Sanctions and public opinion in Russia

Russia’s war in Ukraine continues with no end in sight. Almost a year after the start of a full-scale conflict, one of the most intriguing questions is why the Russian people have yet to respond with a strong protest against the Putin regime’s war. What is the basis of his power? Why does the Russian economy still manage not to collapse in the face of unprecedented economic sanctions? And can Russia continue to resist international pressure to deprive it of the oil and gas revenues that are fueling the war in Ukraine?Invited by the Carnegie Endowment for International Peace, Polina Ivanova, Foreign Correspondent for the Financial Times (FT) covering Russia, Ukraine and Central Asia, covered both the Russian invasion of Ukraine and the changes in Russia itself, from the Kremlin’s crackdown to the consequences of sanctions and attempts to circumvent them – shared his impressions of Russia, after his recent trip to Moscow.As a business journalist, she tried to explain why, despite the enormous pressure of sanctions directed against Russia in key areas – international law, finance, trade, technology, energy and against Russian elites – the Kremlin succeeded to deal with all of this.Western expectations have yet to come true, but sanctions continue to apply”The West hoped for the immediate impact of sanctions on the economy, for example, on the development of an inflationary spiral in finance, but this expectation did not materialize,” noted Polina Ivanova. “In addition, it was expected that the sanctions would have an impact on public opinion, especially members of the elite who will find that their way of life has changed, they will not be able to go on vacation, for example, in Monaco or elsewhere… And also the middle class, who will find that certain products are no longer available. And this change in public opinion in Russia will make it more difficult for Putin to continue the war,” Polina recalled.She believes that “in the short term, these expectations were unrealistic”.Indeed, despite the sanctions, Rosstat says Russia’s GDP fell by just 2.1% over most of the last year. At the same time, most economists are convinced that the Russian economy will face years of deterioration, contraction and regression.Polina Ivanova agrees with this.“Most of the restrictions on oil and gas came later. Given that oil and gas make up nearly half of Russia’s budget revenue, it became clear that only now would sanctions begin to work. It will take longer for the West to get the results it wants,” the FT correspondent noted.The role of so-called “systemic liberals” and “technocrats” was critical, according to Polina Ivanova.”Those in Russia who believed in the free market and the integration of the country into the world economy… first opposed the war, were appalled by its outbreak, and then went to great lengths to keep the economy afloat and thus enabled the continued sponsorship of this war. They made a sort of “transition”, from being horror in relation to the war, to becoming first of all, in a way, its ” assistants”, and, at the end, his “accomplices”, underlines not without regret Polina Ivanova.She gave examples of how the Central Bank of the Russian Federation, after the start of a large-scale Russian invasion of Ukraine , banned the withdrawal of money from banks for individuals, stopped the outflow capital of the country, eased the blows of the end of global payment systems in Russia, and did many other things that are likely to later, according to Polina Ivanova, her leadership “will be vindicated by the fact that they have tried to protect most people in Russia, who have long been below the poverty line.”Moscow is not the rest of Russia, but changes are beginning there”Only a small percentage of Russians, something like 7%, regularly traveled abroad for holidays, but we focus on the mood and nature of life of middle-class Russians, and especially in Moscow, because that’s what the Kremlin pays attention to. That’s where mood swings are important and can be politically sensitive,” Ivanova said.The FT correspondent tried to describe what Moscow looks like at the moment. To do this, she suggests “putting yourself in the place of a representative of the middle class of Muscovites”:”The supermarket you went to in central Moscow looks pretty much the same as usual, western products are still there. You can buy your favorite European products, wines, your favorite western clothing brands, except that the prices have gone up a bit. You can walk down the street, look at United Colors of Benetton, look at other shops. Yes, you can’t go to Starbucks, it has changed its name and McDonald’s, but there is no there are no huge, tangible changes,” Polina said.She quoted Alexandra Prokopenko (freelance journalist and expert on Russian economic policy, in the past – adviser to the management of the Central Bank of Russia – about GA): “Billboards with portraits of the heroes of” the special operation “are hanging all over Moscow, and people are still eating fresh oysters. The war is becoming like some kind of TV show.”However, their morale changed drastically.“From the perspective of a Russian Muscovite, it is as if an atomic bomb had exploded in Ukraine, and the shock waves had not yet reached Moscow, but the radiation was already leaking. The consequences of war are already happening in families, in people’s minds, deep inside, on a personal level, on a moral level, on a psychological level”, Polina tries to describe the mood in Moscow, “The only thing that catches people’s attention every day is empty tables, empty workspaces.If you walk into the office, you can see how many people have left. And although estimates of how many Muscovites have left vary widely, people are constantly talking about it among themselves. They talk about their children who left to escape mobilization, or simply acquaintances who left Russia forever. To some extent, it’s an empty city.Parallel imports and the do-it-yourself economyPolina told how the “parallel import freedom” regime announced by the Kremlin works.“These supply chains are very unstable. You can’t build an economy on that. And it works especially in consumer goods. For example, despite the fact that Apple defiantly left the Russian market, there were no problems with delivery and meeting demand for the new iPhone in the fall,” she said. .“A European company is being created which would have ties to Russia, and it is run by people with European passports. She buys the necessary goods. They will then be transported via, for example, Kazakhstan or via Belarus to Russia. Sometimes it works differently. For example, a company can contact a company in Kazakhstan. So, for example, you have a company in Kazakhstan that was ordering a certain type of computer equipment from the United States, and now it is starting to order a hundred times more than the year before. And then, the “superfluous” goes to the company that “needs” it in Russia”, explained Polina Ivanova.The investigative reporter also explained how the oil is transported on tankers that “go with their radars turned off – the system tracking their movement – and then, somewhere in the middle of the ocean, these tankers pump oil from the ‘to another’.”The tankers built in the 80s are unusable and used to be sent to the smelter, but now they are being bought to transport oil as a sort of ‘shadow fleet’. The world is trying to start tracking these phantom transports, but their numbers are increasing,” the journalist said.”Mysterious” Russian public opinion and propaganda10 months after Russia launched its full-scale invasion of Ukraine, Levada Center is a an independent Russian public opinion research organization – conducted a survey and it showed that around 70% of Russians support the war .World Values ​​Survey under the International Social Research Program, published a report stating that “Russian patriotism is unique” .The two organizations said that “Russians feel compelled to support their country whether it does the right thing or not.”Moreover, according to research data, Russians consistently expressed “more than people in other countries, a willingness to sacrifice their material well-being in the name of their country’s military might.”Polina Ivanova stressed that, nevertheless, the basis for the formation of such a position, in her opinion, is “the strong influence of propaganda”.It’s also important to understand, says Polina, that there are “a lot of passive people in Russia who don’t look for alternatives to propaganda” on the internet or on YouTube.“The vast majority of these people are used to following the message delivered to them. Does this group of people know that they can ‘open that door and get them out of the propaganda bubble’? Polina asks.” Kremlin propaganda is quite insidious: it makes people believe that there is no other reality than the one in which they exist.””Also, there is a paranoid atmosphere in Russia at the moment. There are no more mass protests, because the tactic of the authorities is: the police come and take people away from the crowd. You can and would like to stay and be with them but you know that one in ten people will be taken away and detained. They don’t need mass arrests and mass detentions to scare people. All they want is cases and examples that will really scare people, so we don’t necessarily see a lot of arrests. We saw many arrests of people during the early anti-war protests, and although many were later released, some were sentenced to long prison terms of 6, 7 and even 8 years. And these examples are enough to make anyone think: well, will I be here to be the next? Polina Ivanova, correspondent for Russia, Ukra ine and Central Asia for the FT.