Why Sanctions are Unlikely to Have an Impact in Russia
By VANESSA ROY and SEAN GRIFFIN
WASHINGTON — The Russian annexation of Crimea, support for rebels in eastern Ukraine, and incursions of Russian tanks and troops into Ukrainian territory have led the U.S., E.U., Japan, and other nations to introduce escalating rounds of tariffs against the former Cold War superpower.
The numbers show the sanctions are having an economic impact. After the most recent round of sanctions on September 16, the ruble was trading with the dollar at a historic low of 38, compared to 33 in the beginning of January 2014. The World Bank recently lowered its prediction for Russian GDP growth to under 0.5 percent for next two years.
Despite the evident economic impact of the sanctions, they have not achieved their true goal: to get Russia to stop meddling in Ukrainian domestic affairs. Western sanctions targeted at select individuals, banks, and companies have yet to significantly affect the general Russian populace. As a result, Russians are not demanding that Putin change course.
Further, the Russian government has been effective in leveraging the state-controlled media to promote their perspective on recent world events. Alternative media sources in Russia are limited. The state owns over 60 percent of local newspapers, two national radio stations, and all six national television networks, the latter of which are the principal source of news for most Russians.
The Kremlin has used the media to paint Euromaidan protesters as neo-Nazi Fascists, the U.S. as a manipulative force, and rebels in eastern Ukraine as Russian-speakers fighting for self-determination.
Even now, the Russian government is taking further steps to enhance their control of information. Earlier this year, the Kremlin started to require bloggers with more than 3000 daily viewers to register as mass media. In the Russian parliament, Putin is currently seeking the right to cut Russia off from the global Internet in the event of an emergency. If the state stranglehold on media increases, it will only make it easier for Putin to maintain the current level of support.
The media has also been used to influence public opinion on the impact of sanctions. Summer headlines from the Metro newspaper in Moscow included: “Russians Think that the West is Afraid of Us,” “Russians are not Afraid of European and U.S. Sanctions,” and “Bodybuilders Stronger than Sanctions.”
Putin’s counter-sanctions, which, ironically, may have the greatest potential to negatively affect the well-being of average Russians in the short run, have also received positive spin. While many Russians have noticed price inflation, few seem concerned about the international isolation of Russia. The Russian embargo enacted in August on agricultural products from the E.U., North America, Norway, and Australia has been framed as an opportunity to boost the business of Russian firms as the Kremlin fills the supply gap through increased domestic production.
So far, the PR strategy has been successful. Putin’s personal approval rating had risen to 87 percent as of August 2014. But this rise in public opinion cannot be attributed only to the popularity of the annexation of Crimea or the support of Ukrainian rebels.
The events in Ukraine, Western sanctions, and the Russian response are not seen domestically as Russia’s tumble into international isolation, but rather a return to geopolitical relevance. Instead of yielding to the West in order to avoid the wrath of further punishment, Putin chose to counterstrike with sanctions of his own. Russia’s ability to implement an independent foreign policy, and act from an apparent position of strength, resonates positively with a large portion of the Russian population. For many, the economic impact of sanctions is tolerable in service of a greater cause: the resurgence of Russian strength.
In a trade-off between looking like a stronger Russia geopolitically and actually being one economically, Russians have given national image the upper hand. Putin’s approval rating is growing despite the deterioration of the economy.
If Russians fail to view the economic effects of sanctions as a significant problem, they will not force Putin to alter course in Ukraine. If prices remain high long enough, and the economy is hit hard enough, Russians may change their mind, but it is not likely to happen anytime soon.
It appears that Russian leadership and citizens have both signaled their priorities in a situation that pits power and patriotism against economic reality, a fact that Western policy-makers must keep in mind when determining their next move.