Russian officials acknowledge heavy losses from Western sanctions but Putin not informed – Latvian intelligenc

Although Russia publicly claims it is coping successfully with Western sanctions, internally officials acknowledge that the restrictions are causing – and will continue to cause – major damage to the country, Latvia's Constitution Protection Bureau (SAB) says.

Source: Latvian public broadcaster LSM, as reported by European Pravda

Details: SAB published a report titled "Losses incurred by Russia as a result of Western sanctions", analysing how the impact of sanctions is actually assessed inside Russia.

SAB chief Egils Zviedris told journalists the information was obtained through intelligence collection.

"Sanctions do have an impact. And speaking about the future, they will have a significant impact on the development of the Russian economy," he said.

However, Zviedris acknowledged that sanctions would not be a tool capable of quickly and effectively changing Russia's aggressive stance towards Western countries.

"But sanctions are a tool through which we can weaken Russia's economic capabilities and thus also reduce the threat Russia poses to Western countries," the SAB chief added.

Although the Russian regime typically avoids publicly acknowledging problems and challenges, intelligence indicates that Russian authorities conduct internal assessments of actual and potential losses caused by Western sanctions. These calculations usually evaluate trends across different sectors of the economy, SAB said.

Some of these estimates confirm that sanctions have already caused Russia significant direct losses.

After the invasion of Ukraine, Russia lost about US$130 billion (around US$32.5 billion per year), funds it had to spend on purchasing goods through sanction-circumvention schemes that it had previously been able to buy more cheaply from Western countries.

Russia is also particularly concerned about pressure by Western countries on its trading partners through secondary sanctions, tariffs and other restrictions that hinder efforts to redirect trade towards alternative markets.

According to SAB, most representatives of the Russian regime, including senior officials, understand that the war against Ukraine and sanctions are causing serious damage to the economy and negatively affecting the country's development prospects.

Meanwhile, information about the state of the economy within Russian institutions is shaped by official propaganda narratives to make their work appear more effective.

The report also states that Russian leader Vladimir Putin is most likely receiving distorted information about the country's economic situation.

In this distorted picture presented to Putin, emphasis is placed on "successful development", while problems and risks are downplayed. According to SAB's assessment, even in the face of serious economic difficulties, Putin is unlikely to change his aggressive foreign policy course aimed at establishing control over Ukraine.

Background:

• Recently, Estonian intelligence said in its annual report that Russia does not intend to launch a military attack on any NATO member this year or next year, but will continue rebuilding its armed forces amid concerns about European rearmament.
• Lithuanian intelligence also believes that as long as Russia devotes most of its resources to the war against Ukraine, its ability to pose a direct military threat to Lithuania and other NATO countries remains limited.

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