The whole civilized world is working to stop the aggression of bloody Russia against Ukraine with devastating sanctions. What consequences has the Russian economy already felt?

For the second month in a row, aggressive Putin’s Russia is waging a full-scale war against our native Ukraine. Active hostilities across the country are accompanied by killings of civilians, large-scale destruction of infrastructure, migration of the working population and business to the western regions and neighboring friendly countries. Despite all the difficulties, our heroes-defenders confidently hold the defense and systematically give in to the occupiers.

Equally important is the strong support of the entire civilized world, which consists not only in the systematic supply of weapons and financial assistance to our country, but also in the relentless tightening of sanctions against the aggressor, whose main task is to deprive the occupier of money. That there was nothing to finance the weapon and to pay a salary to barbarians who came to destroy our citizens.

As a result, since the beginning of the full-scale invasion, almost 2,500 Russian citizens have been on the world’s sanctions lists. In general, since 2014, this aggressive country has surpassed such “record holders” in the number of sanctions as Iran, Afghanistan and North Korea. This significantly shook the economic capacity of both the Russian economy as a whole and hit the standard of living of ordinary Russians. And this is just the beginning!

“International sanctions have already specifically undermined a number of sectors of the Russian military-industrial complex. Without imported components and technologies, the Russians have already had problems with electronics, chips, some sniper rifles, some missile and artillery and mortar controls. ! ” – stressed the Minister of Foreign Affairs Dmytro Kuleba.

Industrial decline

Strong international sanctions against the aggressor strike at absolutely all sectors of the Russian economy. According to experts, Russia’s main problem is that in the thirty years of its existence it has become closely integrated into the world economy, importing technology from developed countries and exporting raw materials. And now, depriving itself of Western goods, it risks being in a worse position than the Soviet Union at the time, because it had a closed economic cycle. That is, the Soviet system, in contrast to the Russian, was less dependent on imports and produced almost all the necessary products for the stable operation of the economy.

Now, due to a lack of components, the largest car plant in Russia, AvtoVAZ, has almost halved its activities since the beginning of the war against Ukraine. A similar situation is observed in other car manufacturers: Western car companies stop producing cars in Russia and go out of business.

All world airlines have stopped cooperating with Russia / photo ua.depositphotos.com

According to the Russian analytical agency Avtostat, cars have risen in price by 35-45 percent in the last month and a half in the two dozen car companies officially represented on the Russian market. At the same time, the biggest increase – up to 60 percent – concerns premium cars, the supply of which to this country is limited due to sanctions pressure and logistics problems.

In the near future, Russian motorists will feel the impact of sanctions also due to lack of necessary components for their cars. Almost all imported spare parts are already or will soon be in short supply.

When we remember that all the world’s airlines have stopped cooperating with Russia, the people of this country will soon be able to travel only on foot, by horse (if they still remain there) and by rail. But there will also be problems with the latter, as the world’s manufacturers of locomotives and other railway equipment are also leaving the face.

Without tanks and  space

The difficult situation of the northern aggressive neighbors in the defense industry. According to Ukrainian intelligence, more than 20 enterprises of the military-industrial complex of Russia have suspended their activities in whole or in part due to lack of components and parts

In particular, the production of tanks and aircraft missiles at the Vimpel plant, the Uralzavod plant and the Chelyabinsk tractor plant has been suspended.

In addition, the expansion of restrictions on technology imports, announced by the US government in early April, will hit another 120 companies, including the pride of the Russian government and local patriotic lumpens – the company “Roscosmos”. This means that Russia can begin to say goodbye to its space ambitions. 

“In the coming days, the Department of Commerce will take further action to damage the work of Russia’s defense, aerospace and maritime sectors, including 120 Russian and Belarusian entities in the list of legal entities,” said Kate Bedingfield, director of communications at the White House.

A blow to the energy sector

According to experts, the occupier’s electrical engineering industry is also experiencing an increasing shortage of components, without which Russia’s energy system will begin to collapse.

The civilized world continues to put pressure on the Russian energy sector / photo UNIAN

In other words, businesses will begin to close even faster, and ordinary Russians may soon face fan blackouts.

According to Maksym Bilyavskyi, an energy analyst and former director of integrated communications at Naftogaz Ukrainy, the aggressor now needs to import more than 10 critical equipment items and put them into operation to resolve the aggressor’s energy crisis. But thanks to sanctions, he will not be able to do so.

“For example, one of the components of any transformer is insulating paper imported by Russian assembly plants before the sanctions were imposed. The aggressor will not be able to establish such production on his own, so the aggressor’s power system at various levels will be short of transformers in the next month or two.” , – the expert emphasized.

The civilized world continues to put pressure on the Russian energy sector, forcing it to sell oil at a discount of at least 20 percent. Russia’s oil production has already begun to decline, while the US initiative to ban Russian oil imports is gaining momentum.

Since the beginning of the aggression against Ukraine, the largest buyer of Russian gas, the European Union, has been actively discussing the possibility of refusing to import blue fuel, European Council President Charles Michel said on Wednesday.

“I think that measures on oil and even gas will also be needed – sooner or later,” Michel said in a speech to the European Parliament.

High inflation and falling ruble

Economic sanctions against Russia by the civilized world are actively contributing to accelerating inflation, as well as provoking the fall of the ruble. To hide the devastating effects of sanctions on their country’s economy, the government has introduced several ruble exchange rates. But that only made matters worse.

“The impression is that the head of the Central Bank of the Russian Federation Elvira Nabiullina (who a few years ago received the award for the best central banker in the world) decided to work not for Russia, but against. Special creation of different courses leads to imbalances, speculation and rising inflation, “said Gleb Vyshlinsky, director of the Center for Economic Strategy.

REUTERS

It came to the point that the Russians were forbidden to buy foreign currency. And those who still want to buy it on the black market, have to pay up to 200 rubles for one cash dollar or euro. This is almost three times more than before the war.

Moreover, those Russians who still dare to buy currency on the street can face not only administrative punishment, but also a real prison for up to 5 years. It is obvious that the Russian authorities perfectly copy all the “charms” of the Soviet Union, when “speculation” was also persecuted. Apparently, the time is not far off when they will be imprisoned for life for exchanging currency.

As a result, due to the fall of the Russian ruble, prices for all imported goods are rising, but even at higher prices, a huge number of companies have already refused to supply Russia with their products. This forces Russians to switch to low-quality domestic counterparts or abandon certain goods altogether.

The British think tank Economics and Business Research (CEBR) estimates that by 2023, Russian inflation will reach 30 percent, real wages will fall by at least 18 percent, and by December 2024 wages will fall by another 26 percent.

“The current situation in Russia differs from 2014-2015, when the economy was also affected by sanctions, in that the ruble is falling at the same time as commodity prices have also risen sharply. will fall faster “, – emphasized in the analytical center.  

According to experts, the Russian government will have to partially compensate for rising prices by subsidizing the economy and the population from the federal budget to avoid hunger riots. Although many energy costs are already subsidized by the budget. According to the World Bank in 2019, only energy subsidies in Russia amounted to 1.4 percent of GDP.

“Even more subsidies will lead to even greater backwardness of Russia’s economy and reduce the competitiveness of the country’s labor force against the background of high inflation and a sharp fall in the ruble,” – said British experts.

Rising unemployment

International business comes from Russia in almost all sectors of the economy. And those who do not work out are actively encouraged. Even harsh methods.

“During the war, diplomacy is not always diplomatic. The main thing is the result,” said Ukrainian Foreign Minister Dmytro Kuleba.

Unemployment is rising in Russia / photo depositphotos.com

However, the withdrawal of many companies from the Russian market is still half the battle, the real problem for Russians is rising unemployment, because before leaving the Russian market, international companies, of course, lay off all employees.

According to the Center for Combating Disinformation at the National Security and Defense Council of Ukraine, as a result of sanctions imposed for aggression against Ukraine, the Russian Federation has already lost about 100,000 jobs. And this is just the beginning!

At least another 120,000 Russians will lose their jobs after leaving the Russian market

“The limit of McDonald’s restaurants employed 62,000 Russians, PepsiCo – 20,000, IKEA – 15,000, Inditex – 9,000, KPMG – 4,500, PWC – 3,700, H&M – 3, 5 thousand, LVMH – 3.5 thousand, L’Oreal – 2.2 thousand, Starbucks – 2 thousand “, – stressed in the department.

In total, according to experts, by the end of the year will lose about 9 million Russian citizens. Due to economic and social problems, the most skilled Russians began to actively flee abroad. This is especially true of representatives of the IT sphere. According to analysts, since the beginning of the full-scale war against our country, about 50-70 thousand IT specialists have left the Russian Federation, by the end of April this figure will increase to 100 thousand.

The sanctions blockade continues

The civilized world has reacted harshly to Russia’s genocide of civilians in Bucha and other Ukrainian cities. In response to the killings of Ukrainians, Western countries are further tightening sanctions, which should deal a significant blow to the energy and other sectors of the Russian economy.

REUTERS

In particular, a new package of European sanctions, announced this week, includes a total ban on buying coal in Russia (minus 4 billion euros), a total ban on transactions of Russia’s 4 largest banks, transfer money to Russia or from Russia via they will become impossible.

In addition, all (!) Russian ships are prohibited from entering EU ports. Transport companies from Russia and Belarus are also banned from operating in the EU, as well as supplies of semiconductors and engineering products from Russia (minus 10 billion euros).

According to Foreign Minister Kuleb, the agency is focused on continuing to roll the Russian economy into asphalt.

“The holy trinity of sanctions that will finally stop Russia’s military machine is: the abandonment of Russian oil, gas and coal; the closure of world ports for Russian ships and goods; the disconnection of all Russian banks from SWIFT. In all these areas “, – Kuleba emphasized.

European Commission President Ursula von der Leyen said the EU was working to ensure that the new package of sanctions against Russia was not the last.

“We must increase the pressure on Putin and the Russian government again. Therefore, we propose to further strengthen our sanctions. They limit the Kremlin’s political and economic capabilities. They affect Russia much more than us. And they will not be our last sanctions,” he said. said von der Leyen.

The entire civilized world has come together to help defend Ukraine in the unjust, barbaric war that Russia has started. The pressure of sanctions on sensitive sectors of the economy is gradually devastating Russia’s budget. And the less money there will be, the less they will be able to buy weapons, and the sooner Ukraine will win!

Bohdan Slutsky

(C)UNIAN 2022