Table of Contents
Sanction can be defined as a threatened penalty for being disobedient to a particular rule or law. In this case, Russia is claimed to have violated the rule of international peace in the international system. The Russian groundless and unprovoked incursion on Ukraine early this year triggered other countries to adopt a variety of packages against Belarus and Russia. The violation came in when Russia declared an unjustified war on Ukraine. As a result, the international system reacted toward Russia and sanctioned it over the alteration of international peace. This essay seeks to describe the type of sanctions it will impact the economy of Russia.
Types of sanctions imposed on Russia
Russia has been sanctioned with different types of sanctions, including economic sanctions, diplomatic sanctions, sports sanctions, sanctions on environments, and diplomatic sanctions. The United States and the G7 partners have barred services that aid in financing Putin’s war and help sanctions elusion. The United States has forbidden United States’ people from offering trust, administration check in, accounting, and company development services to any individual in the Russian Federation (Siegel, 2022). This activity comes from earlier bans to restrict the export of products associated with technology, defense, marine, aerospace, and linked material sectors of the economy of Russia.
Again, cutting off imports of Russian oil and lowering the dependence on Russian energy has been another sanction. The United States has barred the import of Russian gas, coal, and gas. The whole committed to phasing out the importation of Russian oil (Allen, 2022). Consequently, this hurt the Russian economy and barred her from the income required to finance the war. The G7 is also dedicated to working as one to guarantee steady global energy supplies while speeding the efforts to decrease dependence on fossil fuels.
In addition, targeting state-controlled media within Russia supports Putin’s war. The United States has sanctioned three of the uppermost indirectly and directly state-controlled television channels. These Television stations include Joint Stock Company NTV Broadcasting Company, Joint Stock Company Channel One Russia, and Television Station Russia -1. These three stations are the most significant foreign income receivers that feed the Russian State’s income.
Furthermore, additional export sanct6ions and controls to vitiate Russia’s war efforts have been done. The United States has issued a rule that imposes further restrictions on the industrial sector of Russia. These restrictions involve a wide range of inputs and goods such as industrial engines, motors, wood products, boilers, bulldozers, fans, ventilation equipment, and other commodities with commercial and industrial applications (Orangian et al., 2021). This action restricts Russia from accessing income and products that boost military capabilities. Additionally, the United States has restricted the Limited Liability Company Promtekhnologiya, which manufactures scours and other armaments used in armed maneuvers in Ukraine, a marine towing company, and seven shipping companies.
Sports sanctions have been evident in Russia as well. The United States, United Kingdom, and the European Union, together with other states, have sanctioned not less than 1000 Russian businesses and individuals (Lektzian et al., 2021). The United States executed nearly 2500 visa restrictions on Belarusian and Russian officials in response to their continuing efforts to limit Ukraine’s territorial integrity, political independence, and sovereignty.
Also, the United States imposed a new visa constraint policy that targets Russian Federation military administrators. These involved the oligarchs closely regarded as Kremlin, involving the previous Chelsea football club proprietor Roman Abramovich. In addition, the Russian national team has been barred from participating in international matches such as the world cup. Eight directors from Sberbank, the prime financial institution in Russia and most significant to the economy of Russia, have been sanctioned by the United States.
Due to sanctions, unemployment levels will be reasonably low in Russia. The economic situation in Russia will worsen because of the sanctions executed; an illustrator will be slightly decreased. The labor market in Russia will release staff or reduce the hours and wages as a result of economic challenges. Mass unemployment is predicted in the Russian community due to the economic sanctions in Russia.
In addition, it is forecasted that there will be a sharp rise in inflation in Russia. The consumer price index is most likely to increase. The oil production will also collapse. Russia will be forced to lower the production of oil products in the future. This is because the G7 and the United States have stopped purchasing oil and gas from Russia.
The Russian transport sector will be affected immensely. Russian civil aviation is undergoing unprecedented restrictions (Grzegorczyk et al., 2022). Most countries have closed the flights in their fleet. There is no more maintenance of Russian –owned planes by Western aircraft manufacturers. Shortly, Russia’s entire air transport sector will collapse due to unmaintained planes and closed flights.
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In the future, there will be a shortage of essential consumer goods. The war is expected to persist, and the West will execute an oil ban and a gas embargo that will result in a sharp reduction in foreign exchange income to the budget. Consequently, Russia will experience significant complications in meeting its social and economic obligations.
The sanctions on Russia are hurting its economy. Although the exchange rate of the Russian currency is higher, Russia has an enormous disparity between the parallel collapse of imports and high volumes of oil and gas exports due to sanctions. The trade surplus of the Russian economy indicates the absence of sound economic health. This is because Russia must import many high-value products not manufactured there. Moreover, Russia depends on almost a percent of Europe and the United States. Thus, the sanctions are posing adverse impacts on the Russian economy.
The United States and the G7 partners have imposed various sanctions that target punishing Russia for its unprovoked and unjustified intrusion into Ukraine. The sanctions have forced us to experience diverse consequences socially, politically, and economically. Russian oligarchs and citizens overseas have been sanctioned, imposing more torture on Russia. Remarkably, the Russian economy has been affected the most. It continues to experience more economic hurt recently and in the future. Unemployment, shortage of essential goods, and collapse of air transport are significant impacts that Russia will face soon if the attacks on Ukraine persist.
- Allen, S. H. (2022). The uncertain impact of sanctions on Russia. Nature Human Behaviour, 1-2.
- Grzegorczyk, M., Marcus, J. S., Poitiers, N., & Weil, P. (2022). The decoupling of Russia: high-tech goods and components. Bruegel-Blogs, NA-NA.
- Lektzian, D., & Mkrtchian, G. (2021). The effect of sanctions on economic freedom. Social Science Quarterly, 102(6), 2776-2794.
- Orangian, A., Varahrami, V., & Orangian, E. (2021). A comparative study of the impact of sanctions on the oil and cement companies listed in Tehran Stock Exchange: Forecasting and Future Trends. Journal of Research in Emerging Markets, 3(2), 1-12.
- Siegel, D. (2022). FROM OLIGARCHS TO OLIGARCHY: The Failure of US Sanctions on Russia and its Implications for Theories of Informal Politics. World Affairs, 185(2), 249-284.