was winning in dense investigation, the gift compelling insights into humanity open until the stories from asia and the pacific. one. 0, one east. on al jazeera, the international monetary fund product, strong growth for russia's economy this year. let's, despite the sanctions imposed for the invasion of ukraine, european nations trial. 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 adrian sending an rushes invasion of ukraine almost 2 years ago has been met with the harshest regime of sanctions imposed on

the country. so russia coming 3rd behind india and china in the global growth full costs from the international monetary fund, may surprise money. that's also off the conscription into the army for launch numbers of russian workers and the hundreds of thousands who fled the country since the war began. despite old, as what's behind the optimistic full costs for rushes economy, do international sanctions actually work? no justin rush of elsewhere will be honest getting, i'll guess this lots more in a few moments, but 1st a report from katia lopez for the young it looks like 2024 will be a good year for russia's economy. the international monetary fund predicts a 2.6 percent growth and russian g d p. that despite widespread sections in the quick lane, the kremlin for inviting ukraine blood rushes so called to war 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. the costs as well for the isolate russia from the international financial system and our economies. and 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 on 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 strongest economy. high energy price is caused in part by sanctions on

russian oil and gas in force or fueling. the fall, german leaders are defiant despite the risk of recession darcia and take him to an up sonata from full given. he has an international responsibility we bank and crane is the world's 2nd largest financial supporter. contribution remains unchanged and above 0.6 percent of that economic output and up to not. it's unclear it's, sasha can maintain predicted growth in the long term without it's more economy. but the i a met figures are raising questions on whether stations designed to hurt moscow at that fired patsy a little bit. so the, again, which is 0 for insights story for russia is one of several countries on the international sanctions, but it tops the total so it goes collated by data specialists, custom built a i for december show, rush faces almost 19000 sanctions before the invasion of ukraine around 2704.

enforce 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 neighbour bell 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 the 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. the ratio from the regions capital was low. we're joined by on build fast, who's a sanctions expert who found that 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 d. c. anatole,

even is the director of the razor program at the quincy institute for responsible statecraft and a gentleman. welcome to you all. let's start with you then chris, what do you make of these up? domestic growth, full cost figures for russia as well? the look up domestic but to an extra 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 military industrial, complex spending, which is having, of course, a big impact economy. and also the fact that the incomes has been rising so strongly last year and again are expected to this year. i'm gonna sit double digits, really broad switches drive 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 in industry for administered just recently said that 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 nearly 2 years now since the green war began and the sanctions what were introduced shortly after i'm all the working is, is joseph burl weiss. well,

jim, they are working, as we all know from historical accuracy, the sanctions do not work like, but we're not. 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. russia has big problems getting hold of hot currency. they have trading problems, they have inflation with him, him costs. and actually what we've 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 goods sort of most the 51 most of work critical goods has declined by 60 percent since december 2022. so trans to december 22 was kind of the peak of the rushes impulse,

both totaling boats. and what critical impulse have been more or less designated since december 1 year ago, of what we're seeing, the long term, i think, or the economies degree. that's the long term picture for, for the restaurant is not the ro see, they have basically a long term 0 percent growth. gpc stay lower than it was 10 years ago. there was a kind of decline in populations autonomy scales with migration of crossing. but actually, even in the short term, we're seeing now, what do you have 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 they're transferring that to public spending on security. and this is not, has nothing to do with re look down a economic growth just not sustainable. this is not something that would drive the

economy to 2020, 2526. that's april. this is a very short term uh, more or less budgetary uh, phenomenon and it has nothing to do be economic growth out of toll. 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 and getting all the way back to cube and i for more than 60 years. and they have not succeeded, but the differences that's 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 is, of course, 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, i'm supplying russia with various critical products. and as long as india also they choose to go out and economy is willing to do that. the west ability to strangle the russian economy is lost. so the 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. if the colds in certain respects the put them in america, which ended the great depression, that the, the 19 such as, as a result of colossally increase military spending. i mean that's, it is a viable way of boosting the 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 shall 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 adults all the saying that did you agree that but the sanctions are almost never working and if they they don't what, what should the west of dumb tape brush this capability to fund? it's a ministry industrial complex and it's more against ukraine. yeah, i could just give me just go back to the one step. i just, 222. okay. uh, adds to a cummings was made earlier. russia is not funding the military spending the, the budget. uh, out of savings it's, it's, it's running the budget 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 is a commodity exports and they are holding up quite well. so it's not the case that you know, rushes bernie to it's, it's stock pile of money and is 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 it, and that's your 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 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 is offering it reduced discounts now compared to what it was offering or had to offer in the 1st half of last year. now the 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, to 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 those 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 to that's not going to happen. and they are looking at cooperation with this expanded bricks plus formats, which of course has 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 as of 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 at least 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 receives from oil exports that's critical all and your pin on us companies in the entire nation is perhaps 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, and so age are, what we found in our research is yes, your opinion and restaurant also us companies are supplementing sanctions of commodities. so sanctions of the export goods to russia, 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 rush out. but uh, what is working here are actually the financial searches. so what do you see is a rough shop just made up of war and intensive war drastically reduce their imports. also what credit to goods of the 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. we had hop currency any more unless they have a lower expos,

gas prices has been decimated, to only face divorce. it was a year ago. and we see this kind of a decline in rush us. that'd be live t dream. cool. so regardless of a 2 bed, which degree commodity sanctions york, we think that we have to look at to come on to, to sanctions in conjunction with the financial sanctions. and we see financial sanctions, the dollar sanction to your sanction, probably working quite well to reduce rush disabilities. 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 little 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 bridge always

stopped officially, us at the surface, that receipt unfolding now. okay. i see chris the shaking his head until 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 wrapping the economy with high levels of spending, all of which is going to come to an end after the election. 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 stage institutions of the management of the economy. and they've been raised to be transparent. and we can cross that the referenced asia with, with importers such as china and india, et cetera. so we just don't see that there was a cliff, you know, terms of spending rescue, for example, last year made

a 140000000000 of trade surplus of almost 80000000000 of credit account surface 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, in spending. we'd see it, but more even, it'd be like this for the year or less, the old price collapses. okay. out of so if sanctions it was never, well cuz you said in your last on so why, why, why are they, are they still used? 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 by the fee amount of time and reasons, or because they all against america will a combination of both to 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 feminist way and cute and replace the governments that, that 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 german maritime trade. then it would look a box, of course we're not prepared to go the not test because it would be an act of war against russia. no, just because it wouldn't feel react to 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 all domestic. 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 insisted much weekly, so time. uh so uh yeah, i mean i, i think that this has something to be reconsidered and it goes on germany, you're absolutely right. it's, you know, it's like, you know, store, you, you don't have to run faster than the lot and you just have to run faster than me and rusher. is doing so much special in germany and it is a serious question. not with so much laurie talking germany of the industrialization, the collapse of the german industrial economy. whether in fact politically, germany can sustain its existing tools included in the 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 it the ordinary people of russia, who bearing the brunt of of the west sanctions against the country? as far as the political support for the president puts in,

has as its strength and to of look because there's no obvious impact on people right now. i mean, i mean that out of russia a lot, i see the stores are full of the mechanisms to, for, for people to buy goods online from se, fashion upsets that have left russia are all fully available there. there's no and, you know, 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 power in the parts 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 put 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 then maybe the agent in germany 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 the saying, you know, the narrative and russian media is that russia is under attack by nation, 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 are quite nationalistic. and 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 a date in september of 2022. but apart from that,

i would have to say to situation and dharma in washington, eggs is, is actually quite stable all. and we talked a lot of 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 go. it's a go as who is the kids, but a sanction convert to a very large should we so for example, i rach uh, they probably had too much effect on or kind of a trip down uh, but uh, out 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 import. that's a trade costs rise so that the costs or the costs of import the cost of technology

. i'm a product, but i disagree with the uh, price uh as of to the burden off on, on uh, ordering the russian citizens they don't pay a very high price for the. ringback physical costs, the constriction towards so. but if you go outside of moscow, you would see people dying from cold because of that. so lack of heating and that tricity, you'll see people's interest rates on loans have really increased. the inflation has increased a lot and even petrol in the country like russia, prices as increase. i lost there was a lot of disturbance of the market mechanism. and actually, i think when did it public spending spree is over out of election, went social and been through the source expanding. he's kind of relaxed again. yeah . you're going to see i cannot make cop problems coming to the forefront looking for or, you know,

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 them i'm sorry, and that's all i might not get back to you but, but chris, chris, quickly, 3 points. first of a lot of people do not see a spending deteriorating after the election. we do that, do not see any basis for that whatsoever. secondly, is 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 and you're starting is i was actually as in the regions last week, i do not for the people that i just think it's normal. quick 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, 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 you overtaking 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 into the website without a 0 talk. com for further discussion on this topic, join us on facebook page. you'll find that at facebook dot com forward slash h a inside story. and you can join the conversation on x on handle the inside story from the adrian. so they get into the team here in doha. let's see you again, bye for now. the one somebody shoot. somebody else dead. most people expect the police to arrive with handcuffs on that person and take them to jail and then stand your ground. you

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