The sanctions war against Russia: a year of playing cat and mouse
“The Russian economy is on track to be cut in half,” Joe Biden said in March last year, as he heralded sanctions brought against Russia after its full-scale invasion of Ukraine.
Annalena Baerbock, the German foreign minister, vowed that sanctions were “hitting the Putin system … at its core of power”. Liz Truss, her counterpart in the UK at the time, forecast that Vladimir Putin’s oligarchs would have nowhere to hide. EU sanctions, the European Commission president, Ursula von der Leyen, said, “are working to cripple Putin’s ability to finance his war machine”.
The language before the invasion had been no less assertive. At a briefing in January 2022, US state department officials said Washington was prepared to implement sanctions “with massive consequences that were not considered in 2014 [when Russia annexed Crimea]. That means the gradualism of the past is out, and this time we’ll start at the top of the escalation ladder and stay there.”
The Institute for International Finance (IIF) predicted a 15% fall in Russian GDP in 2022. JP Morgan envisaged a 12% contraction. Russia’s own technocrats privately warned Putin of a possible 30% fall.
The reality was somewhat different, reflecting what analysts say was a hubristic over-confidence in the west about the speed with which sanctions that were agreed with unprecedented coordination by the G7 could damage Russia.
The Russian economy contracted by only 2.2% last year. Unemployment, according to admittedly dubious official figures, now stands at 3.7 %. The construction sector has been able to grow significantly even if the car and electronics industries have suffered. A bumper harvest has driven growth in the agricultural sector.
Russia is now forecast by the International
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