The Long-Term Impact of Sanctions on US-Russia Relations and the Russian Economy

Since the onset of tensions between the United States and Russia, the European Union, and other Western nations, the Russian economy has faced unprecedented challenges. This article delves into the long-term consequences of sanctions on Russia, including its economic standing, military capabilities, and international relations.

Crashing Ruble and Economic Collapse

The Russian Ruble has suffered a significant depreciation, making it far less viable as an international currency. The Foreign Export income that the country earned from selling rich energy and mineral resources internationally has plummeted to insignificant levels. This loss in export income has hindered the Russian government's ability to fund its budget, and even with potential easing or lifting of sanctions, it is unlikely that Western nations will return to mass purchases of Russian raw materials. Western countries have shifted to alternative energy sources, marking a permanent shift in the energy market dynamics.

Strained Military Capabilities and Economic Deficits

The Russian military's finances have been severely strained. As a result of their costly and controversial war in Ukraine, Russia has lost approximately 80% of its high-tech and modern military equipment. Russian arms factories are struggling to replace these losses, particularly as high-tech components are unavailable due to Western sanctions. Russia's economic deficit has exacerbated this situation, with financial reserves exhausted, increased taxation, and a crushed economy unable to cover the deficit. The country is facing rapidly increasing inflation, which is poised to cause a catastrophic collapse of the economy, similar to the economic crisis that occurred in 1991.

Government Services and Quality of Life

The Russian government has declared a war footing for the economy, resulting in the reduction of essential government services to the people. The overall standard of living for all Russians is declining, characterized by increasing poverty, inability to afford rapidly rising prices, and shortages of basic necessities. Queues for basic food items, health services, and educational resources have become common. Essential utilities and infrastructure are failing, exacerbating the living conditions for Russian citizens.

Technological Debt and International Isolation

Much of Russia's economy relies on modern Western high technology, much of which has been sanctioned. This has led to the crippling or loss of capabilities in various industries. Massive companies like Gazprom, which have been crucial to Russia's energy sector, are now on the brink of bankruptcy and failure. The Russian government's aggressive actions in Ukraine have further isolated the country, leading to a significant loss of access to 50% of the global economy. This loss not only includes the West's sophisticated, modern technology, goods, and services but also the broader international community's economic cooperation.

Impact on International Relations

The conflict in Ukraine and the subsequent sanctions have had a profound impact on international relations. The West, including the United States and Europe, has progressively increased its economic sanctions and isolation efforts, aimed at crippling Russia's capacity to wage aggressive wars. While the goal is not to destroy the Russian economy or destabilize the Russian Federation, the consequences have been severe. Russia has lost significant access to the global economy, including Western markets and technology, which will not return to pre-2014 levels.

Conclusion

The question remains: What has Russia gained from its military actions in Ukraine? The near-unanimous condemnation of Russia by the international community, including a near-unanimous United Nations vote, indicates that the aggressive behavior has been met with global opposition. Peaceful coexistence, vibrant trade, open borders, good relations, and economic development were the goals that Russia has permanently lost. The economic and political fallout from the conflicts will shape Russia's future for years to come.