https://quillette.com/2024/10/15/how-russia-beats-western-sanctions/
Russia currently exists in a state of economic purgatory. Since Vladimir Putin’s invasion of Ukraine in February 2022, Western powers seeking to limit his nation’s warmaking capacity have instituted one of the harshest sanction regimes the world has ever seen. Imports of Russian oil, above a certain price, have been outlawed, as have exports of sensitive materials, such as semiconductors, engine parts, and communications equipment,that might find their way into Russian weaponry. The country’s banks have been cut off from SWIFT—the main system banks use to coordinate international payments. And some $280 billion worth of Russian assets remain frozen in European banks.
Despite this, Russia’s war continues. The Russian economy grew at a rate of around 4 percent in the second quarter of 2024, down from a first quarter high of 5.4 percent. And despite predictions that the Russian military would suffer crippling shortages, Putin’s war machine has proved surprisingly efficient at rearming itself. In fact, the Russian arms industry is booming. The Royal United Services Institute (RUSI), a UK defence think tank, estimates that Russia’s domestic production of Kh-101 cruise missiles has increased eightfold over the last year. And Russian military spokespeople have boasted of supply lines that deliver tanks, drones, and artillery shells in their thousands.
Though the Russian boasts are surely hyperbole, Russia’s military resilience continues to embarrass the world’s economists. Shortly after Russian troops crossed the border into Ukraine, the International Monetary Fund predicted that the sanctions would cause Russian GDP to shrink by more than a tenth by the end of 2023. The Economist speculated about the possibility of a coup. Analysts at Reuters opined that Russia would probably collapse under such financial pressures. How then, has the Russian war machine kept on rolling?
The answer is that trade flows of restricted goods have shifted in response to the global sanctions.