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State of Russian Economy 1 Year Into the War

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Russia’s economy is struggling and it’s all Putin’s fault. When Russia invaded Ukraine in February 2022, the international community responded with unprecedented sanctions. These included cutting Russia off from the SWIFT financial system and measures against Russian energy. Hundreds of foreign companies ceased operations there. In June, Russia defaulted on foreign debt payments for the first time. By December, foreign direct investment fell to a net negative $25 billion, down from about net positive $15 billion. Russia’s technology sector has also suffered, unable to find replacements for foreign imports. Mobilization and emigration of skilled workers added to a grim picture for Russia’s economic prospects. Here’s the bad news. Despite the sanctions, Russia’s energy sector, the most important part of its economy, has remained resilient, assisted by a spike in world oil prices. Chinese and Indian purchases have also somewhat mitigated loss of business with the EU. What additional measures could the West take to increase the effectiveness of economic sanctions against Russia, particularly with regards to the energy sector? Let us know in the comments. #themilitaryshow

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