An interesting study on the economic effect of sanctions on Russia was conducted by Bloomberg (one of the two leading American providers of financial information for professional participants in financial markets).
Local businesses are adapting to the restrictions, and the businessmen who have left are successfully replacing Western brands and establishing new logistics routes, the agency points out. Nevertheless, the Russian economy will continue to shrink.
Western sanctions did not bring down Russia's "mobilization economy", but gave local entrepreneurs and small businesses a chance to gradually occupy the niches of departed international brands and goods, despite the departure of many businessmen from the country.
"After the departure of numerous Western brands, Russian entrepreneurs either buy out their business or create no less successful analogues. Krispy Kreme doughnuts are now called Krunchy Dream, Starbucks is Stars Coffee, and Pizza Hut is Pizza H (the game is that Russian H is similar to English H)," writes Bloomberg. He compares the current economic period in Russia with the "reminiscence" of the 1990s, when after the collapse of the USSR there were "gaping holes in supply chains that forced consumers and entrepreneurs to look for creative ways to fill them."
As an illustration, Bloomberg cites the example of 37-year-old Muscovite Victoria Shelanova, whose sister, a wakeboarder, could not find equipment for her hobby due to sanctions. This prompted the girls to find a factory for the production of such equipment in Guangdong Province (China) and contact them through the local social network WeChat. Two months later, they received 20 neoprene vests, chose the ones they liked, and plan to order them in batches of 100 pieces for sale in Moscow. "We think that the demand will be huge, and there is no competition at the moment," Victoria said in a telephone conversation with the agency.
Bloomberg also notes that the EU ban on the export of luxury goods over €300 has made the market of designer clothing and accessories in Russia "flourishing". According to the data provided by the agency, in 2021, Russians purchased personal luxury goods worth about € 7 billion, or 3% of the global market. "Type in the search bar [Avito] "Gucci" and you will receive 173,000 ads," the agency writes.
Another example is a Russian businessman who left the country, who anonymously told Bloomberg that he had established a business importing Russian gold to Dubai. With the received 40% profit, he buys car parts and other equipment that is exported to Russia.
However, despite the success of parallel imports, this does not mean that sanctions "do not cause pain" to the Russian economy, Bloomberg emphasizes. The agency's experts believe that the country's economy will continue to slow down, as "barriers to trade and capital flows stifle competition and increase inefficiency." According to their estimates, in 2022 the local economy shrank by 2.7%, and in 2023 it will shrink by another 2.5%. The agency compares the current situation in the country with the period of the 1960s-1990s in South Africa, when the region faced sanctions due to apartheid.