Why Western sanctions fail

Russia's economy is surprisingly booming and growing stronger.

Moszkva, 2023. augusztus 23. Vlagyimir Putyin orosz elnök videókapcsolaton keresztül vesz részt a BRICS-országok johannesburgi csúcstalálkozóján 2023. augusztus 22-én. A Brazíliát, Oroszországot, Indiát, Kínát és Dél-Afrikát tömörítõ BRICS-csoport állam- és kormányfõi augusztus 22. és 24. között üléseznek Dél-Afrikában. MTI/EPA/Szputnyik/Kreml pool/Mihail Klimentyev Fotó: Mihail Klimentyev

Russia's economy is less affected by Western sanctions than many EU and US politicians initially hoped. Russia's gross domestic product is forecast to return to pre-Ukraine war levels next year. Germany's government therefore intends to take countermeasures.

Western sanctions imposed against Russia due to the war in Ukraine have no economic impact, German Foreign Minister Annalena Baerbock recently said.

Economic sanctions should have an economic impact. But this is not the case. Because the logic of democracies does not work in autocracies

said the Green party minister. Since Russia's invasion of Ukraine, the EU has adopted eleven sanctions packages in cooperation with the United States, Britain, Canada and other partners. The decision by the G7  countries and the EU to freeze the Russian central bank's foreign assets, equivalent to 300 billion euros, has proved to be a severe economic blow to Russian President Vladimir Putin. It means that vital resources are missing from Russia's budget. Yet the Russian economy appears to be doing well.

Analysts say that the surprisingly strong growth in Russia is mainly due to two factors: Russia has found new buyers for its oil and gas exports, including in India. Besides, Putin has transformed his country into a war economy, with government spending increasingly flowing into the arms sector running at full steam.

The main problem with sanctions is that they are very easy to circumvent and the West cannot do anything against this, according to German politician Roderich Kiesewetter of the  Christian Democrats. Western sanctions against Russia are evaded through third countries such as Armenia, Georgia or Kazakhstan and Hong Kong.

The punitive measures against Russia have had little effect on Russians, but have hurt EU countries, as the Freedom Party of Austria (FPO) pointed out. According to the foreign policy spokesman of the right-wing party,

this is exactly what the FPO has long been saying. This is what happens when an anti-economic People's Party-Green federal government adopts ill-considered measures, and completely misunderstands and overestimates the cause and effects of the measures taken, all to the detriment of our domestic economy and thus of our country's modest social welfare, which our citizens have achieved with much effort and sweat. Despite allegedly tough sanctions against Russia, the country's economy is booming and growing stronger this year compared to many G7 countries,

said Axel Kassegger, FPO's spokesman for economic and foreign policy. The right solution would be for Austria to lift the useless and ineffective sanctions, with the European Union following suit, according to the FPO.

Cover photo: Russian President Vladimir Putin. (Photo: MTI/EPA/Sputnik/Kremlin Pool/Mihail Klimentyev)