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Russia imported a lot of technology and other technologies from the Western economic sphere. To pay for these purchases, Russia has been forced to use Western-controlled currencies. Especially the [[dollar]] and the [[euro]]. By freezing these deposits, [[the West]] calculated that Russia wouldn’t be able to access these deposits, and thereby would lose a huge amount of money. This would hinder further Western imports into Russia.
Russia imported a lot of technology and other technologies from the Western economic sphere. To pay for these purchases, Russia has been forced to use Western-controlled currencies. Especially the [[dollar]] and the [[euro]]. By freezing these deposits, [[the West]] calculated that Russia wouldn’t be able to access these deposits, and thereby would lose a huge amount of money. This would hinder further Western imports into Russia.
However, the West did not anticipate that Russia has been preparing for import substitution since 2014. This preparation was one of the responsibilities of then prime minister [[Dimitry Medvedev]]. Russia prepared well and has been able to switch to indigenous products pretty quickly. What it couldn’t produce on its own, either due to technology or capacity, it procured from partners like China. Russia and China are able to trade outside of the Western system, using their own currencies. This is because Russia expected to be cut off from the [[SWIFT]] network, and trade in dollars and euros didn’t make much sense anymore.
However, the West did not anticipate that Russia has been preparing for import substitution since 2014. This preparation was one of the responsibilities of then prime minister [[Dmitri Medvedev]]. Russia prepared well and has been able to switch to indigenous products pretty quickly. What it couldn’t produce on its own, either due to technology or capacity, it procured from partners like China. Russia and China are able to trade outside of the Western system, using their own currencies. This is because Russia expected to be cut off from the [[SWIFT]] network, and trade in dollars and euros didn’t make much sense anymore.
Russia knew it would be cut off from the Western trade system and SWIFT. There was no point in maintaining these reserves in dollar and euro. However, getting rid of the money in advance would be suspicious. The solution was to buy most of the Western industrial assets in Russia. There were a lot of Western industrial enterprises in Russia before the NATO war in Ukraine. They invested in Russia’s economy by building factories and employing people.
Russia knew it would be cut off from the Western trade system and SWIFT. There was no point in maintaining these reserves in dollar and euro. However, getting rid of the money in advance would be suspicious. The solution was to buy most of the Western industrial assets in Russia. There were a lot of Western industrial enterprises in Russia before the NATO war in Ukraine. They invested in Russia’s economy by building factories and employing people.