The country has withstood Western pressure by developing new trade and boosting domestic investment, Oleg Deripaska has claimed
© Getty Images / Matt Champlin
The sanctions that the West has imposed on Moscow are ineffective and outdated, Russian businessman Oleg Deripaska told Financial Times on Tuesday.
The founder of the world’s second-largest aluminum company, Rusal, likened sanctions to an economic “wonder-weapon,” but noted that their effectiveness is doubtful and could be harmful to the global economy as a whole.
“I always doubted this Wunderwaffe [wonder-weapon], as Germans used to say, of sanctions – weaponizing the financial system as a kind of tool to negotiate… We made so much effort to make the world global, in terms of trade, investment, information flows [but] it’s really over when you use sanctions. It’s kind of an instrument of the 19th century. We can’t see that it would be efficient in the 21st century,” the businessman stated.
Deripaska noted that the Russian economy has not only survived sanctions, but has been growing stronger through new trade ties with the Global South and increased investment in domestic production.
“I was surprised that private business would be so flexible. I was more or less sure that up to 30% of the economy would collapse, but it was way less… Yes, there is war spending and all this kind of subsidies and government support but still it’s a surprisingly moderate slowdown… The private economy found its way to operate and to do so successfully.”
Deripaska said that countries from the Global South were unlikely to join the sanctions, as it would jeopardize their own economies due to Russia’s importance as a trade partner and major supplier of energy, metals, and food exports.
“You know, [the Global South] needs to feed 1 billion people every day, and you ask them to commit [to sanctions] or suffer… Out of the next billion people who’re about to be born, 70% will be in this region. Let’s face reality. They want development, they need Russian resources, Russian solutions, trade with Russia,” he stated, adding that “it was a grave mistake” for the West to believe they could unite the global community against Russia.
Deripaska has called for the cessation of hostilities in Ukraine, but noted that unless Moscow and Kiev themselves decide to put an end to the conflict, other measures are unlikely to bring any positive results.
“I can’t see why it shouldn’t be stopped from both sides. I can’t see that anyone will reach their declared goal… Believing that the sanctions will stop [the conflict] or create regime change or somehow make us closer to the end of the conflict… No. We need to have another solution.”
Since February 2022, Russia has been hit with multiple rounds of sanctions introduced by the US, EU and their allies. While the country’s economy slowed last year, contracting by 2.1%, according to Rosstat estimates, the government has managed to adapt to new realities by adjusting monetary policies and reorienting to markets in the East.
This month, Russia regained the economic growth it had prior to Ukraine-related sanctions, Russian President Vladimir Putin said at a government meeting last week. He noted that while in April, GDP growth was forecast to be 1.2%, “we have already surpassed this target, and by the end of the year, GDP growth may reach the level of 2.5%, or even 2.8%.”
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