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Sanctions Won't Stop Putin

By Sergey V. Popov Senior Lecturer in Economics, Cardiff University writing for The Conversation

The sanctions against Russia are significantly harsher than ever. They haven't just come from governments but from private corporations, making life harder for ordinary Russians.

From the article,

Russia does not need foreign borrowing: it fluctuates around 30% of GDP compared to the US’s 102%, for example. Russia will be happy enough if capital will be hard to take out of Russia as a consequence of expulsion from Swift. Billions of dollars are taken out annually, and not just by oligarchs buying yachts, but also by common people moving their savings to less risky jurisdictions.

The poorest Russians will be the hardest hit, a high-interest rate makes it harder to do things they normally can, such as buying cars and borrowing. The government will need to come up with a support package. Regardless a fall in Russian income is expected. The oligarchs will be poorer, but will still remain very rich and likely very happy.

From the article,

Will Russia survive? Probably. A lot of people have spent a lot of time making sure that Russia can endure isolation. For instance, banks have planned ways of facilitating international transfers without using Swift. Also, other agents such as China will likely buy the oil and aluminium that will not be bought by the west anymore. So while these sanctions will hurt Russia, they will not break Russia. I also doubt this will bring down Putin. His support was not so big anyway: why else would the administration indulge in massive election fraud? Sanctions that make Russians poorer are therefore unlikely to motivate them to vote differently.

Read the full article at The Conversation