Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Araghchi to Grossi: These parties will bear responsibility for the consequences of their actions
Araghchi to Grossi: Iran will respond to any unlawful action by European countries or parties attempting to turn the Agency into a tool for achieving their objectives
Araghchi to Grossi: We urge the Agency to warn against the consequences of any political move against Iran
Araghchi to Grossi: We call on the Agency to highlight Iran’s full cooperation during the upcoming Board of Governors meeting next week
Araghchi to Grossi: We demand that the Agency reflect the facts in a manner that prevents certain parties from exploiting it to advance their political agendas
Iranian Foreign Minister Abbas Araghchi holds a phone call with IAEA Director General Rafael Grossi
Trump envoy Witkoff has sent 'detailed and acceptable proposal' to Iran for nuclear deal; it's in their best interest to accept it: White House Press Secretary Leavitt
Hamas official says Witkoff's position toward group was 'unfair' and shows 'complete bias' to 'Israel'
Hamas official says it has considered Witkoff's proposal acceptable for negotiations, says 'Israel's' response was incompatible with what the group agreed on
Hamas official says group has not rejected Wikoff's proposal for Gaza ceasefire

Have Western sanctions ruined Russia’s economy?

  • Natalie Jones Natalie Jones
  • Source: Al Mayadeen English
  • 1 Jan 2023 23:44
  • 4 Shares
6 Min Read

One must consider whether Western claims about the Russian economy are valid or whether perhaps Western leaders are trying to distract their populations from the collapse of their own economies.

  • x
  • Have Western sanctions ruined Russia’s economy?
    Have Western sanctions ruined Russia’s economy?

According to Ursula Von der Leyen, the consequences of sanctions imposed on Russia have made a significant impact on Russian industry. It is no secret that the West wanted to ruin Russia’s economy with President Biden stating that the West wanted to reduce the ruble to rubble. Ursula Von der Leyen even claimed that the Russian army is removing chips from dishwashers and refrigerators in order to fix military equipment. One must consider, however, whether claims made by Western leaders about the Russian economy are valid or whether perhaps, in actual fact, Western leaders are trying to distract their populations from the collapse of their own economies.

Firstly, it is important to note that in the period prior to the Russian special military operation in Ukraine, Russia did have a grounded, stable economy. It had one of the lowest debt levels in the world – around 18.2% of GDP in 2021, according to certain sources. This can be compared to a country like the UK where the debt level was 102.78% of GDP in Q4 of 2021. Furthermore, during the said period, Russia had a significantly high reserve balance: $615.6 billion. Reserves are critical to funding internal projects, meeting obligations, and crucially maintaining liquidity in the case of an economic crisis. It is also important to note that Russia does not just export oil and gas; it is also a key exporter of various other key commodities. According to the World Economic Forum, it is the world’s largest exporter of wheat, a big exporter of semi-finished iron, and a large supplier of nickel and nitrogen-based fertilizer. In terms of raw materials, it is the second-largest exporter of cobalt, which is used to make rechargeable batteries, and vanadium, which is used for large-scale energy and steel making.

Related News

Six years of dashed hopes for peace and reconciliation in Ukraine

Eurovision: NATO Psychological Warfare Tool

The ambition to destroy Russia’s economy and the livelihood of its population has not been realized by the West. In fact, Russia’s economy appears to have been remarkably resilient to Western sanctions. Of course, it is naïve to assume that the economy has not been affected by the mass withdrawal of Western companies and imposition of restrictions, such as the ban on Russian banks using SWIFT. Yet, it seems that Russia has established backup plans in order to effectively limit the impact of the measures imposed on it. For example, in 2014, Russia created its National Payment Card System “MIR” card, which was created in case of disconnection of cards from the international payment system. According to the National Payment Card System, more than 50% of Russians had at least one MIR card. This does allow for payment of purchases and cash withdrawals following the ban on the use of Visa and Mastercards issued by Russian banks. It also aims to ensure the uninterrupted processing of transactions performed with international payment card systems in Russia.

Furthermore, Russia has been able to redirect some of its supply of crude oil, which was previously being sold to Europe to Asia. India’s oil imports from Russia, for example, have been rising since February of this year. In addition, China’s crude oil imports from Russia soared 55% from a year earlier to a record level in May of this year. Clearly, it will take some time for the redirection of supplies to be established for Russia, which will temporarily affect the Russian economy. The Bank of Russia predicts a decline in GDP of around -4 to -6% for the last quarter of 2022. However, starting in mid-2023, the central bank expects the economy will move into a recovery phase – 1.5% to 2.5%.

In relation to interest rates, on September 16, 2022, the Bank of Russia decided to cut the interest rates in the country to 7.5%. This is in line with the levels that existed prior to the special operation. This was against a backdrop of reduced consumer demand and developments in business activity. With regard to inflation, the annual inflation declined in August to 14.3%, according to the Bank of Russia. In line with interest rates, the Bank of Russia predicts that inflation will be reduced to 4% in 2024. Furthermore, the Ruble has already bounced back to its pre-war level. It seems that Russia has been evidently affected by the raft of sanctions imposed on it by the West, but just for a short time. However, due to foresight and effective management of its economy, it has been able to minimize the effect of sanctions and is predicting a return to growth in 2024. 

The same thing cannot be said for a country like the UK where the BBC expects that the UK economy will plunge into a recession before the end of 2022 with inflation spiking to 14% and weak growth expected until 2024. The pound has fallen to a record low against the dollar and there is an expectation that interest rates will dramatically increase in the coming months. Combined with inflation and a cost of living crisis, many commentators anticipate that the UK’s economy may even fall into a depression. It is also not clear how the government will effectively manage and recover from this economic crisis, as much as it is unclear how future spending can be given the current level of government debt and low reserves balance. It seems that the West’s attempts to destroy Russia’s economy have backfired and are actually leading Western countries’ economies (such as that of the UK) that are faring far worse economically than Russia.

The views expressed in this article are solely those of the author and do not necessarily reflect Al Mayadeen’s editorial stance.
  • Nato
  • Russia
  • West
  • Russian special military operation
  • Sanctions on Russia
  • Nato Alliance
Natalie Jones

Natalie Jones

Independent journalist based in the UK

Most Read

All
Although the background information does not indicate direct US involvement, considering the broader geopolitical context, it is plausible that the US would have an indirect impact. (Al Mayadeen English; Illustrated by Zeinab El-Hajj)

Did 'Israel', US fight a proxy war with China in South Asia during the India-Pakistan escalation?

  • Feature
  • 19 May 2025
The two countries need to sit down and resolve the crisis with maturity, to consider carefully that they could be being manipulated to be easily dominated. (Al Mayadeen English; Illustrated by Batoul Chamas)

Algeria and Mali, divided and almost conquered

  • Opinion
  • 25 May 2025
Trump and Biden both pretended to be fighting Netanyahu

Trump and Biden both pretended to be fighting Netanyahu

  • Analysis
  • 28 May 2025
The spirit of Bandung: 70 years on

The spirit of Bandung: 70 years on

  • Opinion
  • 18 May 2025

Coverage

All
The Ummah's Martyrs

More from this writer

All
Vladimir Putin’s meeting with Kim Jong Un: Impact on global politics

Vladimir Putin’s meeting with Kim Jong Un: Impact on global politics

Why should the decision of the British government to send depleted uranium to Ukraine be condemned?

Why should the decision of the British government to send depleted uranium to Ukraine be condemned?

Why does Western foreign policy need to change?

Why does Western foreign policy need to change?

How has global influence in the Middle East shifted?

How has global influence in the Middle East shifted?

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS