Cash flow freeze: Russians struggle under sanctions, question attack

Russians are starting to feel the economic impact on their daily lives from global sanctions. While facing the challenges of surging food prices and inoperable payment systems, many are also concerned about Russian troops in Ukraine. 

First Look

In the days since the West imposed sanctions on Russia over its invasion of Ukraine, ordinary Russians are feeling the painful effects – from payment systems that won’t operate and problems withdrawing cash to not being able to purchase certain items.

“Apple Pay hasn’t been working since yesterday. It was impossible to pay with it anywhere – in a bus, in a cafe,” Moscow resident Tatyana Usmanova told The Associated Press. “Plus, in one supermarket they limited the amount of essential goods one person could buy.”

Apple announced that it would stop selling its iPhone and other popular products in Russia along with limiting services like Apple Pay as part of a larger corporate backlash to protest the invasion.

Dozens of foreign and international companies have pulled their business out of Russia. Major car brands halted exports of their vehicles; Boeing and Airbus suspended supply of aircraft parts and service to Russian airlines; major Hollywood studios halted their film releases; and the list will likely keep growing.

That’s on top of the United States and other Western nations hitting Russia with sanctions of unprecedented breadth and severity. They have thrown major Russian banks off the SWIFT international payment system, limited high tech exports to Russia, and severely restricted Moscow’s use of its foreign currency reserves.

Russians in Moscow and other cities talked to The AP about how those moves have played out in their daily lives, pointing to problems with converting rubles into foreign currency, long lines at ATMs, and certain bank cards failing them.

Irina Biryukova in Yaroslavl, in a city about 250 kilometers northeast of Moscow, said she could only deposit a limited amount of money into her bank account through the bank ATMs.

“The majority of ATMs [of this bank] don’t work to deposit [money],” Ms. Biryukova said.

Food prices, according to some businesses, have started soaring, too.

“All the main ingredients we prepare our products from have gone up in price by 30-40%,” said Ilya Oktavin, who runs delivery service at a Perm sushi bar.

Certain goods are also harder to come by because of actions by companies like Nike, which on Tuesday night halted online sales with a statement on the company’s website saying it “can’t guarantee delivery of the goods to shoppers in Russia.” On Wednesday, H&M announced suspending “all sales” in the country.

Kremlin critics are painting a bleak picture for Russia.

“We’re facing growing prices, mass layoffs, delays in payment of benefits or pensions,” opposition politician Yulia Galyamina wrote on Facebook Wednesday. “Shortages of medicines and medical equipment. Aging and impoverished car and aircraft fleet. ... We’ll be remembering the 1990s as hardly the worst time. But I have only one question: for what?”

In what looked like an effort to prevent panic, Russian authorities on Tuesday launched a special website, titled “We’re explaining,” that talks about how various areas of life are functioning under the pressure of sanctions. Worrying reports, like the ones anticipating a spike in prices, or saying that certain services don’t work, are debunked on the website as “fake.”

Some Russians, in the meantime, say that it’s not so much the sanctions that worry them, but the deadly attack Russia waged on a neighboring country.

“You know, sanctions bother me the least. I’m worried about Russia killing people in Ukraine,” said Moscow resident Ivan Kozlov. “I wish it stopped the war no sane person with a conscience and capable of mercy and compassion in Russia wants.”

Anti-war sentiment in Russia has been widespread. Thousands of people have signed open letters and online petitions demanding to stop the invasion, with the most widely supported online petition garnering over 1 million signatures in several days.

Russians across the country have been taking to the streets almost every day since the attack started last Thursday. More than 7,000 protesters have been detained in the past week, according to OVD-Info, rights group that tracks political arrests, with nearly 600 arrests taking place on Wednesday.

This story was reported by The Associated Press.