The US House of Representatives has passed a bill today, offering economic aid to Ukraine and imposing sanctions against Russia. The US will freeze assets and set visa restrictions for certain Russian officials. Mikhail Khazin, president of the Neocon Consulting Company, told Vestnik Kavkaza that the impact of the sanctions would be illusionary in the context of the extremely unstable economic situation. He admitted that Russia was vulnerable to mass sanctions but no one would go for that due to losses that all sides would suffer.
Concerning developments in the Russian economy, according to Khazin, the sanctions will stimulate return of capital back to the country. The expert noted that Russian elites had been formed after the fall of the USSR, during the “illegal privatization.” They needed to move their income from privatization abroad.
The analyst believes that the sanctions can encourage industrial development, but imports would not make a significant drop. He said that liberals in the government and the Central Bank were opposed to substitution of imports.
Khazin considers Alexey Kudrin’s pessimistic economic forecasts over annexation of Crimea unjustified. The expert doubts that Crimea would play a significant role in the Russian economy. The only shock can happen, in his words, if the US experiences a market crash. He reminded that Russia had been going downhill in the past 1.5 years.
The expert is positive about formation of Russian financial infrastructure independent from Western payment systems. He noted that a system of over 100 Russian banks should be formed. Such system, as he says, can be organized in just a matter of weeks.
