You are right in that ultimately wealth will be transferred, but circumvention costs resources, especially with the extreme sanctions Russia is facing. If oligarchs now have to resort to loading gold bullion on submarines bound for South America then we did a good job
I'm not intimately familiar with what was in the Panama/Pandora/etc. papers, but if I recall correctly it was a lot more "run of the mill" tax evasion, exploiting loop-holes, and the like. In these cases, I'd guess governments weren't always highly incentivized (or were actively disincentivized) to deal with these sorts of actions.
In the present case, where governments are highly incentivized and the sanctions are quite specifically targeted, I'd expect more of an impact. Will it be enough? I suppose we will see.
One challenge I've seen is that it isn't like all these assets are just labeled with the owners' names. As a result, it make take time to actually enforce such sanctions, possibly too much time to have an immediate impact. Perhaps the threat will be enough, but, again, we'll see.
You are correct in that it's difficult to sanction some oligarch using gray markets for one-off transactions.
But it's very easy to sanction a corporation that is trying to do cross-border trade. If you're selling apples to Poland, your customers - legitimate businesses in Poland - aren't going to be making recurring payments to you through some weird Hawala scheme. They live in Poland, they aren't going to be flouting their country's sanctions laws.
While oligarchs may be fine, the Russian economy can be completely strangled, by cutting off its ability to pay for imports, or get paid for exports.
This also pisses on any remittances the Russian diaspora sends to their relatives back home.
In the long term, I fully expect a proxy banking system to be set up through either China, or one of Russia's satellites, to take care of the needs of the elite. I also expect that the West will either shut down, or keep open particular Russian exports on a case-by-case basis. It's why not every Russian bank has been cut off from SWIFT. If Europe hits a cold snap for instance, there'd still be a channel to buy natural gas...
Especially since they had a lot of time to prepare. But you can't move all your wealth at once, especially if you are not sure if a big event will happen. So it is likeky that they just diversified more outside of Russia. But they will likely still loose a lot.
They’re theoretically going to be frozen, not seized.
More likely that it pushes south florida real estate prices even higher even faster. Just the perception and expectation should do that. Less units that could even be on the market.
I expect them to be firesaled by the oligarches themselves. Get them liquidated before they're frozen, and get that desperately needed western currency that doesn't need to flow through embargoed Russian banks; a desperation life raft.
I had to do some digging to find any details on what these individual sanctions actually entail.
It looks like we're talking about freezing assets and imposing travel bans. One would have to assume that the oligarchs in question are smart enough to have anticipated this and took preemptive measures to safeguard their assets. I would also guess that enough of their wealth has been held outside the reach of foreign entities to begin with.
What do these sanctions aim to achieve? Do we think that the oligarchs are going to turn on Putin? I am guessing that there is nothing they can do to depose him. That's an obvious source of danger for Putin and I am sure he has taken every precaution to ensure that the oligarchs cannot take him down, even with a unified front. We have to remember who we are dealing with here. Putin has proved himself to be a ruthless dictator. I bet he has agents in position to assassinate any one of these individuals at a moment's notice.
I also do not believe that economic sanctions are enough to stop a determined Russian government from waging war. Once again, sanctions would have been anticipated. One has to assume that Russia has taken measures to mitigate the potential impact ahead of the invasion. Even without preemptive stockpiling, I am guessing that Russia is not going to run out of resources needed to wage war anytime soon and even in the long term.
I have analyzed Russia's imports and exports and it looks to me that they are capable of surviving permanent economic isolation from the west, at least in terms running a war economy. Russia seems to be quite economically self-sufficient on that front. Its common imports with strategic value consist of industrial equipment and electronics. China, its biggest trading partner, will not stop providing these goods to Russia. I am not knowledgeable enough about the chip market or related goods like neon gas that was discussed here a few days ago. But once again, I would assume that Russia has plans for how to procure or manufacture military related hardware.
As for exports, yes, losing income from energy exports to the west will certainly hurt. But once again, there is no reason why more of those exports won't be shifted to China. With global demand slashed for Russian gas and oil, China should be able to buy these from Russia at very attractive prices. It would take a complex analysis to estimate how much Russian trade can be shifted to non-western partners but my gut tells me it would be a substantial amount.
There is no question that Russia's economy will contract without Western trading partners. But ultimately, who will this really hurt? I've been making the case that this will not materially impact Russia's ability to wage war in any way. If this was a serious weakness then Russia would not have invaded Ukraine to begin with. Logic would dictate that Russia has spent years preparing for this.
As for the day to day economy, I am not sure how much of a trickle-down effect this will have on your average citizen. Jobs will be lost but the energy sector is probably not doing much to enrich your average citizen beyond a source of income. Oligarchs will take a hit on personal wealth but I have already talked about how I do not believe they will be doing anything to overthrow Putin. My guess is that the loss of energy revenues will impact citizens most directly in terms of a potential contraction to social safety net payments.
My overall point is that I believe Russia can handle being plunged into a second Cold War from an economic perspective. Putin's actions indicate the desire and willingness to do so. It seems that Putin is hell-bent on restoring the Soviet Empire with him at the helm as Stalin 2.0. The Soviet Union collapsed because of the economic and bureaucratic failures of Communism. In Putin's view, both of these problems have been resolved. As an autocrat, he can pursue a consistent agenda for years to come. He is economically unhampered by the baggage of central planning and can rely on consistent future trade with what is soon to be the world's largest economy.
I was born in Ukraine and started school right after it gained it's independence. I still remember being taught propaganda about Lenin and the glory of the Bolshevik revolution in kindergarten. I feel terrible for the Russian people and hope that my countrymen will persevere for everyone's sake.
> If this was a serious weakness then Russia would not have invaded Ukraine to begin with.
Your analysis on whether your opponent has made a mistake cannot assume that they are so smart they'd never make a mistake.
For one, many people in Russia barely can afford food, and many medicines are imported. Prices on basic food were increasing over the past year, and not with sanctins further rise is inevitable.
There could be food riots.
Its like a stock trader looking at the market, saying to himself 'if the stock was undervalued, it's future gainst would already be priced in by the efficient market, therefore no stock is ever worth buying"
> analysis on whether your opponent has made a mistake cannot assume that they are so smart they'd never make a mistake.
why not? You assume they are perfect logical agents, capable of making any true deductions from known information. After all, this is what you'd do in chess.
The errors they could make are things like forced errors or deliberate misinformtion from the west.
