According to President Putin’s former main economic adviser, a “serious embargo” on Russian energy by Western countries may end the conflict in Ukraine.
Russia, according to Dr. Andrei Illarionov, “did not take seriously” other nations’ warnings to limit their energy use.
Despite its efforts to minimize its dependency on Russian suppliers, Europe continues to purchase oil and gas from Russia.
Oil and gas income made for 36 percent of Russia’s government spending last year, thanks to rising prices.
The European Union, which imports around 40% of its gas and 27% of its oil from Russia, accounts for a large portion of that money.
“A billion [euros] is what we pay Putin every day for the energy he gives us,” its senior diplomat Josep Borrell said this week.
Dr. Illarionov said that if Western countries “tried to impose a true embargo on Russian oil and gas exports… I would guess that Russian military actions in Ukraine would be halted, perhaps within a month or two.”
“It’s one of the most effective devices left in Western countries’ hands,” he continued.
While the oil and gas trade has continued throughout the conflict, extensive sanctions have resulted in the cessation of much other economic activity, the withdrawal of many foreign enterprises, and the disruption of exports.
According to a recent study conducted by Russia’s central bank, the GDP will contract by 8% this year, with the International Institute of Finance predicting a 15% drop.
President Putin was willing to take a damage to the economy, according to Dr. Illarionov, demonstrating his objectives.
“His territorial goals, his imperial ambitions, are far more essential than everything else, including the Russian people’s livelihood and the country’s financial status… even his government’s financial state,” he stated.
President Putin said last week that “key indicators” of the Russian economy’s health include “the creation of jobs, the reduction of poverty and inequality, the improvement of people’s quality of life, and the availability of goods and services,” amid tensions with Europe over how gas would be paid for.
According to the World Bank, about 20 million Russians are poor.
In recent years, President Putin has committed to decrease that figure.
As the economy struggles, Dr. Illarionov predicts that “the number of such persons will definitely double, maybe even triple.”
The Centre for Strategic Research, a Moscow-based think tank, estimates that two million jobs would be lost this year as the jobless rate climbs from a historic low.
Vladimir Milov, a former Russian deputy energy minister who is now a member of Alexei Navalny’s Russia of the Future opposition group, shares these fears.
“Many people are anxious about losing their jobs,” he continued, “but I believe the majority of people are underestimating the severity of the economic situation.”
Because of the war, inflation has already reached 15.7 percent, which means people may cease spending money on things like gyms and restaurant meals, which “is terrible news for a lot of small enterprises,” according to Mr Milov.
Since the beginning of the year, the price of several basic foods such as sugar, onions, and cabbages has increased by more than 40%.
Any obvious drop in living conditions, Mr Milov added, would strengthen his party’s opposition cause.
“We’ve been explaining to people all along that Putin’s approach will lead Russia into a disaster, including a full social and economic catastrophe, as well as a decline of living conditions that we haven’t seen in decades,” he added.
“That, I must add, comes at an exorbitant cost. We’d rather not see what’s going on right now.”
Mr Milov, who escaped to Lithuania last year, believes that decreasing living standards would take time to transfer into political change.
“Russia is a country with a lot of social inertia and a lot of fear instilled by the government. People are particularly terrified of demonstrating because they can now be imprisoned for a lengthy period of time if they do so “..
He said, ” “But I believe that a few months of truly profound economic crisis, such as we haven’t had in 30 years, will transform society’s mood. People will begin to speak up more frequently.”
Dr. Andrei Illarionov, a former adviser to President Vladimir Putin who now lives in the United States, believes that a change of administration is inevitable “sooner or later.”
“With the existing political regime, there is no way to have any constructive future for Russia,” he stated.
“There is no way that country could be incorporated again into international ties, in the world economy” under President Putin, he said.