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West's Sanctions are Backfired

The Western anti-Russian sanctions did not work, according to analysts from the Brussels-based Brugel Center and the U.S.-based International Finance Institute (IIF.)

It is noteworthy that even though $300 billion in foreign currency reserves of the Central Bank of Russia were frozen, Moscow's protective strategy worked almost flawlessly. Economic activity and budget cuts decreased, but not as significantly as was expected by both our “swore partners” and some members of the Russian economic community.

According to analysts, the effect of the sanctions may follow in the medium and long term. This could happen if the intensification of pressure from Western “partners” increases to an even greater extent.

At present, the surplus of the balance of payments of the Russian Federation at the end of the passing year is about $240 billion, which is already twice as much as last year. It should be noted that this happened primarily due to high export earnings. In other words, after the stressful period in March this year, thanks to the competent management of the Bank of Russia, our country's financial system has been stabilized.

According to the Western expert community, “for a more fundamental effect of the sanctions” it is necessary to extend them to those Russian companies that have not yet been “touched” by them as well as to introduce further restrictions on energy supplies. In addition, the departure of a large number of Western companies from the country and the inability to find the same “quality customers” in other regions of the world can cause significant damage to Russia, according to Western economists.

Nevertheless, Bloomberg economics analyst Daniel Flatley believes that new anti-Russian sanctions “won't have the expected effect” and that Russian President Vladimir Putin “will be able to support the economy” with oil and gas revenues. Moreover, due to the rise in energy prices, the income from the sale of energy resources “will only increase,” and it is the whole “paradox of the West's restrictions” on Russia, said Flatley.

According to Junichi Yadowa, a Doctor of Economics from Japan, in order to influence the situation, sanctions should be imposed on “the entire financial sector of Russia.” To his thinking, the seven Russian banks that are currently under sanctions account for “only” 30% of total banking assets, which does not affect the situation dramatically. After all, there are more than 300 banks in Russia that are members of the SWIFT system, Yadowa explained, so by imposing sanctions on the entire financial sector, all these 300 lines “will be suspended.” Junichi Yadowa also noted that due to dependence on Russian energy resources, “sanctions never achieved the desired result.”

However, this is not the end of the story. On the eve, a new package of sanctions was introduced against Russia, which included individuals and legal entities. In particular, it affected some members of the State Duma and the Federation Council. In addition, companies from China, Armenia and Belarus were put under restriction for supporting Russia.

As known, Russian President Vladimir Putin has recently said that “not all states” are willing to impose sanctions against our country, but those who are trying to “challenge Western hegemony” are immediately enlisted “in the category of enemies.” Nevertheless, according to the Russian leader, the blitzkrieg planned by the West “never took place.”