Effect of Biden sanctions
On February 24, 2022, US President Biden issued a statement regarding the new stage of the Russian-Ukrainian war initiated by Putin. In his speech, he, in particular, said about how he was going to deal with the aggressor:
[Today, I’m authorizing additional strong sanctions and new limitations on what can be exported to Russia.
This is going to impose severe costs on the Russian economy, both immediately and over time.
We have purposefully designed these sanctions to maximize the long-term impact on Russia and to minimize the impact on the United States and our Allies...
Twenty-seven members of the European Union, including France, Germany, Italy — as well as the United Kingdom, Canada, Japan, Australia, New Zealand, and many others — to amplify the joint impact of our response.
I just spoke with the G7 leaders this morning, and we are in full and total agreement. We will limit Russia’s ability to do business in Dollars, Euros, Pounds, and Yen to be part of the global economy. We will limit their ability to do that. We are going to stunt the ability to finance and grow Rus- — the Russian military...
We’ve already seen the impact of our actions on Russia’s currency, the Ruble, which early today hit its weakest level ever — ever in history...
Q: And — and with that — with his ambitions, you’re confident that these devastating sanctions are going to be as devastating as Russian missiles and bullets and tanks?
THE PRESIDENT: Yes. Russian bullets, missiles, and tanks in Ukraine. Yes, I am...
And we’re now going to — he’s going to begin to see the effect of the sanctions...]
At the end of his speech, Biden assessed the measures he was taking as follows:
"They are severe sanctions".
And he invited the participants of the press conference and the whole world to check the results of their actions after a while:
«Let’s have a conversation in another month or so to see if they’re working»...
The total number of sanctions imposed by the Biden administration against Russia since February 22, 2022, has reached 1948. The European Union also imposed 10 packages of sanctions against the aggressor, including nine packages during 2022. The total number of sanctions imposed by Western countries during the same period reached 11,458, and in terms of their total number, Russia became the record holder
More than one month has passed since Biden's speech, the final statistics for 2022 have appeared. You can look at the results of the ongoing sanctions policy, which, by the name of its author, the leader of the largest country of the Western alliance, who proclaimed it on February 24, 2022, can reasonably be called Biden's. What are the results of these efforts?
Failure of predictions.
The forecasts of international economic organizations and experts made in February-March 2022, which predicted a reduction in the real size of the Russian economy by 10-15-20-30 percent as a result of the introduction of Biden sanctions, turned out to be erroneous. At the end of 2022, Russia's GDP at constant prices decreased by only 2.1%. Such a decrease in output actually coincides with the parameters of a mild Russian recession in 2015 (a 2.0% reduction in GDP) and is much inferior to the scale of the decline in production during other Russian crises of the past three decades: -2.7% in 2020, -5 .3% in 1998, -7.8% in 2008, -40.2% in 1991-1996
Record value of absolute GDP in dollars.
While GDP in real terms decreased slightly (by 2.1%), its value in dollar terms increased by 20.7% and reached $2,216 billion. In absolute terms, this is a record in Russian history. It seems that this is also the first time in world history when, as a result of a year of hostilities, with the simultaneous introduction of nine packages of “comprehensive sanctions from hell” against the aggressor, the GDP of a country subject to sanctions did not decrease, but increased by more than a fifth. If in 2020 Russia ranked 11th in the world in terms of GDP in dollar terms, then in 2022 it moved up 3 steps and now ranks 8th in the world.
High growth rates of GDP dollars. Russia's GDP growth in US dollars in 2022 (by 20.7%)
The return to similar growth rates of dollar GDP in 2022 in fundamentally different macroeconomic and geopolitical conditions has no historical analogues.
Growth of financial resources of the aggressor.
As a result of the growth of dollar GDP, the financial resources at the disposal of the aggressor have increased significantly. The increase in consolidated budget revenues in 2022 amounted to $83 billion, expenditures - $148 billion. The size of government spending of the consolidated budget was increased by 19.3% and reached a record value in the history of Russia - 787 billion dollars. with the simultaneous appearance of a budget deficit in the amount of 51 billion dollars.
Growth of military expenses of the aggressor.
The growth of GDP, government revenues and government spending in dollar terms allowed for a significant increase in military spending in dollar terms. While official data on military spending has not been published since February 2022, available estimates of their annual value fluctuate between $90-$180 billion. Thus, depending on the author, military spending has gone up from $60 billion. in 2021 by 30-120 billion dollars.
Growth in earnings from Russian exports.
The export of goods and services from Russia in 2022 grew by 19.8% and turned out to be a record, reaching $592 billion. The record was also the growth of 42.8% in revenues from the export of oil, oil products, gas, which at the end of the year amounted to 384 billion dollars, or more than 1 billion dollars. per day.
The growth of the ruble exchange rate.
The average annual exchange rate of the ruble against the dollar also - contrary to forecasts and expectations - rose
Reducing the financial and economic potential of Ukraine.
At the same time, in 2022, Ukraine’s GDP, according to the country’s Ministry of Economy, decreased by 30.4% in real terms, and by about 35% (or $71 billion) in dollar terms, and by the end of the year amounted to approximately 128 billion dollars.
Deterioration of the ratio of economic potentials.
The ratio of the GDP of Russia and Ukraine, which was 8.9 times in 2021, increased to 17.3 times by the end of 2022.
Estimation of the aggressor to win the war of attrition. A significant increase in the financial and economic potential of the aggressor, while at the same time reducing the financial and economic potential of the victim of aggression in 2022, allows the aggressor to count on a many-year continuation of a long war of attrition, which he hopes to win
