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Russia starts to pay for sanctions

Despite repeated official denials, the joint efforts of the democratic world continue to increase the damage to the Russian economy.

Russia now the World leader In terms of the number of sanctions imposed (more than 5,500 actions), it has also overtaken Iran. The Kremlin insists it is the only party affected by the measures The West itselfEconomists and its propagandists are now struggling to deny the effects on key sectors of the economy after the unprovoked war of aggression against Ukraine.

During the Summit on Economic Issues June 17thVladimir Putin That said The “blitzkrieg” of measures aimed at his country has failed as the Kremlin has no responsibility for the global recession and everything is under control. Same day, boss Sberbank said It could take a decade for Russia to return to its offensive show. About half of the country’s imports and exports are affected by sanctions. Inflation is up 17% and rising, but by 2022, national output will drop to whatever From 8% -30%.

Some western experts actually do Agree The costs incurred by the sanctions will affect both the US and the EU and ultimately the rest of the world. Russian propaganda is cheerful Cited Such articles, however, have long neglected any effects of home restrictions.

Despite this, the cold reality is beginning to emerge. For years, Russia has been dealing with inferior sanctions and working to produce (or smuggle) what he wants. But that process seems to have failed – something now Agreed The head of the Federation Council Committee on Constitutional Legislation and State Construction, Andrei Klishaas, said the “import substitution program was a complete failure,” and the only thing the industry chiefs would be proud of was “the Brewura reports.” Natalie Zubarevich, economist and professor at Moscow State University, agrees. It is basically impossible to change anything at this time.

He pointed out that the car industry is more import dependent than others. Foreign machinery equipment has been purchased but is now difficult to maintain. Even at her local hairdresser, she noted that there is an absence of hair coloring options as imports are now banned. Meanwhile, workers are being hired for part-time contracts and small service firms in areas such as fitness and catering. To simply collapse With less demand.

“The Russian economy is very tightly integrated into the global world,” he said.

Similarly, the report of the Higher School of Economics, New Outlines of Industrial Policy, Notes Major sectors of industry are critically dependent on imports from the EU and the US. The authors point out that it takes years to find alternatives, and this is not possible in every sector. For example, the share of imported units in the manufacturing industry reaches 46%, and in some industries it exceeds half.

The situation is not good in the pharmaceutical industry. In 2021, the share of imported drugs was 67%. At the same time, according to the media, components and manufacturing equipment known as Russian pharmaceuticals are often purchased abroad. According to this Natalia Zubarevich, 80-85% of raw materials manufactured by Russian pharmaceuticals are imported.

The same is true Other fields And. Imports account for 95% of the auto accessories market; Games and toys 92%; Shoes 87%; Telecommunications equipment 86%; Clothing 82%; Perfumes, cosmetics and detergents 57%, etc. In April, Federation Council Speaker Valentina Matvienko Agreed Surprised to find that Russia does not even produce its own nails.

Telegram channels for the Kremlin have now begun to publish the opinions of experts who suggest the real situation in the Russian economy. Therefore, Yaroslav Ignatovsky, head of the Polytzen Analytical Center, Agreed No import substitution has been undertaken in the last eight years, and the main sectors of the economy are heavily dependent on Western products, including equipment for the oil and gas sector. Expertise in technical areas (manufacture of microchips and software) That is The country lagged behind 10-15 years earlier than the West.

Representatives of the Valdai Discussion Club, one of the leading think tanks in its recent publication, Observe carefully Russia should not abandon all Western economic practices and return to the Soviet model “only increases the difficulties Russia faces at the present time.” The report is unusually blunt. In particular, its authors “clearly lost to the European Union and other Western players in the mode of economic integration of Moscow,” did not accept its defeat, and then “toppled the chessboard”, destroying all previously existing rules.

“It is not clear how the new project will relate to the production of liquefied natural gas Arctica LNG2 Will be completed. The ban on the export of ferrous metals to Europe and the United States prompted Severstal and Magnitogorsk to declare a 20-40% reduction in metal production in June. . . Most likely, the reduction will be about 50%. Says Jubarevich.

In June, trade magazine Vzglyad He admitted that the Russian car market was in serious trouble with “a decline in new car sales in Russia, which would have never occurred even in the 1998 crisis year.” More than one-third of dealers are expected to close.

Experts, regardless of their opinions, admit that these problems primarily affect the well-being of ordinary Russians, which is precisely what worries the Russian authorities the least. They have long been short on the Kremlin’s concerns list.

Xenia Kirilova is an analyst focused on Russian society, mood, publicity and foreign policy. Author of numerous articles for the Jamestown Foundation, he has written for the Atlantic Council, Stratfor and others.

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