Russian Economy Is Growing, Despite or Because of Western Sanctions

The purpose of the never-ending series of sanctions the West has imposed on Russia, we are told repeatedly, is to weaken the Russian economy, and to force Moscow to accept the “rules-based order”. They have certainly weakened the European economies due to soaring energy prices and the restriction of trade, but what happened in Russia? That question was answered indirectly by Vladimir Putin during his speech to the SPIEF. While one might argue over the details he presented, the overall picture has been confirmed by many.

The fact that Russia is now in the top four economic producers in terms of purchasing power (PPP), putting it even ahead of Japan, was attributed by Putin to the shift in the orientation to the countries of the Global South. Between 2020 and 2023, trade with Asia grew by 60%; with Africa, by 69%; with Latin America, by 42%; and with the Middle East, it even doubled.

Importantly, he pointed out that developing these new markets requires a corresponding increase in transportation links. Thus, a number of projects have been undertaken, including several rail lines and sea routes. Overall, by 2030, “the volume of traffic on international transport corridors through the territory of Russia will increase by one and a half times compared to 2021…”

In other parts of the speech, he underlined how Russia has reduced imports, not through punitive tariffs, but by developing domestic sources for many of the products that previously came from abroad. In both the civilian and military spheres, high-tech development is a priority, all of which requires improvements in the education and professional training systems.

Summing up, Vladimir Putin said:

“The global economy has entered an era of serious, fundamental changes…. There is taking shape a multipolar world with new centers of growth, investment and financial ties between the states and companies. The Russian economy is responding to these challenges and is changing just as dynamically, acquiring a large strength and stability.”