Expert says the Kremlin is worried about economic sanctions
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Former special assistant to the US Presidency William Courtney says Russia’s economy is taking a major hit amid the flurry of economic sanctions by Western countries over the Ukraine war. While the Kremlin appears to shrug and turn a blind eye to Russia’s economic reality, Russian citizens are taking the brunt of sanctions and have already seen their standard of living drop over the last few months. As a result, the new harsh economic reality has started to spark civil unrest in the country and provoked attempts to oust Vladimir Putin.
When asked about the chances of a regime change in Russia, Mr Courtney told Times Radio: “It’s too difficult to make predictions about these things.
“There does appear to be unrest in Moscow. For example, one of the top liberal economists is a university president there and has just been detained in what seems to be a politically motivated effort.
“So that could be a sign that the Kremlin, which is run by former KBG officers, is upset about the economic truth that economists are telling them about the damage to the economy.
“The economy has suffered and it’s going to suffer a lot more. This will have a direct impact on the living standards of Russians. Those are going down.
“They could go down a lot. And they’re already lower than they were before the Russian aggression in 2014 when the West opposed sanctions the first time.”
“So, regime change is likely to happen,” Mr Courtney said. “If it occurs, and no one knows, some combination of military factors, frustrations in Ukraine, and economic factors could lead to social and political unrest.”
As a sign of Russia’s crumbling economy, the Kremlin has defaulted on its foreign debt – a first since 1918. In total, Russia has failed to pay around $100million in interests in two bonds.
A US White House official said the sovereign default is a testament to the efficacy of Western economic sanctions.
“(It) situates just how strong the reactions are that the US, along with allies and partners, have taken, as well as how dramatic the impact has been on Russia’s economy,” a senior administration official told CNN on the sidelines of a G7 summit in Germany.
The Kremlin has so far denied any debt and instead pointed out how Western countries saw the sanctions backfiring on their own economy.
European countries are taking a major hit, especially with embargoes on Russian energy imports.
“The EU imported about 115 billion cubic metres of natural gas from Russia in 2021 – that is about 40 percent of the EU’s total gas consumption.
Despite the Kremlin’s claim that Russia’s economy is hardly impacted, some experts argue the sanctions may not have effects in the short term but will hurt in the long run.
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Russian political scientist Ilya Matveev told NPR: “If the goal is a quick and complete collapse of the Russian economy, then no, sanctions are not working because the Russian economy is still functioning. But if the goal is to weaken Russia economically over time, then sanctions are 100 percent working.”
A new report by Russia’s Federal State Statistics Service found that production has dropped in multiple sectors by 1.7 percent in May compared to the same month of 2021.
Russian Foreign Minister Sergey Lavrov even admitted he was taken aback by the scale of Western sanctions.
In a first admission of the economic pain from the Kremlin, he said: “no one could have predicted” Western sanctions could target the country’s central bank.
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