7 reasons why sanctions won’t hurt Russia
Sanctions are often viewed strictly in terms of the amount of economic havoc they cause, in which case they do have a strong record of success, but if sanctions are seen as a coercive tool to pressure governments into changing their policies, then their record is not as impressive. There are many reasons why sanctions have proved such a disappointing instrument of Western policy towards Russia: 1- the Russian economy is large enough to absorb the impact of even the most severe sanctions. The central bank holds USD$630 billion ($878 billion) in foreign currency and gold reserves. The sovereign wealth fund accounts for another US$190 billion. Russia is a global strategic supplier of oil and gas. And public debt is a very modest 20 per cent of GDP. Fortified by this resilience, the Kremlin’s reaction to the threat of further and tougher sanctions is “bring it on”. It is especially confident that Russia can absorb more pain than the Europeans, some of whom remain heavily dependent on Russi