Leaks Show Russian War Effort Still Funded Despite Sanctions
Despite the Biden administration’s efforts to stifle the Russian war machine through sanctions, recent intelligence leaks suggest that Russia can continue funding its war in Ukraine for at least another year. This revelation calls into question the efficacy of U.S. policy regarding the conflict.
The classified assessments, examined by The Washington Post, indicate that Moscow has found ways to mitigate economic pressures, such as increasing corporate taxes, tapping into its sovereign wealth fund and boosting imports. These measures allow Russia to maintain its objectives in Ukraine and circumvent the imposed sanctions.
The sanctions initially aimed to impose a severe economic burden on the Russian populace, hoping to incite riots and destabilization, ultimately forcing Kremlin decision-makers to change course. However, this outcome has yet to materialize. While the ruble faced a temporary setback following the invasion of Ukraine, it quickly recovered to pre-conflict levels against the U.S. dollar by mid-April 2022.
Russia’s ability to withstand the sanctions has been further bolstered by soaring oil revenue, particularly from new markets in Asia. In response to this development, some experts have questioned the effectiveness of the current sanctions and whether they truly deter, punish, or send a message to Moscow.
In early March, U.S. intelligence assessed that Russia’s economic elites, despite being affected by the sanctions, are unlikely to withdraw support for President Vladimir Putin. Instead, these elites remain committed to upholding the Kremlin’s objectives in Ukraine and aiding Moscow in evading sanctions.
The leaked documents also provide a rare insight into the U.S. understanding of its economic measures and the response they have garnered in Russia. While Putin and those close to him have dismissed the impact of sanctions, the documents reveal that the intended targets, such as oligarchs and senior officials, are feeling the pinch.
U.S. intelligence has discovered that Russian Finance Minister Anton Siluanov drafted a letter to Prime Minister Mikhail Mishustin in early March seeking support for contingency plans to prevent the collapse of Russian state-controlled entities due to the sanctions. However, some experts have expressed surprise at Siluanov’s concern for institutions like the International Investment Bank, which is not crucial to Russia’s economy.
As the situation unfolds, it becomes increasingly evident that the current sanctions have failed to achieve their goals. Russia has proven remarkably adaptable, demonstrating a willingness and ability to endure the economic pressures imposed by the West. In light of these developments, it is time for the U.S. and its allies to reconsider their approach to the ongoing conflict in Ukraine.
