Paul Krugman, winner of the Nobel Prize in Economics, says that the historic sanctions imposed by the West against Russia over the war in Ukraine are working in an unexpected way, reports Markets Insider.

“Russia has no problem selling its stuff, but it has a lot of trouble buying stuff,” Krugman notes in a new article published by The New York Times.

He also writes that while Western powers have focused on restricting Russian exports through measures such as the ban on Russian oil imports, it is the restrictions on Russian imports that are seriously affecting the economy of the country led by Vladimir Putin.

The effect is not entirely consistent with the plan of Western officials, who aimed to limit the revenue that Russia can pour into its war machine by curbing energy exports.

Although Gazprom’s daily output fell to a 14-year low in July, data cited by Krugman show that in the first 3 months of the “special military operation” alone, Moscow earned $24 billion in energy export revenues.

One explanation is that since the invasion began on February 24, the price of Brent crude has increased by 8%, and the price of natural gas by at least 70%.

Imports are the Achilles heel of the Russian economy

But on the import side, the situation for the Russian economy is radically different.

Bans on the export of goods to Russia led to a decrease in the volume of its trade exchanges by 60% in the case of countries that imposed sanctions against Moscow, and by 40% in the case of other trading partners of the Russian state.

This led to a sharp drop in Russia’s industrial production, and therefore its GDP.

According to the Peterson Economic Institute, the production of such things as household appliances, coal and plastics has fallen by up to 50% in Russia.

Amazing effect of sanctions against Russia

“So the economic sanctions against Russia turned out to be surprisingly effective, but not in the way that everyone expected,” notes Paul Krugman.

A wide-ranging study by Yale professors and international experts published last week also shows that, despite upbeat statements by Moscow officials, Russian imports from China have actually declined, not increased as many had expected since the Chinese sanctions were imposed. West.

In addition, in terms of goods imported by Russia, the data shows that Chinese exports to Russia fell by at least 50% from the beginning of the year to April.

In absolute numbers, it looks like this: at the end of 2021, exports amounted to $8 billion per month, and in April the monthly value was below $4 billion.

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