Western sanctions led Russia to greatly increase trade with Asia, while devastating Europe’s economy. The US tech war against China is damaging its own industry.
by Renate Bridenthal
Part 3 - Western sanctions lead to more Russian self-sufficiency
Sanctions have been raining down on Russia ever since, against individuals, companies, and government agencies, most importantly against its oil exports, but also against its sale of aluminum, uranium, and agricultural goods.
Initial harm included a sizeable drop in Russia’s GDP and living standards, the loss of foreign investment, a sharp increase in inflation, and a temporary depreciation of the ruble.
The U.S. later restricted Russia’s access to capital markets and to oil and gas extraction technology, which can inhibit Moscow’s financing of oil field development, notably in the Arctic, where Russia has the longest shoreline.
However, Putin turned much of this around with policies of import substitution, government subsidies, and the nationalization of private oil companies, which by 2018 had grown back up to almost 40% more than before sanctions.
Initial harm included a sizeable drop in Russia’s GDP and living standards, the loss of foreign investment, a sharp increase in inflation, and a temporary depreciation of the ruble.
The U.S. later restricted Russia’s access to capital markets and to oil and gas extraction technology, which can inhibit Moscow’s financing of oil field development, notably in the Arctic, where Russia has the longest shoreline.
However, Putin turned much of this around with policies of import substitution, government subsidies, and the nationalization of private oil companies, which by 2018 had grown back up to almost 40% more than before sanctions.
In fact, the value of Russian exports grew after the 2022 sanctions.
Russian farmers gained from import substitution and ensured the country’s food security.
And while Russia exports less now to Britain, Sweden, the U.S., South Korea, and Germany, it exports more to Brazil, Japan, China, India, Turkey, Spain, the Netherlands, and Belgium.
India and China have increased their purchase of Russian oil; France relies on Russian uranium; Belgium still trades in diamonds with Russia; and the Netherlands offers access to Dutch ports for such cargo, the New York Times reported.
Russian farmers gained from import substitution and ensured the country’s food security.
And while Russia exports less now to Britain, Sweden, the U.S., South Korea, and Germany, it exports more to Brazil, Japan, China, India, Turkey, Spain, the Netherlands, and Belgium.
India and China have increased their purchase of Russian oil; France relies on Russian uranium; Belgium still trades in diamonds with Russia; and the Netherlands offers access to Dutch ports for such cargo, the New York Times reported.
Financial sanctions have also fallen short of their goal.
The Bank of Russia’s reserve system has a surplus of pre-war levels. By the end of 2022, Russia’s foreign-exchange reserves were $581.7 billion USD, the fourth-highest in the world – while its ally China remained firmly in first place, with more than $3 trillion USD worth of assets.
The Bank of Russia’s reserve system has a surplus of pre-war levels. By the end of 2022, Russia’s foreign-exchange reserves were $581.7 billion USD, the fourth-highest in the world – while its ally China remained firmly in first place, with more than $3 trillion USD worth of assets.
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