Russian businessman Oleg Deripaska has criticized the Western sanctions imposed on Moscow, calling them ineffective and outdated. In an interview with the Financial Times, Deripaska, the founder of Rusal, the world’s second-largest aluminum company, compared sanctions to an economic “wonder-weapon,” but expressed doubt about their effectiveness and warned of potential harm to the global economy.
Deripaska described sanctions as a tool from the 19th century and expressed skepticism about their efficiency in the 21st century. He argued that the world has made significant progress in terms of global trade, investment, and information flows, and that the use of sanctions undermines these achievements. Deripaska emphasized that despite the sanctions, the Russian economy has not only survived but has also grown stronger. He attributed this resilience to new trade ties with countries in the Global South and increased domestic investment.
The businessman highlighted the reluctance of countries from the Global South to join the sanctions, as it would jeopardize their own economies. He pointed out that Russia is an important trade partner and major supplier of energy, metals, and food exports to these countries. Deripaska expressed surprise at the flexibility of private businesses in Russia to adapt and operate successfully amid the sanctions. While he expected a significant decline in the economy, the slowdown has been moderate, thanks to government support and the resilience of the private sector.
Deripaska also urged for the cessation of hostilities in Ukraine but emphasized that true resolution will only come when Moscow and Kiev themselves decide to put an end to the conflict. He criticized the belief that sanctions alone will bring about a change in regime or lead to the end of the conflict, stating that alternative solutions are needed.
Since February 2022, Russia has faced several rounds of sanctions imposed by the US, EU, and their allies. Despite the economic slowdown last year, with a contraction of 2.1% according to Rosstat estimates, the Russian government has adapted to the new realities by adjusting monetary policies and reorienting towards markets in the East.
Russian President Vladimir Putin announced that this month, Russia has regained the economic growth it had prior to Ukraine-related sanctions. He stated that GDP growth for this year is forecasted to reach 2.5% or even 2.8%, surpassing the initial target of 1.2%. This growth showcases the resilience of the Russian economy in the face of Western sanctions.
In conclusion, Deripaska’s criticism of Western sanctions highlights their ineffectiveness and outdated nature in the 21st century. The Russian economy has proven its resilience by developing new trade ties and boosting domestic investment. The reluctance of countries from the Global South to join the sanctions further undermines their impact. However, the businessman also acknowledges the need for a resolution to the conflict in Ukraine that goes beyond sanctions, emphasizing the importance of a bilateral agreement between Russia and Ukraine.