Sanctions against Russia have slowly damaged its economy over the past year but it hasn’t broken the nation yet.
Key Details
- Russia’s war in Ukraine has dragged into its 10th month following its attack on February 24. The war has caused tens of thousands of casualties and damaged the world economy, with Europe facing an ongoing energy crisis and runaway inflation, in addition to skyrocketing gas prices.
- Dozens of nations like the U.S. have responded by imposing exhaustive sanctions against the country to damage its economy and pressure Russian leaders to end the conflict.
- The sanctions have seen Russian manufacturing hit with a heavy reduction in output, including a 77% decrease in auto manufacturing and a 3.5% GDP decrease.
- The country has been able to preserve its economy through global oil sales and refocusing economic attention internally, The New York Times reports.
Why it’s News
The effect on the average Russian has been mixed, but dozens of U.S. companies have pulled out of Russia and left thousands of workers dependent on government assistance or out of work.
“Putin has avoided any substantive domestic pressure that would threaten his leadership. But the impact of what some have described as the most coordinated and deepest economic sanctions in modern history is evident in communities across Russia—and the worst may be yet to come,” says The New York Times.
Russia has made efforts to liberalize its economy following the fall of the Soviet Union nearly 32 years ago. The results have been chaotic, with the government slipping into a capitalist oligarchy led by President Vladimir Putin.
The sanctions have only contributed to hampering a weak economy, but it hasn’t broken the country yet. The Russian economy, heavily dependent foreign imports and exports, will continue to struggle for the duration of the sanctions. Thousands of Russian factory workers remain uncertain about their economic futures as sanctions threaten to permanently close western factories and limit the importing of western materials.
Notable Quote
“What we’re seeing is falling income, broad depression, less consumption. All this will negatively impact the economy of the country,” says Moscow State University professor Natalia Zubarevich.