Who is impacted by the Western sanctions against Russia and how?

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Photo: Raskrinkavanje.ba

The manipulative narrative about the sanctions the West imposed on Russia being ineffective and harmful to those who impose them is one of the most represented in the Bosnian and Western Balkans media since the beginning of the Russian invasion.

Just before Christmas 2022, a bizarre video trended in the media and on social networks around the world. In the video, Russia Today, a media channel controlled by the Russian government, “wished” Europe a “Merry Christmas”. The video shows a family in Europe that has no electricity, heating or food for Christmas. At the height of the war in Ukraine, RT wished Europeans a “happy ‘anti-Russian Christmas’” with this video.

This cynical video stems from one of the most widely represented manipulative narratives that are part of Russian propaganda about the war in Ukraine – that the sanctions imposed by the West on Russia do not actually affect the country, but rather harm the West which imposed them.

Before analyzing this narrative, we will look into the sanctions that have been imposed on Russia, as well as the countermeasures that Russia has taken as a result. After launching the invasion of Ukraine, the European Union, the USA and Great Britain, in coordination with other partners, such as the G7 countries, the World Bank, the EBRD, the OECD and others, introduced a series of sanctions against Russia. A set of sanctions was introduced back in 2014 due to the invasion of Crimea, but the sanctions introduced in 2022 were much more extensive and serious.

Sanctions have been introduced in several areas: import and export of goods, with special sanctions related to oil and gas (energy sector), transport, sanctions imposed on individuals and individual institutions, sanctions in the banking and financial sector, termination of services to Russia and its citizens, and sanctions against the media.

Sanctions related to the import and export of goods, when it comes to banning exports from Russia, mainly refer to oil, ores and luxury goods. When it comes to imports into Russia, the list includes high-tech products, industrial and all military equipment, as well as all transport equipment or equipment that can be used for both civilian and military purposes. It is important to emphasize that these prohibitions do not apply to goods whose deficit can threaten the life of the population, such as pharmacological and agricultural products, and food. Also, with certain exceptions, the transport of people and goods by Russian means of transport is prohibited, whether the transport was by land, sea or air.

So far, 1,386 individuals and 171 institutions/entities have been sanctioned by having their assets frozen and travel prohibited (for individuals and officials of sanctioned legal entities) to the countries that have introduced these sanctions. Significant sanctions were introduced in the financial and banking sector – access to the SWIFT payment system was terminated for Russian and Belarusian banks; transactions with the Central Bank of the Russian Federation were prohibited and all foreign currency reserves of Russian state banks were frozen. The sale or any transport of euro banknotes to Russia is disabled. Architectural, engineering, IT, legal, marketing, banking, and financial, as well as all services related to the crypto business, are blocked for Russia and individuals in Russia. Finally, a ban on broadcasting and issuing licenses was introduced for a number of Russian media, mostly state media or those associated with the ruling party. In addition, a number of international companies and businesses have stopped their operations in Russia and withdrawn from the Russian market.

Russia responded to the sanctions with countermeasures and sanctions against “foe” states, that is, the states that imposed sanctions. The most important of these sanctions are in the financial and economic sectors, as well as in the energy, transport and import/export sectors. Economic sanctions are mainly aimed at making business in Russia more difficult for companies from countries that have imposed sanctions on Russia, while financial sanctions are mainly aimed at the use of the ruble as currency in all transactions, especially when paying for gas and requiring the conversion of foreign currencies into rubles by all parties. As far as transport is concerned, restrictions have been introduced on access to Russian ports and waters, and restrictions related to import and export mainly concern the energy and food sectors.

In the days and months before the invasion and the introduction of sanctions, the effectiveness of the previous sanctions was questioned in various ways. Thus, for example, the spokesman of the President of Turkey, Ibrahim Kalin, stated just three days before the invasion that the sanctions are useless and that they only delay the solution to the problem, while the day before the invasion, Time magazine published an article in which it was claimed that the sanctions will have no effect because the economic connection between Europe and Russia is too strong.

Immediately after the invasion of Ukraine and the introduction of the first round of sanctions, the potential harm to those who imposed them began to be emphasized. This was a change in narrative from the one that had been largely dominant since 2014, which focused on sanctions having little or no effect, while the narrative of harm to sanctioning countries appeared sporadically.

Anatoly Antonov, the ambassador of Russia to the USA, immediately reacted to the sanctions, emphasizing that the citizens of the United States will also feel the consequences. In the March 31, 2022 announcement of the Ministry of Foreign Affairs of the Russian Federation, it is stated that the policy of EU sanctions against Russia is out of line and Brussels is accused of influencing the strengthening of “Russophobic and neo-Nazi sentiment in Ukraine”. It is also stated that the actions of the EU, according to the claims of this ministry, will threaten “the well-being and safety of its own citizens, as well as the stability of the global financial and economic system”.

Besides the harmfulness of sanctions for the countries that introduced them, several basic elements have appeared in the narrative related to sanctions against Russia since 2014. Among them, the glorification of the strength and importance of the Russian state, army and history stands out, as opposed to the image of Europe as weak, disunited, and economically and energetically dependent on Russia. Moreover, there were somewhat more specific claims about Europe facing a cold winter and being unable to survive without Russian gas, the sanctions not harming the ruble and the financial system of Russia, and the real reasons for global inflation being justified by saying that the crisis is a consequence of the invasion. In addition to this, there was also a set of claims that emphasized Russia’s resilience in this situation, such as claims that Russia can compensate for the consequences of sanctions by turning to other markets, that in a short time it can replace all brands and products that have left the Russian market, and that the sanctions will not weaken Russia’s combat readiness and will only strengthen Putin’s position.

How did this narrative appear in the Bosnian and regional media?

While analyzing the claims “proving” this narrative, Raskrinkavanje often found subtle manipulations rather than outright fake news. Those who are trying to convince the public that the sanctions imposed on Russia do not affect this country, but are affecting Europe, use more sophisticated manipulation techniques to achieve this goal, which are generally harder to spot than clear fabrications of incorrect information.

While the sources of some of these manipulations can be traced back to Russia itself and media such as RT (formerly Russia Today) that spread state propaganda, some were created by the media from the BCS language region, such as, for example, claims about the suspension of transit of Russian gas to Europe via Ukraine. Elements of the narrative about the impact of the sanctions imposed against Russia on the West were rated by Raskrinkavanje in 122 media articles and posts on social networks. Three such articles were published by an established media from neighbouring Serbia, Politika, while two were published by news websites Radio Sarajevo, Buka and 072 info from Bosnia and Herzegovina, and Novosti and Republika from Serbia. Hence, among the media in which this narrative appeared, no special regularity stands out when it comes to ideological or other orientation.

Claims that characterize this narrative usually also contain “predictions” whose verification requires the passage of time, that is, they are difficult or impossible to verify. Such articles, therefore, were not often the subject of Raskrinkavanje’s analyses. Additional research and searches, however, showed that it was a topic that was intensively covered by domestic and regional media, especially those that featured other pro-Russian and anti-Ukrainian narratives. ATV Banja Luka, for example, published about 200 articles on the subject of sanctions. Glas Srpske had about 100 articles, while Nezavisne novine contributed around 120 articles on this topic. Among the regional media, those from Serbia are leading the way. For instance, from February 2022 until the end of the year, Sputnik Srbija had over 200 articles with the tag “sanctions”, Alo had almost 400, Informer about 100, while Kurir published about 130 articles dealing with the topic of sanctions against Russia.

Is it true that the sanctions do not affect Russia?

Within the narrative about the impact of the sanctions imposed on Russia, it is simultaneously claimed that the sanctions do not harm Russia itself and that they are practically disastrous for Europe which imposes them. According to the claims of Russian propagandists, Russia itself does not suffer any significant consequences of the sanctions – moreover, it is even stronger.

Nevertheless, the sanctions imposed on Russia have numerous implications for the lives of the citizens of this country. According to research conducted by the Levada-Center, a Russian non-governmental research organization, 39% of Russian citizens expressed some degree of concern about the sanctions imposed on Russia by the West. The Levada-Center conducted this research in November 2022, on a representative sample of 1,601 people over the age of 18, from urban and rural populations throughout the Russian Federation. 30% of the surveyed population said that sanctions do not worry them at all or that sanctions do not worry them excessively.

“The most worried about the sanctions are older respondents (47% among respondents aged 55 and over), as well as people with low income, who feel their economic vulnerability and who should have been affected first by the increase in prices caused by Western sanctions”, the Levada-Center stated. In addition, the citizens of Moscow are also particularly worried, where 43% of respondents expressed a certain degree of concern about the sanctions, since they are more significantly involved in global economic currents, and felt the departure of certain foreign brands and the shortage of imported products more quickly and strongly. 

Nevertheless, the majority of Russian citizens, 81% of them, say that the sanctions did not cause significant problems. Those who did point out that they encountered problems due to the sanctions primarily pointed out price increases (32%), shortages of certain products, spare parts and medicines (26%) and bans on travel abroad, suspension of flights and the like (11%).

Levada-Center has also conducted this research earlier. According to data collected at the end of March 2022, a month after the start of the invasion when certain sanctions were already introduced, the percentage of those who said they were somewhat or very worried about the sanctions was 46%, slightly higher than in November. In fact, according to Levada-Center research, the attitude of citizens towards sanctions was mostly very similar throughout 2022.

The sanctions imposed by the West on Russia since 2014 were significantly milder than those imposed after the invasion in February 2022. Research by the Levada-Center shows that the concern of Russian citizens about the sanctions was at almost the same level as after the new, harshest wave of sanctions. Namely, according to the data for February 2020, 36% of the respondents stated that they were not overly concerned, while 31% stated that they were not at all concerned about the sanctions. Moreover, when the results of this organization’s research from the end of 2014 to 2022 are compared, it can be seen that the percentages of concern were consistently quite equal – approximately 40% of respondents were concerned to some extent, while approximately 60% stated that they were not. So, almost half of the population in Russia is worried about the sanctions imposed on their country by the West, and they point out the numerous real consequences they feel because of the sanctions.

“Although the sanctions imposed by the West on Russia have existed since 2014, this round of sanctions was much more difficult and its results are more visible”, Denis Volkov, director of the Levada-Center, told Raskrinkavanje. Almost a year after the sanctions were introduced, people are used to them and are slowly adapting to them. As Volkov explains, the biggest shock for the residents of Russia was when the sanctions were just introduced in the spring. The impact of the sanctions was felt by younger, wealthier individuals in larger cities, primarily their economic aspect, since they are the primary consumers of goods imported from the West, they are used to travelling abroad, and some of them have had their investments blocked abroad.

On the other hand, the poorer population have felt the sanctions through inflation, because they do not have enough resources to adapt to the new situation. According to Volkov, the prices initially rose significantly in March, but gradually decreased during the year, as the Russian economy adjusted more and more, and with it, so did the people. Due to the activities of this research organization, in 2016, the Russian Ministry of Justice placed the Levada-Center on the list of non-governmental organizations that “act as foreign agents”.

Attitudes about sanctions largely go hand in hand with the patriotic feelings of individuals. Thus, a significant part of the Russian population holds the view that this will be an opportunity for Russia to further develop its industry. “Regular people see this as an opportunity for the development of Russian industry and goods”, said Volkov, emphasizing, however, that this attitude is not equally present in all parts of Russia, nor about all branches of the economy. For example, when it comes to food, the population generally believes that Russia can adequately respond to sanctions and adapt to them. On the other hand, people are highly concerned when it comes to products such as cars, electronics and medicine.

Raskrinkavanje contacted economist Nikolay Kulbaka, a professor at the Russian Presidential Academy of National Economy and Public Administration, with a question about the economic aspect of the impact of sanctions on Russia. As he pointed out, so far, the biggest losses caused by the sanctions are borne by the middle class in big cities because their standard of living suffers the most consequences. “Inflation certainly affects all segments of the population. But in the lower price segment, it is smaller. However, the poor have no additional security. More than 60% of the Russian population has no savings. Among the companies that suffer the most are high-tech ones, which are critically dependent on the import of raw materials and components”, says Kulbaka.

When it comes to the business community, there are two kinds of positions. Volkov points out that “the sanctions suit part of the business community, because they have less competition, while those connected to foreign markets, such as start-up companies, are not in a good position now”.

“The blockage of financial flow is felt at several levels, but not in a significant percentage of the population. Only a small percentage of the population had savings in foreign currency, around 15% at most, while the impossibility of transferring money also creates a problem”, said Volkov. Also, only about 20% of Russian citizens have the experience of visiting Western countries – most of them have never travelled there, so travel bans do not particularly worry them. Russian citizens who left the country when the war started had difficulties with money transactions since Visa and MasterCard stopped doing business with Russian banks. This aspect is also difficult for those operating from Russia because the transaction of money in and out of Russia is much more difficult.

According to Volkov, the majority of the population of Russia does not fully understand the potential long-term effects of sanctions. They are ready to adapt to the current situation because there is no choice, especially since the effects of the sanctions themselves are not that dramatic. Part of the Russian public, Volkov explains, believes that Western companies, which are leaving Russia following the sanctions, will want to return in a few years, and that it will be up to Russia to decide whether it wants to allow it. This, as he states, is an attitude that they often encountered in their research through various focus groups. Of course, as has been pointed out, attitudes about the impact of sanctions on the West also depend on attitudes towards the Russian regime itself. Those who do not support the current government are more sceptical of Russia’s ability to influence the world in this way. “Most of the people don’t care, they have their own lives and problems and they don’t care about the West to that extent”, concludes Volkov.

We asked Ilya Bar, a journalist and fact-checker from Russia, about the attitude of Russian citizens toward the imposed sanctions. As he stated in his response, Russian residents generally believe that the real practical consequences of the sanctions imposed on Russia by the West “are not as visible as the West wanted them to be”. Life is getting worse, but very slowly, which makes such changes almost imperceptible. “People who know the Russian economy say that the real deep effect will be visible only in three to four years”, said Bar.

Data on the effects of sanctions are difficult to obtain, and a significant number of them will become more clear only after a certain time. There are fewer and fewer official data on the state of the Russian economy and they are increasingly unavailable. Some data that were previously available almost on a monthly basis are now no longer published – for example, data on foreign trade, imports and exports, monthly oil and gas production, financial data of large companies, data of the Central Bank on the monetary base, data on direct foreign investments, airlines and passenger numbers and others. The unavailability and unverifiability of data facilitate the creation of speculative narratives about the stability of the Russian economy. However, there is a fair consensus in the expert community that Russia has been affected by the sanctions much more strongly than the reports in the Russian media admit.

On the other side of this narrative is the claim that the West itself is suffering significant consequences of the sanctions imposed on Russia, taking into account the demand for Russia’s natural resources, primarily gas.

Did the West, which imposed the sanctions, suffer more?

Claims about the scale of the crisis that Europe was facing due to sanctions were shared around the world. This can be seen from the database featuring analyses of disinformation related to the Russian invasion, created within Poynter’s International Fact-Checking Network (IFCN). On the Ukraine Facts website, there is also a folder with the analyses published by verified members of this network from different countries, based on which it can be concluded that certain disinformation is shared in the same or similar form in many parts of the world, including various claims that “prove” this and similar narratives.

For example, a seven-year-old video, which was claimed to show a conflict over a bottle of cooking oil between several people in a supermarket in France, was spread in the Georgian and Bulgarian media and on social networks, as “proof” that there are shortages due to the introduction of sanctions against Russia. In the Russian media, there was an incorrect claim that reusable toilet paper was invented in the United Kingdom due to “anti-Russian sanctions”. In Georgia, it was also claimed that food prices in the United Kingdom had increased eightfold, and in Greece, disinformation was spread about the closure of 2,234 gas stations in France – all because of the alleged impact of sanctions.

However, as already said, the manipulations used to support this narrative are in many cases much more subtle. Thus, it was claimed in the German and Dutch media and on social networks that the German Vice-Chancellor and Federal Minister for Economic Affairs and Climate Action, Robert Habeck, asserted in a speech that the West would maintain the sanctions imposed on Russia “even at the cost of losing 100,000 lives”. Habeck actually stated his opinion that the Russian regime is willing to sacrifice as many lives to get the sanctions lifted, but his statement was manipulatively cut and presented out of context necessary to fully understand it. These and similar claims are used to point to the alleged crisis in Europe caused by sanctions and Russian countermeasures.

The narrative about Europe’s inability to deal with the consequences of its own sanctions was not absent in the media in the BCS language region either. Dozens of media in the region published the claim that the European Union faces “freezing” because Ukraine has allegedly suspended the transit of Russian gas to Europe. In reality, transit was suspended through one of the points, while the others continued to function normally.

To spread panic due to Europe’s alleged dependence on Russian gas, the incorrect claim that Russian Gazprom published a video mocking Europe and announcing an “ice age” was also shared. It was published by almost 80 media in the region, as well as a large number of Dutch and Lithuanian media. These claims followed up on the claims of Russian officials that the sanctions imposed on Russia resulted in technical problems that prevented the delivery of part of the gas to European countries. The video, however, had nothing to do with Gazprom, as confirmed by its author.

These and similar claims are manipulative and fundamentally incorrect. Certainly, Europe feels certain consequences caused by the sanctions and Russia’s countermeasures. This, however, does not mean that it is threatened by freezing, nor that there have been major shortages.

We also asked professor Kulbaka whether the sanctions affected Europe or Russia more. He believes that the sanctions hit Russia harder, but the perception of a negative impact on Europe is stronger in European countries: “Sanctions, of course, hit Russia harder, but from the point of view of the information influence (public perception), for the European public the consequences on the EU are more noticeable. The reason is that for the EU countries, the quality of life of their citizens is an important factor, and the free press makes it possible to discuss all of this”, said Kulbaka. “There is almost no discussion in the Russian public about the impact of sanctions on Russia. There simply isn’t enough media freedom for something like that. There are very few independent analysts, who as a rule can only speak in a small number of media outlets, and for a long time many of the independent media outlets have been working (only) outside the borders of Russia”, said Kulbaka.

Although the sanctions clearly have an impact on Russia, some claim otherwise. Claims that the sanctions do not cause any damage to Russia and its financial system were “proved” by statements that the Russian ruble is the “strongest currency” in the world. Such sensationalistic and incomplete allegations, which were analyzed by fact-checking projects from Georgia, Ukraine and the United States of America, were taken from the Russian media by numerous regional web portals. The fact is that the fictitious “strength” of the ruble is maintained by restrictive measures, where citizens of Russia can’t exchange the ruble for other currencies, and importers are forced to do business in rubles. If you look at the total volume of ruble exchange, you can see that it has decreased significantly since March 2022 and that it is only 20% of the volume from February. It can be concluded that a large part of the exchange takes place on the black market, where the price of the ruble is significantly lower.

However, according to official statistics, the drop in consumer demand in Russia was more than 10%, which, Kulbaka explains, is an excellent indicator of the impact of sanctions on the Russian economy. Inflation is also significantly higher in Russia than in Europe.

“The main consequences of the sanctions are that Russia lags at least 5-10 years in economic development. This especially applies to the high-tech industry, which developed primarily through interaction with foreign partners. Almost all companies involved in international supply chains experienced serious shocks. One day, of course, Russia will start cooperating with European countries again, but a lot will have to be done from the beginning. The European economy is moving forward, and new technologies are emerging that are no longer applicable in Russia”, Kulbaka told us.

Many economic analysts agree that it is the long-term consequences of the sanctions that will potentially have a major impact on Russia. As Kulbaka stated, “Russia needed the conflict over Ukraine, among other things, to freeze the “green transition” that Europe started, which was supposed to break Europe’s energy dependence on Russia to a large extent. But the hopes of the Russian leaders did not bear fruit. The attack on Ukraine prompted Europe to accelerate its energy diversification. Therefore, even after the lifting of sanctions, Russia will have to operate in a more competitive environment in Europe, which will lead to lower profits for Russian energy companies”.

Ilya Ber, the editor of the fact-checking site “Provereno”, confirmed this and pointed out that this propaganda narrative focuses on the impact of sanctions on Europe itself for a reason. “Propagandists do not talk about internal Russian problems. Their narrative is — European sanctions primarily affect Europe itself”, says Ber.

Since the beginning of the invasion, Ber’s fact-checking platform has analyzed a series of disinformation and manipulations that in some way rely on the aforementioned narrative. Thus, among other things, it was falsely claimed in Russia that German crematoria cremate five bodies at the same time due to a lack of gas, or that the Italian politician Paolo Savone said that he was “sure that sanctions were imposed on Russia” until he made a stop at a gas station. Several other similar manipulations were also spread by the Russian media and on social networks and analyzed by the platform Provereno (1, 2, 3). 

From the beginning of the invasion, experts explained that Russia skillfully uses its resources, including food, as a weapon in war. “There is no doubt that food is used as a weapon of war in many different ways”, said David Beasley, World Food Program Director. At the same time, Russia often presents its actions as a response or a direct consequence of the sanctions imposed on it by the West. While Russian officials claim that food shortages are a direct and exclusive consequence of the sanctions, trying to shift the blame to the West, diametrically opposed narratives have also developed in the circles of conspiracy theorists. In a complete reversal of theses, there were even claims on social networks that the global increase in prices or shortages of certain products are not caused by sanctions, countermeasures, or the inability of Ukraine to produce and export certain raw materials, and that the real causes of the crisis are hidden behind such “excuses”.

Propagandists constantly find new “evidence” to support different versions of the narrative about the impact of sanctions on Russia and the West, often manipulating and misinforming the public. Sanctions, as the series of facts and statements of independent experts clearly show, affect Russia and have a significant effect, especially when we talk about certain parts of the population, as well as certain sectors of the economy. The extent of that influence is still not entirely clear, partly due to the lack and conscious concealment of certain indicators and the absence of real democratic dialogue, and partly because, according to experts, the full impact will only be seen later in the years to come.

(Darko Brkan and Marija Ćosić, Raskrinkavanje.ba)