War is one of the most divisive and gruesome events that can happen within human society. Russia enacting a war within Ukraine consequently generated a lot of controversy and conflict globally. The U.S and many western countries at large responded to this war with sanctions, but what does that mean for each respective global power?
Sanctions are the primary modern disincentivization or punishment for countries that do wrong, without having to go as far as enacting a physical war. For Russia this has meant a removal from international banking, having foreign reserves frozen, and the complete or partial stop of certain exports and imports, most notably oil.
Sanctions like these are meant to encourage Russia to stop the war, but there are several risks involved. Sanctions need to be aggressive or the receiving country can just adapt, they tend to hurt the most vulnerable populations more than the country at large, and they tend to hurt the sanctioning countries as well.
Fortunately, there is a predicted 15% contraction of the Russian economy in 2022. This is a sizable drop for Russia, and is certainly putting pressure on the nation, but Russia in response has raised domestic interest rates and made trade harder. This does, as is generally expected, hurt the common people of Russia more than anyone.
On top of the Russian domestic issues, the U.S is seeing all time gas highs, due in part to the complete ban on Russian oil. The citizens of Russia and the U.S alike are turning to gold, a currency known for its popularity in unstable times, something that is a bad sign for the economy.
So are the sanctions working? It certainly seems so, but are they doing enough to change Russia’s actions? That’s something that will be seen with time. What’s at risk currently is putting more pressure on economically struggling countries. The global economy at large suffers from international sanctions, and in times of economic downturn countries have to really consider what actions they want to take.