Russia has weathered western sanctions over the invasion of Ukraine, the oligarch Oleg Deripaska has said, admitting “surprise” at the country’s resilience after a war he thought would bankrupt the Kremlin.
Deripaska, one of Russia’s richest men, told the Financial Times that Moscow had survived the effort to isolate its economy by developing new trade ties with the global south and ramping up investment in domestic production.
The private sector, meanwhile, proved more robust than he had expected only months earlier. “I was surprised that private business would be so flexible. I was more or less sure that up to 30 per cent of the economy would collapse, but it was way less,” he said.
“Yes, there is war spending and all this kind of subsidies and government support but still it’s a surprisingly low slowdown [ . . .] The private economy found its way to operate and to do so successfully.”
Russia’s apparent resilience despite being cut off from global markets and supply chains has been a point of pride for President Vladimir Putin, who said last week that “the recovery stage for the Russian economy is finished” after “we saw off unprecedented external pressure”.
Russia was hit hard in the wake of the invasion but has since succeeded in avoiding G7 sanctions on the vast majority of its oil exports. The International Monetary Fund has forecast Russia’s gross domestic product will grow by 1.5 per cent this year and 1.3 per cent in 2024. Putin was more bullish last week, predicting 2.8 per cent growth this year, more than double the maximum his own cabinet predicted in April.
The comments by Deripaska, the founder of leading aluminium producer Rusal and its parent energy company En+, indicate growing confidence among Moscow’s elite that Russia has emerged relatively unscathed despite fears sanctions would crater the economy early in the war.
“I always doubted this Wunderwaffe [wonder-weapon], as Germans used to say, of the sanctions — weaponising the financial system as a kind of tool to negotiate,” said Deripaska, whose fortune is estimated at $2.5bn by the Russian edition of Forbes.
“We made so much effort to make the world global, in terms of trade, investment, information flows [ . . .] It’s really over when you can use sanction, it’s a kind of instrument of the 19th century. We can’t see that it would be efficient in the 21st century.”
Deripaska was one of the few oligarchs to have offered — albeit guarded — criticism of the invasion in its early months. But though he said he saw “no value” in the conflict, he has toned down his anti-war statements more recently amid growing pressure on oligarchs to pay more taxes and, in some cases, surrender their assets to the state.
“I can’t see why it shouldn’t be stopped from both sides […] I can’t see that anyone will reach its declared goal,” Deripaska said. “Will you give F-16, F-35 [fighter jets]? You know, the only goal which would be reached would be more suffering and more lives would be lost, more wounded [for] maybe 5, 10, 20, 25 kilometres left or right.”
Ukraine has rejected calls like the one Deripaska made for “real negotiations” on the grounds that it would legitimise Russia’s territorial gains. But more fighting, the oligarch added, would mean “another 50,000 dead from both sides [and] maybe 150,000 wounded” by next year. “Do you really believe that it’s wise to have another 200,000 people . . . who would suffer another 12 months?”
The Kremlin urged Deripaska last year to temper his criticism, while prosecutors seized a hotel complex he owns in the Black Sea resort of Sochi and turned it over to a Putin-linked foundation — an early salvo in a growing wave of forced nationalisations. He declined to comment on the episode.
To explain the “resilience” of the economy, Deripaska pointed to Kremlin investment in industry and efforts to force inefficient state enterprises that dominate the economy to ramp up capacity, partly in support of the war effort.
“State capitalism created these massive conglomerates with low productivity, low utilisation rates, low wages. Today I was surprised to see that at some of their factories, wages were similar to wages [at companies] which I founded in the same region,” he added. “They have money, they will recruit, they will compete.”
Deripaska, who has been under personal sanctions by the US since 2018 and the EU since 2022, said his travels to Asia had convinced him countries from the global south would resist pressure to join the western sanctions, offering Russia a lifeline.
“You know, these people need to feed 1bn people every day, and you ask them to commit or suffer,” he said. “It was a grave mistake of people who thought that they could use this excellent mechanism to put pressure on autocratic regimes.”
Trade with China has gone up 32 per cent year-on-year in the first eight months of 2023 to $155bn, while trade with India tripled in the first half of the year to $33bn, according to state newswire RIA Novosti.
Russia’s wealth in natural resources, meanwhile, makes it too attractive a trade partner for countries that depend on its energy, metals, and food exports to abandon, Deripaska said.
“Out of the next billion people who’re about to be born, 70 per cent will be in this region. Let’s face reality. They want development, they need Russian resources, Russian solutions, trade with Russia,” Deripaska said.
“Believing that the sanctions will stop [the war] or create regime change or somehow make us closer to the end of the conflict . . . No. We need to have another solution.”
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