On March 3 at 12:00 pm Moscow Time, the Valdai Club hosted an expert discussion titled “The Vicious Circle of Sanctions: Can Russia and the West Surprise Each Other?”
One of the consequences of the outbreak of hostilities in Ukraine was an unprecedented wave of economic sanctions against Russia by several foreign states. New restrictive measures hit the Central Bank and a number of large financial institutions. They affect the extractive sectors of the economy and infrastructure companies. The West chose to oust Russia from the European and world raw materials markets. Strict export control rules have been introduced, affecting high-tech goods and striking civil aviation. However, the “sanctions bottom” has not yet been reached. A further escalation of sanctions should be expected. Foreign business is rapidly introducing its own informal boycotts, and freezing transactions. Informal sanctions penetrate into the spheres of science, art, sports and other areas not normally connected with politics.
In general, we can say that the very paradigm of “sanctions war” has changed with respect to Russia. Instead of targeted measures designed to impact the long-term accumulation of the reserve, we are talking about an attempt to inflict a crushing blow on the economy in the shortest possible time with the aim of completely destabilising it. Such actions are fraught with inflation, a shortage of imports, and a reduction in the resource base of the economy.
At the same time, over the past eight years, significant work has been done to create an efficient and sovereign financial infrastructure. The sanctions did not paralyse the financial system. The National Payment System, the Financial Messaging System and other tools make it possible to maintain the functioning of the financial infrastructure within the country. Russia is preparing a series of retaliatory countermeasures.
The situation is changing rapidly, but a number of issues need to be discussed immediately. What are the expected consequences of the new sanctions for the Russian economy? What will Russia’s countermeasures be, and how will they affect the initiators of the sanctions? What measures should be expected to adapt the Russian economy to the new realities?
- Nelson Wong, Vice President of the Shanghai Centre for Strategic and International Studies (China);
- Zorawar Daulet Singh, Adjunct Fellow at the Institute of Chinese Studies and a Visiting Fellow at the Forum for Strategic Initiative (India);
- Ekaterina Arapova,Director, Senior Research Fellow, Sanctions Policy Expertise Centre; Head of the Department for Academic Development, Institute of International Studies, MGIMO University;
- Sergey Afontsev, Deputy Director for Research and Head of the Economic Theory Department at the Primakov National Research Institute of World Economy and International Relations (IMEMO) of the Russian Academy of Sciences, Professor at the Moscow State Institute of International Relations (MGIMO).
Working languages: Russian, English.