Sanctions confront Russian economy with crisis of consumer shortages

Already, Moscow is facing serious challenges.

Unable to secure spare parts from Western airplane manufacturers, for instance, the Russian aviation sector is facing a crisis. About 80 percent of Russia’s commercial fleet consists of foreign-made planes, predominantly from Airbus and Boeing, both of which have stopped doing business with Moscow.

Ural Airlines, which has over 50 Airbus planes, has projected that it can safely fly them for only a few months before it will need to start “cannibalizing” from other aircraft — permanently grounding some planes to strip them for parts. The low-cost airline Pobeda, part of the state-run Aeroflot group, has already reduced its fleet from 41 to 25 planes, using its grounded aircraft for “cannibalized” parts.

The decision by Ericsson and Nokia to freeze business with Russia, meantime, has left cellular providers there suddenly scouring the world for used towers and parts to maintain and expand a network that had more or less kept pace with the United States and Europe. Even China’s Huawei appears reluctant to fill the gap, indefinitely delaying a Russian rollout of next-generation 5G technology, a service that providers had been testing before the Ukraine invasion.

“Within five years, there will be a huge gap between Russia and in the rest of the world” on cellular service, said Grigory Bakunov, an expert on Russian technology.

Following the recent exit of French automaker Renault, Russia is moving to restart production of the Moskvich — a Soviet-era make that went bankrupt two decades ago after failing to achieve foreign quality standards. Its resurrection, potentially with Chinese assistance, could either jump-start the production of domestic alternatives or see a new generation of clunkers clogging Russian roads.

Supply disruptions, however, have hit not only assembly lines that rely on advanced technology but also those using imported materials. Sanctions “on the Russian Federation have practically broken all the logistics in our country,” Russian Transport Minister Vitaly Savelyev, conceded to journalists last weekend during a visit to Russia’s Astrakhan region.

Under the hood of the Russian economy

The ruble has rebounded since its initial swoon after sanctions were imposed in the winter, and Russian government coffers are flush from a bonanza of oil revenue. European countries have taken halting steps toward their pledge to curb reliance on Russia’s oil and gas, by far its largest exports, even as Moscow boosts sales to Asia.

JPMorgan this month projected that the recession triggered by sanctions would be…