Fox News’ Amy Kellog talks to Russian economist Pyotr Mironenko about the narrative Vladimir Putin is spreading about the strength of the Russian economy
“Russia’s so-called ‘special military operation’ in Ukraine has not only led to the international isolation of the Russian economy, but to new levels of government secrecy,” began an article in The Bell, a Russian news outlet this week.
The article goes on to say that while the transparency of economic statistics in Russia was not great before the war, data suppression has now reached unprecedented levels.
The Federal Tax Service has stopped publishing monthly figures on imports and exports, the Central Bank has stopped publishing a monthly report on foreign trade, Sberbank, the largest in the country, has stopped publishing on its site Web the identity of its main leaders and the list goes on. , according to La Cloche.
Fox News spoke with Bell co-founder and editor-in-chief – and author of the article – Pyotr Mironenko, about what is really happening with the Russian economy, knocking Iran out of its position as the country the most sanctioned in the world.
He claimed the data hiding served more as an irritant to those tracking the economy and looking for people to punish than anything else. The names and numbers are still in the public domain, but it has become harder to access them – and that has helped Russia deny what it wanted to deny.
People line up outside a branch of Russia’s state-owned bank Sberbank (MICHAL CIZEK/AFP via Getty Images/Getty Images)
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Because energy prices have been so high, Russia is absorbing a lot of foreign currency – but, because it’s under such heavy sanctions, it really can’t spend that money. As a result, the ruble is strong counterintuitive. It had traded at 100 to the dollar in the early days of the war. Now it hovers around 63. The government needs to convert more money at this level to pay the ruble salaries of state employees, but the symbolism advantage of a strong ruble apparently outweighs it, for l moment, on the economic costs of maintaining the currency at its level. high exchange rate.
“The Central Bank is very careful about removing all the restrictions that make the ruble so strong, so expensive now. This is largely done so that the average person walking past a currency exchange office will see that there is has sixty-three rubles for the dollar,” Mironenko said.
“This is the main indicator for him – makes him think that everything is not so bad – the ruble has appreciated, so we showed it to the Americans. This is how the logic of the average Russian works. I read different threads – it’s this kind of social bubble window where you are with like-minded people. And, in these threads, many people come up with precisely this reasoning: the ruble has strengthened, this which means everything is good for the economy, the sanctions haven’t hurt us anyway, the West needs our oil, so they won’t walk away from us, and they will come back to us. “
Customers queue to use ATMs at a shopping center in Moscow, February 2022. (Andrey Rudakov/Bloomberg via Getty Images, File/Getty Images)
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Mironenko said sanctions on technology and parts for many things will have a huge effect on Russia’s economy because the country’s production is very closely tied to the global supply chain, but it won’t change the course of the game. Russian President Vladimir Putin. It will be a slow decline of everything, he says, but like Iran which has been under sanctions for 40 years, life will go on. Sanctions against the oligarchs, according to him, are not a way to hurt Putin.
“I don’t think he communicates with the oligarchs these days, probably because both sides don’t see much into it. Because the same oligarchs who complain to the European press that they lost everything – what – they will come to Putin and what will they say to him? “Volodya, I have lost everything, stop the war in Ukraine!” Which is clearly the main project of Putin’s life at the moment,” Mironenko said.
Ukrainian first responders carry an injured pregnant woman from a bombed-out maternity hospital in Mariupol on March 9. The woman and her baby died a few days later. (AP Photo/Evgeniy Maloletka, File/AP Newsroom)
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Despite the sanctions, the budget remained in surplus. According to economic estimates, if the Kremlin continues the war at full speed, it will be able to afford this and all social spending for another year and a half or two. Only a European oil ban, still under debate, would deal a decisive blow to the economy, according to Mironenko. He estimated that it would cost Russia a quarter of its foreign exchange contribution.
Last month, the state took in some $24 billion from the oil and gas trade, Mironenko said. He added that he believed the maximum he was spending on the war was $8 billion a month. Thus, an economic collapse would not happen just like that. But Mironenko stressed that the budget would head for a deficit next year if oil sales to Europe were blocked, in which case Russia would have to make very tough decisions about which projects it should cut.