Will US Sanctions Affect Russian Transition to Market Economy?

Russia since the 1998 financial crisis and default has only slowly yet somewhat steadily moved toward reform such that a market economy prevails. It was not so many years ago that Vladimir Putin ended the oligarch domination of the economy and distribution for former Soviet assets that they had taken much of. That order of oligarch power was regarded as an unfair distribution of wealth, yet was left somewhat as it was. From there the economy moved toward liberalization.

The process was advanced by the rise in world oil prices in the 2000s that continued until the crash following fracking of old oil fields to renew supply. A surfeit of world oil production made oil dependent states lose much revenue. Alaska in the United States faced a government budget crisis and Russia too lost nearly half of its GDP.

If bad actors are targeted, the principle of mass punishment should not target the innocent too. The U.S. should encourage Russia to continue developing a market economy along sound ecological economic principles.

Even so Russia continued a slower advance toward a market economy though the state held some major banks and oil companies. It began an income tax of a modest scale though it had difficulty collecting that. Russia faced many internal and external challenges before the regime of foreign sanctions began to appear for international contention to permanently wrest away the Ukraine and Crimea from Russia.

The second largest party in Russia is still the communist party. The United Russia party- by far the largest, is basically a coalition of four formerly separate parties that joined to beat the communists. The economic and social dynamics of economic reform is occurring concurrent with reform of government, and eventually constitutional structures, and stimulation of business and new infrastructure development. All of that is challenging and expensive. While the United States and Europe tend to place themselves into a belligerent and adversarial as possible position comprising something of a threat to Russian security.

My concern is that the sanctions and hostile external relationship with Russia will retard the growth of Russia as a market economy and in the long run solidify less than free enterprise elements in Russia.

Apparently Russians have a trust in state run media and state ownership of business because of historical reasons that lie in the fact that authoritarian or Tsarist government were the fact of Russia for 1000 years. Only since the end of the Cold War has Russia had a pluralist government, although a multi-party Duma/congress existed briefly, shortly before the Bolshevik takeover to end that and the tsar.

Ronald Reagan had a policy of constructive engagement with South Africa and that led to the DeClerk government and end of apartheid. Reagan also ended the Cold War along with President Gorbachev in part because of hi affable character engendering trust. The United States should think deeply about its reckless and fay sanctions on Russia, since they may harm U.S. interests more so than Russian, in the lang run.