The West responded to the Russian invasion of Ukraine by enacting an unprecedented wave of economic sanctions against Russia. A year on, we have to ask ourselves what the actual impact has been.

On a national level, the sanctions have disrupted many supply chains and forced Russian companies to search for new business partners. But as a market economy, Russia is most definitely adaptable. Russian businesses have modified their production processes, found new suppliers, or taken over niches left behind since the withdrawal of Western companies. The Russian government refrained from introducing economically detrimental countermeasures, such as price controls, expropriating foreign companies, and nationalizing domestic companies to support war production. The Central Bank of the Russian Federation used capital controls to stabilize Russian banks in March 2022. Sanctions impede Russia’s economic development, but they would only have been truly devastating if the Russian state had taken the wrong approach to economic policy and obstructed the markets in adapting.

From an international perspective, Russia massively profited from the sharp increases in energy prices for oil and gas throughout 2022 despite a decline in exports. The efficacy of the West’s oil embargo, which has been in place since December 2022, is highly questionable because oil can still be exported via Asian ports.

That is why I consider it highly likely that the Russian state can survive these sanctions and will be able to press ahead with the war in the short- to medium-term. But another group has already been hit hard by the war: pro-Western groups in Russia whose contact with Europe has been all but cut off. These people find themselves dealing with the burden of living under both the regime and these sanctions.

The original article was published in the recent Tagesspiegel supplement. You can read it here in German.