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How International Sanctions Helped Putin at Home

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The United States imposed sanctions on Russia in response to the annexation of Crimea and subsequent involvement in the war in Ukraine. The sanctions have hit Russia’s economy hard largely due to foreign investors pulling $96 billion out of Russia since 2014.

The sanctions imposed by the United States have affected Russia as a whole, from the top to the bottom, from the government to the people. This is an important issue as the Russian government has no intention of backing down or moving away from its defiant stance.

The purpose of economic sanctions is to impose economic harm so as to effect policy change in the target nation. President Obama signed Executive Order 13660 on March 6, 2014, which authorized sanctions for violating the sovereignty and territorial integrity of Ukraine and/or stealing assets belonging to the people of Ukraine. The sanctions would restrict certain individuals’ travel, which included Russian and Crimean officials, as well as businessmen who were part of Putin’s “inner circle”, and would demonstrate the United States’ willingness to “impose a cost on Russia and those responsible for the situation in Crimea.” Also, certain Russian government officials’ assets would be frozen, thereby preventing them from buying or selling in the European Union.   Eleven days later, Executive Order 13661 was signed by President Obama which stated that Russia’s actions toward Ukraine undermined the democratic processes and institutions in Ukraine and thus expanded sanctions further against Russian entities such as parts of Russia’s financial, energy, and military industries.

Three days after President Obama signed Executive Order 13661, he issued Executive Order 13662 Directive 4. President Obama enlarged the scope of the national emergency declared in Executive Order 13660 and had then expanded in Executive Order 13661 to declare that Russia’s actions and policies toward Ukraine were a threat to American national security and foreign policy:

“The provision, exportation, or re-exportation, directly or indirectly, of goods, services, or technology in support of exploration or production for deepwater, Arctic offshore, or shale projects that have the potential to produce oil in the Russian Federation, or in a maritime area claimed by the Russian Federation and extending from its territory, and that involve any persons determined to be subject to this Directive, its property, or its interests in property is prohibited.”

A second round was applied on July 16, 2014, called sectoral sanctions. The sanctions prevent Russia from borrowing money to mitigate the blow of falling oil prices. Russian international reserves declined by $135 billion in 2014 and there has also been a huge outflow of capital from the country. Basic food prices have subsequently sharply increased since the sanctions began, with the price of buckwheat increasing as much as 70 percent, for example. The exchange rate in Russia jumps up and down, often by five percent a day, at times even ten percent, which is causing consumer panic. Incomes in Russia have also decreased. In 2014, real incomes decreased by 1% and already by 3.1% in the first half of 2015. This is the first time that has happened since Putin took office in 1999. Inflation also soared to 11.4% in 2014 and the ruble continued to decline, losing 40% of its value to the dollar. Those in the Russian government and the Russian people overall blame the United States for their worsening economy. Thus the blame for food shortages, inflation, devaluation of the ruble, decreasing real income, etc. also falls on the United States in their eyes.

The sanctions most likely will not do much to change the mind of the Putin administration but rather will continue to lower the quality of living for millions in Russia. Russia is highly dependent on food exports, especially from the United States and Europe. In 2013, Russia received $1.3 billion in food and agriculture exports from the United States and $15.8 billion in exports from the European Union. While Russia may try to increase its domestic production of food, it will not be able to fill the void that will be caused by such a loss. “Russia’s Central Bank pointed out that bans on imported food will push up Russia’s already high inflation rate, eroding the purchasing power of Russian citizens.”

The people of Russia have shown deep dissatisfaction with the United States and have increased their approval of Putin. According to the Levada Center polling organization, the Russian people have been decreasing their approval of the United States since the sanctions were imposed in 2014. From this data, it can be implied that the sanctions started the current downward trend of negative views on the US. Looking at the data from 1990, there are three spikes of anti-Americanism that occur prior to 2014. One in the late 1990s during the Kosovo War; one in 2003 when the United States invaded Iraq; and one in 2008 when the United States was critical of Russia’s conflict with Georgia. The difference between these spikes of anti-Americanism and the current trend is that this spike seems more intense and personal.

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The title of the graph roughly translates to “How do you view the US generally”; the blue line represents the percentage of Russians who say they view the US positively, while the red line is percentage of Russians who view the US negatively.

 

During the Kosovo war, Russian disapproval of America peaked at around 53% over a two-year period. In 2003, Russian disapproval of America peaked at around 66% over a five-month period. In 2008, Russian disapproval of America peaked at around 67% over a three-month period. Even though the disapproval lasted the longest in the late 1990s, only half of the population held these views. Since January 2015, Russian disapproval of America stands at 81% and has been increasing for almost a year. With this data, there is evidence to suggest that the level of anti-Americanism within Russia is strongly related to domestic economic conditions in the country. This further supports the primary hypothesis that current economic sanctions, and specifically their impact on the Russian people, will lead to intensifying levels of anti-Americanism.

Even though the sanctions have worsened the economic situation in Russia, they have also created a foreign policy backlash resulting in an increased approval rating for Putin:

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Fisher, M. (2015, February 9). Chart: Anti-Americanism is exploding in Russia

 

As seen in the chart above, Putin’s approval rating was slowly declining from 2008 to the beginning of 2014. In July 2008, Putin’s approval rating was at around 88%. By January 2014, his rating had dropped almost 28 percentage points. After the US sanctions were enacted in 2014, within eight months Putin was almost back to his 2008 rating. What this clearly shows is that there is definitely a sense of ‘nationalist backlash’ connected to the imposition of sanctions against Russia. Whereas there has always been something of a low-grade anti-Americanism in Russia for American global actions, these actions have always largely impacted Russian peripheral interests. The sanctions today, however, are direct and personal: they are seen as an explicit attempt by the United States to hurt Russia, not Russian interests. For that reason it is perhaps more surprising the West could not anticipate this attitudinal backlash. This is, it seems, political naiveté at its finest.

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Russia: Highlights of the XII BRICS Summit

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On November 17, under Russia’s BRICS Chairmanship, Vladimir Putin hosted the 12th BRICS Summit via videoconference. The leaders of Brazil, India, China and South Africa participated to discuss the state and prospects of cooperation within BRICS, discussed the global stability and security, and most importantly exchanged views on joint efforts to halt the spread of coronavirus pandemic.

As the Chair of BRICS 2020, President Vladimir Putin reviewed BRICS activities since Russia took over from Brazil, highlighted achievements and set the challenges for the future of BRICS. During the Russia’s Chairmanship the BRICS, Russia has held 130 events, including some 25 ministerial meetings, many of them online.

Within the context of the current global health situation, Putin pointed to the subject of medical cooperation among BRICS, and reminded the Ufa Declaration which was adopted five years ago included an agreement to work together to prevent the spread of infectious diseases.

Pursuant to that agreement, the BRICS countries created an early warning system for infectious disease outbreaks, which could be used during the COVID-19 pandemic. The BRICS countries promptly responded to the disease outbreak and took practical measures to combat the pandemic.

He said that the Russian Direct Investment Fund (RDIF) has signed agreements with Indian and Brazilian partners on clinical tests of the Sputnik V vaccine and with pharmaceutical companies in China and India on the production of this vaccine not only for own use, but also for third countries. There are Russian vaccines, and they are effective and safe. The next task is to launch large-scale production. It is very important to join forces for the large-scale manufacturing of this product for public use.

Besides this, it important to accelerate the establishment of the BRICS Vaccine Research and Development Centre, as agreed at the Johannesburg summit two years ago at the initiative of South African.

Due to the pandemic, many countries have taken emergency measures to support national industries, finance and the social sphere, to revive their economies and return them to a trajectory of sustainable growth. This is the goal of the Strategy for BRICS Economic Partnership for the period until 2025, prepared for this summit.

The New Development Bank is in great demand in the current situation. The Bank has reserved $10 billion to combat the pandemic, while its overall portfolio of investment projects now exceeds $20 billion. As many as 62 large projects are being implemented in the BRICS countries. Incidentally, a regional branch of the bank will soon open in Moscow to implement lending programs across the Eurasian space. The BRICS countries have a special insurance tool in case of a crisis in the financial markets: the BRICS Contingent Reserve Arrangement, with a $100 billion fund.

The BRICS Interbank Cooperation Mechanism is important in the parties’ cooperation on credit and investment policy. This year, they have agreed on the rules and principles of responsible financing of development institutions within its framework.

The five countries are enhancing cooperation in science, technology, and innovation. Intensive contacts have been underway between our academic and scientific centers. Their coverage is truly impressive – from ocean and polar research to astronomy and artificial intelligence. Experts from the five countries carry out joint energy research: reports have been prepared on the projected development of the fuel and energy sectors in the BRICS countries until 2040.

Putin further highlighted the challenging global and regional security environment. International terrorism and drug trafficking continue to pose serious threats, and cybercrime has greatly expanded its reach.

“We are witnessing dangerous destabilizing trends in the Middle East and North Africa. The armed conflicts in Libya and Yemen are continuing. There is still a lot to be done to bring about a political settlement in Syria, and the risks of escalation persist in Iraq, Lebanon, Afghanistan, and in the Persian Gulf,” he told the gathering.

It is highly satisfying that the BRICS countries have been closely coordinating their efforts on current international and regional matters. A policy document, the BRICS Counter-Terrorism Strategy, drafted for the summit. The BRICS countries are expanding their cooperation on combating drug trafficking and corruption, as well as on international information security.

During the meeting, the leaders of the BRICS member countries heard reports from other speakers who have overseen the work on each track of the association’s activity.

Secretary of the Russian Security Council Nikolai Patrushev spoke about cooperation in the coronavirus pandemic response, in combating terrorism and cybercrime.

President of the New Development Bank Marcos Troyjo cited the financial institution’s performance data and plans for next year.

President of the Russian Chamber of Commerce and Industry Sergei Katyrin spoke about the Business Council events, while Chairman of VEB RF Igor Shuvalov covered the BRICS Interbank Cooperation Mechanism.

The report by Chair of the Board of Directors of Global Rus Trade Anna Nesterova addressed the establishment of the BRICS Women’s Business Alliance.

President of Brazil Jair Bolsonaro, Prime Minister of India Narendra Modi, President of China Xi Jinping and President of South Africa Cyril Ramaphosa, during the meeting, exchanged views on the state and prospects of the five-sided cooperation.

The 12th BRICS Summit Moscow Declaration was adopted which reflects the five countries’ consolidated approach to the further development of the association, as well as the Strategy for the BRICS Economic Partnership until 2025 and the BRICS Anti-Terrorism Strategy.

“India, China, South Africa and Brazil commend Russian BRICS Chairmanship in 2020 and express their gratitude to the government and people of Russia for holding the XII BRICS Summit,” the adopted document says. Besides that, Brazil, Russia, China and South Africa extended full support to India for its BRICS Chairmanship in 2021 and the holding of the 13th BRICS Summit.

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Exchange of Information and Communication Key to Boosting Russian-African Partnership

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Image source: Valdai Discussion Club

On November 5 to 6, Moscow hosted the Second Russia-Africa Public Forum organized jointly by the World Association of Foreign Alumni of Russian Universities and African Business Initiative Union.

It was held within the framework of Russia’s strategy for the development and strengthening of trade, economic, social and cultural relations with the countries of the African continent, as well as building a stronger institutional foundation for Russian-African cooperation.

Since its creation in October 2018, it has become a platform for discussing ways of interaction between Russia and African countries on a wide range of issues, with special attention to the development of socio-cultural, humanitarian, trade and economic cooperation.

This month, prominent political and public officials, representatives of academic circles, the business community, and student and youth organizations were brought to the forum, which organizers believe provides a platform to exchange views on current issues of developing multifaceted relations between Russia and African countries.

Greeting the participants, Foreign Minister Sergey Lavrov reiterated that Russian-African cooperation, which is rooted in the period of the joint struggle against colonialism, is based on the principles of equality and mutual respect.

“Russia’s relations with African countries have always been friendly and multifaceted. However, it is necessary to adjust them to modern realities. We proceed from the assumption that the impetus of the Russia-Africa Summit held in Sochi in October 2019 can help us take our interaction to a fundamentally new level,” he stressed with optimism.

Lavrov said: “I believe that our public and the academic community can do a great deal to help choose methods of boosting Russian-African partnership. There is no doubt that the forum will provide a useful platform for developing innovative ideas and proposals in this sphere, and that it will help the Russian public learn more and understand better the needs of Africa, which is a geographically remote but spiritually close continent.”

The two-day forum focused on the modernization of education in the context of globalization and the scientific and technological revolutions.

It reviewed the strategy of economic cooperation in modern conditions, the development and implementation of new effective institutions and mechanisms of interaction.

It discussed, at length, the problems of international cultural cooperation in the context of modern threats and challenges.

It looked at the ever-growing role of public organizations in various aspects of society’s life and the interaction in the field of healthcare as one of the most pressing issues of the Russian-African dialogue. There were plenary sessions.

Plenary Session 1: Russia – Africa: Dialogue of Civil Societies as the Main Driver of the Future World Order and Sustainable Development.

Plenary session 2: Youth of Russia and Africa: a path towards rapprochement

Plenary session 3: Graduates of Russia as a unique human capital. Export of Russian education to Africa. Personnel training: what kind of specialists does the African continent need today?

Panel session 4: Business and Civil Society Institutions. Innovative technologies of Russian companies for the benefit of sustainable development of the African continent.

Panel session 5: Africa: pressing health issues. Public health and welfare. Pandemic shock.

Speakers and participants have, however, acknowledged the significance of the public forum and stressed that it would be impossible to elevate the entire range of relations between Russia and African countries to an entirely new level unless the public at large takes the most energetic part in these efforts.

It is hard to overestimate the role of this in strengthening friendship, trust and mutual understanding between the two parties without adequate and consistent exchange of information. It is necessary to maximize the potential of public, cultural and business diplomacy using the basic instrument of the media, according to the Chairman of the Board of the Valdai International Discussion Club’s Development and Support Foundation Andrei Bystritsky, speaking at the plenary meeting of the Second Russia-Africa Public Forum.

“On the one hand, the Russian public knows little about Africa. And I guess people in Africa know little about Russia,” he noted, and explained that Russia and Africa need to communicate more. Creating necessary conditions for conversation is important, as communication is the foundation of development, and will help strengthen the mutually beneficial ties between Russia and Africa.

As already known, Africa is an important partner for Russia. This fact was highly re-echoed throughout the forum. Speakers and participants explicitly expressed the need to strengthen relations in various fields. Further, most of the issues and diverse opinions expressed there have to improve the current level of relationship. Russia and Africa have to make that mutual desire, in practical terms, to step up cooperation in all areas including social spheres.

In this connection, it requires complete understanding, support for new initiatives and, commitment to expand friendly relations with Africa. These efforts directed not only at consolidating cooperation with the African countries but also at resolving key African problems such as overcoming social inequality and the involvement of young Africans in sustainable economic development.

Despite the challenges, Moscow plans to boost its presence on the continent in the coming years and, as outlined in the Russia-Africa Summit declaration, both Russia and Africa have to begin pursuing targeted goals, continue encouraging exchanges between Russia and African countries.

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Russia Readies to Host XII BRICS Summit

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Under Russia’s BRICS Chairmanship 2020, President Vladimir Putin will host Heads of State of Brazil, China, India and South Africa via videoconference on 17 November. Initially planned to take place in St. Petersburg in July, it was cancelled due to current coronavirus pandemic.

The leaders will discuss the strengthening and further development of cooperation within the framework of BRICS, including in the context of the global political and socioeconomic consequences of the COVID-19 pandemic.

In addition, the leaders will focus on significant and complicated issues or questions relating to geopolitical to socioeconomic spheres, transformations on the global landscapes in the 21st century. The meeting will adopt a working document that will further reinforce the position and development of the group.

As stipulated by the guidelines, Russia took over the rotating presidency of the BRICS from Brazil. Since its establishment, BRICS has come a long way from an informal venue for exchanging views on current issues on the international agenda to an absolutely mature and stable network of multilateral interaction on diverse issues on international and domestic agenda of the five BRICS countries.

Now BRICS has a multilateral structure, and become an association pushing for fair, democratic and multipolar world order. Russia has agreed to strengthen and promote strategic partnership in all key areas of BRICS activities, such as politics and security, the economy and finance, educational and cultural ties.

The theme of the Meeting of the Leaders of BRICS is “BRICS Partnership for Global Stability, Shared Security and Innovative Growth.” They will discuss the enhancement of their countries’ trade and economic collaboration and coordination at international stage or platforms.

It plans to end its chairmanship with a strong set of new agreements, including the already agreed upon BRICS Anti-Terrorism Strategy and the updated Strategy for Economic Partnership to 2025. This document defines guidelines and priorities of cooperation and gives a new impetus to development of trade and investment cooperation among the five countries.

It further provides a number of initiatives to strengthen sector-specific cooperation among the members. The people-to-people and cultural ties, as well as contacts between experts and civil society representatives are already expanding.

Despite the current global situation due to the spread of the coronavirus infection, the activities under the Russian BRICS Chairmanship in 2020 have been carried out in a consistent manner. Since January 2020, a number of events have already been organized, including via videoconferencing.

Russia’s Foreign Minister Sergei Lavrov has reiterated that deepening the strategic partnership in BRICS is one of Russia’s foreign policy priorities.

Over the past decade, the group has proved to be a relevant and well-respected format of cooperation. The BRICS countries maintain solidarity in strengthening collective principles in global affairs; they advocate respect for the sovereignty and sovereign equality of all states, and are deeply convinced that any conflicts should be resolved by peaceful means only.

The group collectively defends the principles of a more just world order based on respect for the norms and principles of international law and the United Nations Charter.

According to procedure, each BRICS member takes over the chairmanship for a year. Russia last chaired BRICS in 2015, held a summit in the provincial city of Ufa. Russia also presided over the group back in 2009, before BRIC turned into BRICS following South Africa’s accession. The five BRICS countries together represent over 3.1 billion people, or about 40 percent of the world population.

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