An interview with Ilya Zaslavskiy, head of research at the Free Russia Foundation. Interviewer: Olena Babakova

OLENA BABAKOVA: After the United States introduced new sanctions against Russian oligarchs in April this year, the value of their companies collapsed and the exchange rates of the rouble sky rocketed. The West showed, once again, that it can still exert pressure on Russia. Is this a long-term problem for the Russian economy or has it already learnt how to adapt to such restrictions?

ILYA ZASLAVSKIY: I think we should examine whether the Kremlin and its business circles adapted to the western sanctions or whether the economy as a whole adapted. The regime found ways to continue with its current policies and its various confidants that have been targeted still have lots of money in offshore accounts, so they only feel threatened but not bitten. Even more importantly, they feel confident. However, if we talk about the quality of life and wealth of ordinary Russians, standards have obviously dropped. Some estimates say it has fallen by as much as a third. However this is still better than the situation in the 1990s.