Abstract
In this article, we examine Russia’s geo-economy under the economic sanctions imposed by the EU, the USA and many other states since spring 2014, including restrictions on economic cooperation in areas such as trade, certain types of energy technology, access to credit, trade in arms, travel bans and asset freezing. We first examine Russia’s economic and geopolitical interests and the cognitive frames Russian policymakers use to weigh these diverse interests against each other. Second, we examine how Russian policymakers can further these interests given the effect of the sanctions on Russia’s geo-economy. We analyse constraints and opportunities along the resource geographic, financial and institutional dimensions of geo-economy. Regarding resources, the sanctions seriously hamper new greenfield projects in Russia’s emerging energy provinces. They impede the industry’s middle- to long-term prospects while some Russians perceive new opportunities for its domestically induced modernisation. Along the financial dimension, low oil prices since mid-2014 shape existing fossil fuels trade more than the sanctions, which have no impact on Russia’s arms exports. The combined effect of low oil prices and sanctions on Russia’s state budget, the financial sector and the rouble is severe. On the institutional dimension, Russia’s international standing suffers, but its domestic institutions are relatively resilient. Overall, we see Russia as part of an international structure where it can constitute itself as an autonomous geo-economic actor under favourable conditions including high oil prices and no sanctions.
Highlights
Within the emerging multipolar world order with power shifting towards the growing economies of Eurasia, Latin America and Africa, Russia is often assigned the role of a prominent pole
The Ukrainian crisis since 2014 has for its part portrayed Russia as an old-fashioned military power rather than an emerging economy or rising power. These ambiguities associated with the geography, politics and economy of Russia require a detailed explication through the three approaches of geoeconomics discussed in this special Issue (Mattlin and Wigell 2016, this issue)
In response to our research question of how the sanctions affect Russia’s geo-economy, we can conclude that Russia’s overall capacity to realise its interests has been impaired, the impact is not uniform across the three dimensions of geo-economics analysed in this article
Summary
Within the emerging multipolar world order with power shifting towards the growing economies of Eurasia, Latin America and Africa, Russia is often assigned the role of a prominent pole. The sanctions involve several restrictions on economic cooperation in areas such as access to long-term credit for major Russian banks, energy companies and the defence industry, the export of Arctic and offshore energy technology and trade in arms.
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