Analysis of the effectiveness of the latest sanctions against Russia : NPR

NPR speaks with Ian Bremmer, founder of Eurasia Group, about a new round of sanctions against Russia.



LEILA FADEL, HOST:

The Biden administration introduced a new round of sanctions against Russia last week. Sanctions have become a Western weapon of choice to counter Russian aggression in Ukraine. But as the war drags on, the question remains: are the sanctions working? With me now is Ian Bremmer, founder of Eurasia Group, the world leader in political risk research and advice. Hello.

IAN BREMMER: Hello there.

FADEL: So when President Biden banned Russian oil and natural gas in March, he said he wanted to deliver another mighty blow to Putin’s war machine. And you and I have been talking for over a hundred days about Russia’s war on Ukraine, with no sign that Russia’s military onslaught is waning after rounds and rounds of US and Western sanctions. So what did these sanctions actually do?

BREMMER: Well, a lot of evidence that the Russians – the military assault is diminishing in the sense that they’ve withdrawn from Kharkiv, they’ve withdrawn from around Kyiv. But the sanctions are not what accomplished this. It’s the military and intelligence that support the West, and especially…

FADEL: It’s true.

BREMMER: … The United States provided for Ukraine, as well as how much – how bravely the Ukrainians fought. The–these sanctions don’t change Russia’s military behavior, but they do seriously damage its economy. The IMF expects about a 10% contraction in Russian GDP. Russian economists I spoke to who are closer to the issue believe it could be as high as 15% this year. And it is the first time that an economy of this size has been decoupled so aggressively from the advanced industrial economies of the world. Russia is a G-20 economy.

FADEL: Yeah.

BREMMER: You’ve never seen such sanctions against a G-20 economy of this magnitude.

FADEL: But the declared objective was to stop the Russian army. Wasn’t that the goal?

BREMMER: The stated purpose of the sanctions was to punish the Russians for their invasion. You know, I think the idea that economic sanctions by themselves will force the Russians to change their behavior is always going to be a tough decision. It will hurt them for a long time. I don’t think they are coming back. I think once the Europeans decouple their oil and gas – like they have their coal – from Russia, I don’t see that coming back. I see that the diversification will be permanent. And it’s–it’s an unfortunate thing for people around the world, don’t get me wrong.

FADEL: Yeah.

BREMMER: But there’s no question that’s part of a — the understanding, that Putin really misjudged his decision to invade Ukraine. I think the way I would phrase it would be if he knew the West was going to react collectively and as strongly as they did…

FADEL: Yeah.

BREMMER: … The probability that he invaded on February 24 is really very low.

FADEL: Now he always projects an image of strength, real or not. And energy prices are high. The United States banned Russian oil. Europe is, as you said, declining. But they still make money from oil – billions from oil and gas sales. So what does this mean for Russia right now?

BREMMER: Yeah, well, that means we’re between when the announcements of all the cuts were made and when they were made. I mean, right now, in terms of gas, you have a small number of countries that have declared that they will no longer use these ruble-denominated accounts – Poland, Bulgaria, Finland, the Netherlands, I think Denmark. That’s all, like, 15% of the gas that goes to Europe from Russia. And oil – announcements were made of big boycotts – the big ones, like Germany and Poland – from the end of the year. So the prices are going up, but they’re still selling in Europe. And so as a result, yes, they’re still making a lot of money right now.

That said, keep in mind that half of the Russian central bank’s assets have been frozen. They don’t have access to it. It’s hundreds of billions of dollars. That’s more than the amount of energy they currently sell. It is an unprecedented sanction that has also been taken by the Americans and the Europeans. So when you look at the Russian economy as a whole, you can’t say, oh, they’re doing better in response to sanctions. It is simply not true. But also, Russia is not North Korea, and you can’t make it a global pariah when countries around the world are still very dependent on the many commodities they extract from the ground.

FADEL: It’s true. And they are looking elsewhere to compensate for the possible loss of Europe, namely China and India. You talked about punishing Russia. In the few seconds we have left, the long-term goal – to punish Russia on the world stage. What does this accomplish?

BREMMER: The long-term goal is that a — an invasion of a democratic country to forcibly alter its borders and wipe them off the map will not be tolerated by the United States and its global allies, whether at within NATO or in Asia. And I think that sends a message not only to Russia, but to other countries that are considering further invasions in the future.

FADEL: Ian Bremmer is the founder of the Eurasia group. Thank you for taking the time.

BREMMER: With pleasure.

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Sara H. Byrd