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How to Hit Russia Where It Hurts

A Long-Term Strategy to Ramp Up Economic Pressure

Russian President Vladimir Putin, Defense Minister Sergei Shoigu, and Chief of the General Staff of Russian Armed Forces Valery Gerasimov attend a meeting of the Defense Ministry Board in Moscow, December 2018. Mikhail Klimentyev / Kremlin via REUTERS

Russia’s 2014 annexation of Crimea, its war in eastern Ukraine, its interference in the 2016 U.S. presidential election, and other aggressive acts against the United States and its allies demand a strong Western response. For the past four years, that response has been dominated by sanctions and other coercive economic measures. U.S. and European officials have hoped that the economic measures would not only exact a cost for such actions but also deter the Kremlin from escalating its assault on American and European interests.

The economic pressure has certainly had an effect. The IMF estimated that the sanctions linked to the 2014 invasion of Ukraine cost Russia 1 to 1.5 percent of its GDP by mid-2015. The sanctions also hurt the Russian treasury’s bottom line, since Russia had to make up for lost Western capital by spending billions of dollars to prop up large companies that depended on Western funds. The

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