Janis Kluge Profile picture
Mar 23 19 tweets 4 min read
What are the effects of #sanctions on the opinions of Russians about the West and the war? There is a naïve pro-sanctions view: Sanctions lead to economic hardship which is then attributed to the war and leads to anti-war sentiment. This is certainly not happening. 1/
There is also a naïve anti-sanctions view: Sanctions lead to economic hardship, which is attributed to the West's hostility and leads to a "rally-round-the-flag" effect and stronger support for Putin. This is also not happening. 2/
From my experience, there are two groups: The "enlightened group" of educated Russians, a minority, and the "loyal group" of Russians, the majority, who rather believe in Putin and the official line on foreign policy. Interestingly, the sanctions effects on both is complex. 3/
The "enlightened group" understands the economics behind sanctions, how they create economic hardship. They see that sanctions are often unfair, because they mostly affect Russians with closer ties to the West (sanctions target these ties) who are often against the war. 4/
The no.1 case study of these Russians is their own case. BUT the "enlightened group" also understands a second thing: That Russia started the war, that the war is horrible, and that sanctions are necessary in principle, and that the sanctions are a consequence of Russia's war. 5/
The result is a complex, sometimes contradictory position. The "enlightened group" will argue that sanctions don't work because of the "rally-round-the-flag" (see tweet 2), or that they should be done differently, so that they are fairer and more effective. 6/
Side note: Sanctions are already designed having "fairness" in mind, e.g. they don't target medical goods. The problem is: If you need to sanction really hard, there is no way to do it without unintended side effects. There is simply no more effective, fairer alternative... 7/
Now to the "loyal group": They are inclined to believe the official line on foreign policy (domestic policy is another story). According to this line, the West sanctions Russia because it wants to weaken or destroy it and achieve regime change. 8/
Most importantly, the official line does not connect sanctions to the war! Instead, Putin claims that sanctions will be introduced no matter what, have always been introduced and are not related to Russia's behaviour (insiders know this as "Jackson-Vanik blablabla"). 9/
So sanctions are "an attempt of the West to keep Russia down". BUT there is also a second element in Russian propaganda, which is different from other heavily sanctioned countries: Putin claims that sanctions are laughable, don't work, and only make Russia's economy stronger. 10/
Putin needs to project strength, and that is why he can't admit that Russia is in fact very vulnerable to sanctions. After all, under Putin Russia "stood up from its knees", as the official narrative goes. While the West is blamed for sanctions, their effectiveness is denied. 11/
Essentially, Putin tells Russians that there is no economic problem. And here it gets complicated for the "loyal group": If they experience economic hardship, who is to blame? Of course, it is difficult for the "loyal group" to see HOW sanctions lead to falling real incomes. 12/
They will see that their utility fees are rising. Who will they be mad at? They will see that their pensions are inadequate. Who will they blame? There is a good chance that they blame some Russian official, some firm, or some other Russian who is making their lives hard. 13/
While they experience economic hardship, the state propaganda tells them that the economy is fine: the often-cited "conflict between the TV and the fridge", a cognitive dissonance that can lead to frustration and anger, but that anger will rarely be targeted against the West. 14/
This is how the official line of "invincible Russia" undermines the "rally-round-the-flag effect". Of course the West is blamed for sanctions, but the link between concrete hardship and sanctions is weak. It creates unspecified frustration with the overall state of things. 15/
This frustration also does not lead to immediate political problems for Putin, but if a policy is introduced that is unpopular (say, a pension reform like in 2018), or if the state makes a mistake (does not manage a natural disaster adequately), the response is amplified. 16/
Of course, the war means that many unpopular policies are necessary, and that many mistakes can be made. For now, the patriotic mood connected to the "ongoing external conflict" is stronger. But chances are that it will wear off like after 2014, while frustration accumulates. 17/
I still see other war-related problems creating more frustration than sanction-induced economic hardship, especially the high number of dead and wounded soldiers. Economic hardship for Russians is also not a primary goal of sanctions. 18/
It is also completely unclear what frustration in Russian society will lead to or if it will play a role at all, given the level of repressions. The first goal sanctions is still to deprive the Russian state of resources, limit its options, making it harder to fight the war.19/19

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More from @jakluge

Mar 21
Can Vladimir Putin drag the world into the abyss of West-China escalation? Maybe. The secret to Putin's long-term survival in power is his skill in taking everybody hostage. He excels in creating settings in which you go down if he goes down, if you like him or hate him. 1/
He did it in Russia, in Russia's neighbourhood, with many in the West, and he is of course also trying to do it with Xi Jinping. Putin's tactic should not be confused with actual "madman" behaviour. Putin will not choose nuclear armageddon. It is calculated and rational. 2/
Note how Putin tries to portray him and Xi as sitting in the same boat at the current meeting. It could be dismissed as laughable, because it is so transaprent. And certainly Xi understands what is going on. But still, if Putin goes down, it would be a huge problem for Xi. 3/
Read 8 tweets
Mar 16
Great thread by @AlexGabuev, the best source on everything related to Russia-China! The way the use of the yuan has increased in #Russia over the last year really is remarkable. I still wonder how far it can grow from here, and if it is a local or a global phenomenon. 1/
Let's look at what the yuan can and cannot offer to Russia.

1.) Yuan is a store of value with low sanctions risk. Yuan has become the most important element in Russian foreign exchange reserves. Russia does not have any alternative if it wants to implement its budget rule. 2/
At the same time, the yuan has many (economic) disadvantages over dollar/euro as a store of value. a) China can simply devaluate the currency and its monetary policy is intransparant. b) It is more liquid than gold, but liquidity is still not great. 3/
Read 10 tweets
Mar 15
How are Russians sending money abroad? Raiffeisen has become the most important channel. On OhMySwift.ru, Russians are reporting about their experiences with wire transfers abroad (~4700 datasets), the picture is pretty clear. Here are recent transfers to Germany: 1/ Image
You can also order entries by bank, which is conclusive in the case of recently sanctioned Tinkoff: It stopped working, except for one yuan transfer to Hongkong. 2/ Image
What are the most important banks for sending money abroad?
Raiffeisenbank: 1770 transfers, 83% successful
Tinkoff: 981 transfers, 59% successful
BKS: 300 transfers, 76% successful
After Tinkoff was sanctioned, Raiffeisen almost has a monopoly. 3/
Read 7 tweets
Mar 10
China's Huawei and Russia post 2022: It's complicated. Overall, Huawei tries to respect Western sanctions and is retreating from Russia in crucial areas. It is not delivering network equipment to Russia, which is painful for Moscow. It has closed down offices and sales points.1/6
Huawei has banned Russian MIR cards from its "Huawei Pay" in Russia, an Apple/Google Pay alternative. It has also kicked out the apps of sanctioned Russian banks from AppGallery, its App Store alternative, and is compelling app developers to follow Western sanctions. 2/6
It has also closed down its enterprise sales division in Moscow at the end of 2022, laying off ~2000 employees (while offering some to move to different countries). 3/6
Read 9 tweets
Mar 9
#Russia has become much more dependent on #China as a result of war and #sanctions. This is about shifting trade volumes, but also the changing character of economic cooperation: It increasingly resembles the classic relationship of a petrostate with a modern economy. 1/
Most of the signature projects of the Russia-China economic partnership since 2014 have failed. Highspeed railway between Moscow and Kazan? Cancelled. The Russian-Chinese long-range airliner CR929? Practically dead. Russian 5G networks with Huawei technology? Nowhere in sight. 2/
What is thriving is Russian exports of oil, coal and gas, and Russian import of finished machinery, finished vehicles and finished electronics. This is in line with the "simplification" of Russia's economy that takes place gradually due to technological isolation. 3/
Read 4 tweets
Mar 7
Ein kurzer 📺🧵 zur Frage von Friedensverhandlungen und Auswegen aus dem Krieg (Sendung StudioM, Link ganz unten).

1.) Zum "Manifest für Frieden":
2.) Zum Vorschlag "Land für Frieden":
3.) Waren wir 2014/2015 naiv?
Read 6 tweets

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