Russian economy under tough external sanctions: problems, risks and opportunities

The article examines key issues related to the current economic crisis in Russia caused by large-scale sanctions imposed by Western countries. We analyze main trends that have developed in the Russian economy after the introduction of the sanctions. We provide findings of a questionnaire survey of representatives of Russian enterprises, showing the reaction of domestic producers to the crisis phenomena of 2022. Having analyzed official statistics, sectoral and corporate information, we identify growth points that have emerged in the Russian economy under new conditions and describe main reasons for these “success stories”. We assess major risks and threats related to the development of the Russian economy in the medium and long term and propose methods to deal with them. We show that under dramatic foreign policy pressure on Russia, it is necessary to significantly expand the scope of mobilization (planning) tools. These mechanisms should provide a prompt solution to such structural problems as the full-fledged revival of key economic sectors, infrastructure development, elimination of regional imbalances, etc. Increasing the role of mobilization tools should be ensured by expanding public investment, strengthening protectionism in foreign trade policy, introducing elements of indicative planning and currency control; at the same time, the key function of market mechanisms should be preserved. We argue that Russia’s economy could make a powerful breakthrough in the modern context. This point is justified, on the one hand, by analogy with the situation in the late 1990s (a powerful breakthrough of the Russian economy immediately after the abandonment of inadequate macrofinancial policy), on the other hand, by the survey data of RAS Institute of Economic Forecasting on a sufficiently high modernization activity of Russian enterprises at the present time.