Since February 2022, Russia has introduced a series of counter sanctions in response to the international sanctions introduced following the country’s full-scale invasion of Ukraine. These measures aimed to counteract external economic pressure while shielding the domestic economy from further destabilization. However, their broad implementation has led to mixed effects across various sectors while simultaneously increasing the administrative burden. This policy brief argues that Russia’s countersanctions reinforced state control over key industries, worsened market competition and fiscal sustainability, which contributed to a systematic move towards a planned economy.

Key points from the policy brief

• Presidential decrees have become the main tool of economic control, allowing the Kremlin to bypass the parliament and micromanage industries, from oil and gas to car dealerships, without transparency or accountability.
  
  
• Russia’s use of subsidies has exploded since 2022, with sectors like energy, aviation, agriculture, and housing becoming heavily dependent on state support, increasing the burden on public finances and raising long-term fiscal risks.
  
  
• New laws compel businesses to accept government contracts, enforce price controls on essential goods, and allow military-related spending to bypass official budgets, all contributing to a dangerous shift toward a centrally planned economy and economic inefficiency.

Meet the author

• Anna Anisimova: Researcher, Stockholm Institute of Transition Economics (SITE)
  Email: Anna.Anisimova@hhs.se

Photo: idikomne, Shutterstock