An expert from the Institute of Economics of the Russian Academy of Sciences saw a weakening of the effect of the “big country trap”

The head of the Center for Research of International Macroeconomics and Foreign Economic Relations of the Federal State Budgetary Institution “Institute of Economics of the Russian Academy of Sciences” Daria Ushkalova in her work described how the “trap of a big country” allowed Russia to more easily endure Western sanctions. If the state is a major player in any market, then limiting supplies leads to an increase in world prices, which compensates for the decline in exports. The expert believes that the effect is weakening.

Ms. Ushkalova’s work was published in the Bulletin of the Institute of Economics of the Russian Academy of Sciences. Pay attention to the material “News”. According to the expert, in the conditions of the “big country trap,” the formal effectiveness of sanctions (the ability to limit physical volumes of exports) contradicts its strategic effectiveness (reducing export revenues). Under these conditions, EU sanctions were modified so as not only to reduce the physical volumes of exports, but also to control their cost. Thus, a price ceiling for Russian oil and petroleum products was introduced.

Daria Ushkalova believes that the “big country trap” continues to reduce the negative impact of sanctions, but its influence is decreasing. Thus, in January-September, Russian exports reached $316.3 billion, 29.5% less than in the same period in 2022. In this regard, the expert believes that the authorities should pursue an active policy to expand sales markets and logistics capabilities of exporters.

About new US sanctions against Russian oil – in the Kommersant material “Tankers for inspection”.

Leonid Uvarchev