Russia’s economy has rebounded in the two years since the full-scale invasion of Ukraine despite massive Western economic sanctions. Despite efforts to drain Russia’s coffers and restrict war funding, factories are running, oil and gas sales are booming, and Putin is in power.
The legal, financial, and military resources needed to implement economic penalties differ by country, resulting in inconsistent enforcement across allies. Political factors complicate problems because governments hesitate to urge partners on numerous fronts. Economic penalties, however effective, fail to win the short term.
Russia circumvents export prohibitions on high-tech goods by relabeling shipments and exploiting loopholes. These efforts are weakened by Russia and China’s growing collaboration and other nations’ reluctance to cut ties.
The Russian oil price restriction, intended to cut war funding, originally worked but has subsequently faded. Moscow circumvents the price cap by exporting crude oil to China and Turkey for refining and sale to the EU and UK.
Limited efforts have been made to cut Russian banks off from SWIFT, a major setback. Many regional and smaller Russian banks enable cross-border transfers and transactions. Russia uses Chinese yuan for imports and is considering its own banking messaging system.
Russia has suffered from economic sanctions, although the precise extent is unknown. The West’s non-military agenda to constrain Russia confronts obstacles, insisting on a comprehensive strategy beyond sanctions.
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