A business plan to destroy the Russian economy

The West must move on from the last four years of economic skirmishes and declare an "Economic World War" against Russia.

The $70 billion budget deficit that Russia faced at the start of the year did not manage to cripple its economy.  Since then, its oil exports soared 52% to 713 million euros ($836 million) per day in March compared to February, turning Western efforts into a case of one step forward and two steps back.

Russia's windfall from oil inflation has been further boosted by U.S. President Donald Trump's lifting of sanctions on Russian oil trapped around the world, even though Russian exports have been dented by Ukraine's recent attacks on Russian oil facilities.

A rich Russia risks tipping the balance between whether democracy or autocracy prevails on our planet, and eventually whether the future human race lives in freedom or under servitude.

The West is not going to confront a nuclear state militarily, so an Economic World War, the way I call it, is the way to tip the balance in the right direction.

Western nations have the power to put Russia in the economic position that led to the collapse of the Soviet Union. Since Russia is not going to catch the communist disease again, we must destroy its economy from the outside.

Why the West is failing now

To see why Russia still has enough money to pay for a war made expensive by Ukraine's stamina, it's necessary to look at sanctions in four dimensions rather than one.

First, Russia has been economically confronted with only a tiny number of products; then these were enforced only to a feeble extent; then only by a limited number of countries; and, fourthly, unplugged from only a portion of the banking system.

The mathematical result of a percentage of a percentage of a percentage of a percentage produces a disappointing fraction of what is possible.

When there are more loopholes than sanctions, the picture that Putin is looking at is an open field with a handful of areas cordoned off with low fences.

Without a four-dimensional approach across the board, the West has only been nibbling at the devil. Meanwhile, the devil has been laughing at our naivety, lack of resolve, and coordination, hoping we won't wake up.

The goal is to deliver Putin's regime into a "desert island economy" where it can only do business with other dictatorships.

Despite Western efforts, Russia still managed to export $476 billion worth of goods in 2024, not much off its high point of $635 billion for 2022 when it invaded Ukraine.

This, combined with the recent surge in oil prices and President Trump making exceptions, means that Russia is still a major exporter.  A sorry state of affairs.  Yet a wonderful Achilles heel to attack. Without trade, Russia could hardly survive economically and certainly would be unable to afford a war simultaneously.

To sink the Russian ship of state, we must create a "perfect storm" by sending as many "tornadoes" as possible into its path and, to ensure perfection in economic imprisonment, these must surround Russia in all dimensions.

The way to win the Economic World War

The declaration of the Economic World War would be based on a 10-point "business plan" to hurt Russia and simultaneously help Ukraine. Each of these tornadoes sent Russia's way will augment each other to deliver the perfect storm.

My first tornado — though they should all be launched as soon as possible — involves the four things we need to do about oil. No more de-sanctioning of oil. That only helped Russia sell trapped oil and India buy cheap oil. No more capping the price of Russian oil — but a real embargo — because a cap does no harm to Russia if the market price for Russian crude trades below the cap.

After banning Russian crude from being shipped anywhere under Western control, secondary sanctions would then be imposed on countries still obtaining it by sea and pipeline, forcing deeper discounts.

With its "shadow fleet" then as Russia's last sea route lifeline, we would drive the discount further by grounding the by-then burgeoning fleet with “pincer movement” sanctions on insurers that cover Russian cargo and on any ports that allow uninsured ships to dock, and, as needed, with a blockade on the high seas.

Oil may be a commodity, but "pariah oil" will operate in its own oversupply/reduced-demand sub-market at a significantly lower price, volume, and profit margin.

Like blood diamonds, "blood oil" will suffer a discount, no matter what happens to the price of oil. We should never be in a position where oil price inflation makes our enemy more dangerous by allowing it to become richer.

The second tornado ends patchwork sanctions across the product dimension beyond oil, and for trade and investment in both directions. Blocking some Russian imports can bring a factory to a halt with a powerful economic pain multiplier effect.

The third tornado will take these new Western embargoes global through secondary sanctions that join up with a fourth, the maximum possible globalization of banking transaction sanctions, so trade becomes doubly-difficult by blocking Russia from making and receiving payments. That tornado must sweep up alternative payment mechanisms Russia can use.

Such a 360-degree trade, investment, and transactions embargo would be the first step towards the creation of a "Single Democratic Market." All countries would have to close out Russia or lose access to the West, polarizing the world into two economic blocs.

The fifth tornado is the enforcement of embargoes by punishing countries that host trade embargo evasion hubs. This is supplemented by my sixth tornado, which gives companies a "duty to damage" Russia.

This would, for example, force software companies to deploy kill switches on Russia-based customers, with any legal liability being underwritten by the sanctioning government.

My seventh tornado is to brain-drain Russia with the specific goal of turning Russia into a particularly badly-run economy. This must be an active economic destruction strategy, not a passive immigration policy.

The idea is well-hedged because, if Putin bans talent from leaving, he will only make the cleverest Russians hate him.

Ukraine is also in my Russian economic destruction plan: tornado eight gets companies that work with Russia out of Ukraine and expropriates Russian-owned companies still there.

Tornado nine puts Ukraine to work, making it an investment hotspot with Western-backed incentives and extra boosts for the defense sector; and tornado ten turns Russia's money against itself by getting the famous $300 billion of Russian cash sitting in Belgium into Ukraine through the Ukrainian Repatriation Loan solution.

The Economic World War, combined with Ukraine's valiant daily fight, if waged with the same determination, can bring Russia to its knees, get Putin out of the Kremlin, and give liberty a better chance on Earth. Moreover, at a time when so much of the world craves military peace, an Economic World War will shorten the war in Ukraine.

If you treat your enemy with kid gloves, you are throwing the next generation to the wind.

Editor's note: The opinions expressed in the op-ed section are those of the authors and do not purport to reflect the views of the Kyiv Independent.