US President Joe Biden boasted on Wednesday that American sanctions on Russia will undo the country’s economic gains over the last 15 years and “stifle” the Russian economy for years to come. Despite previously admitting that sanctions have done little to deter Russian President Vladimir Putin, Biden nevertheless unveiled a fresh round of economic penalties on Tuesday.
“Just in one year, our sanctions are likely to wipe out the last 15 years of Russia’s economic gains,” Biden told a trade union conference in Washington. “Because we’ve cut Russia off from importing technologies…we’re going to stifle Russia’s ability in its economy to grow for years to come,” he continued.
The White House on Wednesday unveiled further sanctions on Russia, to be implemented in lockstep with the US’ G7 and EU allies. These measures include blocking sanctions on more Russian banks, a ban on new US investments in Russia, blocking sanctions on “Russian elites and their family members,” and sanctions on Russian state-owned enterprises, with a list of these firms to be revealed by the Treasury Department on Thursday.
A White House press release also stated that “Russia’s GDP will contract up to 15 percent this year, wiping out the last fifteen years of economic gains.” This statement was attributed to unnamed “experts.”
Assessing the impact of US and international sanctions on Russia is difficult. While Biden said that his initial sanctions – imposed within days of Russia’s military offensive on Ukraine – would “crater” the Russian economy and its currency, the ruble has since bounced back to its pre-war value and Russia is expected to increase its oil and gas revenue by more than a third this year, according to analysis by Bloomberg.
According to German analyst Janis Kluge, this record energy revenue will be enough to cover the impact of Ukraine-related sanctions on the Russian economy and halt inflation. Not all countries have cut off Russia’s supply of imported technologies either, and Moscow will likely turn to other suppliers to make up for the halt in imports, likely China.
Biden told the crowd in Washington that his latest round of sanctions would “ratchet up the pain for Putin.” However, while multiple officials in his administration have described sanctions as a method of deterring Putin from pursuing his military goals in Ukraine, Biden himself admitted last month that “sanctions never deter,” but would continue regardless.
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