Mahdi Seif-Tabrizi, researcher in the field of Russian studies
Sanctions have been used by Western countries for a long time as a tool to achieve foreign policy goals in the international arena, aiming to influence the behavior of targeted countries. However, it can be said that in recent years, there is significant evidence showing that the effectiveness of Western sanctions on political entities is increasingly diminishing.
Perhaps the dynamic nature and constant changes in the global economy are one of the key factors contributing to the reduced effectiveness of Western sanctions. Emerging powers such as China, Brazil, Russia, Iran, and India, in line with their active roles in the multipolar system, provide alternative economic pathways for targeted countries. In such a way, these countries are often willing to fill the gap created by Western sanctions for the sanctioned nations, thereby reducing or even neutralizing the impact of the sanctions. Furthermore, the interconnectedness of the global economy enables countries to limit the effectiveness of Western sanctions by finding solutions such as creating new alliances and business partnerships. In the following, we will point out some of the key reasons for the reduced effectiveness of Western sanctions and examine Russia's experience, which, in the current situation, is the most successful example of combating extensive collective Western sanctions and diminishing the effects of sanctions.
Sanctions exhaustion
In recent years, sanctions have become a common and widely used tool in Western foreign policy, to the extent that some politicians and economists refer to it as "sanctions fatigue" or "sanctions exhaustion." Years of imposing and continuing sanctions against various countries have led to desensitization among the targeted countries and the international community.
In response to sanctions, targeted countries have developed strategies to mitigate the impact of sanctions and find ways to continue their activities through unconventional means. This increasing flexibility in various sectors has significantly weakened the intended effects of Western sanctions and raised serious questions about their applicability.
Western sanctions often have unintended consequences that can undermine their effectiveness. In some cases, sanctions lead to increased hardship and suffering among various segments of society, while simultaneously failing to exert pressure on the political structure of the targeted country.
The cost imposed on different segments of society can eliminate international support for the sanctions and generate sympathy for the established political system, ultimately leading to a reduction and weakening of the intended impacts of the sanctions.
This supports the point made by Imam Khamenei, during a meeting with a group of university students on March 12, 2025, when he stated: "When sanctions continue, they gradually lose their impact. They themselves have admitted this. That is, they too have acknowledged that a country that’s been sanctioned can gradually find ways to counteract the sanctions." On the other hand, the effectiveness of Western sanctions heavily depends on the support and cooperation of other countries. However, in the current international system, guaranteeing broad multilateral support for the sanction structures has become increasingly challenging due to differences in the interests and priorities of countries, and disagreements among Western countries and their partners can significantly reduce the impact of sanctions.
Overall, the decline in the effectiveness of Western sanctions can be attributed to several factors, including changes in global dynamics, sanctions exhaustion, unintended consequences, and the limitations of multilateral cooperation.
Why have sanctions against Russia failed? Russia's experience in neutralizing the effects of sanctions
In March 2022, France's Minister of Economy and Finance, Bruno Le Maire, declared, "We will bring the Russian economy to its knees." Sixteen sanctions packages were imposed on Russia after that, but Russia's economic growth is projected to exceed that of the European Union and the United States for the second consecutive year. In 2023, Russia's GDP increased by 6.3%, and Russia's economic growth in 2024 is expected to reach 4.1%, which is better than official forecasts. Mikhail Mishustin, Russia's Prime Minister, reported to President Vladimir Putin that the Russian economy grew by 4.1% in 2024, which was slightly higher than the official forecast of 3.9%. Militarizing the economy, labor shortages, and difficulties in accessing Western technology can all have short-term negative impacts on a country's economy, but Moscow's strong performance is currently a big surprise for the West.
At that time, Le Maire's opinion aligned with those of US President Joe Biden and President of the European Commission Ursula von der Leyen, reflecting a Western consensus that the result of the attack on Ukraine would lead to shortages of weapons and money supply, a lack of electronic components, and reduced oil revenues for Russia. However, now, three years later, this has not happened. Why is there such a large gap between expectation and reality?
What were the mistakes of the West?
The first mistake of the West was underestimating the size of Russia's economy. Clément Beaune, France's Secretary of State for European Affairs, said in February 2022 that Russia "has the GDP of Spain." This statement was both incorrect and naive. World Bank statistics show that in 2022, Russia's GDP was the eighth-largest economy in the world by nominal value (while Spain was fifteenth) and the fifth-largest economy by purchasing power parity, which is slightly above Germany.
Russia's strategic assets
In any case, the size of a country's economy is an incomplete measure of its power. Despite undeniable weaknesses, such as excessive dependence on oil and gas revenues, Russia ranks among the top nations in several strategic areas. It is one of the three largest producers of hydrocarbons, non-ferrous metals, and grains, the largest exporter of nuclear reactors, and one of the top three space powers in the world. In electricity production, which is a key indicator of industrial power, Russia ranks fourth, after China, the United States, and India.
Predicting economic resilience
Since the annexation of Crimea in 2014, Russia has taken measures to promote economic resilience in the face of sanctions. The import substitution policy has led to self-sufficiency in various sectors, including the strategic sector of food security, in recent years. The National Payment Card System (NSPK), launched in 2015, manages all payments in Russia using cards issued by Russian banks. The Central Bank also developed a financial messaging system (SPFS) to replace SWIFT.
These measures proved their worth in March 2022, when sanctions forced Visa and MasterCard to suspend all cards issued in Russia. The SPFS was immediately implemented, allowing locally issued Western cards in Russia to continue providing services seamlessly. Ten major Russian banks that had lost access to SWIFT were transferred to SPFS.
Sanctions did not act as the crippling “financial nuclear weapon" that Le Maire had anticipated: after absorbing the shock of the 2022 sanctions, the banking sector was able to set a record in 2023, registering profits of nearly $37 billion. Despite Western countries freezing Russia’s financial reserves worth $300 billion, the Central Bank of Russia managed the crisis effectively and gained access to an additional $300 billion, equivalent to the entire reserve of Germany’s central bank, continuing operations with strength.
Proper management of oil sanctions
The sanctions forced Russia to adopt measures for crisis management, including capital controls to support the ruble, partial liberalization of foreign trade, and legalizing parallel imports of Western technology (by removing legal protection for intellectual property rights). These actions, along with redirecting trade toward "friendly countries," helped mitigate the effects of sanctions on Russia's economy.
Moscow has managed to minimize the impact of sanctions on its oil revenues, which form a significant portion of the federal budget. The Western sanctions on Russian oil and the imposition of a $60 price cap by the European Union on each barrel initially had a broad negative impact on the economy. However, with proper policies, by September 2023, Russian oil was being sold for $80 per barrel.
In early December, Bloomberg reported that Moscow's oil revenues had returned to pre-war levels, amounting to $11 billion per month. To achieve this goal, Russia purchased a fleet of second-hand tankers (a shadow fleet), shifted exports toward BRICS Plus members, and reached an agreement with Saudi Arabia to reduce global oil supply to keep prices at their highest levels. As a result of this policy, not only were Russia's oil revenues not reduced, but according to reports, due to the high price of oil despite the lower volume of sales, Moscow's revenues had tripled.
Growth of self-sufficiency in the economy
Western sanctions have unintentionally acted as a form of external support, and the exit of many Western companies from the Russian market has created new opportunities for Russian companies. Additionally, since Russia has a structural trade surplus (due to high oil and gas sales), it faces fewer challenges in attracting foreign investment. The biggest challenge for Russia's economy in recent years has been preventing the outflow of domestic capital (particularly from the export of raw materials) abroad. In fact, sanctions, which primarily isolated Russia from the Western financial sector, caused concerns among Russian oligarchs about the assets outside their country. This, in turn, led to a reduction in capital flight and reinvestment in the Russian economy, which resulted in nothing but contributing to economic dynamism.
This may explain why the number of Russian billionaires has significantly increased in the years following the start of the war. The total value of their assets has reached $537 billion, almost double that of 2022. The newcomers are not oil billionaires or arms dealers but managers of companies in the food, distribution, real estate, and transportation sectors, which itself is evidence of economic strengthening in various fields. The construction sector has grown by 8% with increased support for homebuyers, and air travel and hotels have increased by 10% and 9%, respectively, mainly due to the growth of domestic tourism. The automotive sector, after overcoming the shock of sanctions and capitalizing on the exit of Western car manufacturers, has witnessed a 19% growth.
Transformation of the world order
The West has not only underestimated Russia but has also failed to understand the recent structural changes in international relations. The failure of sanctions is related not only to the reluctance of most countries to impose them but also to internal factors within Russia. It seems that the collective West believes its economic weight gives it the power to impose its will, while failing to sufficiently pay attention to the growing economic power of Asia. Instead, Russia has managed to redirect its trade toward emerging economies such as China, Brazil, and especially India (exports to India have increased fivefold.)
Establishment of a new supply chain to meet needs
Expanding and activating the capacity of alliances and coalitions such as BRICS, the Shanghai Cooperation Organization, and the Eurasian Economic Union has allowed Moscow to shift its supply chain toward countries such as the UAE, Turkey, Armenia, Kazakhstan, and several African countries. Through this, Russia has been able to export sanctioned products by creating multi-layered networks, without the West having the capacity to counter the network that has been established.
Russia has demonstrated that by making the right decisions in political, economic, cultural, and other areas, it is possible not only to limit the consequences and impacts of Western sanctions but, in some cases, to neutralize them. Additionally, by effectively utilizing internal capacities, relying on domestic capabilities, and having a realistic and accurate understanding of the structure of the international system and global trends, it is possible to manage threats and use the opportunities gained to secure national security and interests in the best possible way.
(The views expressed in this article are author’s own and do not necessarily reflect those of Khamenei.ir.)
Comment