Western punitive measures work
Small companies in particular are feeling the effects of sanctions
03/15/2022, 6:25 p.m
Small and medium-sized companies in Russia that have not yet recovered from the pandemic are particularly suffering from the imposed sanctions. Many are complaining about the falling ruble and massive supply chain problems. A large majority is therefore dependent on the help of the state.
A clear majority of small and medium-sized enterprises in Russia are feeling the effects of the economic sanctions imposed by the West. The Kremlin representative for companies, Boris Titov, has now presented a study according to which a good 84 percent of the companies surveyed state that they have been affected in some way by the punitive measures. Before the new round of sanctions over the Russian attack on Ukraine, it was 26 percent.
Around 6,000 companies nationwide took part in the survey. The study was carried out by the Stolypin Economic Institute in two stages, one from February 14 to 18, ie before the military operation in Ukraine, and one from March 3 to 7. According to the Russian media, the “biggest problem” of the latest sanctions is the sharp rise in purchase prices, along with many other difficulties. This has consequences for the costs of the companies and weakens their competitiveness.
The companies surveyed also complained about the falling ruble and massive supply chain problems. According to the survey, more than half of the companies have not yet recovered from the consequences of the corona pandemic. Almost 90 percent of Russian companies currently need state support.
What are the new sanctions?
The Ifo Institute also believes that the planned new Western sanctions against Russia will have further negative effects on Russia. Only last Friday, the EU states agreed on further punitive measures with the USA and other allies because of the Russian war of aggression against Ukraine. In addition to an EU export ban on luxury goods and an import ban on steel, this also includes new trade barriers.
Specifically, Russia is to be deprived of the so-called most-favoured-nation status in terms of trade. A statement by the G7 states talks about ongoing preparations for a statement by a broad coalition of WTO members. In fact, that comes very close to being expelled from the World Trade Organization (WTO), said Lisandra Flach, head of the Ifo Center for Foreign Trade.