Russia’s economy is not behind the war against Ukraine, says the Moscow economist Yakovlev. The companies have no choice but to survive somehow. They are extremely adaptable. However, they could not compensate for the supply shortfalls resulting from the sanctions with imports from Asia.
Apparently, Russia’s industry cannot compensate for the lack of imports due to the sanctions with imports from emerging countries. “The political leadership hoped that the emerging countries would help. That has not been confirmed,” Moscow economist Andrei Yakovlev told Der Spiegel. “We see no evidence of increased trade with these countries in the macroeconomic data.” On the contrary, Russia’s exports to China have increased. But China’s exports to Russia have fallen to a similar extent as Europe’s exports, explained the professor of economics, who has been a guest researcher at Freie Universität Berlin since January.
“I also hear that from companies,” reported Yakovlev. “They have tried to establish long-term supply relationships with the Chinese. That seems to work in small batches, but when it comes to large quantities on an industrial scale, the talks peter out.” In contrast to 2014, every company today, including those from Asia, must expect to become the target of secondary sanctions.
According to the economist, however, Russia has enormous adaptability. Because of the numerous crises, including the Crimean sanctions, the Russian economy is prepared for crises at any time. “It affects their strategic planning, their reserves, supplies, their ability to adapt,” Yakovlev said. “Now, for example, many companies are benefiting from having high inventories of components before the crisis.”
Nevertheless, the economist does not believe that the Russian economy is coping with the current sanctions as well as the corona pandemic. Because the interruptions in the supply chains would last longer than a few months, contrary to what many initially hoped. “Companies are only now beginning to understand that there is no return to normal.” Because of public pressure, companies that were not even obliged to do so had also given up their business in Russia.
According to Yakovlev, most businessmen do not support the political course, but have no influence on it either. “One thing becomes clear again and again in our discussions with company representatives: these people would not have started the war.” The business world has “no choice but to do what it has always done: survive somehow. The Russian economy naturally benefits from this. But you have to understand that this has nothing to do with supporting Putin.”
