How effective have the sanctions been so far?

While the U.S. and other G7 nations have turned Russia into the most sanctioned country in the world, some foreign policy experts question the effectiveness of the financial penalties and point to Russia’s maneuvers to evade them and press its war effort.

Maria Snegovaya, a senior fellow at the Center for Strategic and International Studies, said Russia has demonstrated “a remarkable degree of adaptability to Western sanctions.”

She added that the war is “relatively cheap” for Russia to prosecute, amounting to up to an estimated 5 percent of GDP.

“That is easily manageable for Russia in the next couple of years at least, and the cumulative effect of sanctions is just not strong enough to radically alter that,” she said.

U.S. officials defend the effectiveness of the sanctions, and argue that they are not designed to work immediately.

It is now over a year since Russia launched its invasion of Ukraine. Shortly after troops first crossed the border, Western nations imposed a range of sanctions on the Russian government, as well as on individuals and firms supporting the Putin regime.

With Russia continuing its offensive actions in Ukraine, commentators have started to question whether these economic sanctions have worked.

To answer this, it is reasonable to ask what ‘successful’ sanctions could achieve in such a situation.

First, the sanctions have not been successful in stopping Russian aggression – the Ukrainian military has done a better-than-expected job of that. Neither have the sanctions brought Russia to the negotiating table. While Putin and his remaining acolytes dream of restoring a ‘Greater Russia’ and there is no internal means, as yet, of removing him from power, achieving these criteria of success is far-fetched.

The primary aim of sanctions is to induce major disruption to the economy of the sanctioned country. So, the real question is whether sanctions on Russia have achieved that goal. The current consensus appears to be that, to date, sanctions have had, at most, a very limited impact on the Russian economy.

Critics point to the slight fall in Russian real GDP – despite predictions to the contrary a year ago, and the maintenance of oil and gas exports from Russia – as sanctions’ minimal effect. They argue that the short-run impact of sanctions is inevitably limited, and that they will only ‘work’ in the longer run by putting cumulative pressure on the Russian economy.

This raises the concern that the sanctioning nations may gradually lose the willpower to keep restrictions in place, particularly in the face of the resulting disruption to the world economy and supply chains, especially in the energy and agriculture markets.

Kyiv wants more Western sanctions against Russia, but there are signs that the effectiveness of the sanctions campaign is nearing its limits. In early March, the European Union issued its 10th package of sanctions against Russia, but various European firms are still finding ways to do business with the country. The most important example concerns oil. Europe continues to buy Russian oil, only it’s doing it through middlemen like India, which is exporting 360,000 barrels per day to the Continent.

Even the International Monetary Fund has said that, after a sharp fall in the second quarter of 2022, Russia’s economy managed to recover in the second half of the year. This suggests the Russian economy is weathering sanctions better than most observers expected.