A study released by Yale University economists this week claimed Russia’s economy faces “economic oblivion” as a result of western sanctions placed on the country. The heavy economic penalties were imposed on Moscow in response to its invasion of Ukraine. In the report, the authors add: “The findings of our comprehensive economic analysis of Russia are powerful and indisputable: Not only have sanctions and the business retreat worked, they have thoroughly crippled the Russian economy at every level.
“Russian domestic production has come to a complete standstill with no capacity to replace lost businesses, products and talent.”
Express.co.uk spoke to the the lead author of the study – Jeffrey Sonnenfeld – who explained how Russia is “really in trouble.”
He said: “It just speaks to their inability to make payments, to receive compensation, that they have become such a rogue nation.
“To not be part of the global flows of finance is devastating, they are running a deficit as they are.
“They are an un-investable asset as they are in default, China won’t bail them out, that’s a huge problem. Other than cutting off their dependence on gas and oil exports, all they have to bring to the world market is grain and cyber-terrorism.
“If they can’t access any funds they are really in trouble.”
One key measure taken by Western countries earlier this year was the removal of some Russian banks from SWIFT, the system that facilitates financial transactions all around the world.
The organisation says it provides payment services for 11,000 institutions in more than 200 countries.
Sanctions have also stopped Russia from using its reserves of foreign currencies, estimated to be worth around £470billion.
Individuals with links to Russian President Vladimir Putin have also been sanctioned.
The US, EU, UK and other countries have sanctioned more than 1,000 Russian individuals and businesses who are said to be close to the Kremlin.
Prominent figures in the Russian government itself have also been targeted – President Putin and Foreign Minister Sergei Lavrov have had their assets frozen in the US, EU, UK and Canada.
One mystery of the last few months, however, has been the performance of the Russian rouble.
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Mr Tian said: “Simply put, if you are a Russian right now, you cannot legally access dollars. You can’t even access your own dollar deposits.
“That is your money in dollars but you cannot get it. If you look at the capital controls that have been placed on trading currencies, it is unprecedented, this is the strictest set of capital controls of any country in the world.
“Guess what’s happened to the trading volume of roubles to dollars – it has plummeted.
“When you have that level of capital controls, the exchange rate is meaningless. It is just an official exchange rate that no one can access.
“The currency will do whatever Russian policy makers have it do. It is an artificial reflection of Russia’s trade balance right now.”
Mr Wyrebkowski also said: “The reality is, if you are an inhabitant of a Russian city like Kazan, it doesn’t matter to you that the rouble is allegedly soaring because the shelves are empty.
“You cannot feed yourself based on what the Russian propagandists are saying, that is the reality of it.”