Other developments have played a role too, including the U.S. Federal Reserve slowing its monetary tightening. Lower interest rates help emerging economies with high levels of debt denominated in U.S. dollars, such as Russia.
Sanctions appear to have had a modest effect, with the International Monetary Fund estimating that they have shaved off between 1.0 and 1.5 percent of Russia’s economic output. A 2019 report [PDF] by the Congressional Research Service (CRS) says this was partly intentional. Policymakers wanted to target individuals responsible for Russia’s bad behavior, without hurting ordinary Russian citizens or U.S. and EU businesses. This has prompted complaints that sanctions have lacked economic bite. The CRS analysts, however, point out that many of the measures prioritized long-term impact over short-term pain. Sanctions advocates emphasize that the uncertainty that results from sanctions could continue to drag on GDP in the coming years.
Have sanctions changed Russia’s behavior?
There doesn’t appear to have been much immediate effect, disappointing policymakers who hoped sanctions would deter Russian interventionism. Russia is still active in Ukraine and, according to Western intelligence agencies, Moscow has meddled in U.S. and European elections. Additionally, suspected Russian agents used a banned nerve agent in the attempted assassination of ex-spy Sergei Skripal on UK soil in 2018.
Some experts disagree, arguing that sanctions have dissuaded Russia from even more aggressive action in Ukraine. Others believe deteriorating economic conditions have cut into public support for Russian President Vladimir Putin and weakened his position.
On the other hand, some suggest sanctions may have actually backfired by boosting elite support for Putin. Still others argue that without clearly stated objectives for Russia to meet for sanctions relief, Russia will view the sanctions regime as indefinite, giving it no incentive to change. In any event, the debate over the effectiveness of sanctions is an old one.
That debate continues in Washington. In 2017, President Donald J. Trump’s ambivalence toward Moscow prompted bipartisan majorities in Congress to pass new sanctions and prevent the president from unwinding existing sanctions without congressional approval. In January 2019, Congress tried to again assert itself with legislation that would have stopped the White House from removing sanctions on Russia’s largest aluminum producer. That measure ultimately failed.
Still, the Trump administration has expanded some sanctions, including another minor tranche imposed in March in coordination with Canada and the EU. The White House is also considering additional sanctions related to election tampering and the Skripal poisoning, though the administration has pushed back on other Senate proposals.
Experts have long warned that Putin’s goal is to weaken cooperation between Western countries, and he has sought to coax friendly leaders in Austria, Hungary, and Italy to break ranks and push for sanctions relief. Meanwhile, separate sanctions on Iran and Venezuela are further bolstering the price of oil, raising the prospect that Putin’s struggling economy could get another boost.