The Russian economy after the Russia-Ukraine war: focusing on the short-long term effects of sanctions against Russia

Minhyeon Jeong

Head of Russia and Eurasia Team at Korea Institute for International Economic Policy

mjeong@kiep.go.kr​​​

The Russian-Ukrainian War has been prolonged. As a result, the economic sanctions against Russia, which were initiated by the United States and Europe since the war broke out are also continuing. So we could ask ourselves whether the sanctions will continue, or will be lifted once the war ends. It is always impossible to predict the future with certainty. However, based on the historical context of the Russian-Western conflict, the background to the war, and the nature of the war, it is likely overly optimistic to expect a complete lifting of sanctions, no matter how the war ends. It is more realistic to expect a partial lifting of sanctions after the end of the war, as a full lifting will take much longer than expected. This is because the nature of the war is multi-layered and cannot be explained solely by the clash of interests of Russia and Ukraine. In particular, as many experts point out, a long-potential ideological and political conflict between the West and Russia has emerged in the form of the Russian-Ukrainian war. In fact, immediately after the war, Western powers such as the United States, the United Kingdom, and the European Union, which traditionally share the same ideological terrain, united to impose a unified set of high-intensity sanctions on Russia with countries of similar political ideologies, while continuing to provide military and economic support to Ukraine. Russia, on the other hand, has countered the traditional Western-centered ideological coalition by expressing solidarity with so-called middle powers such as China, North Korea, India, and Latin America. The ideologically based cohesion inherent in the post-war escalation of conflict between the West and Russia and between the United States and China, as well as the growing solidarity between Russia and China, is similar to that of the past Cold War system. This has led some to interpret the Russian-Ukrainian war as the advent of a new Cold War system.