Just over four months ago, the U.S. and several allied nations levied unprecedented sanctions against Russia in response to its invasion of Ukraine.
For weeks afterwards, the Russian ruble's value tanked, foreign multinational companies pulled out of the country, and economic prospects began looking grim.
But Russia responded aggressively. It shored up the ruble's value and increased oil exports to China and India.
The ruble is now the world's strongest performing currency. Thanks to years of preparations, Russia has become far more self-sufficient, and has massive foreign exchange reserves. It has also reopened several companies that were previously under foreign management, like McDonald's.
So, are sanctions working?
"It depends on the criteria," Russian political scientist Ilya Matveev said. "If the goal is a quick and complete collapse of the Russian economy, then no, sanctions are not working because the Russian economy is still functioning. But if the goal is to weaken Russia economically over time, then sanctions are 100% working."
We examine how Russia prepared for this moment, and what sanctions may mean for its war on Ukraine.
How did Russia prepare for this moment?
Russia is now under almost 11,000 individual sanctions.
After it invaded Ukraine in February, dozens of countries responded by rapidly turning Russia into the world's most sanctioned nation.
Some of the most significant sanctions included removing several major Russian banks from the SWIFT payment clearing network; freezing Russian assets in foreign countries; restricting imports of Russian oil; and cutting off key exports to Russia like high-tech components and microchips.
While the sanctions caused some immediate damage, the Russian government has spent years preparing for a situation like this. When it faced sanctions in 2014 after annexing Crimea and launching a "hybrid war" in eastern Ukraine, Russia began trying to sanction-proof its economy.
In 2013, for example, Russia imported about half of its food; but today, it is self-sufficient in basic food supplies and has even become a significant exporter of items like grains and wheat, according to Chris Weafer, the chief executive of the Moscow-based consultancy Macro Advisory.
Prices were initially high and the quality of many products like bread, cheese and breakfast cereals varied.
"We went through a couple of years of eating what I could best describe as flavored tissue paper as they were trying to get it right," Weafer said of many Russian foods at that time. Now, he said Russian companies were able to meet many of the country's food needs, as well as other basic supplies like detergents.
Russia also reduced its reliance on foreign debt and amassed a huge supply of reserves in foreign currency.
What are the long-term prospects for Russia?
This week, Russia defaulted on its foreign debt payments for the first time in more than a century.
That might not have an immediate impact, Weafer said, because Russia doesn't have much foreign debt compared to countries like the U.S., and sanctions had already prevented it from borrowing money. But the default "will hang over it like a bad credit rating hangs over people," he said.
"This is the sort of thing that would be a problem in a few years' time," Weafer said. "If Russia gets in a situation where it needs to rebuild and wants to go back to national projects, it will need to borrow money. And then, that might be difficult because of today's default."
The ruble's value was also high "for the wrong reasons," according to Michael Alexeev, an economist at Indiana University Bloomington — chiefly because Russia's central bank limited exchanges of the ruble, and Russian businesses had maintained high exports as imports plummeted, resulting in a record trade surplus.
"If you earn in dollars and you spend in rubles, the weaker the ruble, the better," Weafer said. "So the central bank is now in a quandary...the current rate is about 54 [rubles] against the dollar. The Finance Ministry and Economy Ministry say it should be 75 to 80. But the central bank are scratching their heads as to how they can do that without risking a collapse."
And while Russia is relaunching versions of some multinational businesses that have left, such as McDonald's, this is far harder for those that relied on imports.
The French carmaker Renault, for example, had previously manufactured Lada cars at plants across the country through a partnership with a Russian state-owned manufacturing company. When Renault pulled out of Russia, the Russian government decided to nationalize the plants and produce the cars itself. Since it can no longer import foreign components, however, the Russian manufacturer has been forced to make cars that don't have automatic transmissions, anti-lock brakes or even airbags.
Alexeev said that this was an example of where the Russian economy could be headed if sanctions continued.
"They will not starve. There will be no famine," he said. "It's just that stuff that they are able to make and consume will become simpler and simpler. Refrigerators, cars, not to mention smartphones. Yes, they will be able to import some of these things from China, but a lot of stuff China will either be not able or willing to supply."
Will the sanctions deter Putin from continuing the war?
While Russia may have the reserves and revenue to fund its military, it may not be able to arm it as easily if sanctions continue, according to Alexeev.
"Where there is a very significant limitation, is what kind of armaments for weapons and munitions they can actually make," he said.
Restrictions on imports of spare parts and high-tech goods mean the Russian military "basically cannot make a lot of stuff that they would need if the war becomes prolonged. They have very limited ability to make tanks, missiles...and fighter jets."
Yet a recent survey by the Russia-based independent polling firm the Levada Center found that while a majority of respondents were concerned about sanctions, a majority also thought that Russia should carry on with its current policies rather than make concessions to try to lift sanctions. Many polls taken since the invasion began have reported that a majority of respondents support the war.
Matveev, however, doesn't believe that polling can be relied on to determine how the Russian public truly feels about key issues.
"These results are highly questionable because polling in authoritarian regimes, in general, is a very problematic activity," he said. "You ask people, 'So what do you feel about the government?' And they're obviously afraid to say the truth, even to pollsters. Especially now, when there is a de facto martial law in operation in Russia and all criticism of the war is criminalized with very long prison sentences."
The sanctions have had an impact on ordinary people, according to Alexeev. He said that despite government price controls on essentials like food and gas, inflation has caused most things to become more expensive. Although many poor Russians in rural areas farm some of their own food and don't rely on goods that have been sanctioned, most of what they still need to buy has become more expensive, Alexeev said, and "those who don't grow any food themselves are suffering quite a bit."
Still, Matveev doesn't believe that sanctions will influence Russian President Vladimir Putin's decision-making on Ukraine.
"Putin is very determined to wage this war and he is prepared in his mental space, let's say, for a prolonged conflict," Matveev said. "And sanctions as such cannot change his calculation, because for him, it's something like an existential struggle. And sanctions, yet, are not an existential threat to Russia."
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