Eurasia Group President and ‘The Power of Crisis’ author Ian Bremmer on the most likely economic outcomes of Putin’s invasion of Ukraine.
The United States and its Western allies have imposed crippling sanctions against Russia over its invasion of Ukraine.
These sanctions, imposed after Russian troops rolled into Ukraine, have targeted Russian banks, oligarchs and President Vladimir Putin himself, biting deeply into Russia’s economy.
The ruble, meanwhile, has plummeted in value while dozens of multinational companies have either ended or dramatically scaled back their work in Russia.
The yacht “Lady M,’ owned by Russian oligarch Alexei Mordashov, as it is docked at Imperia’s harbor, Italy, Saturday, March 5, 2022. (AP Photo/Antonio Calanni)
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Many reports have declared the sanctions to be “unprecedented” in scope and severity. Yet some experts have a more cynical take, pointing to the ineffectiveness of sanctions in the past.
Italian Financial Police officers walk by the superyacht “Lena,” belonging to Gennady Timchenko, an oligarch close to Russian President Vladimir Putin, in the port of San Remo, Italy, Saturday, March 5, 2022. (Jacopo Gugliotta/LaPresse via AP)
The U.S. imposed sanctions on Russia after it annexed Crimea in 2014. It also slapped Venezuela with sanctions amid Western accusations of an illegitimate election in 2018. In the former case, U.S. officials criticized former President Obama for not going far enough, while the latter case has been criticized for being ineffectively rolled out.
Will the sanctions against Russia work this time, and how could anyone tell if they are working? In short, it depends on what the intended outcome is. Experts who spoke to FOX Business were unanimous in their belief that sanctions will do little to quell the bloodshed in Ukraine.
Gideon Rose, a distinguished fellow in U.S. foreign policy at the Council on Foreign Relations and a sanctions expert, told FOX Business sanctions are often a way for policymakers to take a stance on something without taking a riskier action, like sending American troops into harm’s way.
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“Most of the time, that’s why (sanctions) are put in place, as a sort of way of signaling a kind of elaborate virtue signaling in which you don’t really expect them to solve the problem, but you don’t want to just ignore it,” Rose said.
However, he acknowledged the unique circumstances of the sanctions against Russia given the extraordinary solidarity of the international community.
“The reason it’s happened so quickly … is because of the incredibly obvious aggression, the unprovoked nature of it, the violation of every sort of basic rule in the international norms playbook,” Rose said.
An Italian Finance Police car is parked in front of the yacht “Lady M,” owned by Russian oligarch Alexei Mordashov, docked at Imperia’s harbor, Italy, Saturday, March 5, 2022. (AP Photo/Antonio Calanni)
He predicted, though, that the sanctions will not entirely crush the Russian economy because Russia has massive energy reserves that the world still wants.
“They will find their way on the markets, probably through somewhat illicit or other kinds of networks through China, India or the Middle East,” he said. “The Russian money will get back into the world, but the Russians will be facing a kind of isolation and economic warfare that great powers have never really felt in peacetime.”
Pete Marocco, former deputy assistant secretary of defense for African affairs, told FOX Business the sanctions are “not nearly enough” because they fail to target third-party intermediaries that are used to evade sanctions.
“If you’re going to be sanctioning these banks and Russia, then you need to sanction all the banks. If you’re going to sanction intermediaries, you need to sanction every intermediary,” Marocco said. “Because right now, what’s going to happen is third-party intermediaries are going to make bank off of the current structure, and oil is probably going to go up 50 bucks a barrel.”
Marocco alluded to his time working on Venezuela sanctions, which he described as “enormously ineffective.” He said the intended targets often found elusive ways of moving their money around and the sanctions ultimately emboldened U.S. adversaries.
“Contrary to our interests, it emboldened Russia. It created a firmer alliance with China and Russia, both with Venezuela,” he said. “It’s still allowed for ship-to-ship transfer and a cheaper oil price for China and more expensive oil for us.”
A woman holds a sign with the face of Russian President Vladimir Putin and the word “Genocidal,” written in Spanish, during a rally asking for peace after the Russian invasion of Ukraine, in Buenos Aires, Argentina, Sunday, March 6, 2022. (AP Photo/Natacha Pisarenko)
Rebekah Koffler, a former U.S. intelligence officer who grew up in the Soviet Union, told FOX Business that sanctions will not curb Putin’s ambitions.
“The annual trade between the U.S. and Russia is minuscule compared to what it is between the U.S. and China. And so the amount that is sanctionable is negligible on the big scheme of things,” Koffler said.
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“The same people who’ve been minimizing the Russian threat by saying ‘Russia is a gas station masquerading as a country,’ somehow magically think that these sanctions are going to change Putin’s decision calculus to make him abandon the plan that he’s been hatching for 20 years.”
The Associated Press contributed to this report.
