News / Economy

Experts Debate Effect of Sanctions On Russia

Experts Debate Effect of Sanctions On Russiai
Jim Randle
May 22, 2014 10:58 PM
Why can't I start setting up a site with my domain name? Only is showing as an option
Jim Randle
Western nations are warning Russia that they will toughen economic sanctions if Moscow interferes in Ukraine's election on May 25th.  Economic analysts are divided on what impact sanctions have had so far on Russia's economy and the actions of its leaders.  Some say sanctions frighten off investors and hurt the economy.  Others say those sanctions have already kept Moscow from pushing harder into Ukraine.  And still others are skeptical that sanctions will have much impact.  

Pro-Russian activists have been working to take over parts of eastern Ukraine, using tactics similar to those that helped Moscow annex Crimea.
Western nations are already using sanctions to punish Russia for seizing Crimea and to discourage any possible Russian invasion of other parts of Ukraine.

U.S. Secretary of State John Kerry says economic sanctions could get much tougher.

"If Russia or its proxies disrupt the election, the United States and those countries represented here today in the European Union will impose sectoral economic sanctions," said Kerry.

Russia's vital oil and natural gas industry could be one target of stronger sanctions.  That would be a big change from sanctions that have so far been aimed just at people in Russian President Vladimir Putin's inner circle.

John Chambers, of the Standard and Poor's financial services company, says sanctions worry investors because they increase uncertainty.
"There's already been an impact on the Russian economy.  You see that in the financial markets. You see that in the outward portfolio flows," said Chambers.

Uncertainty makes it hard for investors to assess risk, prompting them to take money out of the country.  Without capital to buy and build things, the economy can stall or even shrink.  

Russia’s economy already had problems, making it hard to judge the impact of sanctions, according to Columbia University Professor Tim Frye, who spoke via Skype.

“There are lots of underlying negative trends in the Russian economy that have dramatically slowed growth in the last couple of years.  At the margins, sanctions may be increasing some economic uncertainty, but they are not having a broad economic impact yet," said Frye.

An economist who once advised the Russian and Ukrainian governments says sanctions could get “a lot tougher.”  

Anders Aslund, of the Peterson Institute for International Economics, says that sanctions may have kept Moscow from taking stronger military action against Ukraine.

 "It is not obvious, but I think they [the sanctions] have worked.  What we have seen is that the Russian action in eastern Ukraine looks as if it is faltering, and one of the factors behind it is sanctions," said Aslund.

Aslund says Russia’s economy will shrink rather than grow this year, at least, in part, due to sanctions.

You May Like

Video Russia’s Syrian Escalation Tests Obama’s Crisis Response

Critics once again question whether president has been slow to act on Syrian conflict, thus creating opening for powers like Russia More

Ancient African DNA Shows Mass Migration Back Into Africa

First genetic analysis of ancient human remains in Africa suggests massive migration from north around time of Egyptian empire More

NASA: Pluto Has Blue Sky

New photos also reveal the presence of water ice More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Hungary Criticized for Handling of Refugeesi
Henry Ridgwell
October 08, 2015 8:02 PM
Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

VOA Blogs

World Currencies


Rates may not be current.