Russia-Watching: Economic Dysfunctionalities

[from the Russian Analytical Digest]

This issue deals with dysfunctionalities in the Russian economy. The first three contributions look at the direct impact of sanctions. Ilya Matveev provides an overview, while Andrei Yakovlev compares the government’s anti-sanctions measures to its reaction to the economic impact of the COVID-19 pandemic. Janis Kluge offers a more detailed picture of the short- and long-term effects of the unfolding sanction regime. Michael Rochlitz then goes on to explain the lack of strategic planning in the country’s economic policy. Finally, Olga Masyutina and Ekaterina Paustyan provide a case study of inefficient governance mechanisms looking at waste management.

Read the full issue [archived PDF].

Analyses

Sanctions against Russia: No Blitzkrieg, but a Devastating Effect Nonetheless

by Ilya Matveev

In response to the Russian invasion of Ukraine, over 40 countries have introduced sanctions against Russia. The new restrictions concern finance, trade, logistics, and personal sanctions against businessmen and officials. In addition, more than 1,000 companies have ceased or limited their activities in Russia. In this article, Ilya Matveev argues that the sanctions, despite their unprecedented scale, have not led to the collapse of the Russian economy, yet their effect is dramatic, multi-faceted, and will increase over time.

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Fighting the Pandemic and Fighting Sanctions: Can the Russian Economy Now Benefit from Its Experience with Anti-Crisis Measures?

by Andrei Yakovlev

Faced with tough international sanctions in reaction to its war against Ukraine, the Russian government has resorted to measures developed during the COVID-19 pandemic in order to stabilize the economy. This short analysis discusses the rationale behind this approach and demonstrates its limits.

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Russia’s Economy under Sanctions: Early Impact and Long-Term Outlook

by Janis Kluge

Four months after a coalition of Western states imposed unprecedented sanctions on Russia, the Russian economy seems to be holding up better than expected. The Central Bank has managed to stabilize the country’s financial system and Russian officials are trying to project optimism about the future. However, this optimism is likely to be short-lived. The sanctions’ effects are only just beginning to unfold: supply-chain problems are intensifying and demand is falling quickly. In the longer run, Russia’s economy will become more primitive as it partially decouples from international trade. To avoid social tensions, the government will intervene to support Russian businesses, leading to more protectionism and a larger state footprint in the economy.

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Why Russia Is Lacking an Economic Strategy for the Future

by Michael Rochlitz

Even before the economic crisis caused by Russia’s full-scale attack against Ukraine and the ensuing sanctions, the Russian economy was plagued by a number of growing problems. As a result, Russia’s economy has hardly grown for almost a decade, with an average annual growth rate of just 0.5% between 2013 and 2021. However, the Russian government does not have a strategy for addressing the fundamental economic challenges that are looming just over the horizon. There also seem to be no public debates about these challenges, whether in the policy circles around the government or among the wider public.

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The Political Economy of Waste Management in Russia

by Olga Masyutina and Ekaterina Paustyan

The problem of household waste is one of the numerous environmental challenges facing Russia today. The 2019 nation-wide waste management reform was designed to tackle this problem by promoting recycling. However, the reform is stalling, due in large part to the nature of state-business relations in Russia. The lack of transparency in the public procurement process and the importance of personal connections between businesses and the federal and regional authorities undermine the implementation of the reform and produce suboptimal outcomes in the fight against waste.

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Education: Disease, History and Lit

The Italian writer Giovanni Boccaccio lived through the plague as it ravaged the city of Florence in 1348. The experience inspired him to write The Decameron.

The Plague of 1665 in England was a major upheaval affecting Isaac Newton’s life.

The 1984 movie, A Passage to India (David Lean) set in 1920s India, has a scene where the ever-present lethal threat of cholera is discussed as Doctor Aziz lies sick of a fever.

The W. Somerset Maugham novel, The Painted Veil (2006 movie) is also about cholera in the Chinese countryside in the 1920s.

Manzoni’s 1827 The Betrothed, the most famous classic novel of Italian literature, centers on the plague to drive the story.

Overview:

Etymologically, the term “pest” derives from the Latin word “pestis” (pest, plague, curse). Hardly any disease had such cultural and historical relevance as the bubonic plague. Throughout the centuries, the plague was the most terrifying infectious contagious disease which generated a series of demographic crises. The plague epidemics influenced the evolution of society biologically and culturally speaking. The Black Death was one of the most devastating pandemics in human history, is estimated to have killed 30%–60% of Europe’s population, reducing the world’s population from an estimated 450 million to between 350 and 375 million in 1400. This has been seen as having created a series of religious, social and economic upheavals, which had profound effects on the course of European history. It took 150 years for Europe’s population to recover.

The plague returned at various times, killing more people, until it left Europe in the 19th century. Modern epidemiology (Dr. John Snow, London) has its roots in cholera management and water sanitation as well as waste management.

Education involves seeing disease as a major protagonist in all history and not as a footnote.

The classic Plagues and Peoples should accordingly be studied by every student: Plagues and Peoples is a book on epidemiological history by William Hardy McNeill, published in 1976.

It was a critical and popular success, offering a radically new interpretation of the extraordinary impact of infectious disease on cultures and world history itself.