May 20: WaPo Editorial Board, Russia’s economy is still marching along. Here’s how to slow it down.

As published in The Washington Post, May 14, 2023

Russia’s economy is still marching along. Here’s how to slow it down.

Editorial Board, The Washington Post, May 14, 2023

The air is seeping out of Russia’s sanctions-beleaguered economy, but not fast enough to impede President Vladimir Putin’s calamitous war in Ukraine or to inconvenience most Russians. Longtime visitors to Moscow and other cities report that shelves are full and daily life is visibly unchanged, thanks partly to huge state subsidies. It is now clear that the West’s campaign to weaken Russia’s finances in hopes of dampening Mr. Putin’s resolve and popular support will be a slog, not a sprint.

Still, Washington and its allies retain potent ways to undercut the Kremlin’s war-making capacity over time — if they are honed and intensified. Better coordination and tighter enforcement of existing restrictions hold the key to sharpening the war’s costs for Russian industry and consumers, and to further sapping Russia’s ability to continue manufacturing high-tech weapons. Equally important, the West can double down on its success in squeezing the Russian state’s most important revenue source: energy.

None of this will be simple. U.S. efforts to broaden the ban of exports to Russia have hit a brick wall in the European Union and Japan, according to a recent report in the Financial Times. And enforcement of multiple rounds of sanctions imposed on Russian entities and individuals has become an increasingly intricate cat-and-mouse game in the 15 months since Russia’s unprovoked invasion last year. As the sanctions have multiplied, so has the sophistication of Russia’s efforts to evade them.

An Altera Cyclone II FPGA chip in the internal navigation system of a Russian 9M544 precision guided rocket, also known as Tornado-S, which was collected on the battlefield by Ukraine's military and presented to Reuters by a senior Ukrainian security official in Kyiv, Ukraine on July 19, 2022. — Reuters/File

That is especially the case in Moscow’s efforts to obtain dual-use products — Western-made items and electronic components manufactured for civilian use that can be cannibalized and repurposed for weaponry.

It would help for the United States and the E.U. to coordinate more closely on their export bans. A group of Harvard economists examined the discrepancies in sanctions applied to several thousand products sought by Russia and found that many have been targeted for restrictions by either the E.U. or the United States, but fewer than half have been subject to sanctions from both. For example, high-end washing machines — banned for export by the E.U. but not by the United States — in some cases contain microchips that can be stripped for use in Russia’s arms industry, which is on a wartime footing.