The West expected that the unprecedented sanctions imposed on Russia in early 2022, especially those in the financial and energy spheres, would swiftly coerce it into stopping the special operation. They calculated that the Russian economy wasn’t resilient enough to survive the systemic shocks that these moves were supposed to provoke. President Putin would either do their bidding in order for Russia not to go bankrupt or Russians would rise up to overthrow him in a Color Revolution if he didn’t.
None of this came to pass precisely because the presumptions upon which the West’s sanctions policy was built were fundamentally flawed. For starters, Russia created an alternative payment system inside the country during the eight years between “EuroMaidan” and the special operation, thus enabling it to continue processing financial transactions despite that aspect of the sanctions regime. The West knew about this but wrongly assumed that it couldn’t fully replace their systems. That was the first mistake.
The second was in thinking that the energy aspect of their sanctions regime would provoke a systemic shock to the Russian economy. The country still had enough reserves at home even after the West stole approximately $350 billion worth of its foreign assets to prevent that from happening. Then Russia mandated that officially designated “unfriendly countries” like those in the EU, which couldn’t completely cut themselves off from Russian energy right away, pay for these resources in rubles.
That helped replenish some of its stolen reserves while stabilizing the ruble. In parallel with this, energy sales to Asian countries like China and India surged, which compensated for the lost EU market. Moreover, it turned out that India became a middleman for quietly facilitating the indirect sale of Russian oil to Europe, which nullified the purpose of the latter’s sanctions regime. Questions then arose about why the sanctions remain in place just for the EU to pay a premium for Russian oil from India.
China and India also replaced Western products on Russian shelves, especially technological and medicinal ones respectively, while some former Soviet Republics helped Russia obtain prohibited Western products via discreet trade channels. Consumers remained largely happy and were accordingly a lot less likely to participate in a Color Revolution. Enough time was also bought for Russian companies to replace Western products with their own brands and contribute to maintaining economic growth.
A promising Eurasian trade route was also revived throughout the course of the past two and a half years. This is the North-South Transport Corridor (NSTC) between Russia and India via Iran. Its three branches run across Azerbaijan, the Caspian Sea, and Central Asia. Although the NSTC hasn’t reached anywhere near its full capacity, it importantly represents a so-called “sanctions-proof” means for Russia to trade with the Global South since the West has no direct influence over this route.
Reviewing the insight that’s been shared thus far, Western sanctions against Russia failed because: 1) Russia had alternative financial systems available to replace Western ones; 2) it also had enough reserves available to inject into the economy to stabilize it; 3) the ruble began to be used much more in all facets of bilateral trade with its partners; 4) China, India, and some former Soviet Republics helped Russia replace Western products; and 5) the NSTC was revived as a “sanctions-proof” Eurasian trade corridor.
The sanctions didn’t just fail, however, since they even ended up backfiring by forcing Russia to prioritize its long-overdue economic restructuring. To begin with, Russia was forced by necessity to diversify from its hitherto disproportionate dependence on the West as its primary trade partner, with China, India, and other Global South countries like Turkiye, Iran, the UAE, and African countries collectively replacing it. The West now has less leverage over Russia than ever before.
Likewise, although resource exports still comprise a sizeable proportion of the country’s budgetary revenue, Russia is no longer dependent on the EU as its primary customer. Furthermore, the discounted prices at which Russia has sold these resources to India fueled its economic rise, which resulted in its present status as a Great Power whose emergence on the global scene accelerates multipolar trends. This in turn hastens the decline of unipolarity and is therefore a blow to the West’s hegemonic plans.
India isn’t the only Global South country to speed up its rise since the special operation began since this is also true for all BRICS members, including the new ones that joined during the group’s second expansion in summer 2023. Saudi Arabia is of particular significance since it’s continued to cooperate with Russia via their OPEC+ framework for managing the global oil price even though America has pressured the Kingdom to flood the market in order to lower prices to help bankrupt Russia.
That energy superpower’s defiance of the US in spite of their decades-long strategic partnership and the role that Saudi Arabia played in popularizing the petrodollar speaks to how much has changed. It also deserves mentioning that not a single Global South country, even comparatively smaller- and medium-sized ones, has complied with Western pressure to sanction Russia. The reason is that they’ve become sovereign enough to prioritize their own economic interests instead of sacrificing them for others.
This approach holds true even among those countries that voted against Russia at the UNGA on Ukraine. To their credit, the pursuit of pragmatic relations is more important to them than obsessing over political differences on issues that don’t even directly concern them, thus proving that it’s possible to stand up to the West without any serious consequences as long as everyone does so at once. It’s here where larger trends come into play for explaining why the Western sanctions against Russia failed.
The 2008 financial crisis can be seen in hindsight as heralding the beginning of “regionalized globalization” in the sense of regions gradually integrating through economic means at first in order to ultimately become independent poles in the emerging world order. This process unprecedentedly accelerated in the aftermath of 2020’s COVID-19 pandemic, with everything being facilitated at the same time by China’s Belt & Road Initiative (BRI) investments in the Global South.
The modern infrastructure that was built across Afro-Eurasia and Latin America through no-political-strings-attached low-interest loans made it easier for regional leaders to advance their economic integration plans. The reduced cost of doing business with China led to more economic growth, which in turn lifted more of their people out of poverty, thus expanding the scope of China’s potential markets. These win-win outcomes that preceded the Western sanctions against Russia helped spell their doom.
The Global South had never been more prosperous and sovereign, which explains why this category of countries refused to comply with Western demands to cut off trade with Russia. The West was completely oblivious to these trends due to its hubris and that’s why it mistakenly thought that its sanctions regime would swiftly coerce Russia into stopping the special operation. They failed, the Russian economic is more resilient as a result, and multipolarity is arriving faster than ever.