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Russians are feeling the impact of sanctions, but the worst is still yet to come

ARI SHAPIRO, HOST:

It's been nearly two months since Russia launched what the Kremlin calls its special military operation in Ukraine. And it's been nearly two months since the U.S. and its allies responded with unprecedented sanctions. From Moscow, NPR's Charles Maynes has been tracking their impact and finds the worst is still to come.

CHARLES MAYNES, BYLINE: In a small Moscow antique shop, owner Sergei holds up an unexpected piece of the global economy.

SERGEI: ...Which is a first press in Japanese - Michael Jackson.

MAYNES: Michael Jackson's 1982 album "Thriller" on Japanese vinyl.

SERGEI: Perfect condition.

MAYNES: It's not an easy thing to come by in Moscow in normal times. But Sergei, who declined to give his last name out of fear of the authorities, says soon it may be impossible because overseas suppliers are refusing to do business with him because of where he's from.

SERGEI: (Through interpreter) Yes, I'm from Russia. But what have I personally done against another country? We don't make the decisions. Why should we suffer for someone else's ambitions?

MAYNES: In the weeks since President Vladimir Putin launched his so-called special military operation in Ukraine, the Russian leader has repeatedly painted the mission as a necessary battle to demilitarize Ukraine and protect the Russian homeland. But as Western sanctions have piled on, Putin has also sought to assure a nervous public that Russia's economy cannot only survive but thrive amid whatever comes next.

(SOUNDBITE OF ARCHIVED RECORDING)

PRESIDENT VLADIMIR PUTIN: (Speaking Russian).

MAYNES: "We can already say with certainty that the politics of sanctions against Russia have failed," said Putin in a televised address to his cabinet this week. The Russian leader went on to argue Western governments had harmed their own economies while spurring on Russia's economic development.

MAXIM MIRONOV: The main thing - they just want to create a picture that everything is normal. And if you talk about propaganda, it's working. But reality - not.

MAYNES: That's economist Maxim Mironov. He says Putin and his government have tried to push a rosy narrative that sanctions are a gift to Russia's domestic producers and that Russia can redirect its trade towards rising powers like China. But there's a catch, says Mironov.

MIRONOV: It's going to destroy the economy completely in terms of how it was.

MAYNES: That's starting with an exodus of major global companies - McDonald's, Starbucks, IKEA and others. There's also the quirks of life under sanctions, like a run on sugar or the soaring cost of office copy paper.

But the national currency, the ruble, rebounded to its original value after an early collapse thanks to moves by the central bank. Produce and goods are still on supermarket shelves, and even credit cards and cash machines still work inside the country. If that sounds more disruptive than crushing, analysts say that's because it's merely pain delayed.

NATALYA ZUBAREVICH: (Speaking Russian).

MAYNES: "Sanctions don't kick in immediately," says Natalya Zubarevich, an expert on Russia's regional economy with Moscow State University.

ZUBAREVICH: (Through interpreter) The people have been promised that if they wait two months, things will go back to normal. They don't yet understand. This crisis is here to stay.

MAYNES: Zubarevich warns Russia will soon find itself felled by a feature of most modern economies. It doesn't produce much on its own. Soon, she says, major industries from auto and aviation to oil and gas will find they're missing key imported parts that will stop production and jobs in their tracks.

ZUBAREVICH: (Through interpreter) For the economy and the Russian people, it's now simply about survival. You can forget about the word growth and development altogether.

MAYNES: Some in Russia's government acknowledged the harder road ahead.

(SOUNDBITE OF ARCHIVED RECORDING)

ELVIRA NABIULLINA: (Speaking Russian).

MAYNES: In a speech before lawmakers this week, Russia's central bank chief Elvira Nabiullina warned that what had been until now a crisis in the markets would soon be felt throughout the economy. Russia had no choice, said Nabiullina, but to embrace what she called a structural perestroika, a full restructuring of the economy and a new way of doing everything.

ASATUR ANDREEV: (Speaking Russian).

MAYNES: With a drag on his cigarette, Asatur Andreev, the owner of a small supermarket, says he's seen some version of this before. Having lived through the collapse of the Soviet Union, the free-for-all capitalism of the early '90s and the sanctions of the Putin era, he's used to starting over. In fact, he spent his whole morning trying to find new suppliers for goods in his shop.

ANDREEV: (Speaking Russian).

MAYNES: "The politicians make decisions, and then they boomerang back on us," he says. In a lifetime of crises, he's learned one key lesson. The survivors are the ones who put their heads down and keep doing the work.

Charles Maynes, NPR News, Moscow.

(SOUNDBITE OF ANIMAL LIBERATION ORCHESTRA SONG, "COWBOYS AND CHORUS GIRLS") Transcript provided by NPR, Copyright NPR.