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Examining the success of sanctions on Russia after it invaded Ukraine

STEVE INSKEEP, HOST:

We have an assessment this morning of U.S. sanctions on Russia. For more than two years now, the United States has constantly tightened its penalties on powerful Russians and their country's economy and their oil exports, all in an effort to impose a cost for Russia's invasion of Ukraine. It is also a test of a U.S. foreign policy approach that has become more prominent in recent years. The U.S. tries to pull all of its levers of economic power to influence what it sees as bad actors in the world. David Wessel and his colleagues conducted an evaluation of the effort for the Brookings Institution, which is a think tank here in Washington. David, welcome back.

DAVID WESSEL: Good morning, Steve.

INSKEEP: Are the sanctions working?

WESSEL: Well, if the objective was to get Putin to pull back his troops, the answer is obviously no.

INSKEEP: Right.

WESSEL: Russia's economy has been more resilient than many expected, but the sanctions are inflicting a lot of economic pain. The government-owned gas company Gazprom, for instance, reported its first loss in 20 years. And the sanctions are degrading the capacity of the Russian economy to deliver goods and services to its people.

Now, the architects of the sanctions say they're changing Putin's calculus about the cost of continuing the war, giving Ukraine leverage for the day that it negotiates an end to the war. And they certainly are sending a strong message to any other autocrat - think China and Taiwan - that's contemplating an invasion of its neighbors. But economic sanctions alone aren't going to deter Putin. And here's how Daleep Singh, the deputy national security adviser from the White House, put it at a Brookings event yesterday.

(SOUNDBITE OF ARCHIVED RECORDING)

DALEEP SINGH: President Putin's revealed preference is to think about this invasion much like an 18th-century land grab in the Czarist tradition of Peter the Great or Catherine the Great. What he cares about most is what's happening on the battlefield.

WESSEL: And that's even at the cost of returning Russia to a Soviet-style economy that's heavily devoted to producing arms rather than consumer goods.

INSKEEP: Well, I'm also thinking, David, that the Russians can adapt and have been adapting. You don't want to buy our oil? Fine, we'll sell it to China, we'll sell it to India, try to find new markets for our goods.

WESSEL: Exactly. So Singh told us yesterday that sanctions are like antibiotics. Repeat usage builds up resistance. So Russia is doing all it can to circumvent sanctions, and thus the U.S. and its allies keep adapting them. For instance, when the leaders of the Group of Seven meet in Italy in a couple of weeks, they're going to endorse a scheme to aid Ukraine by using interest on the 300 billion of Russia's foreign exchange reserves, which have been frozen. And there are also discussions about going beyond bans of Russian imports of U.S.-made products to an even broader list of U.S.-branded products, no matter where they're made, because a lot of them are ending up in Russian weapons.

INSKEEP: OK, David, a lot of us have followed this story as it's developed over the past couple of years, but I want you to help me understand the big picture because I've gotten the impression this is part of a bigger shift in U.S. foreign policy. We don't send armies abroad anymore. We might send weapons to people. But we also send these economic sanctions using all these levers of power. Is this working, and how big a change is it?

WESSEL: I think it is an evolution. It's called, among the experts, economic statecraft. It is an alternative to using troops. The U.S. moved from sanctioning trade of goods in the Carter years when Russia invaded Afghanistan...

INSKEEP: Oh, yeah.

WESSEL: ...To using the global financial system to thwart terrorists after 9/11 and against Iran more recently. With Russia, the U.S. has expanded the use of financial sanctions. It's doubled down on ways to prevent Russia from getting technology. But there are risks to this. There are risks that Russia and China will build their own financial system to prevent sanctions being used in the future. And the fact that we haven't explained well how we're going to use these tools of economic statecraft is making some of our otherwise friendly allies uncomfortable because there's so much uncertainty, and it's also novel.

INSKEEP: Oh, because they wonder if the sanctions might affect them at some point, I suppose.

WESSEL: Exactly.

INSKEEP: David, thanks so much for your insights.

WESSEL: You're welcome.

INSKEEP: David Wessel is director of the Hutchins Center at the Brookings Institution. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Steve Inskeep is a host of NPR's Morning Edition, as well as NPR's morning news podcast Up First.