WHAT KREMLIN PROPAGANDISTS SAY:
Since Russia launched its war of aggression in Ukraine in February 2022, the EU has imposed 11 successive sets of sanctions against Russia. In response, Russia has utilised the full scope of its propaganda machine to construct the disinformation narrative that ‘Russia is unaffected by Sanctions.’
The narrative takes various forms, depending on its intended audience. The Kremlin has focused on explaining that the sanctions are not harming Russia to its domestic audience, whilst projecting claims that sanctions are causing more damage to the West than to Russia to international audiences. This narrative is very closely related to the narrative that ‘the EU cannot survive without Russian gas’.
Russia aims to appear unaffected or even strengthened by the packages and portray the decisions of its former trading partners as internally damaging and ineffective.
Here’s some evidence:
"There is no rational replacement (for Russian gas) in Europe now," said Vladimir Putin in April 2022.[1]
“As President Putin recalled, we are now champions in the number of sanctions introduced against the Russian Federation, more than 5,000 individual acts, almost twice as many as were introduced against Iran and North Korea. But sanctions always made us stronger," Russian Foreign Minister Sergey Lavrov said in March 2022.[2]
"<…>In general, the European Union’s economy cannot do without Russian gas so far. That is why it was no surprise for me that they have failed to reach an accord on the upper limit of prices on Russian gas," the Russian diplomat Vladimir Chizhov said in September 2022, adding that as a result Europe "is in for a harsh winter.”[3]
WHAT ARE THE FACTS:
The narrative serves a clear strategic purpose for domestic audiences: reinforcing anti-Western sentiment and emphasising the strength and independence of Russia, whilst dismissing international condemnation of Putin’s illegal and unprovoked invasion of Ukraine. Kremlin propagandists seek to minimise the costs of the war and maintain the perception of positive momentum by portraying the Russian economy as unaffected.
Whilst Russia has remained tight-lipped about its own internal assessments of its economic performance, economic indicators have revealed the undeniable effects which these sanctions have had on the Russian economy. The sanctions have impacted targeted areas of Russia’s economy as intended, with its financial sector losing hundreds of billions of dollars and oil and gas exports dropping in volume and value. Russian factories have been forced to suspend production due to the lack of access to foreign parts, leading to international companies exiting the Russian market.
By the first quarter of 2023, Russia’s real gross domestic product (GDP) was 7-10% below what it would have been had sanctions not been applied. This calculation compared forecasts of Russia’s GDP growth before and after the invasion of Ukraine in February 2022.[4]
Russia's earnings from oil and gas exports fell to USD 8.1bn a month in April 2023, from USD 22.5bn because of Western sanctions.[5]
Over 1,000 global companies have voluntarily left Russia[6], with significant implications for the country's economy. These companies generated 35% of Russia's GDP and provided jobs for 12% of the country's population.
The Russian economy heavily relies on oil and gas exports, which accounted for more than 50% of the country's total export earnings and 20% of its GDP each year before the war. While Putin's energy revenues grew in the first months after the invasion, he has been losing USD 500 million a day in oil and gas export revenues since February this year - and this figure is only increasing.[7]
Before the war in Ukraine, 86% of the gas sold to Europe came from Russia. However, a warmer than normal winter has resulted in Russia losing its importance in the gas supply chain. Europe's dependence on Russia has dropped to a meagre 7% and is soon expected to be non-existent. Currently, Russia only receives 20% of its gas revenues.[8]
Pro-Kremlin outlets stated that pulling away from Russian fuel would take the EU back to the ‘dark ages.’ However, natural gas prices in Europe have recently returned to their normal trading range for the first time since the war began, trading at around €30 per megawatt hour.[9]
Russia is currently unable to replace the losses of military material with newly produced weapon systems. On a more structural level, the sanctions implemented back in 2014 have weakened the Russian armed forces.[10]
The significant effect was the shutdown of automobile plants, which belonged to international companies. As a result, the production of new cars in Russia fell threefold, and sales – by 59 percent. The manufacturing industry in the Kaluga and Kaliningrad regions, where such plants were concentrated, shrunk by 20 percent.[11]
To assess whether sanctions are effective, it is necessary to consider the goals behind them. Western countries are trying to send a strong signal of resolve and unity to the Kremlin. Second, sanctioning states aim to degrade Russia’s ability to wage war. Third, Western democracies are betting that sanctions will gradually weaken the Russian economy, especially targeting the country’s energy sector. Judged on the basis of these criteria, sanctions are clearly working. [12]
The effect of sanctions is not immediately apparent; it takes time. While Russia's economy may not collapse, in the long term, the sanctions will have severe consequences for the technological development of the Russian economy. For ordinary Russians, this would mean a gradual decline in the quality of goods on store shelves and limited access to services that were customary before the war.
References:
Debunker is a series of disinformation-busting articles from Debunk.org which focus on dispelling the harmful lies and propaganda being pushed by pro-Kremlin sources. Check out the rest of the series at debunk.org/debunker.