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# 									Fact vs. Fiction: Kremlin Disinformation About International Sanctions							

August 22, 2022

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Economically, the sanctions we’ve imposed on Russia to end its aggression are having a powerful and also growing effect. Now, Moscow has been cherry-picking economic data to support President Putin’s insistence that everything is fine and the Russian economy is going strong. It’s simply not true.
**Secretary of State Antony Blinken**

Since February 2022, the international community has imposed numerous sanctions on Russia in response to its war against Ukraine. In an attempt to undermine the sanctions’ effects, dismiss the international rejection of Russia’s actions in Ukraine, and discourage future actions, the Kremlin has spread disinformation about the effectiveness of sanctions. Anew study from Yale provides data directly contradicting the false narrative the Kremlin has spread about the state of Russia’s economy.  

*Fiction: The Russian economy is strong enough that international sanctions cannot significantly affect it. International sanctions actually harm the West more than Russia.*

**Fact: International sanctions are having a powerful effect on the Russian economy.** The Kremlin’s purveyors of disinformation push the narrative that international sanctions have no significant effect on the Russian economy despite the fact that even Russia’s central bank chief Elvira Nabiullina admitted, “economic activity is declining … the termination of long-term economic relations will have a negative impact.”  

Russia does not have the capacity to produce domestic versions of products it once bought internationally. To try to bridge this gap, President Putin even attempted tolegalize intellectual property theft from “unfriendly countries.” Many of Russia’s most talented citizens have left the country in search of a better life.Researchers estimate that hundreds of thousands of academics, technology workers, journalists, artists, entrepreneurs, and other members of the skilled workforce have left Russia since the Kremlin’s February 2022 further invasion of Ukraine. Even if Russia could rebuild its economy without materials from countries that have sanctioned it, Russia now lacks the workforce needed to foster robust and dynamic economic growth.  

*Fiction: International sanctions are not effective because Russia can pivot to trading with countries that have not sanctioned it yet.*

**Fact: Russia is struggling to find new suppliers and customers for goods it once bought and sold globally.** Since Russia’s February 2022 invasion of Ukraine, Russia’s importsdropped 50 percent. The Kremlin is struggling to find new sources for important items it is unable to produce. This is notable on the battlefield where Russia is using microchips taken fromrefrigerators and dishwashers in its military equipment.  

Publicly, Russia is touting its trade relationship with the People’s Republic of China (PRC) to make up for import and export shortfalls. In reality, it is anunequal relationship as Russia needs the PRC much more than the PRC needs Russia. As of 2021, the PRC was Russia’s primary source of imports; however, Russia ranked as only the 11th largest importer of PRC goods. Since the war, PRC exports to Russia have shrunk by almost 50 percent from the beginning of the year to April 2022.  

Russian officials incorrectly stated it can easily pivot to other buyers of its natural gas and oil exports but exporting large amounts of natural gas to countries beyond Europe is not a short- or even medium-term option for Russia. Over 90 percent of Russia’s gas istransported via pipeline, and the vast majority of Russia’s pipelines connect to markets and refineries in Europe. Russia would need to build expensive new pipelines or maritime facilities to meaningfully increase natural gas exports to Asia.  

*Fiction: The ruble’s performance shows the Russian economy is strong.*

**Fact: The Kremlin has enacted severe measures in order to artificially increase the performance of the ruble, which harm both Russian businesses and the general population.**

Russianofficials claim the ruble is the strongest-performing currency of the year, without mentioning its relatively high value is due to theextreme capital controls Russia hasenacted. After its unlawful, unprovoked full-scale invasion of Ukraine, the Kremlin banned citizens from sending money abroad, suspended bank dollar sales, required exporters to exchange 80 percent of their earnings into rubles, and forced businesses to pay foreign debt in rubles. These measures propped up the value of the ruble by forcing purchases of the currency and outlawing sales. These draconian financial restrictions hurt both Russian businesses and citizens.  

*Fiction: The Russian government can enact policies that protect its economy from the effect of sanctions, therefore the average Russian consumer is not affected by Russia’s failing economy.*

**Fact: Average Russian citizens already see the effects of the Kremlin’s war on Ukraine in their daily lives.**

The Kremlin cannot ensure the average Russian citizen has the same quality of life as he or she did before the Kremlin made the decision to further invade Ukraine. Over1,000 international companies across a range of sectors have left Russia in 2022, resulting in Russian citizens no longer having access to goods and services they once enjoyed. For example,Apple has left Russia and its products will no longer be available once existing stock is depleted.  

Various data show how the dire state of the Russian economy negatively impacts the lives of average Russian citizens. Inflation in import reliant sectors, such as appliances and hospital services,increased 40-60 percent. In May 2022,new car sales dropped by 84 percent, indicating consumers in Russia do not have the confidence in the economy to make major purchases. Reports indicate that Russia’s domestic production in many sectors has been severely disrupted, with real impacts on Russian citizens. For example, Russian companies have stoppedmanufacturing cars airbags or anti-lock braking systems due to a shortage of necessary components, putting Russian consumers at greater risk. 

Tags

ChinaDisinformationEconomic Prosperity and Trade PolicyGlobal Engagement CenterRussiaUkraine

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