By Thomas Fazi writing for UnHerd
Sanctions are a form of economic and financial war. The goal of the sanctions against Russia is to cripple their economy and punish them for their invasion of Ukraine. However, many of the sanctions against Russia aren't new, the export bans and freezing of assets were also imposed against Russia in 2014 when they annexed Crimea and the exclusion of Russian banks from SWIFT is not new, it was used against Iran with mixed results.
From the article,
The most controversial aspect of the new sanctions regime is without a doubt the freezing of Russia’s offshore gold and foreign-exchange reserves — about half of its overall reserves — but even this is not unprecedented: last year, the US froze foreign reserves held by Afghanistan’s central bank in order to prevent the Taliban from accessing its funds; the US has also previously frozen the foreign-exchange reserves of Iran, Syria, and Venezuela. So, taken individually, these measures are not as exceptional as they’ve been portrayed. However, never before have so many sanctions been deployed at once: there are already 6,000 various Western sanctions imposed on Russia, which is more than those in existence against Iran, Syria and North Korea put together. Even more importantly, none of the previous targets of sanctions were remotely as powerful as Russia — a member of the G20, and the world’s largest nuclear power. Western pundits and commentators have little doubt: the sanctions will hamstring the Russian economy, sow discontent among the Russian people and elites alike, and possibly even cause the downfall of the Putin regime. At the very least, we’re told, they will hinder Russia’s war efforts. But history suggests otherwise: see Iraq, or more recently Iran. Far more likely is that this turns out to be the latest Western strategic miscalculation in a long list of strategic blunders, of which the United States’ inglorious withdrawal from Afghanistan is just the most recent example. After all, Russia has been preparing for this moment for quite some time. Following the first wave of Western sanctions, in 2014, and partly in retaliation against them, Putin embarked on what analysts have dubbed a “Fortress Russia” strategy, building up the country’s international reserves and diversifying them away from US dollars and British pounds, reducing its foreign exposure, boosting its economic cooperation with China, and pursuing import substitution strategies in several industries, including food, medicine and technology, in an effort to insulate Russia as much as possible from external shocks. Let’s not forget that the main source of Russia’s foreign-exchange reserves — oil and gas exports — has been excluded from the sanctions, for obvious reasons: for most European countries, Russia accounts for a huge part of their oil and gas imports (and other staple commodities), and there’s simply no way of replacing those energy sources from one day to the next. Moreover, thanks to the Russian government’s successful efforts at boosting domestic agricultural production, domestic food production now accounts for more than 80% of retail sales, up from 60% in 2014. This means Russia is largely self-sufficient food-wise. So even if its export revenues were to plummet (which is unlikely), the country wouldn’t go hungry — unlike the rest of the world — and would most likely be able to continue to finance its war efforts...For a central bank to freeze the accounts of another central bank is a really big deal… As a direct result of these decisions, we have turned the dollar and the euro, and everything that is denominated in those currencies, into de facto risky assets