N. Peter Kramer’s Weekly Column
March 2022, the Russian rouble crashed, the value in London of Gazprom and Sberbank fell 97%. Oligarchs’ yachts, football teams, mansions and even their credit cards were seized. Russia crashed into a major recession. That was the immediate result of the most extraordinary attempt by the West at financial containment of Russia after it invaded Ukraine.
Russia’s official foreign exchange assets were seized and the central bank’s $300billion frozen. Followed by an export ban on high-tech high-technology, an embargo on coal and steel imports and a price-cap on crude oil delivered by sea.
But those expecting a collapse of the Russian economy were disappointed. Although the West has long maintained that ‘the sanctions are working’, the Russian economy is closing the second year of the war surprisingly. The International Monetary Fund (IMF) underlined the resilience of the Russian economy when it upgraded its forecast growth for this year to 2.6% from 1.1%. Based on the IMF’s figures, the Russian economy grew faster than the whole G7 last year, and will do so again in 2024. The Financial Times wondered ‘Are the sanctions against Moscow really working?’.
‘What the IMF is now recording is not healthy organic growth of the Russian economy’, experts tell us, insisting that time is on side of the West. But we are discovering that the world is bigger than the West. Russian tankers are now going to India and China and more payments are in Chinese yuan rather than the US dollar. Russian oil production remains at 9.5 million barrels per day, barely down on pre-war levels.
Besides those facts, a heading on the website of EurActiv.com tells us: ‘Austria’s dependence on Russian gas rises to 98%’…
