factors such as oil prices, currency fluctuations, and the Covid pandemic. Beyond the direct impact they have, sanctions also undermine the foundations for long-term economic development.
Russia’s economy is ill-equipped to address the challenges created by international sanctions. It is increasingly state-controlled, particularly by Putin’s close associates. It is also concentrated in a few regions and conglomerates, heavily dependent on technology imports, and massively corrupt.
Low growth and high inflation have severely affected Russian living standards over the past seven years. Putin’s counter-sanctions resulted in price increases for food staples even before the disruption of the coronavirus crisis. In some regions of Russia, people report their food basket now costs 30% more than in 2014.
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