Have Western Sanctions On Russia Failed?

By David Pinsen of Portfolio Armor
Monday, August 22, 2022 5:45 AM EST

An anonymous edit of Stonetoss’s famous “Burgers?” cartoon. 

Reassessing Sanctions On Russia

In a post in March (Sanctioning Ourselves), I questioned the efficacy of Western sanctions on Russia.

And in a subsequent post in April, I wrote about how the West had likely underestimated the size and resiliency of the Russian economy.

Now, The National Interest has a piece by Mark Episkopos asking whether Western sanctions on Russia have failed. Episkopos starts by referring to a speech by Hungarian Prime Minister Viktor Orbán saying that, in fact, they have:

Hungarian prime minister Viktor Orban claimed in a speech last month that the European Union’s sanctions strategy against Russia has failed. “A new strategy is needed which should focus on peace talks and drafting a good peace proposal … instead of winning the war,” he said. Orban said the West’s strategy was built on four pillars—that Ukraine can win a war against Russia with NATO backing, that sanctions will hurt Russia more than Europe, that the rest of the world will support Western punitive measures against Russia, and that sanctions will critically weaken Russia. “We are sitting in a car that has a puncture in all four tires. It is absolutely clear that the war cannot be won in this way,” Orban said.


Western Brands Are Replaceable

Episkopos details some reasons why the sanctions on Russia haven’t had their intended impact. One reason is that Western consumer products such as Apple, Inc. (AAPL) iPhones are still available in Russia, thanks to gray market imports from friendly neighboring third countries such as Kazakhstan.

Another reason is that Western brands such as McDonald’s Corporation (MCD) and Starbucks, Inc. (SBUX) are easily replaceable. The new Stars Coffee is the latest example (though one wit on Twitter suggested the Russians should have called their replacement “Tsarbucks”).

But Oil Isn’t

The main reason the sanctions have failed, though, is that non-Western countries, including the most populous countries in the world, China and India, have happily continued to buy oil and other Russian exports.

Meanwhile, the sanctions appear to have backfired on the West, and Germany in particular.

With this in mind, it’s interesting to look back on Mike Whitney’s post from shortly before Russia invaded Ukraine. 

Whitney may have overstated the case a bit, but his opening quote is the opposite:

“The primordial interest of the United States, over which for centuries we have fought wars– the First, the Second and Cold Wars– has been the relationship between Germany and Russia, because united there, they’re the only force that could threaten us. And to make sure that that doesn’t happen.” George Friedman, STRATFOR CEO at The Chicago Council on Foreign Affairs


In Case You Missed It

We posted a brief update on our last Bed Bath & Beyond post on our blog. Brief updates that aren't long enough to warrant posts here will appear there going forward. 

 

More By This Author:

Blood Bath & Beyond
The Market's Up, The VIX Is Down, But Risks Abound
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