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The extensive sanctions imposed on Russia after its invasion of Ukraine one year ago have not led to the decimation of the Russian economy, as many experts had predicted. As recently as last fall, according to new polling data, many Russians actually believed they were better off economically than they had been before the war started.

According to data gathered by the Gallup organization, the share of Russians reporting they were satisfied with their standard of living increased by 15 percentage points, to 57% in 2022. For the first time in the poll’s history, satisfaction with living standards was above 50% in every region of the country.

The number of Russians reporting that their economic conditions were improving grew to 44% from 40%, while the number who said their economic prospects were declining plummeted to 29% from 50%.

Similarly, the percentage of Russians reporting that they were satisfied with the country’s leadership surged to 66%, up from 50% in 2021, while the share reporting that they were dissatisfied fell from just under half to only 21%.

The survey is part of Gallup’s expansive annual World Poll, which conducts large-scale polling in dozens of countries around the world every year. The poll of Russian citizens was taken between mid-August and early November of last year, and therefore cannot have captured any changes in attitudes since the fall. The survey involved in-person interviews with a random sample of 2,000 individuals ages 15 or older, living in Russia. The margin of sampling error is plus or minus 2.6 percentage points.

Surprising resilience

Recent data has demonstrated that the impact of international sanctions on Russia was not nearly as dramatic as the 10% contraction that many economists were foreseeing in 2022. The Russian economy contracted by a relatively mild 2.1% in 2022, and the International Monetary Fund has predicted that it will post small, but positive growth of 0.3% in 2023.

Russia began the war with a financial system braced for sanctions. The Russian central bank used currency controls and sharp interest rate hikes to stabilize the ruble early in the first year of the war. At the same time, Russian businesses began exploring deeper ties with countries such as China, India and Turkey, which allowed trade in goods and commodities to largely recover from initial dips at the outset of the conflict.

The biggest reason for Russia’s surprising resilience, however, was that it was allowed to continue selling petroleum products, far and away its largest source of pre-war revenue, on global markets. Prices were elevated at the outset of the fighting, and a slow move by many Western nations away from Russian oil and gas gave Russian firms time to broaden their sales to countries such as India and China.

In an address to the nation this week, Russian President Vladimir Putin touted the country’s economic performance.

“The Russian economy and system of governance proved to be much stronger than the West supposed,” he said. “Their calculation did not come to pass.”

‘Rally’ effect

Benedict Vigers, a consultant with Gallup, told VOA that the better-than-expected performance of the Russian economy may explain some of the economic optimism. However, a strong “rally-round-the-flag” effect is probably also in place.

When two countries go to war, there is a tendency for the people in both countries to demonstrate stronger affection for and satisfaction with their respective homelands, Vigers said.

“It is a well-known effect in Russia,” he said. “We have seen it historically, and it is happening now, in conjunction, to some degree, with Russia’s broader ability to evade some of the worst impacts of Western sanctions.”

He pointed out a similar spike in Russians reporting optimism about the economy and satisfaction with their government in the wake of the invasion of Ukraine’s Crimean Peninsula in 2014.

Repression of dissent

Another factor potentially coloring the responses to the Gallup survey is the fact that the Russian government aggressively punishes public criticism of the government, and has done so with more frequency in the months since launching its invasion of Ukraine. Tens of thousands of Russian citizens have been arrested for protesting against the war.

Galina Zapryanova, Gallup’s regional director for Eastern Europe and the former Soviet Union, told VOA in an email that the company cannot rule out the possibility that fear of reprisal affects peoples’ answers to poll questions.

“It is certainly possible that some people would not give a truly honest answer on questions related to approval of government policies, etc. — they may give the ‘safest’ answer that they consider most appropriate,” she wrote.

“This is a risk in all survey research in countries that are not entirely free, but we need to try our best to obtain representative data, while keeping in mind that a portion of any trend could be due to self-censorship by respondents.”

However, she noted that on the question of how Russians feel about the future of the economy, 56% opted for a response other than the seemingly “safe” option of declaring themselves optimistic.

Economic data suppressed

Another potentially complicating factor is that since the invasion in February 2022, the Kremlin has significantly closed off access to economic data that used to be public information.

“As far as mass media is concerned, economic information just recently fell victim to censorship,” Vasily Gatov, a senior fellow at the University of Southern California Center on Communication Leadership and Policy, told VOA. “Until spring last year, the Kremlin literally didn’t control narratives and the way people were writing about the economy in general.”

Gatov, who studies Russian media, said that since then, the government has blocked access to many reports on economic activity, making it more difficult for journalists and academics to get a full picture of what is happening with the Russian economy.

However, Gatov said, while it may be possible for the Kremlin to control access to some information, much of people’s perception about the economy comes from their own lived experiences.

“People receive economic information from various sources, and not always media sources,” he said. “One of them is their bank account. Another is prices at the gas station or grocery store.”

Without addressing the Gallup findings specifically, Gatov said that in his view, Russians “read between the lines” of information coming from the Kremlin and Kremlin-controlled media sources.

He said that they see major international brands refusing to do business in their country and are experiencing infrequent but serious shortages such as an ongoing lack of Western-produced drugs like insulin. “Russians are skeptical about the economic future of the country.”
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Moscow’s invasion of Ukraine a year ago has had profound impacts on how the world powers itself. VOA’s Steve Baragona explains.
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Russia’s invasion of Ukraine a year ago saw a dramatic rise in the price of fertilizer for importers like Ghana, where farmers are struggling to cope.  Ghana’s economic problems have made imports even more expensive, forcing farmers to switch to different crops and ultimately, reduce production.  Kent Mensah reports from Akatsi, Ghana.

Camera: Nneka Chile
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The United States is nominating former Mastercard CEO Ajay Banga to lead the World Bank, President Joe Biden announced on Thursday, crediting him with critical experience on global challenges including climate change.

The news comes days after Trump appointee David Malpass announced plans to step down in June from his role leading the 189-nation poverty reduction agency. His five-year term was due to expire in April 2024.

Addressing the impacts of climate change at the multilateral bank is a priority for the U.S. And leading climate figures have urged the Biden administration to use Malpass’ early departure as an opening to overhaul the powerful financial institution, which has been increasingly criticized as hostile to less-wealthy nations and efforts to address climate change.

Malpass ran into criticism last year for seeming, in comments at a conference, to cast doubt on the science that says the burning of fossil fuels causes global warming. He later apologized and said he had misspoken, noting that the bank routinely relies on climate science.

Banga, currently vice chairman at private equity firm General Atlantic, has more than 30 years of business experience, having served in various roles at Mastercard and the boards of the American Red Cross, Kraft Foods and Dow Inc. He is the first Indian-born nominee to the World Bank president role.

“Ajay is uniquely equipped to lead the World Bank at this critical moment in history,” Biden said in a statement, adding that Banga “has critical experience mobilizing public-private resources to tackle the most urgent challenges of our time, including climate change.”

Treasury Secretary Janet Yellen said in a statement that Banga’s experience “will help him achieve the World Bank’s objectives of eliminating extreme poverty and expanding shared prosperity while pursuing the changes needed to effectively evolve the institution,” which include meeting “ambitious goals for climate adaptation and emissions reduction.”

Biden’s climate envoy, John Kerry, said on Twitter that Banga was “the right choice.”

“He can help put in place new policies that help deploy the large sums of money necessary to reduce global emissions and help developing and vulnerable countries adapt, build resilience, and mitigate the impact of greenhouse gases,” Kerry tweeted.

The United States has traditionally picked the World Bank chief. The head of its sister agency, the International Monetary Fund, has traditionally come from Europe. But critics have called for an end to that arrangement and for developing countries to gain a bigger voice in the two organizations.

The World Bank has promised to conduct “an open, merit-based and transparent selection process″ and said it would accept nominations through March 29.

Eric LeCompte, executive director of the anti-poverty coalition Jubilee USA Network, said the United States was “looking to nominate people that will be supported by the developing world” and that it was “incredibly relevant” that Banga was born in India. “They want to be able to appoint people who have experience and roots with other economies,” LeCompte said.

“I can’t think of a more intense time for a person to be coming into this job,” said Clemence Landers, policy fellow at the Center for Global Development, a Washington think tank.

The bank is under pressure to expand its mandate — an effort that likely would require the next president to convince donor countries to provide more money.

Critics say the bank should be doing more to help poor countries finance projects to combat and prepare for climate change without saddling them with heavy debt burdens. And Landers said it needs to do a better job at tackling problems that cross borders such as providing pandemic surveillance and backing broad vaccination programs.
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Pakistan Prime Minister Shehbaz Sharif has asked his ministers and advisers to fly economy class, forgo luxury cars and their salaries as part of an austerity drive that will save the government $766 million a year.

The belt tightening comes as Islamabad — which is facing a balance of payment crisis — thrashes out a deal with the International Monetary Fund (IMF) to secure funds worth $1 billion which have been pending since late last year over policy issues.

Pakistan’s foreign exchange reserves have fallen below a three-week import cover and the expenditure cuts announced on Wednesday are part of an effort to stave off an economic meltdown.

“These austerity measures will save us 200 billion rupees annually,” Sharif told a news conference in Islamabad.

“These measures are need of the hour, and these savings no matter if that’s one penny is very significant,” he said, terming it a sacrifice for the poor who wouldn’t afford food on the table or medicines in the face of consistently high inflation, which touched 27.5% in January.

Sharif said all federal ministries and government offices have been directed to reduce expenditure by 15% and that he had asked his ministers and advisers to forgo salaries, allowances, luxury cars, foreign trips and business class travel.

The ministers agreed to the measures voluntarily, he said, adding all Cabinet members will surrender their salaries and perks, and they will pay all of their utility bills from their pockets.

Armed forces have given a positive response to cut non-combat expenditures, Sharif said without elaborating.

Other steps include a complete ban on the purchase of luxury items or vehicles for all government-run entities and no administrative unit like a new district or town will be created for two years.

All luxury vehicles will be withdrawn from the ministers, advisers and bureaucrats, who would travel abroad only if inevitable and that too in economy class.

The South Asian nation hopes to secure funds from the IMF soon, Sharif said, adding the stringent measures were part of the requirements the lender had asked Pakistan to fulfill before finalizing a deal.

Talks between Pakistan and the IMF are due to conclude this week, officials say.

Before the talks the IMF had asked Pakistan to take a host of prior actions, which included withdrawal of subsidies, hiking energy tariffs, raising extra revenues and arranging external financing.
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