The air is seeping out of Russia’s sanctions-beleaguered economy, but not fast enough to impede President Vladimir Putin’s calamitous war in Ukraine or to inconvenience most Russians. Longtime visitors to Moscow and other cities report that shelves are full and daily life is visibly unchanged, thanks partly to huge state subsidies. It is now clear that the West’s campaign to weaken Russia’s finances in hopes of dampening Mr. Putin’s resolve and popular support will be a slog, not a sprint.
Still, Washington and its allies retain potent ways to undercut the Kremlin’s war-making capacity over time — if they are honed and intensified. Better coordination and tighter enforcement of existing restrictions hold the key to sharpening the war’s costs for Russian industry and consumers, and to further sapping Russia’s ability to continue manufacturing high-tech weapons. Equally important, the West can double down on its success in squeezing the Russian state’s most important revenue source: energy.
None of this will be simple. U.S. efforts to broaden the ban of exports to Russia have hit a brick wall in the European Union and Japan, according to a recent report in the Financial Times. And enforcement of multiple rounds of sanctions imposed on Russian entities and individuals has become an increasingly intricate cat-and-mouse game in the 15 months since Russia’s unprovoked invasion last year. As the sanctions have multiplied, so has the sophistication of Russia’s efforts to evade them.
That is especially the case in Moscow’s efforts to obtain dual-use products — Western-made items and electronic components manufactured for civilian use that can be cannibalized and repurposed for weaponry.
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It would help for the United States and the E.U. to coordinate more closely on their export bans. A group of Harvard economists examined the discrepancies in sanctions applied to several thousand products sought by Russia and found that many have been targeted for restrictions by either the E.U. or the United States, but fewer than half have been subject to sanctions from both. For example, high-end washing machines — banned for export by the E.U. but not by the United States — in some cases contain microchips that can be stripped for use in Russia’s arms industry, which is on a wartime footing.
That might sound like minor seepage. In fact, many analysts believe tighter controls on electronic components would deepen Moscow’s intensifying problems in producing precision missiles and other advanced weapons systems.
For items that Russia can no longer import directly from the West, it has found workarounds in friendly third countries that have served as transshipment points. That has driven up the cost of procurement. But it is a price the Kremlin, awash in funds from last year’s spike in energy prices — including a cash pile of nearly $150 billion in its sovereign wealth fund — can bear for the time being.
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Some 222 Nicaraguan political prisoners left that Central American country for the United States in February. President Daniel Ortega released and sent them into exile in a single motion. Nevertheless, it appears that Mr. Ortega let them go under pressure from economic sanctions the United States imposed on his regime when he launched a wave of repression in 2018. The Biden administration should keep the pressure on. Read recent editorials about the situation in Nicaragua.
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Afghanistan’s rulers had promised that barring women from universities was only temporary. But private universities got a letter on Jan. 28 warning them that women are prohibited from taking university entrance examinations. Afghanistan has 140 private universities across 24 provinces, with around 200,000 students. Out of those, some 60,000 to 70,000 are women, the AP reports. Read a recent editorial on women’s rights in Afghanistan.
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That means the West needs to target those transshipment countries and double down on its efforts to obstruct the Russia-bound flow of electronics and other key components. The E.U., which is examining banning exports of sensitive products to countries that have been forwarding them to Russia, should move aggressively to do so — even at the cost of diplomatic fallout. It would be wise to target companies in China, Iran, Turkey, Kazakhstan, Armenia and elsewhere that supply Russia’s military. South Africa, which the United States has accused of covertly sending arms and munitions to Russia, should also be subjected to scrutiny.
The West could turn up the heat on Armenia, from which the re-export to Russia of a range of critical goods, including electronics, has spiked. Armenia, whose large diaspora population in the United States could be useful in applying pressure, is eager for U.S. security assistance in the face of recent hostilities with Azerbaijan, its fellow former Soviet neighbor. Washington should flex the muscle it has.
The West has been aggressive in targeting oligarchs who help sustain Mr. Putin’s regime; it also needs to take more resolute action against the network of services and service providers — lawyers, wealth managers, middlemen, shell companies — that sustains them. Cultivating disaffection among the elite could have a corrosive effect on the regime’s stability over time.
The West’s most effective measure to date has been the imposition last year of a $60-per-barrel price cap on Russian crude oil, compounded early this year by similar caps on diesel and other refined petroleum products. Those caps — above which Western shippers and insurers will not move the Kremlin’s exports — slashed Russia’s oil export revenue by nearly a third in the first three months of this year compared with the last three months of 2022, a $15.7 billion hit in a single fiscal quarter, according to the Kyiv School of Economics.
Russia’s economy, though it has proved surprisingly resilient, is smaller than Canada’s or Italy’s; it cannot indefinitely absorb such an income loss — let alone even lower revenue if the West continues to reduce the cap, as it should.
The Ukrainian military has stopped Russia’s advance on the battlefield. By enlarging the field of battle to sap Russia’s economy, the West might hasten a reckoning for Mr. Putin and the circles around him sooner rather than later.