Western sanctions against Russia have failed

Russia’s economy is growing as Western sanctions fail to impede President Vladimir Putin’s war against Ukraine . On Monday, the World Bank said Russia has gone from being an upper-middle-income country to a high-income country. Military investment and major government subsidies have spurred this economic growth.

After the initial full-scale invasion of Ukraine in 2022, the Russian ruble lost 40% of its value. Western companies left the country and the international banking system, SWIFT, closed to Russian banks. Western states also banned the exporting of weapons technology to Russia, the importing of Russian gold and diamonds, and sanctioned individual oligarchs.

While these sanctions certainly hit Russia hard in 2022, the Russian economy has been recovering since then. Gross domestic product growth in 2023 was 3.6% and is on track to be 2.5% in 2024. Western sanctions have made Russia negotiate new trade partners and increase domestic industry. Most critically, Russian oil exports are continuing. Since the oil market is global, it is hard for Western countries to dramatically hurt Russian oil exports in the long term as prices and supply chains will adjust to sanctions.

This is not meant to say that the Russian economy is healthy. This wartime growth is not sustainable long-term . High amounts of government spending on military goods and housing have been driving the economy’s recovery. While consumer spending and incomes have increased, technology and production capabilities have not dramatically improved. Inflation is still high and the 2022 mobilization worsened the country's ongoing brain drain.

However, these issues will not deter Putin from continuing to pursue his goal of dominating Ukraine. Putin is content with the current trajectory of the war in Ukraine as he thinks he can outlast Western resolve. He is fighting an attritional war that is currently to his advantage. Russian troops are continuing to slowly take ground while Ukraine has been incapable of waging a successful counteroffensive since its victories in the autumn of 2022.

The West must learn from the war in Ukraine that economic incentives are not enough to block determined foes. While they can be a nice carrot to encourage good behavior, other states must be receptive to Western goals for aid and sanctions to matter.

This means that the diagnosis of a state’s goals is all important in determining which tools to use. Western wealth is a useful tool for states that desire Western wealth more than they want to pursue anti-Western goals. But it cannot be used as a catch-all solution to negotiate with adversaries. Other states and their leaders do not have the same priorities as us.

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The failure of Western sanctions to incentivize Putin to not invade in 2022 and to actually stop his campaign shows that other tools matter more in the rough-and-tumble world of geopolitics. The backbone of international relations is still hard military power and the consistently demonstrated willingness to use it.

At the end of the day, there are things in life more important than money. Even if we don’t realize that, our foes do. The failure of Western sanctions against Russia has taught us this lesson.