The writer is a non-resident senior fellow at the Peterson Institute for International Economics. She is a director of the International Affairs Program and vice-president for foreign policy at the Kyiv School of Economics Russia has faced unprecedented sanctions from the US, the EU and their allies following its 2022 full-scale invasion of Ukraine. One day, the US may need to sanction on this scale again, possibly China over a potential conflict in Taiwan. If this happens, valuable lessons can be learned from the Russia case, which has not been an unequivocal success.
The primary lesson is that seeking complete isolation of a large, complex and globally-integrated economy is costly and unattainable. It took coalition governments almost a year to reduce purchases of Russia’s oil and gas — and many of their corporates are still actively engaged in trade with Russia.
Although Moscow’s statistics should be approached with great caution, two years into the war, Russia’s economy appears to have stabilised, supported by nearly 10 per cent of GDP in war-related fiscal stimulus and sanction coalition countries’ reluctance to stop buying Russian oil and gas. The Russian government’s statistics agency estimates GDP growth of 3.6 per cent in 2023 following a moderate contraction in 2022.