McCafferty Russian Economy Final Project

Russia’s Economy:
The Bleak Reality
Analyst: Katelyn McCafferty
Class: RIAP 275
Date: 11 December, 2014
Classification: UNCLASSIFIED

1 | R u s s i a n E c o n o m y
Cover Image Sources:
http://www.jamestown.org/uploads/pics/russian_economy.jpg
http://www.kyivpost.com/media/images/data/uploads/e/iblock/en_articles/129529/4738/big.jpg
http://ukinflation.co.uk/wp-content/uploads/2012/06/Dark-Clouds-Over-UK-Economy.jpg
http://ak4.picdn.net/shutterstock/videos/408835/preview/stock-footage-sunset-silhouette-of-st-
petersburg-russia-high-speed.jpg

Key Findings
It Is Highly Unlikely ThatRussia Has The Economic Leverage
Required To ThreatenThe United States Economy
Executive Summary:
It is unlikely that Russia poses an economic threat to the United States due to the impact of the
country’s current recession. Russia’s economy is highly vulnerable in its current state and, due to
its economic dependence on the West, it would unlikely endure the Western retaliation that
would result from an attack. Although Russia is currently experiencing economic hardship, the
country does have an economic strategy in place to spur rapid growth in the next ten years.
Due to:
 Russia's Sovereign Wealth Funds Is Unlikely To Be Effective In Curtailing
Recession:
Due to Russia’s poor economic performance, the conflict in Ukraine, and poor fiscal
management, it is unlikely that Russia’s Sovereign Wealth Funds will be effective in
curtailing recession in the near future. Russia’s Sovereign Wealth Fund is responsible for
economic stabilization and is key in insolating the economy from the volatile prices of the oil
and gas market.
 Russia’s Import Substitution Long-term Effects Likely To Be Negative:
It is likely Russia’s import substitution program will mainly see negative effects in the long-
term. Though the program is seeing a few short-term benefits and the program succeeds in
making Russia less dependent on the West, the program will prove to be costly and will
likely raise the prices on any commodities Russia manufactures. Russia will also face many
issues implementing the program nation-wide as manufactures are already struggling with
finances and work capacity and are still heavily reliant on Western firms for specialized
equipment.
 Russia Likely To See Indirect Benefits From Gas Deal With China:
It is unlikely the USD 400 billion gas deal between Russia and China will directly aid
Russia’s economic state during the Ukraine crisis. Since the deal will not begin until 2018, it
will be of little to no help for Russia in the short term, but it will likely provide indirect help
as it strengthens Russian-Chinese relations. Russia and China signed around 40 agreements
that will help Russia weather Western sanctions since the initial gas deal in May.

 Russia Highly Likely To Relax And Reverse More Banned Food:
It is highly likely that Russia will continue to relax and reverse their food bans due to the
bans negative effects on the Russian economy. Before the Ukraine crisis, the EU and Russia
had significant agricultural trade. Since Russia and the EU are very economically
intertwined, neither economically benefit from the food bans. Russia is already relaxing
previous bans since their agricultural sector is seriously struggling, food prices are rising, and
there are many indirect negative costs to Russia and the EU from a lack of agricultural trade.
 Russia Is Unlikely To Replace Needed Western Technologies:
It is unlikely that Russia has the economic and industrial capability to replace Western
technologies they are dependent on. Since sanctions against Russia limit their access to
specialized equipment and much needed technologies, Russia is trying to develop their
domestic technological sector to replace this equipment. This is unlikely to be successful as
Russia’s industrial capability for this specialized equipment is limited, their economic
standing makes it difficult to pursue, and the lack of technology hurts the economy.
 Russia Likely To Continue To Ignore The Need For Foreign Finances
It is likely that Russia will continue push for economic independence than try to repair their
foreign financial market relations. Russia is dependent on Western finances as they owe over
USD 700 billion to western banks, China cannot give them enough economic support, and
since limited foreign financial market access inflicts long-term economic damage. Despite
this, Russia is still fighting to become economically independent from the West, even at the
expense of their economy.
Analytic Confidence:
Analytic confidence for this assessment is medium. Source reliability ranges from medium to
high, and there was very little conflict among sources. The analyst has minimal knowledge of the
subject matter and worked predominantly alone, although some assessments are the work of a
team and/or casual discussions. The analyst used the Analysis of Competing Hypotheses (ACH)
for one assessment. Finally, the complexity of the task was medium and the deadline was
adequate.

Table of Contents
Key Findings .................................................................................................................................. 2
Table of Contents........................................................................................................................... 4
About This Document ................................................................................................................... 5
Outlook........................................................................................................................................... 6
It Is Highly Unlikely That Russia Has The Economic Leverage Required To Threaten The
United States Economy............................................................................................................... 8
Russia's Sovereign Wealth Funds Is Unlikely To Be Effective In Curtailing Recession......... 13
Russia’s Import Substitution Long-term Effects Likely To Be Negative................................. 18
Russia Likely To See Indirect Benefits From Gas Deal With China ....................................... 20
Russia Highly Likely To Relax And Reverse More Banned Food........................................... 22
Russia Is Unlikely To Replace Needed Western Technologies................................................ 24
Russia Likely To Continue To Ignore The Need For Foreign Finances................................... 26
Annex A: ACH............................................................................................................................. 28
Contact Information .................................................................................................................... 29
Endnotes ....................................................................................................................................... 30

About This Document
Tasking
This document represents the cumulative work of three intelligence analysts. Professor William
Welch presented the tasking on Thursday, August 28, 2014 and analysis concluded on
Thursday, December 11, 2014. The report was generated with the intent of analyzing what
economic threats Russia presents to U.S. interests. The report addresses the overall outlook of
the region for the next 12 -24 months. It should be noted that the analysts evaluated various
sectors of Russia’s economy individually.
The Key Findings are a combination of various issues and outlooks addressing Russia’s
economy and how it interacts with other nations, particularly the U.S. and EU. The findings are
supported by the short and long form analytical reports (SFARs, LFARs) which provide highly
detailed descriptions of relevant topics and their effect on Russia’s economy.
All information contained within this report is unclassified, as were all the sources used to create
this estimate. The sources were generally medium to high in credibility. The expertise of the
three analysts who authored this report is low, and the complexity of the subject matter is
medium. The time provided to complete this task was adequate. Each analyst’s contact
information is included should there be any feedback or questions.
Signature:_________________________________
11 December 2014
Analyst: Katelyn M. McCafferty
kmccaf10@lakers.mercyhurst.edu
(440) 799-3999

Outlook
It Is Highly Unlikely Russia Poses A ThreatTo TheUnited States
Economy
Executive Summary:
It is highly unlikely that Russia poses an economic threat to the United States. Considering the
country’s current recession, dependence on the West, and the fall in oil prices, Russia’s economy
faces economic hardship. Their economic state coupled with their dependence on Western goods
and services makes it nearly impossible for Russia to manage their deteriorating economy while
also pursuing economic independence from the West.
Discussion:
There are three main Western goods and services that Russia is dependent on. They are:
 Western food imports and agricultural trade
 Western technology and specialized equipment
 Foreign financing
There are several methods Russia is using to try and pull away from the West to become more
economically independent. They are:
 The Import Substitution Program
 The Russia-China gas deal
 Food bans
 Developing sectors, like technology, that are dependent on the West
Though Russia is trying to become more independent, there are many various problems,
setbacks, and reasons why this is currently not feasible for Russia. They include:
 The current recession
 Western sanctions
 Rising commodity prices
 Food bans already being relaxed
Russia is fighting very hard to become economically independent from the West, even at the
expense of their economy. With so many issues piling on though, Russia has to set aside these
plans in exchange for more reasonable measures reforming their economy. In the next 12-24
months, Russia will have to focus on their economy’s wellbeing before pushing plans for
economic independence or territorial conquest in Ukraine, making it a low threat to the U.S.

Analytic confidence for this assessment is medium. The analyst used an ACH structured
methods of analysis. Source reliability is high with very little conflict among sources. The
analyst’s expertise is minimal and collaborated with a team along with doing individual work.
The task complexity is moderately complex and the time constraint was ample.

It Is Highly Unlikely ThatRussia Has The Economic Leverage
Required To ThreatenThe United States Economy
Executive Summary:
It is highly unlikely that Russia poses an economic threat to the United States due to the impact
of the country’s current recession. Russia’s economy is highly vulnerable in its current state and,
due to its economic dependence on the West, it would unlikely endure the Western retaliation
that would result from an attack. Although Russia is currently experiencing economic hardship,
the country does have an economic strategy in place to spur rapid growth in the next ten years.
Discussion:
Current Economic Hardship
As Russia significantly depends on
oil and gas exports, which account
for more than half of the total
exports, the decrease in oil price
has a remarkable impact on the
future growth of the Russian
economy. The oil price reached its
lowest point in the last five years at
the end of 2014. Many financial
institutions forecasted that the oil
price will fluctuate around USD 72
to USD 85 in 2015.1 This
downward movement of the oil
price is the result of the high oil
supply compared to the low global
consumption. The Organization of
Petroleum Exporting Countries
decided that they will maintain the currently high production as no country in the group is
willing to give away its market share.
As the result of the decreasing oil price and Western sanctions, the Russian economy is
gradually falling into recession again after the last financial recession in 2009. The Russian
Finance Ministry has lowered the forecast for the growth of gross domestic product in 2015
from 1.2% to -0.8%.2 The oil price required for Russia to break even in 2015 is USD 107 per
barrel, which is much higher than the current oil price and the estimated average oil price over
the next three years.3
The appreciation of the U.S. dollar compared to the ruble.
Source: http://tinyurl.com/2ddbz93

The decline of the oil price and economic sanctions also led to the devaluation of Russian
currency. The ruble lost 15% compared to the U.S. dollar from July to October of 2014 and
reached 40.37 per dollar on 10 October, the lowest level since the Russian financial crisis of
1998.4 The Russian Central Bank made its effort to support the currency by raising interest
rate up to 8%. The bank also spent USD 15 billion in the Foreign Market Currency to buy
back the ruble and support the value of the currency.5 However, the sharp diminishing of the
oil price hinders the effort of the Central Bank.
Russian Dependency On The West
Many aspects of the Russian show that Russia is reliant on the West for economic support.
Russia’s import substitution program will likely see negative effects in the long-term with few
short-term benefits. The majority of Russia’s export revenue comes from fuels and metals
with machinery, food products, and chemicals dominating imports.6 Russian external trade
focuses heavily on the West though Russia is trying to diversify its exports to open markets
abroad and spur internal competitiveness.7 The biggest direct impact the program will have is
that it will lead to high costs and prices. 8 Economists are warning the program will be
detrimental as prices would likely grow at least 20-30% on products, especially produce.9
Despite Russia’s extensive industrial capabilities, their high-tech sector is still reliant on
Western firms for most of their specialized equipment. President Putin told officials that
Russia’s task is to protect themselves against the risk of foreign partners not performing their
contractual obligations, but industrial development is still required.10 Without the proper
foundation to install this program, the chances of its success are low.
When considering Russia’s recent
USD 400 billion gas deal with China,
Russia is trying to improve eastern
relations to attempt to pull away from
the West. While the deal will not
directly aid Russia’s economy until it
begins in 2018, the deal will likely
provide indirect help through
strengthened relations with China. 11
The deal involves China paying
Russia USD 400 billion to supply 38
billion cubic meters of gas annually,
over 30 years beginning in 2018. This
is equal to about 20 percent of
Russia’s gas sales to Europe. 12
In October 2014, Russia and China
furthered these ties by signing an
2014 gas deal would make China the third largest
singular country Russia exports gas to. Source:
http://tinyurl.com/nus33nc

additional 40 deals.13 These include energy, trade, technology, and finance agreements to
help weather Western sanctions as well as also extend credit lines from Chinese banks and
arrange for currency swaps.14 There is some concern over Russia’s improved relationship
with China, but this relationship seems to only work when China benefits so it poses little
threat currently.
Russia and the EU’s agricultural trade also display Russia’s dependence on the West. Before
the Ukraine crisis, the EU and Russia had significant agricultural trade. Since Russia and the
EU are economically intertwined, neither economically benefit from the food bans. Russia is
already relaxing previous bans since their agricultural sector is seriously struggling, food
prices are rising, and there are many indirect negative costs to Russia and the EU from a lack
of agricultural trade. 15
In August 2014, Russia banned agricultural products from the EU and other countries to
contest sanctions against them. The bans will last at least one year with 73% of those banned
imports being from the EU.16
Russia is slowly relaxing and reversing these bans as their agricultural sector cannot make up
their imports from the EU.17 The ban caused prices to rise in some areas and the market to
fall.18 The Russian government will allow select imports to help their farmers increase
production.19
Russia is facing a financial crisis and
cannot support to boost the economy
while also becoming more independent
from the West. Russia is dependent on
various Western technologies,
industries, foods, and general trade, on
top of being unable to find new
economic partners that can cover the
full extent of the Western economic
impact on Russia’s economy. The
Russian government is trying to
prioritize their interests and security
over economic reform in an effort to
become more independent from the
West at the expense of their own economy. Despite its economy falling into a recession,
Russia is slowly reprioritizing their economy back over their interests.
Russian Economic Outlook
As stated earlier in this document, the current state of the Russian economy is bleak. Low
global oil and gas prices, as well as Western sanctions have crippled the economy. Vladimir
Putin’s actions to counter these sanctions such as Russia’s food ban has done little to stabilize
the economy, and in some cases, worsened it. Despite this economic hardship, many aspects
A selection of Russian paper and coin currency.
Source: http://tinyurl.com/k6e3a23

of the Russian economy including the Yamal project, the auto industry, and increases in
government gold purchases have a positive outlook.
The Yamal project is a liquid natural gas (LNG) project that is among the largest industrial
endeavors in the Arctic Circle.20 The project will extract large quantities of LNG from the
Russian Arctic, the location of the largest LNG reserves in the world.21 Estimated to be
operational by 2017, the project will generate hundreds of millions of USD annually in tax
revenue annually. Overall, the Yamal project has cost its private investors USD 26.9 billion
and will export 16.5 million metric tons of LNG a year.22 As trends toward environmentally
friendly alternatives to coal become more popular, the Russia reaps the benefits of vast LNG
reserves and modern infrastructure to extract it. Revenue generated from Russia’s oil and gas
industry will allow the country to invest in other sectors of its economy to diversify risk and
insulate it from violent swings in gas prices. With no alternative energy solutions to natural
gas in sight, it is likely that Russia’s choice to expand its petroleum industry will not only
promote sustained growth for its economy.
The Russian automotive industry plays a large role in the country’s economy. The industry
accounts for nearly 3 million jobs in Russia, which equates to about 4% of its workforce.23
Despite its recent poor performance plagued by questionable economic policy, the auto
industry has a positive outlook. According to a US based consulting group, the Russian
automotive market is far from saturated and has room for exponential growth.24 The country
has 190 vehicles for every 1,000 Russians (compared to 800 vehicles per 1,000 U.S.
citizens).25 This fact highlights Russia’s economic
potential and demonstrates why the country is
predicted to jump from the 10th largest auto-
making country to the sixth largest by 2020.26
Additionally, 33% of vehicles in Russia are
manufactured by foreign brands and 36% of the
total cars sold in Russia were imported.27 With this
vast presence of international automakers, and
substantial room for growth, Russia has leverage
over foreign companies looking to capitalize on
their potential growth.
Over the last decade, Russia's National Treasury
has increased its gold reserves by 570 metric
tons.28 Its holdings have nearly tripled to 1,149.8
tons, making it the world's sixth largest holder of
gold among central banks.29 Putin has continued this trend by purchasing 55 tons of gold in
the third and fourth quarters of this year.30 Two main factors for Russia’s gold accumulation
include decreasing its dependency on the US dollar and ongoing geopolitical tensions derived
from the Ukraine crisis.31 Russia’s defensive economic strategy allows the country to remain
flexible in a time of recession. The country’s gold reserves can also serve as a method to pay
for imports, as a solution to the rapidly devaluating ruble.32 This strategy is an indicator that
Russia has tripled its holdings of gold since
2004 to 1,149 tons,making it the sixth
largest gold holder among central banks.
Source: http://tinyurl.com/n32p52u

Russia seeks to enhance its economic resilience in order to employ Putin’s policies and endure
Western sanctions. It is likely that Russia will continue its gold purchases in future in order to
combat Western sanctions forecasted to be in place until 2017.33
The analytic confidence of this assessment is medium. The analyst used no structured analytical
techniques for this project. Source reliability is medium and sources corroborated. The analyst’s
expertise is low and the analyst worked as a team. Subject complexity is medium and the time
available for the task was adequate.

Russia's Sovereign Wealth Funds Is Unlikely To Be Effective In
Curtailing Recession
Executive Summary:
Due to Russia’s poor economic performance, the conflict in Ukraine, and poor fiscal
management, it is unlikely that Russia’s Sovereign Wealth Funds will be effective in curtailing
recession in the near future. Russia’s Sovereign Wealth Fund is responsible for economic
stabilization and is key in insolating the economy from the volatile prices of the oil and gas
market.
Discussion:
History
In 1994, the Russian government created the Stabilization Fund to finance the budget deficit
during a period of recession.34 In 2004, the Stabilization Fund rapidly grew from USD 3.73
billion in to USD 157.38 billion in 2008, due to thriving economic conditions and rising oil
and gas prices.35 At this time, former Finance Minister Alexei Kundrin divided its stabilization
fund into two Sovereign Wealth Funds, the Reserve Fund and the National Wealth Fund.36
The National Wealth Fund created the country’s pension savings while the Reserve Fund took
over the role of the Stabilization Fund, covering the federal budget’s expense.37 The Ministry
of Finance supervises the operation of these two funds and the Central Bank of Russia is the
manager financing both funds.38
Russian National Wealth Fund
Russia’s Sovereign Wealth Funds consist of the Reserve Fund and Russia’s National Wealth
Fund, also known as the National Welfare Fund. The National Wealth Fund serves as a
cushion for the Russian economy39 and as a pension reserve fund that is supposed to save for
the long term, safeguard suitable co-financing of Russians’ voluntary pension savings, and
steady the budget of the state pension fund.40
The National Wealth Fund holds USD 83 billion41 derived from energy revenues42 meant for
investment in debt of foreign governments, central banks, foreign banks and international
financial institutes.43 According to Russian laws, the fund can allocate a maximum of 100% of
its assets in foreign investments including 45% U.S. dollars, 45% euros and 10% British
pounds. The fund cannot domestically invest more than 40% of its assets.44 This rule
diversifies the asset allocations of the fund and minimizes the investment risk. However, in
June 2014, Russia lifted the cap on domestic investment up to 60%.45 Compared to the
Reserve Fund, the National Wealth Fund involves in a higher-risk/ higher-yield investment.46

The National Wealth Fund uses the revenue from the investment of its funds to reinvest itself
and finance pension payments.47 After the Reserve Fund receives enough money from the oil
and gas revenue to reach its mandatory size, 10% of the GDP, the rest of the revenue will go
to the National Wealth Fund.48
As Western sanctions,
capital flight, and the
plummeting ruble
continue to take a toll
on Russia’s economy,
public and privately
owned companies need
financial support. The
government has pledged
to support sanction-hit
companies using the
National Wealth Fund
as one of the options.49
Managed by close
contacts of President
Vladimir Putin, the
state-controlled oil
company Rosneft, has
requested $49 billion
from the National
Wealth Fund.50 However, Rosneft might receive only up to $4 billion from the fund.51
Not only is the Russian government ready to use the National Wealth Fund to aid public and
privately owned energy companies, but reportedly banks as well. The fund allegedly would
aid the state-controlled banks of VTB Bank and Rosselkhozbank by buying over USD 6
billion of their shares. Vice Premier Dvorkovich stated the Russian government would also
“consider temporarily placing the remainder of the National Welfare Fund into securities,
including the securities of oil companies.”52
Russia’s Reserve Fund Summary
For decades, Russia’s overreliance on oil and gas as a source of revenue left its economy
vulnerable to the ever-fluctuating prices of these commodities on the global market.53 To
combat this weakness, Russia developed its Reserve Fund, which is a large reserve of capital
the country uses to stabilize its economy when oil and gas prices dive below their international
averages.54 The Reserve Fund also adds economic stability by reducing inflationary pressure
and insulating economic performance from the volatile market.55 The fund is dedicated to
ensure the federal government has the capital to fund national projects.56 Russian laws require
the overall size of the Reserve Fund be no more than 10% of Russia’s GDP.57
The distribution of oil and gas revenues in the federal budget, the
Reserve Fund and the National Wealth Fund. Source:
http://tinyurl.com/m9ov6uc

Russia’s Reserve Fund and National Wealth Fund’s assets
from creation in February 2008 through August of 2013.
Source: http://tinyurl.com/qfyfugj
The creation of the Reserve Fund occurred for a number of reasons. First, it needed to
compensate for lower-than-forecasted oil and gas prices to keep the economy running.58 Next,
the fund needed to fulfill budget obligations and counterbalance budget deficits during harsh
economic downturns.59 Furthermore, the fund serves as a tool for combating inflation, creating
a buffer for the economy, and absorbing excess liquidity generated from oil and gas profits.60
In order to maximize its performance, the Russian government invests its Reserve Fund in
international low-risk/low-
yield securities and used when
oil and gas incomes fall.61 The
investment of the Reserve
Fund in locations abroad
combats high inflation rates.62
Without the fund, these
fluctuations would likely
cause a sudden negative
impact on the economy, as
seen during the recent
financial crisis.63
After the financial crisis in
2008, the global recession and
rapidly falling oil prices
devastated Russia’s economy,
forcing Russia to rely on the Reserve Fund. The fund decreased by 82% from USD 142.6
billion in 2008 to USD 25.44 billion in 2010.64 After the global economic crisis, prices of oil
and gas subsequently rose, as did Russia’s oil and gas revenues.65 The Reserve Fund started to
recover its losses, reaching USD 84.68 billion in 2013.66 The Finance Ministry forecasts that
the Reserve Fund will be 3.7% of GDP in the end of 2014 and drop down to 3.0% in 2015.67
The annual withdrawals from this fund demonstrate Russia’s dependence on this financial
resource and its importance for the health of its economy.
Russia’s politicians propose a multitude of arguments for using the Reserve Fund in the
country. Many politicians believe in the benefit of using the fund to increase government
spending and boost the economy.68 Others believe that the government should invest the fund
more aggressively when oil prices are high.69 As a result of sanctions imposed by the West,
Putin and the Russian government are currently spending vast amounts of capital out of the
Reserve Fund to prevent a recession.70 By tapping into the fund’s current balance of USD $88
billion to curtail a sluggish economy, Russia is decreasing its ability to be economically
resilient during prolonged periods of low oil prices.71

Impact On Russia
After 2008, the financial crisis and the plunge in global energy prices caused various
complications for Russia economy which decreased its federal budget revenue.72 The Russian
government used financial resources from the Sovereign Wealth Funds to cover the federal
budget deficit and bailout major state-banks and other industries.73 In the past two years, the
Russian government did not use the National Wealth Fund as a savings for future generations,
but as a tool to stimulate economic growth and resolve current financial problems. 74 This
runs the risk of only benefit Russia’s economy in the short term with growth dying out after a
sharp, brief acceleration.75
As one of the solutions for the financial crisis, Russian Federal Law No. 245-FZ, which
expires at the end of 2014, suspends deposits to these funds and allows for the transferring of
revenue to directly finance the federal budget expenditures.76 The conflict in Ukraine currently
forces Russia to increase expenditures, which adds to the budget deficit for 2014.77 Without
the direct financial support from the Reserve Fund and the National Wealth Fund in 2015,
Russia’s government faces a threat of partly losing its financial power to balance its budget.
Currently, the Russian government
is receiving criticism for its poor
management of the Sovereign
Wealth Funds. According to
former Finance Minister Alexei
Kundrin, the government
mismanages the funds by exposing
them to risky investments. Kundrin
also disagrees with the investment
of the National Wealth Fund in oil
companies such as Rosneft because
it goes against this hedge fund’s
purpose of being independent on oil
and gas exports.78 He also
mentioned that this fund allocates
its assets on riskier investments,
such as infrastructure, which will lead to risk concentration without diversification.79
Russia faces a higher financial threat since the West controls the right to freeze the assets of
the Sovereign Wealth Funds to punish Russia for its involvement in Ukraine.80 As the two
Sovereign Wealth Funds allocate a large part of their assets on foreign investments, Russia has
a significant financial dependence on the West. If the West decides to freeze these assets, it
has to consider if it wants to block the pension savings which many Russian citizens are
dependent on. However, the fact that Russia uses these funds for political interests gives the
West reason to restrict Russia’s access to these funds.81
Former Finance Minister Alexei Kudrin criticizes
the poor management of the Sovereign Wealth
Funds. Source: http://tinyurl.com/naanzv7

Analytic confidence for this assessment is medium. The analysts used no structured method of
analysis. Source reliability is high with very little conflict among sources and information is up
to date. The analysts’ expertise is minimal and worked together as a team. The task complexity is
moderately complex and the time constraint was ample.

The chart above depicts the 2013 major trading partners of
Russia. It is important to note the volume of trade between
Russia and other western countries making up a significant
portion of not only imports, but exports as well. Source:
Accessed through Jane’s “Russian Federation: Economy – Data”
Russia’s ImportSubstitution Long-term Effects Likely To Be Negative
Executive Summary:
It is likely Russia’s import substitution program will mainly see negative effects in the long-
term. Though the program is seeing a few short-term benefits and the program succeeds in
making Russia less dependent on the West, the program will prove to be costly and will likely
raise the prices on any commodities Russia manufactures. Russia will also face many issues
implementing the program nation-wide as manufactures are already struggling with finances and
work capacity and are still heavily reliant on Western firms for specialized equipment.
Discussion:
Russia is taking steps to
reduce its reliance on
imported goods through
an import substitution
program. The majority
of Russia’s export
revenue comes from
fuels and metals with
machinery, food
products, and chemicals
dominating imports.82
Russian external trade
focuses heavily on the
West though Russia is
trying to diversify its
exports to open markets
abroad and spur internal
competitiveness.83
Reuters discussed the
impact of the import
substitution program, noting that Russian manufacturing has been slowly expanding through
August with the consumer goods sector reporting output growth, a rise in new work, a rise in
new export orders, and an increase in outstanding business as a result of import substitution.
Nonetheless, the long-term effects are likely to be negative for Russia’s economy as it will
lead to higher costs and prices.84
President Putin told officials that Russia’s task is to protect themselves against the risk of
foreign partners not performing their contractual obligations and he further elaborated that

Russia can produce all their industrial needs themselves, though he acknowledged
development is still required. Despite Russia’s extensive industrial capabilities, their high-
tech sector is still reliant on Western firms for most of their specialized equipment.85
It is unlikely import substitution will be successful considering manufacturers are running at
near-full capacity and are in need of new investment, which is in shorter supply as foreign
financing is shrinking. 86 Economists are warning the program will be detrimental as prices
would likely grow at least 20-30% on products, especially produce.87
The Ministry of Industry and Trade is managing part of the program and proposes the Russian
government would provide additional funding through budget appropriations in 2014 through
2016 for a two-step program. The proposal suggests Russia begin substituting Ukrainian
components with Russian systems which then extends outwards to other components delivered
by foreign suppliers.88
Analytic confidence for this assessment is medium. The analyst used no structured methods of
analysis. Source reliability is high with very little conflict among sources and information
updated within the last 3 months. The analyst’s expertise is minimal and mainly worked alone
with some casual discussion among peers. The task complexity is moderately complex and the
time constraint was ample.

Russia’s President Putin and China’s President Xi
Jinping during the signing ceremony for the USD
400 billion gas deal in Shanghai. Source:
http://tinyurl.com/kmpxwrs
Russia Likely To See IndirectBenefits From Gas Deal With China
Executive Summary:
It is unlikely the USD 400 billion gas deal between Russia and China will directly aid Russia’s
economic state during the Ukraine crisis. Since the deal will not begin until 2018, it will be of
little to no help for Russia in the short term, but it will likely provide indirect help as it
strengthens Russian-Chinese relations. Russia and China signed around 40 agreements that will
help Russia weather Western sanctions since the initial gas deal in May.
Discussion:
Russian foreign policy dictates
China is increasingly important to
economic and strategic interests.
Bilateral ties between the two
countries are strengthening, most
notably with the landmark deal on
gas exports from Russia to China in
May 2014. China has an interest in
accessing Russia’s natural resources
while providing energy resources to
China is more economical for Russia
since their main oil fields are in
eastern Siberia.89
Russia and China finalized a USD
400 billion deal to supply 38 billion
cubic meters of gas annually over 30
years, or about 20 percent of its sales to Europe. Bloomberg reported an associate at the
Chatham House research group stated “Russia can manage bad relations with the U.S. and the
EU, but it can’t manage that and an uncertain relationship with China.”90
The deal will start around 2018 and because of this, the “economic effect on the European
crisis will be limited,” as stated by a BBC news analyst. The greater achievement may be that
the deal opens more doors between China and Russia.91 On 13 October 2014, Russia and
China furthered their ties by signing energy, trade, and finance agreements to help weather
Western sanctions. Russia and China signed around 40 deals in total and there are prospects
of a 2015 deal to build a second pipeline to ship Russian gas to China.92 The deals also cover
technology and extend credit lines from Chinese banks and arrange for currency swaps.93

diversify their gas imports away from Russia.94 Trade relations with China must diversify or
Russia risks becoming a raw material supplier and the internal Russian market could be
flooded with cheap Chinese manufactured goods. On top of this, Chinese investments could
displace locally produced goods and labor.95
Analytic confidence for this assessment is medium. The analyst used an ACH as a structured
method of analysis. Source reliability is high with very little conflict among sources and
information updated within the last week. The analyst’s expertise is minimal and mainly worked
alone with some casual discussion among peers. The task complexity is moderately complex
and the time constraint was ample.

Russia Highly Likely To Relax And Reverse More Banned Food
Executive Summary:
It is highly likely that Russia will continue to relax and reverse their food bans due to the bans
negative effects on the Russian economy. Before the Ukraine crisis, the EU and Russia had
significant agricultural trade. Since Russia and the EU are very economically intertwined,
neither economically benefit from the food bans. Russia is already relaxing previous bans since
their agricultural sector is seriously struggling, food prices are rising, and there are many indirect
negative costs to Russia and the EU from a lack of agricultural trade.
Discussion:
Russia and the EU
are highly
economically
interdependent.96
Russia is a net
importer of
agricultural products
from the EU.
Agricultural
products as well as
machinery and
chemicals dominate
EU exports to
Russia. In 2013, the
gap between
imports and exports
stretched up to USD
20 billion due to a
12% reduction in
agricultural exports and a 1.4% reduction in agricultural imports. In 2013, Russia’s top
destination for agricultural exports was the EU at 19%.97
Russia mainly exports commodities, making up half of the agricultural exports. Wheat alone
makes up one third of Russia’s agricultural exports, but sales were down by 26% in 2013.
Import wise, Russia relies on meat, cheese, fruit and vegetables, alcoholic beverages, and
tobacco products from the EU.98
In August 2014, Russia banned agricultural products from the EU and other countries to
contest sanctions against them. The bans will last at least one year with 73% of those banned
U.S. officials say the impact of Russia’s decision on the American
economy will be minimal, but more significantly hurts the EU.
Source: http://tinyurl.com/kvajhva

imports being from the EU.99 The original food bans were on dairy, meat, fish, fruit, and
vegetable products.100
Russia is slowly relaxing and reversing these bans as their agricultural sector cannot make up
their imports from the EU.101 The ban caused prices to rise in some areas and the market to
fall.102 The Russian government will allow select imports, like salmon and potato seeds, to
help their farmers increase production.103
The lack of agricultural trade between Russia and the EU caused various other indirect
impacts. The countries most exposed to the Russian market are losing export business, like
Germany. There is also an influx of liquidity from Russia that benefits some financial
systems. Finally, partly due to tense Russian-Western relations, the price of oil dropped which
the big energy importers gain from.104
analysis. Source reliability is medium to high with very little conflict among sources and
information updated within the last year. The analyst’s expertise is minimal and mainly worked

Russia Is Unlikely To Replace Needed Western Technologies
Executive Summary:
It is unlikely that Russia has the economic and industrial capability to replace Western
technologies they are dependent on. Since sanctions against Russia limit their access to
specialized equipment and much needed technologies, Russia is trying to develop their domestic
technological sector to replace this equipment. This is unlikely to be successful as Russia’s
industrial capability for this specialized equipment is limited, their economic standing makes it
difficult to pursue, and the lack of technology hurts the economy.
Discussion:
Russia’s economy is largely dependent
specialized foreign technologies and
industries.105 In late 2013, Russia banned
foreign-made technology and machinery if
a domestic equivalent was available. This
took effect at the start of 2014 in order to
preserve their defense industry’s
technological independence and support
local producers.106
Currently, Western sanctions are limiting
Russia’s access to modern technology that
they are dependent on. The Western
sanctions range from visa bans and asset
freezes to restricting Russia’s foreign
drilling technologies which encourages
Russia to develop its technology and
fundamental sciences sectors.107
The United States banned exporting high technology oil equipment to Russia while also
sanctioning major Russian oil companies like Rosneft.108 Russia heavily relies on certain
technologies like specialized robots used to develop oil fields as well as other arctic and
offshore drilling technologies.109 Russia depends on hydrocarbons that they need to
effectively exploit without western technology if Russia wants to succeed economically
without the West.110
SMD, a specialist engineering firm that makes
sophisticated robots which operate on
seabeds, relies on its exports, and one fifth of
its market is in Russia. Source:
http://tinyurl.com/lc2kzdg

Russia must decide between furthering their territorial expansion in Ukraine and risk further
economic damage from the West or construct a stable free-market economy that provides
long-term prosperity.111 Russia depends on foreign technology to upgrade industry and create
jobs which boosts the economy.112
Combined with the fall in oil prices, the Russian economy is falling into a recession and the
ruble is dropping. Still, Russia will not decrease the USD 15 billion budget for sciences even
with falling oil revenues and gas exports.113 Russia must either find an economically sound
way to manufacture the technologies they need from the West or they must accept their
economy will continue to hurt from the lack of foreign technology until they take steps to gain
foreign industrial production back.

Russia Likely To Continue To Ignore TheNeed For Foreign Finances
Executive Summary:
It is likely that Russia will continue push for economic independence than try to repair their
foreign financial market relations. Russia is dependent on Western finances as they owe over
USD 700 billion to western banks, China cannot give them enough economic support, and since
limited foreign financial market access inflicts long-term economic damage. Despite this, Russia
is still fighting to become economically independent from the West, even at the expense of their
economy.
Discussion:
Financial experts say Russia’s most pressing problem is their financial crisis. Russia owes
almost USD 700 billion to Western banks with much of that owed by state-run companies.
Russia tried turning to the east to help, but China does not have the capacity or drive. Their
“debt threatens to drain the Kremlin of its [USD] 400 billion in foreign currency reserves.”114
On top of this, companies like Rosneft are asking for large quantities of money that is well out of
reach for the USD 80 billion in the National Welfare Fund which is part of those reserves.115
Since the West is barring Russia from western financial markets, the government will have to cut
spending or raise taxes to keep the deficit down to .6% of the GDP or Russia must borrow from
domestic institutions at increasingly expensive rates.116 Russia not only wants to avoid this, but
does not want to be dependent on external financing altogether. 117
Russia’s total external debt began steadily increasing in 2003 where it spiked in 2008.
Russia currently owes USD 715 billion in external debt. Source:
http://tinyurl.com/kqm6xbh

The current sanctions against Russia target their financial sector to inflict long-term damage.
The sanctions froze most of Russia’s companies and banks out of the global capital markets
which is damaging how Russia pays its USD 700 billion in foreign currency debt as they must
pay off USD 10 billion every month. The International Energy Agency says Russia “needs
[USD] 750 billion of fresh investment over the next 20 years – and imported Western technology
– just to stop oil and gas output declining.”118
Although domestic banks dominate the Russian market, foreign bank’ claimed USD 219 billion
at the end of 2013.119 Currently, the central bank, the most independent institution in Russia,
raised interest rates that will push Russia deeper into recession in 2015, but held off a currency
meltdown.120 The bank’s actions are starting to gain traction, but will mainly just help in the
short-term.121
Even though Russia is facing considerable financial problems, Western countries are beginning
to realize that the economic and financial measures imposed so far have not deterred Putin from
his actions in Ukraine.122 Though Russia is dependent on foreign finances, they continue to try
and prioritize economic independence over economic reform.

Annex A: ACH
Analysis of Competing Hypothesis for the analytic report on “Russia Likely To See
Indirect Benefits From Gas Deal With China”

Contact Information
Katelyn M. McCafferty
Mercyhurst University Institute for Intelligence Studies
4964 West Park Drive
Fairview Park, OH 44126
Phone: (440)-799-3999
kmccaf10@lakers.mercyhurst.edu

Endnotes
1 http://www.theguardian.com/business/2014/dec/03/oil-collapse-leads-world-economy-trouble
2 http://www.theguardian.com/world/2014/dec/02/russia-warns-fall-into-recession-2015-sanctions-oil-price
3 http://www.marketwatch.com/story/iran-venezuela-russia-may-face-pain-from-cratering-oil-prices-2014-12-01
4
http://www.bloomberg.com/news/2014-10-09/russia-moves-ruble-band-by-most-since-march-spends-1-
8-billion.html
5 http://www.businessweek.com/news/2014-10-07/orderly-ruble-drop-seen-costing-up-to-30-billion-
russia-credit
6 http://ec.europa.eu/trade/policy/countries-and-regions/countries/russia/ (high)
7 “Russian Federation: Economy – Trade Profile”, in Sentinel Reports 01 July 14 (accessed through Jane’s): “After
the collapse of the special trade relationships within the old Comecon (or more properly, CMEA) and the
disintegration of the Soviet Union, the locus of Russian external trade has shifted dramatically toward the West, the
EU in particular. Nevertheless,Russian import demand is still crucial for most of the otherCIS economies. Russia is
seeking to diversify its exports in terms of commodities and, in an effort to open markets abroad and spur
competitiveness at home,” (high)
8 http://www.reuters.com/article/2014/09/01/us-pmi-manufacturing-russia-idUSKBN0GW1C520140901 (high)
9 http://www.globalpost.com/dispatch/news/afp/140807/russia-retaliates-against-western-sanctions-food-ban (high)
10 “Analysis: The impact of Europe’s sanctions on Russia”,in Jane’s Defense Weekly 01 Aug 14 (accessed through
Jane’s): “Russia has been preparing for sanctions on its defence industry in recent months and has been taking steps
to secure its security of supply and reduce its reliance on imported goods.Speaking at a meeting on import
replacement on 28 July, Russian President Vladimir Putin told officials: "Our task is to protect ourselves against the
risk of foreign partners not performing their contractual obligations." However, despite the country's broad
industrial capabilities the high-tech sectoris still reliant on many Western firms for specialised equipment, and while
stating that Russia "can definitely produce everything we need ourselves" Putin also acknowledged that
development was still required.” (high)
11 http://www.bbc.com/news/business-27503017 (high)
12 http://www.bloomberg.com/news/2014-05-21/russia-signs-china-gas-deal-after-decade-of-talks.html (high)
13 http://uk.reuters.com/article/2014/10/13/russia-china-banks-idUKL6N0S82EJ20141013 (high)
14 http://www.voanews.com/content/china-russia-business-finance-technology-deals-signed/2483776.html (high)
15 http://modernfarmer.com/2014/08/5-ripple-effects-russias-food-ban/ (medium)
16 http://epthinktank.eu/2014/10/03/russian-measures-against-european-union-agricultural-products/ (high)
20 http://www.total.com/en/energies-expertise/oil-gas/exploration-production/projects-achievements/lng/yamal-
lng?%FFbw=kludge1%FF
21 http://www.eia.gov/countries/cab.cfm?fips=rs (High)
22 http://www.total.com/en/energies-expertise/oil-gas/exploration-production/projects-achievements/lng/yamal-
lng?%FFbw=kludge1%FF
23 http://www.reuters.com/article/2009/07/31/us-autos-usa-clunkers-sales-idUSTRE56U0GR20090731
24 http://www.sema.org/sema-enews/2011/20/10-facts-about-the-russian-car-market-you-need-to-know
28 http://www.csmonitor.com/World/Europe/2014/1114/Can -gold-deflect-Western-economic-attacks-The-Kremlin-
thinks-so
thinks-so
thinks-so

31 http://www.csmonitor.com/World/Europe/2014/1114/Can-gold-deflect-Western-economic-attacks-The-Kremlin-
thinks-so
32 http://www.bloomberg.com/news/2013-02-10/putin-turns-black-gold-into-bullion-as-russia-out-buys-world.html
33 http://www.csmonitor.com/World/Europe/2014/1114/Can-gold-deflect-Western-economic-attacks-The-Kremlin-
thinks-so
34 http://blog.securities.com/2013/03/national-funds-of-russia-gain-momentum-in-2013/
35
http://blog.securities.com/2013/03/national-funds-of-russia-gain-momentum-in-2013/
36
37
http://sovereignwealthfundshistory.wordpress.com/ (moderate)
38
http://www.state.gov/e/eb/rls/othr/ics/2013/204720.htm
39
http://www.reuters.com/article/2013/11/06/russia-putin-idUSL5N0IR2W220131106 (high)
40
http://www.sovereignwealthcenter.com/fund/47/National-Wealth-Fund-and-Reserve-
Fund.html#.VGaynfmjOm4 (moderate)
41
http://www.bloomberg.com/news/2014-07-10/why-putin-raiding-wealth-fund-won-t-cure-what-ails-
russia.html (high)
42
http://www.businessweek.com/articles/2014-10-08/russia-dips-into-its-pension-fund (high)
43
http://ccsi.columbia.edu/files/2014/04/nrf_Russia_September2013_RWI_VCC.pdf (high)
44
http://www.reuters.com/article/2013/11/06/russia-putin-idUSL5N0IR2W220131106 (high)
45
http://www.reuters.com/article/2014/11/15/us-russia-economy-wealth-fund-idUSKCN0IZ0I920141115
(high)
46
http://sovereignwealthfundshistory.wordpress.com/ (moderate)
47
http://ccsi.columbia.edu/files/2014/04/nrf_Russia_September2013_RWI_VCC.pdf (moderate)
48
http://www.investinginrussia.ru/ppp/nationalfund/ (moderate)
49
http://www.reuters.com/article/2014/09/20/ukraine-crisis-novatek-lng-idUSL6N0RL0G520140920
(high)
50
http://www.reuters.com/article/2014/10/24/russia-economy-ratings-idUSL6N0SJ1SU20141024
51
http://www.businessweek.com/articles/2014-10-08/russia-dips-into-its-pension-fund
52
http://www.businessweek.com/articles/2014-10-08/russia-dips-into-its-pension-fund (high)
53
http://scieuro.com/wp-content/uploads/2014/10/April-2014.pdf#page=7
54
55
56
57
58
59
60
61
62
63
64
65
66
67
http://www.reuters.com/article/2013/05/22/russia-economy-idUSL6N0E330K20130522
68
69
70
russia.html

71
russia.html
72
“Russian Federation: Economy – Outlook”, in Sentinel Reports 29 October 14 (accessed through
Jane’s):“The plunge in world-market energy prices in the fourth quarter of 2008 and the credit crunch
that accompanied turmoil in global financial markets subsequently resulted in a very sharp contraction of
aggregate economic activity in Russia. This caused federalbudget revenues to dwindle while the
government instituted major fiscal stimulus initiatives and fortified social spending. The resulting huge
federalbudget deficit was funded from the Reserve Fund and the National Wealth Fund, which are the
successors to the oil stabilization fund accumulated during the period of record-high world-market energy
prices.” (high)
73
http://www.state.gov/e/eb/rls/othr/ics/2013/204720.htm
74
75
russia.html (high)
76
77
http://www.reuters.com/article/2013/05/22/russia-economy-idUSL6N0E330K20130522 (high)
78
http://www.bloomberg.com/news/2014-11-11/ex-finance-minister-says-rosneft-must-stay-away-from-
state-fund.html (high)
79
russia.html (high)
80
http://geoeconomica.com/index.php/analyses.html?file=tl_files/geoeconomica/reports/
March%20Update%20Russia.pdf (moderate)
81
http://geoeconomica.com/index.php/analyses.html?file=tl_files/geoeconomica/reports/
March%20Update%20Russia.pdf (moderate)
82 http://ec.europa.eu/trade/policy/countries-and-regions/countries/russia/ (high)
83 “Russian Federation: Economy – Trade Profile”, in Sentinel Reports 01 July 14 (accessed through Jane’s): “After
the collapse of the special trade relationships within the old Comecon (or more properly, CMEA) and the
disintegration of the Soviet Union, the locus of Russian external trade has shifted dramatically toward the West, the
EU in particular. Nevertheless,Russian import demand is still crucial for most of the otherCIS economies. Russia is
seeking to diversify its exports in terms of commodities and, in an effort to open markets abroad and spur
competitiveness at home,” (high)
84 http://www.reuters.com/article/2014/09/01/us-pmi-manufacturing-russia-idUSKBN0GW1C520140901 (high)
Jane’s): “Russia has been preparing for sanctions on its defence industry in recent months and has been taking steps
to secure its security of supply and reduce its reliance on imported goods.Speaking at a meeting on import
replacement on 28 July, Russian President Vladimir Putin told officials: "Our task is to protect ourselves against the
risk of foreign partners not performing their contractual obligations." However, despite the country's broad
industrial capabilities the high-tech sectoris still reliant on many Western firms for specialised equipment, and while
stating that Russia "can definitely produce everything we need ourselves" Putin also acknowledged that
development was still required.” (high)
86 http://www.economist.com/news/europe/21611141-vladimir-putin-pretends-he-can-make-russia-self-sufficient-
and-strong-how-lose-friends (high)
87 http://www.globalpost.com/dispatch/news/afp/140807/russia-retaliates-against-western-sanctions-food-ban (high)
Jane’s): “One strand of the substitution work is being managed by the Ministry of Industry and Trade
(Minpromtorg), with Minpomtorg Minister Denis Manturov announcing on 25 July that his ministry had developed
and submitted a programme for import substitution for the Russian military-industrial complex to the government.
Under his proposals the Russian government would provide additional funding through budget appropriations this
year and in 2015-2016 for a two-step programme. The proposal would first substitute Ukrainian components with

homemade systems and then be extended to other components delivered to the Russian military-industrial complex
(MIC) by foreign suppliers.” (high)
89 “Russian Federation: External Affairs – Outlook”, in Sentinel Reports 28 July 14 (accessed through Jane’s):
“Economic and strategic interests make China an increasingly important priority of Russian foreign policy. Bilateral
ties have strengthened in recent years, most obviously with the signature of a landmark deal on gas exports in May
2014. The first visit abroad by China's new president Xi Jinping was to Russia in March 2013, and resulted in multi-
billion-dollar contracts.China has an interest in accessing Russia's natural resources,including oil and gas, other
mineral resources and timber. Russia's main oil fields are in eastern Siberia, making it more economical to provide
energy resources to China.” (high)
90 http://www.bloomberg.com/news/2014-05-21/russia-signs-china-gas-deal-after-decade-of-talks.html (high)
92 http://uk.reuters.com/article/2014/10/13/russia-china-banks-idUKL6N0S82EJ20141013 (high)
93 http://www.voanews.com/content/china-russia-business-finance-technology-deals-signed/2483776.html (high)
94 http://www.forbes.com/sites/pikeresearch/2014/05/30/russia-china-gas-deal-narrows-window-for-u-s-exports/
(high)
95 “Russian Federation: External Affairs – Outlook”, in Sentinel Reports 28 July 14 (accessed through Jane’s): “In
September 2010, the first oil pipeline connecting Russia to China was launched,the East Siberian Pacific Ocean Oil
Pipeline, sending up to 300,000 b/d of Russian oil to China under a 20-year supply deal. Additionally, the two
governments have agreed to create a joint Russian-Chinese venture for production of high-speed trains connecting
eastern Russia with China. The Chinese development bank has extended USD500 million to Russia's
Vnesheconombank (VEB), and another USD500 million to VTB. While Sino-Russian economic relations are likely
deepen,but political relations will remain cautious.If trade relations with China do not diversify, Russia risks
becoming a raw material supplier, and the domestic Russian market could be flooded with cheap Chinese
manufactured goods.In addition, Chinese investments could displace locally produced goods and labour.” (high)
96 http://www.ecfr.eu/article/commentary_who_pays_for_the_sanctions_on_russia372 (high)
97 http://ec.europa.eu/agriculture/trade-analysis/map/2014-1_en.pdf (high)
98 http://ec.europa.eu/agriculture/trade-analysis/map/2014-1_en.pdf (high)
104 http://www.ecfr.eu/article/commentary_who_pays_for_the_sanctions_on_russia372 (high)
105 http://www.globalpost.com/dispatch/news/afp/141124/russia-lose-some-40-bn-year-due-sanctions-0 (high)
106 “Russian Federation: Defence Production and R & D – Assessment”,in Sentinel Reports 01 July 14 (accessed
through Jane’s): “In late 2013 the government banned the industry from purchasing foreign-made machine tools,
production equipment, and services if a local equivalent is available. The order, which went into effect on 1 January
2014, is part of a drive to preserve the technological independence of Russia's defence industry and support local
producers.” (high)
107 http://www.reuters.com/article/2014/12/08/russia-putin-science-sanctions-idUSL6N0TS3AO20141208 (high)
109 http://www.ft.com/intl/fastft/245981/putin-says-western-sanctions-will-help-russia (high)
110 http://www.neweasterneurope.eu/interviews/1384-russia-s-dependence-on-the-west (high)
111 http://www.neweasterneurope.eu/interviews/1384-russia-s-dependence-on-the-west (high)
112 http://fortune.com/2014/11/20/russias-lackluster-economy-means-putin-simply-cant-afford-a-ew-cold-war/ (high)
113 http://www.reuters.com/article/2014/12/08/russia-putin-science-sanctions-idUSL6N0TS3AO20141208 (high)
114 http://www.nytimes.com/2014/12/03/business/russia-forecasts-a-recession-in-2015-signaling-a-toll-from-
sanctions-and-oil-prices.html?_r=0 (high)
115 http://www.nytimes.com/2014/12/03/business/russia-forecasts-a-recession-in-2015-signaling-a-toll-from-
sanctions-and-oil-prices.html?_r=0 (high)
116 http://fortune.com/2014/11/24/finance-minister-oil-slump-sanctions-cost-russia-140-billion-a-year/
117 http://www.ft.com/intl/fastft/245981/putin-says-western-sanctions-will-help-russia (high)
118 http://www.telegraph.co.uk/finance/economics/10981648/Russia-vastly-outgunned-in-economic-showdown-
with-West.html (moderate)

119 http://www.economist.com/news/economic-and-financial-indicators/21601532-foreign-banks-lending-russia
(high)
120 http://www.reuters.com/article/2014/11/24/russia-cenbank-independence-idUSL6N0TB40W20141124 (high)
121 http://fortune.com/2014/11/24/finance-minister-oil-slump-sanctions-cost-russia-140-billion-a-year/ (high)
122 http://foreignpolicy.com/2014/09/03/the-wests-tricky-economic-war-with-russia/ (high)

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