Natalia Zubarevich is a Russian economist and geographer, specializing in the socio-economic development of regions. She is a professor at the Department of Economic and Social Geography of Russia at Moscow State University.
Are you surprised by the resilience of the Russian economy observed so far? After an initial fall, the ruble, for example, has recovered…
Macroeconomists explain this very well. Russia receives an immense flood of dollars and euros for its hydrocarbon exports. Imports have been reduced drastically, which means that these euros and dollars are not used. At the same time, the authorities banned the sale of foreign assets and the removal of currency from the country. The ruble is, de facto, no longer convertible; its course is artificial.
There were also no food shortages…
There was a brief moment of panic, at the beginning of March, but that is over. There will be no shortage of commodities. Russia is able to supply its population with cereals, sugar, sunflower oil, chicken meat, pork… Beef is already more complicated, it comes from Latin America. However, we still have a hard time measuring what will happen with imports. Cocoa, coffee, tea… The prices of everything produced abroad are rising sharply, even without direct sanctions on these products. The problem is one of logistics.
There is also a very important gray area, that of products made in Russia, but with foreign components. Indonesia, for example, prohibits the export to Russia of palm oil, which is used to make cheese. Even in agriculture, there is a need for Western materials, seeds, ferments. Again, logistics are a problem.
The most visible effect of the sanctions, for the Russian population, is high inflation, on top of years of declining living standards. Is it tenable for households?
Between 2014 and 2020, according to official statistics, the real incomes of Russians fell by almost 10%. The situation has since improved somewhat, but especially in Moscow and St. Petersburg. Since the beginning of 2022, the trend is down again, and this could be 5% or 10% at the end of the year.
The current crisis adds to this degraded situation. Inflation, between December 2021 and March 2022, stands at 17%, and even more on food. The poorest suffer the most, but they are also those who are the most accustomed to cultivating vegetable gardens, and they do not consume the products whose prices have really exploded: cars, electronic gadgets… We must not forget that it is the fourth crisis in the last fifteen years. People are used to getting poorer.
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