Russia Must Pay for Ukraine’s Reconstruction
By Augusto Lopez-Claros Last week, on the eve of the Russian invasion of Ukraine, I was contacted by a radio station in Moscow. The journalist, who had interviewed me before, wanted to hear my views on the current situation. In my remarks I focused on the likely impact on the Russian economy of the sanctions which were then being contemplated. I told him that I feared that the impact would be devastating and that it would lead not only to a huge economic contraction, perhaps as large as that seen during the global financial crisis in 2009 when the Russian economy contracted by close to 8 percent, but that it would also contribute to substantially widen the gap with respect to China and India, two other emerging market giants. Russia’s recent dismal economic performance As best as I could I described to the journalist the gist of the insight conveyed by the chart below, which shows that over the period 2000-2021 the Russian economy has, broadly speaking, expanded by a facto...