7 ms·

Western sanctions will eventually impair Russia’s economy

14 points by acqbu 4y ago

acqbu 4y ago
https://archive.ph/jqiXz https://archive.ph/jqiXz
shrubble 4y ago
People who remember all the grey-market Cisco gear they could buy that came from China, might well be skeptical that Russia has been truly prevented from buying chips that are made in China...
- mamonster 4y ago
  They aren't fully fleshed out, but alternative import networks are already set up at least for some products, for example German cars are slowly coming back. You simply import to Azerbaijan(became even more popular as gas deal makes it less likely to be shut off) or Turkey(don't listen to Erdogan rhetoric on Crimea IMO, he is playing both sides really well as usual), and from there on out reship it to Russia with no problems. I don't know about chips, but European products will basically come back, but be more expensive as they now have to take detours of varying lengths.
exabrial 4y ago
It's sad to see a lot of people have moved on from the Ukraine war, just as Russia hoped would happen. No doubt their propaganda arm is busy stirring the pot on social media attempting to provoke outrage elsewhere.
- kylehotchkiss 4y ago
  I’m able (and interested) in keeping up on daily basis because the news I follow has done a decent job keeping it accessible. Also blogs like the war zone have had interesting-to-me analysis. Biden’s done a decent job keeping the stories in the spotlight and trying to keep people engaged too. The news the past 6 weeks with HIMARS etc and some Ukraine progress on slowing Russia’s advance has made it more interesting and while this is not a war that ends soon, morally I feel somewhat better Russia never achieved its original goals (and can barely archive the new ones)
- midislack 4y ago
  How does it benefit the common person? Also the Afghan rout cooled people off.
Kukumber 4y ago
What's up with that western obsession to "impair Russia's economy"?
- whythre 4y ago
  Because it beats the hell out of escalation and the specter of nuclear exchange.
  - Kukumber 4y ago
    Nuclear exchange? Ukraine doesn't have nuclear weapons And it is Russia's neighbor, i doubt Russians want a radioactive cloud above them
    - kadoban 4y ago
      If Russia is left unchecked, the next targets after Ukraine are even more obviously European, and many of those have nukes or are closer to countries that have nukes than Ukraine is/was.
      - Kukumber 4y ago
        Reverse the role, open a map and look at the NATO expansion and US military bases that spread everywhere, full of long range missiles Now, how would you react? specially when they enter in an economy war with you, forcing everyone to comply with their sanctions https://www.reuters.com/article/us-russia-nato-putin-idUSKBN1K92KA https://www.reuters.com/article/us-russia-nato-putin-idUSKBN...
        kadoban 4y ago
        > Reverse the role, open a map and look at the NATO expansion and US military bases that spread everywhere, full of long range missiles NATO is a defensive compact, not a country that's expanding. > full of long range missiles These being long range means it really doesn't matter, right? Russia's government could try not being such shitheads if they want to be left alone. Their current war is just expanding NATO more than anything in decades. Invading your neighbors has a way of driving people away, funny that.
PaulHoule 4y ago
An obvious consequence of the war is that Russia is going to lose ground as an arms vendor. (1) As Russia rebuilds its military, production capacity will be diverted from exports (2) Russian arms contain western sourced chips. For instance the microprocessor used in the S-400 missile system is made in Taiwan. Sanctions will disrupt the supply chain for military systems. (3) Russian weapons have underperformed in the war. You'd have to be crazy to buy any of the T-72 derivatives (T-80, T-90, ...) On the other hand the Javelin looks good, HIMARS looks good. The S-300/S-400 missile system is the wildcard in that it has been basically effective but is fantastically expensive so that it is a prime target for the enemy. Ukraine inherited them from the Soviet Union but now they are largely depleted and are being replaced with NASMAS https://en.wikipedia.org/wiki/NASAMS https://en.wikipedia.org/wiki/NASAMS which is a very low-cost weapon in comparison. On paper NASAMS underperforms the S-300 in terms of range, altitude, and capability against ballistic missile. On the other hand NASAMS terminal guidance is better against cruise missile and other airbreathing targets so it has a very high hit rate. NATO member Turkey bought the S-400 because the Patriot sucks, India is another major "non-aligned" S-400 buyer. That is an export business endangered by this war.
- splintercell 4y ago
  I feel like this suffers status quo bias. 1. production capacity is degraded by marketing goes up, their products which have now show real benefit will be higher in demand. Whether it can compensate fully for the reduced capacity, only time will tell. 2. Russia can try (and focus) on building weapons without western chips. They will obviously not as advanced, but then they weren't really known for advanced high tech weaponry to begin with. 3. Existing machinery underperfomed, but now investment in tested weaponry will be made. I am not trying to make a really hard case for Russian perseverance, but to me your argument sounds like someone saying "you messed with the son of the farmer, lets see how you celebrate your birthday without eggs to make the cake".
- AftHurrahWinch 4y ago
  You make good, pragmatic points, but I think international military procurement is often drive more by geopolitics than pragmatism. There will be nations who buy Russian garbage at unreasonable price and unreasonable delivery schedule.
Someone 4y ago
And Russian sanctions will eventually impair the EU economy. The question is which side will give in earlier. The EU has a disadvantage there in that it regularly holds elections, and when they happen the ballooning energy prices may cause large swings. It will be interesting to see what happens a month from now in Italy, for example (https://en.wikipedia.org/wiki/2022_Italian_general_election https://en.wikipedia.org/wiki/2022_Italian_general_election) I’m not sure what will happen.
- blub 4y ago
  I've read about the Irish and French governments recently claiming that 5-10 years of economic "difficulties" can be expected and that the era of prosperity is likely over. I guess we'll know more come this and next winter. But there's also Ukraine's economy: they are currently wholly dependent on the IMF and Western backers in order to keep the lights on. In the war they are completely dependent on Western weapons deliveries. Ukraine has essentially ceased to exist as an independent country except on paper.
grnmamba 4y ago
As opposed to the record-high energy prices and inflation in the eurozone? This article is lying by omission. https://markets.businessinsider.com/news/commodities/europe-energy-crisis-germay-france-power-prices-record-highs-russia-2022-8?op=1 https://markets.businessinsider.com/news/commodities/europe-...
midislack 4y ago
fulafel 4y ago
The likely more significant effect (in terms of human lives saved and large scale famines, droughts, wars, opulation displacements etc avoided) of the sanctions is to accelerate the fossil fuels rampdown. But not surprising that Economist ignores this.

14 points by acqbu 4y ago

https://archive.ph/jqiXz https://archive.ph/jqiXz

People who remember all the grey-market Cisco gear they could buy that came from China, might well be skeptical that Russia has been truly prevented from buying chips that are made in China...

mamonster 4y ago
They aren't fully fleshed out, but alternative import networks are already set up at least for some products, for example German cars are slowly coming back. You simply import to Azerbaijan(became even more popular as gas deal makes it less likely to be shut off) or Turkey(don't listen to Erdogan rhetoric on Crimea IMO, he is playing both sides really well as usual), and from there on out reship it to Russia with no problems. I don't know about chips, but European products will basically come back, but be more expensive as they now have to take detours of varying lengths.

exabrial 4y ago

It's sad to see a lot of people have moved on from the Ukraine war, just as Russia hoped would happen. No doubt their propaganda arm is busy stirring the pot on social media attempting to provoke outrage elsewhere.

kylehotchkiss 4y ago
I’m able (and interested) in keeping up on daily basis because the news I follow has done a decent job keeping it accessible. Also blogs like the war zone have had interesting-to-me analysis. Biden’s done a decent job keeping the stories in the spotlight and trying to keep people engaged too. The news the past 6 weeks with HIMARS etc and some Ukraine progress on slowing Russia’s advance has made it more interesting and while this is not a war that ends soon, morally I feel somewhat better Russia never achieved its original goals (and can barely archive the new ones)
midislack 4y ago
How does it benefit the common person? Also the Afghan rout cooled people off.

Kukumber 4y ago

What's up with that western obsession to "impair Russia's economy"?

whythre 4y ago
Because it beats the hell out of escalation and the specter of nuclear exchange.
- Kukumber 4y ago
  Nuclear exchange? Ukraine doesn't have nuclear weapons And it is Russia's neighbor, i doubt Russians want a radioactive cloud above them
  - kadoban 4y ago
    If Russia is left unchecked, the next targets after Ukraine are even more obviously European, and many of those have nukes or are closer to countries that have nukes than Ukraine is/was.
    - Kukumber 4y ago
      Reverse the role, open a map and look at the NATO expansion and US military bases that spread everywhere, full of long range missiles Now, how would you react? specially when they enter in an economy war with you, forcing everyone to comply with their sanctions https://www.reuters.com/article/us-russia-nato-putin-idUSKBN1K92KA https://www.reuters.com/article/us-russia-nato-putin-idUSKBN...
      - kadoban 4y ago
        > Reverse the role, open a map and look at the NATO expansion and US military bases that spread everywhere, full of long range missiles NATO is a defensive compact, not a country that's expanding. > full of long range missiles These being long range means it really doesn't matter, right? Russia's government could try not being such shitheads if they want to be left alone. Their current war is just expanding NATO more than anything in decades. Invading your neighbors has a way of driving people away, funny that.

PaulHoule 4y ago

An obvious consequence of the war is that Russia is going to lose ground as an arms vendor. (1) As Russia rebuilds its military, production capacity will be diverted from exports (2) Russian arms contain western sourced chips. For instance the microprocessor used in the S-400 missile system is made in Taiwan. Sanctions will disrupt the supply chain for military systems. (3) Russian weapons have underperformed in the war. You'd have to be crazy to buy any of the T-72 derivatives (T-80, T-90, ...) On the other hand the Javelin looks good, HIMARS looks good. The S-300/S-400 missile system is the wildcard in that it has been basically effective but is fantastically expensive so that it is a prime target for the enemy. Ukraine inherited them from the Soviet Union but now they are largely depleted and are being replaced with NASMAS https://en.wikipedia.org/wiki/NASAMS https://en.wikipedia.org/wiki/NASAMS which is a very low-cost weapon in comparison. On paper NASAMS underperforms the S-300 in terms of range, altitude, and capability against ballistic missile. On the other hand NASAMS terminal guidance is better against cruise missile and other airbreathing targets so it has a very high hit rate. NATO member Turkey bought the S-400 because the Patriot sucks, India is another major "non-aligned" S-400 buyer. That is an export business endangered by this war.

splintercell 4y ago
I feel like this suffers status quo bias. 1. production capacity is degraded by marketing goes up, their products which have now show real benefit will be higher in demand. Whether it can compensate fully for the reduced capacity, only time will tell. 2. Russia can try (and focus) on building weapons without western chips. They will obviously not as advanced, but then they weren't really known for advanced high tech weaponry to begin with. 3. Existing machinery underperfomed, but now investment in tested weaponry will be made. I am not trying to make a really hard case for Russian perseverance, but to me your argument sounds like someone saying "you messed with the son of the farmer, lets see how you celebrate your birthday without eggs to make the cake".
AftHurrahWinch 4y ago
You make good, pragmatic points, but I think international military procurement is often drive more by geopolitics than pragmatism. There will be nations who buy Russian garbage at unreasonable price and unreasonable delivery schedule.

Someone 4y ago

And Russian sanctions will eventually impair the EU economy. The question is which side will give in earlier. The EU has a disadvantage there in that it regularly holds elections, and when they happen the ballooning energy prices may cause large swings. It will be interesting to see what happens a month from now in Italy, for example (https://en.wikipedia.org/wiki/2022_Italian_general_election https://en.wikipedia.org/wiki/2022_Italian_general_election) I’m not sure what will happen.

blub 4y ago
I've read about the Irish and French governments recently claiming that 5-10 years of economic "difficulties" can be expected and that the era of prosperity is likely over. I guess we'll know more come this and next winter. But there's also Ukraine's economy: they are currently wholly dependent on the IMF and Western backers in order to keep the lights on. In the war they are completely dependent on Western weapons deliveries. Ukraine has essentially ceased to exist as an independent country except on paper.

grnmamba 4y ago

As opposed to the record-high energy prices and inflation in the eurozone? This article is lying by omission. https://markets.businessinsider.com/news/commodities/europe-energy-crisis-germay-france-power-prices-record-highs-russia-2022-8?op=1 https://markets.businessinsider.com/news/commodities/europe-...

midislack 4y ago

fulafel 4y ago

The likely more significant effect (in terms of human lives saved and large scale famines, droughts, wars, opulation displacements etc avoided) of the sanctions is to accelerate the fossil fuels rampdown. But not surprising that Economist ignores this.