Lifting force: why sanctions against Russia are not working

© REUTERS / Denis BalibouseВсемирный economic forum in Davos, SwitzerlandLifting force: why sanctions against Russia are not working© REUTERS / Denis Balibouse

The world Bank and the international monetary Fund (IMF) has improved its forecasts for GDP growth Russia in 2018 and 2019. This assessment of two prestigious international institutions suggests that anti-Russian sanctions do not actually work. Based on what positive predictions of the future of the Russian economy — in the material RIA Novosti.

A big plus

Analysts of the world Bank and the IMF refer to a significant rise in oil prices. «Black gold» rose significantly in the second half of 2017. Currently, prices remain at a level close to 70 dollars per barrel.

«Russia benefits from rising prices for raw materials. In particular, the increase in oil prices in the end of last year greatly improved the performance of the Russian economy», — says a leading economist of the world Bank Francesca Ansorg.

In favor of Russia and the situation in the world economy — Moscow is helping global growth in trade and investment, said Ansorg. Therefore, in the January Global Economic Prospects report, the world Bank raised its forecast of growth of Russian GDP from 1.4 to 1.7 percent for the current year and from 1.4 to 1.8 percent for 2019.

World Bank estimates are largely consistent with the expectations of the IMF. Chief economist of the Fund, Maurice Obstfeld, speaking with a report at the forum in Davos, said that in 2018 Russia’s GDP may rise by 1.7 percent. This is 0.1 percent more than the previous forecast.

In addition, Russia is named among the countries capable of in the next two years, become important drivers of global economic growth. In this list, the IMF included the USA, Canada, Brazil and Turkey.

Real growth of Russia’s GDP is even higher, says associate Professor of management and entrepreneurship the faculty of economic and social Sciences (FASN) Ranepa Eugene Isakov. He recalled that the IMF and the world Bank are settled in dollars, while the Russian economy benefits, the cost of which is denominated in rubles.

«The impact of exchange rate fluctuations on the statistics is significant. It turns out that the weakening of the ruble, the real economy is growing even faster», — said the interlocutor of RIA Novosti.

Now it turns out that these sacrifices are in vain: Russia’s GDP is on a trajectory of growth. According to the chief researcher of the Financial University under the government of the Russian Federation Valery Abramov, the West imposed restrictions on banks with state participation, state corporations and defense companies, has not prevented the recovery of the domestic economy.

In the country there is a significant rise in industrial production, agree with the expert Isakov. One of the reasons is that the capital started to return home and invest in projects implemented on the territory of Russia.

The weakening of the ruble led to higher prices of imported goods, and domestic producers have increased business margins. The situation is used and Russian exporters who have received competitive advantages on foreign markets.

A positive role is also played by the import substitution program, implemented in various sectors of the economy. In particular, to accelerate the development of agriculture greatly contributed to the anti-Russian sanctions and of bradenburg, imposed by Moscow in response. As a result, Russia last year took first place in exports of wheat, which had never happened before, said Abramov.

Everyone remembers the story with the supply to bypass the sanctions turbines Siemens in the Crimea. Well, Microsoft is taking proactive measures to not to fall under prosecution in the U.S. if the authorities deem that the company is in violation of the sanctions regime.

According to Isakova, the requirement of advance payment for software products looks like an attempt to get out of the situation, when at the same time want to maintain commercial contacts with Russia and have to do something to create visibility for the implementation of sanctions.

The head of the Ministry Nikolai Nikiforov called it an example of politically motivated decisions.

«Where will it end? The fact that Microsoft will lose almost completely the market of several billion dollars from the point of view of corporate and government elements in our country», — said the Minister.