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Russian people walk in front of an empty commercial space with a sign posted on a window reading 'For rent', in Moscow, Russia, 20 July 2022. The departure of international companies from Russia, which formed a third of the demand for office space in Moscow, could provoke a serious decline in Moscow's business center market. [EPA-EFE/YURI KOCHETKOV]

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Building Potemkin villages*, fabricated structures designed to disguise reality, is an old Russian speciality. The question is whether this makeup, elevated at an industrial scale after the invasion of Ukraine, is effective with public opinion, writes Orhan Dragaš.

Orhan Dragaš is the founder and director of the International Security Institute based in Belgrade.

The Russian central bank has printed a new hundred-ruble banknote, but banks have asked that it not be put into circulation at least until April. The reason is simple, no ATM in Russia can recognise the new banknote.

This is because every ATM is manufactured in the West, and since those companies have withdrawn from Russia, there is no one left to adjust the software for the new banknote.

On the less sophisticated technological side, we notice the same misfortunes. The Russian Federation Council Speaker Valentina Matviyenko said that she realised only when the invasion of Ukraine was well underway, that Russia was importing, of all things, nails.

With such a large steel complex, we import nails, she begrudged in parliament, during a debate on how to replace imported products.

From nails to banking software, everything is unavailable in Russia. Even salt: in the middle of the aggression against Ukraine, Russians realised that they only produced 60% of their domestic needs and that they imported the rest – mostly from Ukraine.

It’s strange but it’s true. Eight years after the Western sanctions that followed the annexation of Crimea, Moscow has not realised that the country’s market is highly dependent on the import of almost everything. Compared to today’s sanctions, those sanctions were mild, but Moscow’s short-sightedness – or arrogance – to take them as a warning is astonishing.

Russia assumed that the West would not have a strong and particularly united response to the invasion of Ukraine. At the most, the expected it would be equal to the Crimea sanctions. Moscow anticipated some tensions regarding imports and exports, but nothing serious enough to not be able to be avoided by international corruption and smuggling.

As we know, the Western response was stronger. The shops in Russia were emptied, and the technological base, the market and money reserves were dried up.

Moscow counters this to the best of its abilities – with even stronger internal propaganda, false statistics, and by suggesting that the West suffers more from its own sanctions.

Building Potemkin villages is an old Russian speciality. Potemkin villages serve to disguise reality.

“The Russian economy has been catastrophically crippled, in the short and long term, due to economic sanctions and the withdrawal of (Western) companies.” This is the main conclusion of a large study on the state of the Russian economy, which a group of professors prepared from Yale University after the five-month invasion of Ukraine.

In almost 120 pages, there is not a word that would give Russia any hope that it can recover after the harm it inflicted itself.

The research debunked Russian lies. For example, in March, the Kremlin predicted (fabricated data) that despite the sanctions, it would earn much more from oil and gas than a year ago, due to rising prices, and that forecast was taken for granted by the biggest media authorities in the West, such as Bloomberg and famous journalist Fareed Zakaria.

In May, however, it turned out that revenues from oil and gas had been halved, and Moscow stopped publishing data on earnings from its most important products.

Russia irreversibly lost its position as a strategic exporter of raw materials. It turned out that its dependence on the European market is much greater than Europe’s needs for its raw materials. Russia cannot compensate for the departure of Western companies and technologies, as companies that made up as much as 40% of its GDP have left.

It thus erased 30 years of economic and technological progress brought by Western companies. For Russia, there is no way out of the economic collapse, as long as the economic sanctions of the West are in force.

The headlines in the media saying that the Russian economy is recovering are simply not true, and the facts say that the Russian economy is falling apart according to every parameter and at every level.

The economists from one of the world’s most respected universities invested their reputation in these conclusions about today’s wartime and isolated Russian economy. No one’s interest stands behind their names and careers, just as there is nothing in their study except facts and scientific conclusions.

When it comes to such a clash of narratives, we are always faced with a choice. Will we surrender to obscure propaganda, lies, and fabrication of data by an autocratic regime, which decided to attack another sovereign state, its neighbour?

Are we really going to believe that everything is fine with a country that in 2022 starts making automobiles with 1980 standards? Should we have confidence in a state that, like in the Middle Ages, launches a war campaign with the aim of robbing the neighbour’s grain and reselling it as its own?

A July economic study from Yale warns that the narrative about fear of shortages and rising prices in Europe is nothing more than the effect of the same propaganda from the Kremlin, which says that the ruble is strong and that revenues from oil and gas are higher than ever.

When the Titanic was sinking, musicians were still playing, but in Russia, they play with guns pressed against their heads. We have a choice: believing the captain of the ‘drunken ship’, or the Yale scientists. Everything else is a deception.

*The original story behind the term ‘Potemkin villages’ was that Grigory Potemkin, former lover of Empress Catherine II, erected cardboard images of beautiful settlements along the banks of the Dnieper River(Dnipro) in order to impress her and foreign guests as they sailed along the river. The structures were to be disassembled after she passed and re-assembled farther along her route to be viewed again.

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