When Western nations imposed unprecedented sanctions on Russia following its invasion of Ukraine in February 2022, the declared aim was to punish the Kremlin and impair its ability to wage war. Yet, two years later, a disturbing pattern has emerged: while Russia’s economy has proven surprisingly resilient, ordinary citizens worldwide are bearing significant costs. The impact of sanctions on Russia extends far beyond its borders, creating humanitarian challenges that receive little attention in policy discussions.
Russian Citizens: First Line of Economic Impact
Russian citizens faced immediate economic hardship when sanctions hit. The ruble initially lost nearly 50% of its value against the dollar, according to Reuters, triggering inflation and financial uncertainty. However, contrary to Western expectations, the Russian government’s swift actions stabilized the situation. The central bank raised interest rates to 20% and implemented capital controls that helped stabilize the currency.
Everyday citizens still face challenges as the sanctions regime continues. VICE reports that Russian students abroad have had their bank accounts frozen without warning, leaving many without access to funds for basic necessities. The article quotes a 20-year-old student from Siberia studying in Poland: “I was shocked when my account was frozen. I had just €300 and was suddenly left without any way of withdrawing my savings.”
While the Russian state has increased social spending to cushion the blow, sanctions have increased the cost of imported goods and limited consumer choices. However, according to Monde Diplomatique, real wages in Russia rose 7.8% in 2023, helping to reduce the poverty rate to one of its lowest levels since the Soviet Union’s collapse.
European Energy Crisis and Inflation
European citizens have paid a heavy price for EU sanctions Russia imposed. The sanctions triggered an energy crisis across the continent as Russian gas supplies were reduced and oil prices soared. According to The Guardian, sanctions reduced UK living standards by approximately £2,500 per person.
The economic impact has been particularly severe in Eastern and Central European countries more dependent on Russian energy. Politico reported that many European countries faced inflation rates exceeding 10% in 2022, with energy and food prices hitting low-income households hardest.
A particularly revealing statistic comes from The Financial Times, which noted that during the first year of the full-scale war, the European Union paid Russia more money for oil and gas than it provided for Ukraine’s war effort over the first two years. This underscores the complex and often contradictory nature of the sanctions regime.
Collateral Damage to Third-Country Nationals
Some of the most overlooked victims of sanctions are citizens of neither Russia nor Ukraine who have been caught in the crossfire of economic warfare.
The Times documented the case of Nerijus Kuskys, a Lithuanian estate manager working for a Russian billionaire in the UK. When his employer was sanctioned, Kuskys had his bank account frozen without explanation, leaving him without money for food, bills, or rent. The article quotes him saying: “I was treated like a common criminal and animal. We were all shocked and scared.”
Similarly, Ukrainian staff employed by Russian businesspeople have found themselves without income. The Times reported that one Ukrainian housekeeper returned to her war-torn country to help her sick mother but couldn’t pay for medical treatment because her UK bank account had been frozen.
The collapse of Russian-owned businesses due to sanctions has also cost jobs and livelihoods. The Times recently reported that Compound Photonics, a British semiconductor company backed by Russian investors, collapsed after sanctions “torpedoed its business,” resulting in the loss of 100 jobs.
Sanctions Effectiveness vs. Humanitarian Cost
The central question remains: are Russian sanctions working when measured against their human cost? The evidence suggests a troubling imbalance between their humanitarian impact and their strategic effectiveness.
The New Yorker reports that sanctions generate meaningful change only about forty percent of the time. Russia’s case appears to fall among the failures, with Reuters reporting that Russia’s economy grew by 3.6% in 2023, with further growth of 2.6% projected for 2024.
Meanwhile, CEPA reports that despite sanctions, Russia managed to increase defense spending by 70% in 2024 to $157.5 billion. The military-industrial complex has actually stimulated economic growth through what economists call “military Keynesianism.”
Towards More Humane and Effective Economic Policies
The human impact of sanctions forces a reconsideration of their role in international relations. Rather than continuing to intensify sanctions that harm ordinary citizens while failing to achieve their strategic aims, policymakers might consider more targeted approaches that minimize collateral damage.
Future sanctions regimes could incorporate humanitarian impact assessments and sunset provisions that automatically lift restrictions if they prove ineffective after a certain period. Additionally, more resources could be dedicated to humanitarian aid for unintended victims of sanctions, regardless of nationality.
The experience of Russian sanctions suggests a need to move beyond binary thinking about economic warfare to develop more nuanced approaches that recognize the human dimension of international disputes. Without such reforms, sanctions risk becoming blunt instruments that cause widespread suffering without advancing their intended goals.
