The Structuration of Russia’s Geo-Economy under Economic Sanctions
Aalto, Pami; Forsberg, Tuomas (2015)
Aalto, Pami
Forsberg, Tuomas
2015
Asia Europe Journal 14 -
221-237
Johtamiskorkeakoulu - School of Management
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:uta-201606282041
https://urn.fi/URN:NBN:fi:uta-201606282041
Tiivistelmä
In this article, we examine Russia’s geo-economy under the economic
sanctions imposed by the EU, the USA and many other states since spring 2014,
including restrictions on economic cooperation in areas such as trade, certain types of
energy technology, access to credit, trade in arms, travel bans and asset freezing. We
first examine Russia’s economic and geopolitical interests and the cognitive frames
Russian policymakers use to weigh these diverse interests against each other. Second,
we examine how Russian policymakers can further these interests given the effect of
the sanctions on Russia’s geo-economy.We analyse constraints and opportunities along
the resource geographic, financial and institutional dimensions of geo-economy. Regarding
resources, the sanctions seriously hamper new greenfield projects in Russia’s
emerging energy provinces. They impede the industry’s middle- to long-term prospects
while some Russians perceive new opportunities for its domestically induced modernisation.
Along the financial dimension, low oil prices since mid-2014 shape existing
fossil fuels trade more than the sanctions, which have no impact on Russia’s arms
exports. The combined effect of low oil prices and sanctions on Russia’s state budget,
the financial sector and the rouble is severe. On the institutional dimension, Russia’s
international standing suffers, but its domestic institutions are relatively resilient.
Overall, we see Russia as part of an international structure where it can constitute itself
as an autonomous geo-economic actor under favourable conditions including high oil
prices and no sanctions.
sanctions imposed by the EU, the USA and many other states since spring 2014,
including restrictions on economic cooperation in areas such as trade, certain types of
energy technology, access to credit, trade in arms, travel bans and asset freezing. We
first examine Russia’s economic and geopolitical interests and the cognitive frames
Russian policymakers use to weigh these diverse interests against each other. Second,
we examine how Russian policymakers can further these interests given the effect of
the sanctions on Russia’s geo-economy.We analyse constraints and opportunities along
the resource geographic, financial and institutional dimensions of geo-economy. Regarding
resources, the sanctions seriously hamper new greenfield projects in Russia’s
emerging energy provinces. They impede the industry’s middle- to long-term prospects
while some Russians perceive new opportunities for its domestically induced modernisation.
Along the financial dimension, low oil prices since mid-2014 shape existing
fossil fuels trade more than the sanctions, which have no impact on Russia’s arms
exports. The combined effect of low oil prices and sanctions on Russia’s state budget,
the financial sector and the rouble is severe. On the institutional dimension, Russia’s
international standing suffers, but its domestic institutions are relatively resilient.
Overall, we see Russia as part of an international structure where it can constitute itself
as an autonomous geo-economic actor under favourable conditions including high oil
prices and no sanctions.
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