the on the go and me tonight out is there is only mobile app, is that the, this is where we dissect from out is there is a mobile app available in your favorites apps to just set for it and typed on a new app from out to 0 new at you think is it the of the international monetary fund products strong grows from the bushes economy this year. let's just find sanctions imposed for the invasion of ukraine. european nations trail. well, behind russia in the i am at full cost. so what's behind these figures? do sanctions actually work? this is inside story, the

hello welcome to the program. i'm a 3 instead of going rushes invasion of ukraine almost 2 years ago has been met with the harshest regime of sanctions imposed on a country. so russia coming 3rd behind india and china and the global growth full costs from the international monetary fund may surprise money. that's also off the conscription into the army for launched numbers of russian workers and the hundreds of thousands who fled the country since the war began. despite the old f, what's behind the optimistic full costs for russia's economy? do international sanctions actually work? well justin rush of elsewhere will be on scale. guess this lots more in a few moments, but 1st a report from katya lopez for the yeah. it looks like 2024 will be a good a year for russia's economy. the international monetary fund predicts a 2.6 percent growth in russian g d p. that despite widespread sections in the crippling the kremlin for invading ukraine,

blood rushes so called for economy and military spending are driving much of the growth. raising questions on whether sanctions have become relevant. we are resolved to continue imposing massive costs on russia. costs that will further isolate russia from the international financial system and our economies. now, 2 years into the war president vladimir putin has managed to get around some western sanctions by using allies to obtain technology, such as computer chips needed for weapons to fight and ukraine. using so called shadow ships is another way of russia is getting around you sanctions by passing the $60.00 per barrel price cap on oil exports by hiding the vessels port of oregon ownership and route to the move. allow shipments to reach major customers, such as china and india, keeping rushes vital oil,

trade and income flowing. in contrast to russia's expected growth, the am, if has downgraded germany, europe's strongest economy. high energy price is caused in part by sanctions on russian oil and gas enforce or fueling the phone. german leaders are defiant despite the risk of recession darts. i'll take him putting up sonata from fall given. he has an international responsibility. we bank ukraine is the world's 2nd largest financial supporter. contribution remains unchanged and above 0.6 percent of the economic output and up to not. it's unclear if russia can maintain predicted growth in the long term without it's more economy. but the i, a, my figures are raising questions on whether sanctions designed to hurt moscow at that fired patsy a little bit. so again, elda 0 for insights story. russia is one of several countries on the international

sanctions, but it tops the total so it can escalate it by data specialists. custom don't a i for the send the show russian faces almost 19000. the sanctions before the invasion of ukraine, around 2740 in force trading. well behind russia is around with almost 5000 syria faces just over 2800 sanctions. north korea is next week, maybe 2200. and then comes russia's name, but the roofs with almost 1500 next to me on the and then venezuela sanctions against russia have been imposed by countries including the u. s. t e u, the u. k. a straight to canada and japan. all right, let's bring it out. guess for today's discussion for us, started in context on web joined by chris with us. who is the chief executive of micro advisory? that's a strategic business consultancy focused on russia. do you raise up from that? always in capital also we're joined by all and build sites who's a sanctions expert who founded the country risk analysis company co risk. he also

helped to write a recent report that investigated how russian sanctions are being ignored and from washington dc. and the total leaving is the director of the razor program at the quincy institute for responsible state draft. and the gentleman, welcome to you all. i'll start with you then chris, what do you make of these up domestic growth, full cost figures for russia as well? they look optimistic but to an actual effects. uh but, but really does numbers show is that the economy is stabilized. is, is large the being driven, but with a combination of a military industrial, complex spending, which is having, of course, a big it back to the economy. and also the fact that the incomes have been rising so strongly last year. and again, expected to this year. i'm gonna sit double digits, a really broad switch to try it and consumption. so it's those 2 factors that are

supporting this, you know, up to mistake a forecast we expect between 2 to 2.5 percent growth. so not too dissimilar to the i m f. we expect that the government will come out with very strong numbers for 2023 for last year. the company ministry for administered just recently said, cuz he thinks that you'd be paying for 2023 could actually have been 3.5 or even a little bit better. but it is very much down to the military industrial complex spending under recovery and consumption. it is not a reflection of kind of a broad economic recovery. it's not an indication of an economy test. you know, that that's a, as seen, sustains growth across multiple sectors. it's a very specific reason, but it is supportable for several years, provided the oil tax income remains roughly versus today all in europe and commission, vice president joseph borrow continues to insist,

the sanctions against russia all working. but as we said at the beginning of the program, it's, it's many, 2 years now since the green war began and the sanctions were, were introduced shortly after. i'm all the working is, is joseph for a life as well. and they are working, as we all know from historical accuracy, the sanctions do not work like or whatnot. it takes some of the time to start making their way. uh, but what i'm seeing is that financial sanctions of russia are really working. rashaw has the big problems getting hold of hot currency. they have trading problems, they have inflation with him, him costs. and actually what we've just seen in our search is that, and this has not been a very much, much a noticed, but actually a rush of input watch off to so called critical list. good sort of most the 51 most of work critical fields has declined by 60 percent since december

2022. so trent, 2 december $22.00 was kind of the peak of the rushes impulse. both toppling bolts and what critical impulse have been more or less designated, sams, december, 1 year ago of what we see in the long term, i think world economies, debris, that's the long term picture for, for the restaurant is not the ro see, they have basically a long term 0 percent growth gps stay lower than it was 10 years ago. there was a kind of decline in populations of time, scale, speed, migration of crossing. but actually, even in the short term, we're seeing now. what do you buy a masters actually kind of documenting is not the economic growth. is spending growth. so basically what russia is doing, they're taking money and for the pension funds, they probably fall off to their pensions,

font and have transferring that to public spending on security. and this is not, has nothing to do with reload, panicked like what i meant growth just not sustainable. this is not something that would drive or economy to 2020, 2526, etc. this is a very short term, more or less budgetary. uh, phenomenon and it has nothing to do be a economic growth at all. the sanctions were intended to undermine russia's ability to, to fund this will in you create, are they doing that the cost of russian military production has increased huge fail. i'm competing the west when it comes to the production of alternative shelves, for example, which is critical. but i think it's also worth noting that when it comes to regime change or even changing critical regime, policies, sanctions of

a list never worked. you a regular long list of them, i'm going all the way back to cuba and i for more than 60 years and they have not succeeded. but the difference is that in those cases they did do great damage to the economies concerned the wrong way. and so on, where is, in the case of russia, they haven't done that. i think there, there are other things to be noted here. the 1st, as opposed to the economy over the past generation, the world economy has become very different. a china is now in economic super, as long as it is willing to go on buying russian energy and trading with russia and supplying russia with various critical products. and as long as india will say that they choose to go and economy is willing to do that, the west ability to strangle the russian economy is colossally reduced. unless of course, it were actually to impose enabled ok, don't rush it,

but that would be an act of will. the other thing i thing to note is that uh, what's happening in russia is being cold, military kaden's in this. it for colds in certain respects, the boom in america, which ended the great depression of the, the 19 such as, as a result of colossally increase military spending. i mean that's, it is a viable way of boosting industrial economy. if of course you've got the results is from the sale of oil and gas to do that. the long term question, i think, and this is something that russian, i'm of the so rice, me a bunch of great deal now is whether this can be turned into a sustainable state program of industrial development in other fields when the war ends. if it ever does not cost for that we, we, we don't know whether this will be possible. but since so many western predictions have proved fools predictions or should we say hoops?

i think it would be a mistake simply to, to assume a probably all right, that russia cannot do that. chris, what do you make of what i told the saying that did you agree that but the sanctions almost never walk in and if they they don't what, what should the west of dun take brushes, capability to fund? it's a ministry industrial complex and it's more against ukraine. yeah, i could just can i just go back to the one step uh, just to, to, to uh, adds to a comments was made earlier. russia is not funding the military spending. they, they but just out of savings it's, it's, it's running the bunch of depths. it's only about one percent last year, less than one percent this year. the critical element for the budget is the level of oil, a gas and the commodity exports. and they're holding up quite well. so it's not the

case that you know, rushes brittany to it's, it's stop by live money and it's going to end up in there. and it a difficult situation. it within the next couple of years they, they were different. national reserves are more or less staying intact and rushes actually running down the steps. so it's financial position right now, which is critically dependent on the export volumes for sure, is remaining in quite a comfortable position. but in and ask you a question about sanctions almost never worked well. the field was never work it in to, to deliver on what was the declared intention. in this case, the declared intention was to force russia into a difficult economic situation. so that it would force to cramming into rethinking its actions in ukraine. had to stop and get sanctions that are granted terry that, that hasn't happened. and the reason that it hasn't happened is because russia is such an important a exporter, our, our supplier of,

of hydrocarbons and other materials which are in high demand in places like china and india and other asian markets. and there's no sign of that, let, letting up russia it is offering it reduced discounts now compared to what it was offering or had to offer in the 1st half of last year. now discounts are much smaller and it has to built up this shadow fleets. and other ways of getting the, the products to the asian customers and to be paid for it. so, does that extent? yeah, for sure. yeah, russia is not in the comfortable position of being able to diversify the economy and to grow and to handle all of the demographic issues that it was talking about before this conflict. but it isn't a comfortable position into that. i can pay its bills and funds a budget's kind of requirements that it's no facing. and then one final point is in terms of the future. uh, you know, clearly the situation remains that it is today. russia will slip more in board,

the stagnation to the economy will become even more dependent on military industrial complex. the narrative in boscoe of course, is that that's not going to happen. and they are looking at cooperation with this expanded bricks plus formats, which of course was added to it, other countries from january this year. and for the intention of russia and based on china, is to bring even more country's interest in the next couple of years. and to use that formats as low terms of if you liked what was a previous dependency and engagement with western nations. it's far too early to say that that would work or how long it would take to work. but there is a way forward that a nice has been discussed, which is got some options. but meantime, the critical factor for us. yeah, absolutely is. what are the level of the budget receipts from oil exports that's critical, all of your pin and u. s. companies in the entire nation,

so have undermining the sanctions regime by so convincing them. and if so, what can be done to better enforce a sanctions regime once it's put into place? so age are what we found in our research is yes, your pin and rest are and also us companies are supplementing sanctions of commodities. so sanctions of the export codes to russian, those goods will usually kind of find a way we have. so come praise be up to are, can you, your customer sign all the countries and they were basically find a way to russia, but uh, what is working here are actually the financial subjects. so what do you see is that russia just made up of war and intensive war drastically reduce their imports of what could you do? goods of critically steps. they have been more than

a soft since one year ago. and we think the reason for that is because russia is having issues with hop currency anymore unless they have a lower expos, gas prices has been decimated, to only face the force it was a year ago. and we see this kind of a decline in rushes at b live t dream coal. so regardless of a 2 bed which degree commodity sanctions york, we think that we have to look at a commodity to sanctions in conjunction with the financial sanctions. i'm be see financial sanctions, the dollar sanction to your sanction. probably working quite well to reduce russia's abilities. so i kind of, i think bill as great as kind of rushes long term economic development has been very bleak, a very a batch. but even in the short term, also the spending spree that we see up into action in, in a, in

a month. we've been in progress see much clearer, the erosion of russian predictive capacity below that kind of better direct, stopped officially set the surface that receipt unfolding now. okay. um, i see chris shaking his head and that's all i know i'll, i'll come back to you in just a 2nd. let me just give chris a, a moment to come in. yeah, every time i've read this in a few places of see the expectations of rushes deliberately, kind of rubbing the economy with high levels of spending, all of which is going to come to an end after the election. and i just don't see that. you know, the, one of the reasons why the economy has performed quite very well. it'd be like relatively well last year continues is because of the effectiveness of the stays. institutions of the management of the economy under being raised to be transparent . and we can cross that the referenced asia with,

with importers such as china and india, etc. so we just don't see that there was a cliff, you know, in terms of spending a rescue, for example, the last year made a 140000000000 of trade surplus and almost 80000000000 of current account surface and, and the current oil price. there's no reason why that won't be repeated through this year. so we do not see a reduction in spending. we'd see it, but more even if you liked this for the year or less, the old price collapses. okay. out of. so if sanctions it was never, well because you said and your last on so what, what, why they are they still use of what impact do they have upon the economies of countries that impose them? i'm thinking specifically here of germany. that is the critical question. we just started with the united states and it's a progressively become a kind of declarative policy, especially on the pots with us congress. it's a way that the congress has signaled its displeasure rang with

a range of countries around the world geography. tremendous tyran reasons or because they all against america will a combination of both on it. so it's, and of course it's also the full terms of tool. if for whatever reason, you feel like you can kind of out as you would having the cost invaded vendors way and cute and replace the governments that then you impose sanctions on the same thing with iran. same thing with russia. if you're not prepared to fight to try to do it by economic means. now, if this, as i've said, was the equivalent of the british blockade of germany in the 1st and 2nd world war couple of old chapman maritime trade. then it would look a box, of course, when not for pet code, not test because it would be an act of war against russia. and no, just because it would infuriate the chinese, but it would also infuriate the critical western pop is like india was. so depends

on western world. so this is a policy which has become reflexive of who want to magic. i mean, the congress often appears to be unable to find the type of this. it's not necessarily a policy that has been seriously and systematic, typically, sometimes. uh so uh yeah, i mean i, i think that's a, this is something to be reconsidered. and it goes on, jem, and you're absolutely right. it's, you know, it's like the old story. you, you don't have to run faster than the lot and you just have to run faster than me. and russia is doing so much special than germany. and it is a serious question that we so much laurie talking germany of the industrialization, the collapse of the german industrial economy. whether in fact politically, germany can sustain its existing goals, including bathroom sanctions against russia. a few minutes left. i want to get

a couple more questions and chris to you 1st, to what extent is the ordinary people of russia who bearing the brunt of of the west sanctions against the country. as far as the, the political support for the president puts in has as its strength and have of what looked good. there's no obvious impact on people right now. i mean, i mean it out of russia a lot. i see the stores are full of the mechanisms to, for, for people to buy goods online from, say, freshen, oaks instead of left. russia are all fully available there. there's no, and you know, a look at the streets of moscow. it's not only that they're full of chinese cars, but they're a brand new asian and you're paying cars come into a pilot in the course of it. so there's a, as of now there is no kind of abuse, a negative impact or any major impact on russians other than those who want to travel. it is charity, a lot more expensive to prep for russians to travel outside russia. and it's more

difficult to go to go to most places except down to the middle east. but for me to be josh impressions, i would say no, they haven't really noticed any, any, any impact on their lifestyle. other than perhaps there's more goods with made in china labeled on them that may be made in, in germany. that was, was the case in terms of support for, for the president. but, you know, the russians historically support the state where, especially when there's time of trouble as i say. and, you know, the narrative in russian media is that russia is under attack by nation or by the west of ukraine is simply being used as the depaul in an, in the middle of rushes is fighting against nature. so people support the states. and there are quite nationalistic, in, in, in that sense, to that extent present putin is the presence, gets the support by, by default. but i don't see at this stage any reason to assume that there would be any public protests that although it is worth mentioning,

that there is concern about a possible next round of globalization. we are beginning to see some push back against that. so the comfortable need to be careful not to make a misstep on mobilization as it did in september of 2022. but apart from that, i would have to say to situation in norma in washington, eggs is, is actually quite stable all and we've talked a lot on the program about commodity and financial sanctions designed to bring about political change. um, is there any evidence to suggest that the functions also work as a tool for bringing about a positive change as far as human rights are concerned as well, it gets deeper suddenly. and so that's for the, it's a go as who is the kids. but the sanctions convert to a very large should we so for example that i racked, they probably had too much effect and we're kind of a chill down. uh, but uh all our search uh shows that the sanctions of russia are really working

quite a lot for us. as i touched upon, the dollar and euro sanctions, the financial sanctions reduced, our ability to embarks, that's a trade costs rise to the costs or the costs of the cost of technology on the product. but i disagree with the uh, price uh, as of to the book notes on, on the order in the russian citizens, they will pay a very high price for more physical costs. the conscription award. so, but if you go outside of law spelling you would see people dying from cold because of that. so lack of heating and that's present to you. you'll see people's interest rates on loans have a really increase the inflation has increased a lot and even petrol in the country like russia, prices as increased loss, or is a lot of the disturbance of the markets or mechanism. and actually uh, i think when do it, public spending spree is over after the election went social monday through.

ringback sauce expanding these kind of relaxed again, you're going to see uh, economic problems coming to the forefront to get more organized. we're almost out of time out just by christmas shaking his head. that course i'd look up in about 30 seconds that i wanted to get out of tell that long story and that's all i might not get back to you, but but chris tricked quickly for 3 points. first of all, people do not see a spending deteriorating after the election. we do that, do not see any basis for that whatsoever. secondly, it says it's 85 percent of russia's trade is. now, conductors encourages or breaks countries, which includes the u, a 0 as, as, as well as the chinese one. so yes is mostly substantially away from our daughter of your and the searching is i was actually as in the regions last week, i do not see peoples. i think it's normal. good things like the news doesn't wait for anyone and that's coming up next. i told just just briefly yes,

i mean actually just being a great re distribution of money to the russian provinces of that doing much better than the industrials and, uh, and uh, no, i mean the, the will, will continue and spending on the industrial economy will continue after the elections, this is not a political business for the account. okay. just a boy or a gentleman that we must end it, but he thinks indeed uh too old for taking punch in the program. today. chris, we the on build sites and out of the whole leaving as always, thank you for watching. you can see the program again at any time by going to the website without you 0 dot com for further discussion on this topic. join us at our facebook page, you'll find that at facebook dot com forward slash h a inside story, and you can join the conversation on x. i handle the page i inside story from the adrian instead of going into the team here in doha. let's see you again, bye for now. the

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