“The sanctions are starting to weigh very heavily on the Russian economy”, estimates the analyst in geopolitics and specialist in Russia Christine Dugoin-Clément, this Sunday August 21 on franceinfo. She goes into detail on the effects of Western sanctions against Vladimir Putin’s regime and ensures that the war effort and part of the population are “hit hard” by these.
franceinfo: Is Russia feeling the effects of the economic sanctions that have been taken by the West since the start of the war?
Christine Dugoin-Clement: The reality of the facts is that the sanctions are beginning to weigh very heavily on the Russian economy. It has a strategic positioning as an exporter of raw materials which has deteriorated very sharply. The pivot towards Asia that it tried to make is very complicated, in particular for what are called non-fungible exports, that is to say which depend on very heavy infrastructures such as piped gas. And some companies left Russia. We talk about Starbucks, but there are many others, including some that touch on high technology. It’s a huge cost: you have about 40% of the GDP that has been affected by the withdrawal of these companies, which has canceled a very large part of three decades of foreign investment.
The replacement of Starbucks or McDonald’s, which left Russia, by Russian versions of these brands, are they proof of its ability to bounce back? Or is it a facade that hides the lack of many things?
Russia gives alternative solutions which make it possible to avoid that there is a runaway movement at the level of the population. There are the examples of Starbucks and McDonald’s, there is also a relatively humorous little spot that had been broadcast, where we saw a woman in traditional Russian dress who explained that she was thanking the United States for taking care of health of the Russians, by ridding them of McDonald’s. And that to thank them in return, they were going to deprive them of oil, which would force Westerners to walk. It was said in a humorous way, but we can clearly see that there is a way of trying to show that Russia will not change its position in the invasion that it has started in Ukraine and that it carries high , especially in terms of its population. Knowing that in the domestic markets, you have an increase in prices and an anxiety of a certain part of the population.
Inflation is above 15% in Russia, how do Russians experience these price increases in their daily lives?
It is extremely complicated. We tend to speak of Russia as being a homogeneous block, which is not the case for any country, but even less so for Russia, which covers an enormous area and has enormous differences in its population. It is obvious that when you live in Moscow and you have a very large fortune, you will be able to cash in. That said, there is a second Russia with what could be described as CSP+, which has been hit hard. There is yet another Russia, much more southern and in the East with much poorer, less educated populations, who take it with great difficulty.
The Russian government has nevertheless taken measures to support them…
This is a second point that has an impact on the Russian economy, even if the Russian government is putting in place means to try to help its population and is using the effect of the sanctions, or at least trying to do so, to unite its population against Westerners by taking up this kind of besieged fortress rhetoric that we have seen for several years now. Nevertheless, it is extremely complicated. And then, in addition to these economic problems, Russia must also face another concern: to maintain its war effort from a human point of view, Moscow took out the checkbook to try to be able to enlist many more fighters than it pay a relatively high price. Or at least it’s supposed to pay, since there are already a lot of men in the volunteer battalions who haven’t been paid. Especially those who have been recruited into the prison system.
Do these economic sanctions, which were originally supposed to target Russian oligarchs and elected officials, really hit their mark? Or is it the population that suffers the most?
You must have both. The purpose of the sanctions that had been taken by the West was to prevent Russia from maintaining its war effort, or at least to weaken its capacity for financial support. There, somewhere, Russia makes choices and these choices are transferred to the populations who pay a high price. It’s a strong choice they are making to try to end this invasion. We knew that the sanctions, because there is a lag, would take several months before starting to have an effect, they are starting to have an effect.