By Andrei Skvarsky.
An analysis by investment bank Renaissance Capital suggests that the Russian economy’s degree of resilience practically rules out it being sent haywire by Ukraine-related sanctions the White House has on the table and that harsher sanctions might have exorbitant international costs for the United States.
Sanctions formulated in a bill put before Congress by Democratic lawmakers last week would pose “no crucial risks” to Russia’s economic growth or fiscal position, RenCap economists Sofya Donets and Andrei Melashchenko say in a report released on January 14.
Those sanctions, which would mainly target Russian sovereign debt, some Russian banks and the Nord Stream 2 gas pipeline project, would only have a “moderate negative effect”, Donets and Melashchenko say.
What will become “Defending Ukraine Sovereignty Act of 2022” if the bill is signed into law would authorise more rigorous anti-Russian sanctions if the Ukraine crisis keeps escalating, with Russia’s extractive industries – the oil and gas, coal and other mineral-producing sectors – being put in the United States’ crosshair.
But even those measures would hardly get very far, according to Donets and Melashchenko, who are economists for Russia and the Commonwealth of Independent States.
“We believe that Russia, with its robust external and fiscal position, abundant reserves, de-dollarisation, potential counter-sanctions toolkit etc., has quite a high ‘pain threshold’ now, and the related international costs of overcoming it could be too high to go for,” the two economists say.
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