Sanctions have ‘crippled’ the Russian economy.
According to a Yale University study, Russia’s economy has been “catastrophically crippled” by Western sanctions and the mass exodus of international companies.
The research, which the authors say is the “first comprehensive” analysis of the Russian economy, found that since the start of the war in Ukraine, Russia has taken a devastating hit.
“Russia has lost companies representing ~40% of its GDP, reversing nearly all of three decades of foreign investment,” write researchers at the Yale School of Management, adding that this situation has been exacerbated by a departure ” unprecedented” of capital and population.
More than 1,000 companies have limited their operations in Russia or left the country entirely since the start of the war in Ukraine, in almost every industry from fashion to finance.
The Yale research, which was published on July 20, says that international sanctions have “irreversibly worsened” Russia’s exports and that imports into the country “have plummeted”.
This has led to “widespread supply shortages” within Russia and brought domestic production, which relies on imports in all industries, to a standstill.
“Despite Putin’s delusions of self-sufficiency and import substitution, Russian domestic manufacturing has completely stagnated without the capacity to replace lost businesses, products and talent; draining Russia’s domestic innovation and manufacturing base has led to rising prices and consumer anxiety,” the Yale team wrote.
Russia’s status as a major commodity exporter has also taken a hit, according to researchers.
“Russia’s strategic position as an exporter of goods has deteriorated irreversibly, as it now faces a position of weakness with the loss of once key markets”.