Russia now bears the brunt of a crumbling economy as the over 141 countries in the United Nations impose crippling sanctions not only on its banking system but on various other systems and wealthy citizens.
By positioning itself as an aggressor whose tyrannical expansionism and fervent, unjustified imperialism that impinges on the sanctity of a neighboring, democratic country, Russia has now fallen prey to the following harsh economic measures:
- A 25-40% reduction in the value of the ruble, from ca. 60 rubles/USD to 104.54/USD
- Doubled interest rates for Russia’s central bank
- Abrupt closures in the Russian Stock Exchange
- Citizens’ desperate needs for access to money
- The barring of several Russian banks from SWIFT, a global exchange system for international transactions
- Paralysis of assets of oligarchs both unaffiliated – and recently, affiliated – with Vladimir Putin and his agenda
- Paralysis of 1/2 of Russian reserve money, nullifying part of Putin’s safety net of $630 billion
All of these measures affect millions of ordinary Russian citizens, many of who staunchly oppose the war. Home purchases are falling through; there is a drastic reduction in the basic ability for people to eat, spend, and earn decently; and many other measures are directly reducing people’s basic needs. This may indeed prompt a revolt against Putin and his madness. The problem is that in his autocratic seat, he would stifle such dissent immediately. Every day, benevolent Russian citizens are in a huge catch-22.
These stringent sanctions that so many nations across the globe are imposing on Russia’s economy also address another key factor: natural resources. Russia’s position as the top exporter of oil in the world has fallen as more countries are refusing to purchase its oil and gas, even before these resources have been the direct target of sanctions.
Russia’s banks are now failing. The Russian Central Bank now has no choice but to turn to other currencies as theirs has dropped so much in value. This creates a possibility for increased value in such currencies’ countries, further leveraging them as more prominent economic powers with more control of Russia’s economy. Another company that UN countries have targeted is Sberbank, Russia’s biggest lender. The European Central Bank has now predicted that Sberbank is likely to completely go under as it had less and less ability for liquidation. Two other major players in Russia’s economy, Gazprom (large gas company) and internet provider Yandex can no longer trade.
This is war of the most egregious kind. Because Ukraine is not a NATO ally, no country can violate the terms of the treaty to only send troops to those within its ranks. Nevertheless, the world is coming together in solidarity to provide A) as much resources, economic, humanitarian, and militaristic as it can to Ukraine, and B) for the purposes of this article, defeat Putin’s authoritarian agenda by preventing Russia’s economic ability to function as a country. These countries recognize – rightly so – that an economy is one of the central factors that gives a nation its power. Once that factor is taken away, Russia may not be able to move. That is precisely what the world is seeing now.