Why a Moscow Visitor Says Sanctions Boosted Russia's Economy

Russia today is much richer country than it was at any time since the Soviet collapse.

Now, I went to Moscow in June. I haven't been to Moscow since 2019, and I was able to talk to people at many levels. I spoke to waiters, I spoke to taxi drivers, I spoke to workers at a bread factory, and the one thing that I got from all of them was that there has been a very, very big upswing in the Russian economy.

Russia has become richer. It become much richer, and the single biggest reason why there has been this economic upsurge is because Western sanctions are preventing Russian money leaving, because when it was an exporter of raw materials, the money that was made from the export of those was then transferred to the West. It went into

Western financial institutions, Western banks.

It was invested in building properties in London.

Because for all kinds of reasons, Russians didn't trust their own financial system. Now they can't take money out, so it has to stay there, and money doesn't like to remain idle, so it has to be put to use.

Western businesses left. Russian businesses stepped in.

They are investing inside Russia, and that meant that a very large domestic market was created, which in turn triggered very rapid industrialization.

The- Because of also cheap oil and all this stuff.

Cheap oil, cheap energy, the fact that Russia does not have a massive stock market, the whole financial system is much more focused therefore on spending money to increase production, and there has been a major upsurge that manufacturing is rising.

Parts of the service economy are growing alongside it, and you can see this with shops and restaurants and all of these kind of things developing in all kinds of ways. E-commerce has expanded to a degree that is completely beyond my imagination. Consumer goods far more widely available.

Cost of living has fallen, not because inflation hasn't fallen, but because real incomes have risen much faster, and the government is facilitating all of these processes through the tax system, and it's also creating a digital infrastructure to support them.

But we in the West, obviously what we are confronted with mostly is our own propaganda, that a lot of these analyses about the situation are made in the abstract without actually going there and seeing the reality of what is going on in Russia now.