Sanctions are working
If there were a ranking of jurisdictions or countries that understand sanctions, Ukraine would be in the top five, says Vladyslav Vlasyuk, advisor to the head of the OP. We have provided 40% of the information, evidence and recommendations for the latest sanctions packages, so Russian aggression has made Ukraine much more important in many issues of world politics, he added.
"There are a lot of sanctions. Unprecedentedly so. No country in the world has ever been subject to so many sanctions. Even North Korea and Iran, which have been living under sanctions for decades, including UN sanctions, are not in the top five, which is different from the Russian situation.
And this is a difficult story for us, by the way. Because every time we try to expand the sanctions coalition of 40+ countries or at least convince India not to buy Russian oil or China to supply less microelectronics, they say: "Your sanctions are unilateral." Not the UN, but unilateral ones. They tactfully keep silent about the fact that the UN Security Council will never impose sanctions on Russia. And the fact that 40+ countries adhere to the sanctions restrictions, which, in my opinion, makes them quite multilateral, is also tactfully kept quiet," Vlasyuk said.
He recalled that Russia is the world's largest exporter of resources. "We are used to Russia's constant economic growth. They have the ability to simultaneously steal billions, fill the National Welfare Fund with billions, and at the same time finance all their key expenditures quite well - for them, this is defence. Now we see that 30+% of their budget is already spent on the army. This is an incredibly large number and is already reminiscent of the Soviet Union.
But we also see that entire industries - for example, aircraft construction, woodworking, where the main market was the European Union, certain parts of oil refining, certain parts of mechanical engineering - have simply disappeared. There is none. That's it," Vlasyuk said.
GDP growth in the Russian Federation is 2-3%, and this is even taking into account the good global oil price environment, says the advisor to the head of the Presidential Office. "This is not much. Imagine how much would have happened without sanctions," he says.
But perhaps the most visible result of the sanctions policy, Vlasyuk says, is that Gazprom has become unprofitable for the first time since 1996, a company that was once valued at more than Apple or Microsoft.
"Russian imperial grandeur suffers greatly at those moments when Russians have to beg not even China or the Emirates, but other countries in the region to help them buy, supply or conduct some relevant transaction not even in yuan, but in third or fourth currencies. This is where Russia is in the context of the global economy as a result of its civilisational choice. There are no investments there now," the OP representative notes.
But sanctions are not enough
The bad news, says Vlasyuk, is that Russia continues to make money from oil, and a lot of it - between 10 and 17 billion a month.
"The difference in earnings from crude oil exports in February was 10 billion, in March - 17 billion, in April - 17 billion. That is, plus 7 billion, because they have adapted to oil sanctions again. And we are talking about it, we are being heard, we will see," says Andriy Yermak's advisor.
Another sad thing is that European companies that continue to remain on the Russian market pay huge taxes. European banks paid 800 million euros in taxes in Russia last year, which is twice as much as in any other year, Vlasyuk says.
"On the one hand, the economic pressure is great with definite results. The most conservative estimate of Russia's losses from the sanctions is 170 billion. But they can afford to lose them as long as they can continue to make money. Which they do relatively successfully," says the OP representative.
At the same time, he emphasises that the sanctions imposed on Russia have provoked a serious shift in many economic processes. For example, Central Asian countries are making incredible profits. Economic and trade flows are being redirected.
"This is a shake-up that has happened and continues to happen. And believe me, our position and the position of many partners is as follows: sanctions are not enough, there will be more and more sanctions.
"I like the metaphor of our co-coordinator of the International Sanctions Group, former US Ambassador to Russia Michael McFaul, who says that if you park your car incorrectly, you will receive a parking ticket every day until you pick it up, and that's how it works in the US. This is the situation with sanctions and the consequences for Russia," Vlasyuk said.
For partners, sanctions are not a punishment, but a means of encouragement
Ukraine's partners do not perceive sanctions as punishment for Russia, but rather as a means of encouraging it to behave in a certain way, says Vladyslav Vlasyuk, and requests for their cancellation are received quite often.
"It's good that we are involved in the possibility of sanctioning someone or getting sanctions imposed on someone. It rarely becomes public, but quite often our partners, in particular the UK and the EU, ask us for help - they receive letters to lift sanctions that they are imposing, but they lack evidence, then we help, and these sanctions stand. Usually, such steps are taken at the initiative of the Austrians and Hungarians," Vladyslav Vlasyuk said.
But, he concludes, sooner or later, the issue of lifting sanctions and the conditions under which they will be lifted will arise. It is a matter of time.