The Expectation vs. Reality of Russian Sanctions
When Russia launched its full-scale invasion of Ukraine in February 2022, Western nations responded with what was described as the “most extensive sanctions and trade restrictions in history” against Moscow. Years later, an assessment of whether Russian sanctions are working reveals a stark contrast between expectations and outcomes.
“We will bring down the Russian economy,” declared French Finance Minister Bruno Le Maire in March 2022. Yet contrary to these bold predictions, Russia’s economy grew by 3.6% in 2023 and is projected to grow another 2.6% in 2024, according to Monde Diplomatique. This economic resilience stands in sharp contrast to initial Western forecasts that predicted Russia’s GDP would contract by 8.5% in 2022.
Why Sanctions Russia: The Strategic Miscalculations
Several critical assumptions underpinned the West’s belief that economic pressure would quickly force Russia to change course. According to The Guardian, these included expectations that Russia would run out of money to finance its military operations, that the global community would unite against Russian aggression, and that Russia’s economy would collapse under pressure like the Soviet Union in the 1980s.
All three assumptions proved flawed. Despite energy embargoes and the freezing of Russian reserves by Western central banks, higher energy prices have compensated for reduced export volumes. Countries including China and India have significantly increased their purchases of Russian oil, often at discounted rates but still providing substantial revenue.
The impact of sanctions on Russia has been further mitigated by the country’s preparation since 2014. Following the annexation of Crimea, Russia implemented an import substitution policy that achieved food self-sufficiency, developed alternative payment systems, and built financial infrastructure to reduce dependence on Western systems like SWIFT.
The EU Sanctions Russia Dilemma: Asymmetrical Effects
The European Union’s approach to sanctions has been particularly problematic. According to legal analysis from Noerr, “EU sanctions aim to have an asymmetrical effect, i.e., to hurt the Russian economy more than the EU’s. It is doubtful whether this aim has always been achieved.”
Special interests within the EU have led to critical exemptions that undermine effectiveness. Hungary obtained exceptions for nuclear cooperation with Rosatom, while Belgium long resisted restrictions on Russian diamond imports. Meanwhile, European companies face substantial compliance burdens and operational challenges from the sanctions regime.
The Unintended Global Consequences
Perhaps most concerning is how sanctions have accelerated de-dollarization trends globally. According to Al Jazeera, many nations have accelerated efforts to reduce their dependence on the dollar after seeing Russia’s currency reserves frozen. From India to Argentina, Brazil to South Africa, countries are developing arrangements aimed at reducing dollar dependency in international trade.
The sanctions have also strengthened economic ties between Russia and China. Trade between Russia and China rose by nearly 30% to exceed $200 billion in the first 11 months of 2023, according to Politico, with Chinese exports to Russia surging by 50%.
Acknowledging That Sanctions Are Not Working
The evidence increasingly suggests that sanctions are not working as intended against Russia. Rather than collapsing, Russia’s economy has adapted through economic nationalism, military Keynesianism, and reorientation toward non-Western markets. This does not mean sanctions have had no effect—they have certainly imposed costs on Russia—but they have failed to achieve their primary strategic objective of forcing a change in Russia’s military posture.
For Western policymakers, this reality demands a reassessment. As The Guardian notes, “the new sanctions and the pledge to back Ukraine for ‘as long as it takes’ is recognition that Russia is putting up stiffer economic resistance than the G7 anticipated.” This recognition should inform more realistic approaches to using economic leverage in geopolitical conflicts moving forward.
Recent data from the Atlantic Council confirms this trend, showing that “the IMF’s World Economic Outlook from April 2024 predicted Russia’s economy would grow by 3.2 percent in 2024, outpacing all advanced economies.” This growth is largely fueled by massive war spending, with nearly a third of the Russian budget now directed toward national defense.
The Center for Strategic and International Studies notes that despite significant impacts from sanctions that have deprived Russia of more than $500 billion that could have funded its war effort, Moscow has restructured its economy around military production. This transformation has profound implications for any future negotiations or sanctions strategies.
