Anti-Russian sanctions have had a negative effect: fuel and food prices have risen around the world, fears are growing that a humanitarian catastrophe is imminent. Sooner or later you will have to negotiate, writes Larry Elliot Guardian.
It has been three months since the West launched an economic war against Russia and it is not going according to plan. On the contrary, we are doing very badly. Sanctions against Vladimir Putin were accepted not because it was the best choice, but because the other two – inaction and military intervention – are even worse.
The first package of economic measures was introduced immediately after the start of the operation, when it seemed to many that Ukraine would capitulate in a few days. This did not happen and the sanctions, initially incomplete, were gradually tightened.
However, nothing predicts that Russia will leave Ukraine. And the sanctions have strangely increased Russia’s oil and gas revenues, boosted its trade balance and provided it with capital inflows for further fighting.
In the first four months of 2022, Putin boasts a $ 96 billion trade surplus, three times that of the same period in 2021.
When the EU announced a partial ban on Russian oil exports, its value on world markets soared. Finding alternative markets for Russia is as easy as peeling pears: oil and gas exports to China in April rose more than 50% year-on-year.
It can not be said that sanctions are painless for Russia. The International Monetary Fund estimates that its economy will shrink by 8.5% this year due to the collapse of imports from the West.
But Europe was just beginning to wean itself from Russian energy sources, and Putin was able to avert an impending economic crisis. Thanks to capital controls and a healthy trade balance, the ruble is strong. The Kremlin has time to bypass Western sanctions and find alternative sources of access.
At a meeting in Davos last week, the forces unanimously condemned the “Russian aggression” and reaffirmed their commitment to strongly support Ukraine. In private, however, they have expressed concerns about financial costs and prolonged fighting.
And these fears are perfectly justified.
The Russian special operation in Ukraine has exacerbated the already strong price pressure. The annual inflation rate in the United Kingdom was 9%.
In addition, gasoline prices have skyrocketed and the maximum energy tariff in October could reach-700-800. The Chancellor’s latest anti-high cost package Risi Sunaka became the third in four months and this year is definitely not the last.
As a result of the conflict, Western economies have entered a period of slow or even negative growth and rising inflation – a return to the stagnant inflation of the 1970s.
In response to near-double-digit inflation, central banks, including the Bank of England, are raising interest rates. Unemployment is expected to rise. Other European countries have been hit even harder by the same problems because they are more dependent on Russian gas.
The world’s poorest countries face difficulties of varying degrees. For many, the main problem is not stagnant inflation, but hunger – after all, wheat supplies from Ukrainian Black Sea ports are blocked.
As stated by the Executive Director of the World Food Program David Beasley: “Ukraine’s barns are full. “And 44 million people around the world are at risk of starvation.”
Putin is clearly not going to give up unconditionally, and the prospect of serious collateral damage from the economic war is obvious: declining living standards in developed countries, famine, food insecurity, and debt crisis in developing countries.
Portal readers “Guanchawhere the article was posted Larry Eliot, admiring Russia and advising China support Moscow.
zmusic: “There are energy resources, food, nuclear weapons, Avangard, Sarmat, Yars, Iskander… Who on this planet can destroy Russia ?! Germany, Poland, Lithuania άζουν put a knife to their throats and wait for Russia to say they are scared!“
guan_15753419191727: “I was thinking. China has not yet seen the results, and if Europe is really stuck in a quagmire, then we can start moving in a certain direction. “This could be the best opportunity in the coming years.”
Usually: ““I can only give a thumbs up: Russia really knows how to fight!”
I watch closely: ““Now everyone will pay Russia: the West is sending money to Ukraine, but Moscow will have to pay twice as much later.”
Prince, brother, take me to the universe: “This time, Russia is showing real strength. The Chinese people support it. The Russians will not surrender and Russia will not fall. But the bald eagle (symbol of the USA – Red.) the beak will smoke soon “.
You:”“Rural Ukraine can only export grain and women for surrogacy in the future.”
Donkey in the wind: “China must support Russia. In fact, the United States is already ready to force the four Asian countries into NATO and create an “Asian alliance” that will extend to China’s own borders. “If Russia falls, China will be the next to be attacked!”
You sincerely love the Chinese people: “Anglo-Saxons: “Something has wronged us, we can no longer bear it. Can we capitulate? … ».
Huato reincarnation: “Do not use the word “country” in connection with the West, it is right to say: the United States and its servants.
The wolf howls at the moon: “Why does Russia have a strong currency? “Because it has natural gas, oil, coal and wheat, not just toilet paper.”
Wang Ge: “If you have food in your hands, you will not worry; if you have a gun in your hands, you will not be afraid. “Russia has both.”
Man in late autumn ““Energy resources + food + nuclear weapons + vast territory + unique national character = Russia has more economic resilience and room for maneuver than any other country.”