Expert economists, diplomats and investors have projected that the Russian Ruler’s unprovoked war on Ukraine that is being met by a global response will set the country’s economy back by at least 30 years.
The expert projections hints close to old Soviet Union times for the Euroasian country.
Owing to the sanctions being served to Russia by many Western countries, corporate bodies and entities, experts also project that the sanctions will lower the standard of living for at least the next five years.
Undoubtedly, the sanctions are placed to inflict maximum pain on the country’s economy by ejecting it from global markets and trade activities and by also freezing assets by Russia and Russian Oligarchs around the world.
However, from the moment these sanctions were stamped, three weeks ago, they have opened a new chapter in Russia’s economic history and by extension, many other global markets. Russia’s financial system and currency are already on the verge of collapsing on multiple fronts, forcing the Kremlin – Russia’s citadel of foreign affairs – to close the stock market and artificially prop up the Ruble – Russia’s local currency – inside its borders.
These sanctions are practically reducing a 40-year effort in building a prosperous market-based economy that commenced under former leader Mikhail Gorbachev.
Three major sanctions have wreaked the most havoc for the country:
Expulsion from SWIFT Payment: This sanction ensures that Russia is excluded from the global transaction system known as SWIFT. This has made it very difficult for Russia to process overseas transactions.
Freezing of Russia’s Euros Reserve: The second sanction saw the freezing of hundreds of billions of euros held in reserve by Russia’s central bank. Without the reserve funds to shore up the Ruble, the Kremlin has quite a limited level of power to prevent the value of the Ruble from collapsing.
Halting Russia’s Oil and Gas Products: The U.S. and Britain have also moved to halt oil and gas products from Russia. For the U.S., export controls have also been imposed on high tech equipment and luxury goods from Russia. There is also a growing list of countries that have barred Russian ships from their ports as well as a number of brands that have exited Russia in what has been tagged as The Great Exodus.
Russia is already snowballing on its economic crisis and this threatens to wipe out decades of economic gains made by ordinary citizens in the country as well as other foreign relationships. Investors King also gathered that in the past month, the ruble has lost 40% of its value against the dollar – rendering the currency effectively useless outside of Russia.
