Punitive measures harm the whole world more than the country against which they are directed, Gertrud Traud, German Landesbank’s chief economist has said.
The war against Russia cannot be won with sanctions, said Traud. According to the expert from Landesbank, a conglomerate of regional state-owned banks, “while the effects of the war in Ukraine are becoming more and more obvious to us, the effects of the war and sanctions on the Russian economy are much smaller than originally expected.
“On the one hand, Russia is well prepared for war, and on the other hand, it is much less isolated than Western countries assumed or hoped,” added Traud, who also noted that while more than 1,000 Western companies have scaled back, suspended, or closed their business in Russia since the start of the war. Those who pulled out completely were probably glad to get anything for their real estate at all; it is easy to figure out who benefited from this, said the economist.
She believes that the stronger the sanctions, the more there will be “alternative” means of supply.
“The West overestimated Russia’s vulnerability and underestimated the importance of its raw materials for the world. Moreover, they do more harm to us Germans and to most of the world than to the country they are actually aimed at,” explained Traud, noting that Russia is not only an important supplier of energy to the world, but also one of the most important exporters of wheat, especially for the poorest countries.
Sanctions indirectly increase the risk of a food and economic crises in these countries. The rise in the price of wheat is a clear signal, she pointed out. According to Traud, it can also be observed that Russia’s trade is even increasing with some countries, such as China and India — the former buys natural gas and the latter purchases crude oil from Russia.
In Europe, more and more experts are warning that the sanctions have not worked, but governments overseas were also been warned in advance that punitive measures will only harm their own people.