Yale Study on the Russian Economy

Many analysts have reported that Russia’s economy is not hurting as badly as predicted by the sanctions. However, a new study published on July 20th by economic professors at Yale University found that the impacts of the sanctions may be more significant. 

The study found that over 1000 companies had imposed sanctions and planned to withdraw from Russia. The 1000+ companies in the process of leaving account for roughly 40% of Russia’s GDP. It’s essential to remember that their GPD hasn’t been affected overnight; it will take several months for these companies to withdraw from Russia. In addition, these companies leaving will result in more than 1 million citizens without jobs.

The study presents evidence that the Kremlin hand-picked Russian economic data. Russia has been selectively removing undesirable data from its reports.

For example, a middle school student typically gets A’s and B’s on his exams. However, he doesn’t tell his parents when the exams are and only shows them the tests he earned an A. As a result, his parents would assume their child is a straight A student.

Similarly, well-meaning analysts and reporters made unrealistic forecasts based on cherry-picked data by the Kremlin. Most analyst citations came from The Federal Service for State Statistics (Rosstat) without cross-referencing or validating data. The Rosstat is a federal executive body responsible for developing government policy and legal regulation of official statistics.

In addition, in May of 2022, the Kremlin stopped providing Russian taxpayers with information regarding government spending. Before the governmental change, the data revealed that the military’s budget increased by nearly 150%

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BRICS Summit 

On June 23rd, at the 14th BRICS summit (Brazil, Russia, India, China, and South Africa). Putin announced a plan to create a new global currency reserve. He added, “We are ready to openly work with all fair partners.” Some analysts have speculated that BRICS’ new reserve could be an attempt to undermine the US dollar and International Monetary Fund’s (IMF’s) Special Drawing rights (SDR)

“The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves.” The value of the SDR is based on a basket of five currencies—the US dollar, the euro, the Chinese renminbi, the Japanese yen, and the British pound sterling.”

https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14/51/Special-Drawing-Right-SDR

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