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China’s New “Green Policy” of Sustainable Mobility and Development

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Launched in 2013, China’s Belt – One Road Initiative (hereinafter referred to as the BRI) is aimed to create a global transport and investment infrastructure. Basically, it combines two (possibly three, given the possible Polar Silk Road) projects – the Silk Road Economic Belt and the 21st Century Maritime Silk Road. This project of the creation of a single Eurasian trade and economic space and a transcontinental Transport Corridor includes many infrastructure projects that should eventually cover the entire planet. The initiative to create a global system of transport corridors connecting Australia and Indonesia, all Central and East Asia, the Middle East, Europe, Africa and through Latin America, in the future may bring China closer to the United States of America (through Latin America (possible transport connection via Dorian gap) or an underwater tunnel via the Bering Strait between American Alaska and the Russian Far East).

Logistics aspect

According to the authors of the project, BRI significantly reduces the delivery time of goods from China to Europe. Currently, the average delivery time of container cargo by sea is 45 – 60 days. If the BRI project is successfully implemented, goods from China to Europe will be delivered in 10 days.

It should be noted that land railways were chosen as the main export industry, which could become the engine of the PRC’s economic development initiative. As in the case of the Japanese “flying geese” paradigm, suppliers of equipment, software, engineering, and other services, as well as banks, insurance and other companies will come to BRI countries following Chinese railways constructions.

When comparing cargo transportation from China by sea and rail, delivery time is often a key argument in favour of rail. At the same time, the figure of 14 – 15 days, which are required for the delivery of goods from China to Europe, is very often mentioned. In practice, it turns out longer: 42 – 46 days by sea, 28 – 32 days by rail, 6 days by plane and 14 days by road. This difference in numbers is caused by the need to form a train, delays at some stations, etc.

Rail container transportation has certain advantages (compared to sea transportation) in the following areas: speed (time), regularity (rhythm), reliability (guaranteed delivery on schedule and safety of cargo) and the ability to deliver cargo to any destination.

Analysts predict that all regular trips from China to Europe via Eurasia will be fully loaded in the coming years. It is estimated that the elasticity of demand for “convenience” (including speed, regularity and accuracy of delivery) in rail container transportation between China and Europe is 98%: in 2011 – 2020, the number of train departures per week and the volume of container transportation grew at almost the same pace.

Thus, strict adherence to railway schedules (99.7% of all container trains running on China – Europe routes operate their flights on a schedule), having delivery times approximately three times less than what sea transport offers, guaranteeing a wide margin of “convenience”.

It is estimated that while maintaining current rates of end – to – end transport (including Chinese subsidies), the growth potential of China – Europe container transport created by “convenience” (speed, regularity and accuracy of delivery) is far from exhausted. By 2025, this could lead to a multiple increase in the number of container trains and the total volume of container traffic (up to 200.000 – 250.000 FEU (forty-foot container)), with the number of train departures per week (regularity) tripling (to about 100 per week).

Although in general the negative impact of rail transport on the environment is less than that of road transport, diesel locomotives with diesel power plants have a negative impact on the atmosphere, since the exhaust gases contain carbohydrates, carbon oxides, nitrogen, sulfur and various solid pollutants.

However, the analysis and estimation of CO2 emissions directly resulting from transportation between China and the EU by air, sea and rail suggest that the transportation of a TEU (twenty-foot container) between China and the EU by container ship results in emissions of about 0.5 tons of CO2. These emissions may decrease in the future if the average cost of goods shipped by sea decreases, and if this leads to ships sailing at a lower and more efficient speed.

It was also assumed that the transportation of TEU between China and the EU using diesel trains would result in emissions of about 0.7 tons of CO2. However, emissions from electric trains could be lower, perhaps even drop to zero, if they were powered entirely by renewable sources. Over time, this may in principle become possible if electrification and the use of renewable energy sources become more extensive. However, this will primarily depend on providing electrification on all routes used by BRI-related trade on railways throughout Eurasia.

On the other hand, one can find several estimates of the average cost per ton-kilometre of air transportation. The United Kingdom Ministry of Environment, Food and Rural areas published (2012) estimates that air travel on long-haul flights results in emissions of 630 grams of CO2 per ton-kilometre. This means that five tons of air cargo flying about 8.000 kilometres between China and the EU will result in emissions of about 25 tons of CO2, compared to about 0.7 tons if transported by diesel train.

Thus, each TEU transferred from air to rail will reduce CO2 emissions by almost 25 tons, and each TEU transferred from shipping to rail can increase CO2 emissions by no more than 0.2 tons but can reduce or eliminate CO2 emissions if a significant part of the trip will be powered by renewable energy sources. This suggests that if CO2 emissions from transportation between China and Europe are estimated, BRI is likely to be good for the environment.

Switching freight traffic between China from air to rail should result in significantly lower CO2 emissions. This should outweigh the increase in emissions from the transport of goods from sea to rail, especially if rail transport is carried out at the expense of renewable energy sources.

While in theory electrification of railways and the use of renewable energy sources can lead to a reduction in CO2 emissions, perhaps even to zero, in practice this process can take decades, which, unfortunately, our planet may not have. This fact makes humanity think about other possible modes of transportation that can benefit both in “convenience” (including efficiency, regularity, and accuracy of delivery) and in reducing CO2 emissions.

Map 1. Transhipment lines from Far East to Western Europe

Source: IFIMES, 2021

According to map 1, the land (green) shipping line is currently the most profitable. Since maritime (warm waters – red) transport delivery rates remain quite low (including for modern container ships). Ships traveling on the China – Europe route can reach speeds of 20 to 25 knots, while the average total travel time, including passage through the Suez Canal and calls to ports, is 35 to 45 days. In addition, there is always a risk of delays due to natural and other reasons (for example, waiting for loading at the port of departure). Despite this, the regularity (rhythm) of sea container transportation between the ports of the EU and China is quite high. For example,, the Maersk Line alone operates six times a week. However, when using a sea route for container transportation between the EU and China, it is necessary to consider not only the actual travel time (4 – 6 weeks), but also the time required for cargo consolidation in ports (about 1 Week).

The warm water shipping line from China to the Greek port of Piraeus for cargo delivery to the Balkan Peninsula, which is located at the intersection of Transit Communications in Europe, Asia, and Africa, now has great logistical prospects. Currently, 80% of cargo from China to Europe passes through the Atlantic Ocean to Northern European ports. The warm water shipping line through the Arabian Sea and the Suez Canal to the Balkans reduces transportation time by 7 – 10 days: this is still the shortest sea route from China to Europe (however, for this, Central and Eastern Europe needs to build a transport infrastructure that the region is in great need of. This is especially relevant for Ukraine and the countries of the Balkan Peninsula, which are only now entering (at least the Balkans) a period of stable development after conflicts and wars that caused serious damage to infrastructure).

It is expected that goods currently transported by sea and air (white shipping line) between Europe and China will switch to rail transport in the future due to improved services provided by BRI. It is indicated that by 2040, about 2.5 million TEU can be switched to rail transport from sea transport and 0.5 million from air transport, which is equivalent to 50 – 60 additional trains daily or 2 – 3 trains per hour in each direction.

These data show that Chinese investment in railway infrastructure has led to the railway becoming a viable alternative to both sea and air for trade between the Far East and Europe.

As for the environmental problem, this means that if maritime services lose their most time-sensitive cargo in favour of the railway, it will be being able to sail more slowly in practice, increasing transit times, but reducing fuel costs and therefore prices, as well as reducing CO2 emissions.

Today, given the melting of ice in the Arctic Ocean, we can talk about the emergence of another alternative to the main transcontinental routes that pass through Eurasia ((green land railway transport line, air line (White) and the warm southern waters line of Eurasia and further to Africa via the Suez Canal (Red shipping line) (see Map 1). The cold water transhipping line (Northern Seas blue line or Arctic route) will allow cargo to be delivered to Europe by sea faster than 48 days (which is on average required) for transportation from China’s northern ports to Rotterdam via the Suez Canal, given that the passage of a cargo ship from Shanghai to Hamburg via the Northern Sea route is 2.800 miles shorter than the route through the Suez Canal (as an example, in 2019, the Russian Arctic gas tanker Christophe de Margerie reached South Korea from Norway without an icebreaker escort in just 15 days).

Map 2.: Maritime transhipment lines

Source: Economist, 2014

In addition to the time criterion, the cold-water shipping line is advantageous in terms of other possibilities. It is usually characterized as the shortest sea route between Europe and China, the safest (for example, due to the problem of Somali pirates in the Indian Ocean) and has no restrictions on the size of the ship, unlike the route through the Suez Canal (see Map 2). Thus, the Arctic route will allow faster delivery of cargo to Europe by sea, reducing the route by 20 – 30%, and, consequently, will be more environmentally friendly (due to the use of less fuel and reduced CO2 emissions) and saving human resources.

Energy aspect

By analysing the cooperation of countries in the Arctic region not only in the field of transport, but also in environmental issues, it is possible to trace favourable trends in solving China’s environmental problem (and, consequently, BRI in the future). Thus, since the current priority of the People’s Republic of China in the energy sector is the country’s transition from coal consumption to natural gas consumption, finding a stable supply of the latter is one of the most important tasks of China’s foreign policy.

The joint Russian – Chinese Yamal LNG project met the stated goal of reducing the share of coal in total energy consumption in China to below 58% by the end of 2021, as this project allows to diversify China’s energy sources, contributing to its abandonment of coal. This, in turn, reduces domestic CO2 emissions and may contribute to the implementation of a similar scheme under the initiative.

Thus, the development of the Northern Sea route means saving time on cargo transportation from China to European countries, as well as the possibility of solving the energy problem within the country (and going beyond it within the framework of the initiative), on the solution of which, in turn, depends on the regulation of the global environmental issue.

By implementing the green BRI, each side pursues its own economic and political interests. For China, this means solving serious social and environmental issues and problems of overproduction, striving to establish closer ties with resource-rich countries and bring its goods to the European market. Thus, the BRI concept solves the problem of more rational distribution of production and reducing the burden on the environment in China while maintaining growth rates and strengthening integration with neighbouring countries and the European Union.

Political aspect

Domestically, for several years now, China has been trying to create an “eco-friendly nation” by creating strict environmental standards that are mandatory for local producers. However, if China is concerned about protecting the environment internally, its economic expansion is alarming to international environmentalists. They are convinced that the Chinese side is trying to get rid of outdated, “dirty” technologies in this way and call for broad public control over the construction of the Silk Road infrastructure.

The high environmental impact of the first wave of BRI investment has already been noted in a 2018 study conducted by the China Council for International Cooperation in Environment and Development (CCICED, an advisory council of international experts working with the Government of China): low demand for environmentally friendly standards from host governments; complexity of the nature of projects and level of transparency).

Understanding the environmental risks that may arise during the implementation of BRI, the Chinese side decided to improve logistics and, most importantly, project implementation tools in partner countries.

In 2017, four state regulators issued an advisory document, “Guidelines for promoting the green Belt and Road”. This recognized the challenges faced by Chinese companies implementing overseas infrastructure projects and encouraged them to adopt higher environmental and social standards.

In 2018, China and the United Kingdom jointly published the Green Investment Principles for the Belt and Road. These principles are mainly aimed at standardizing green logistics in BRI countries, expanding the introduction of a green economy in the region and, ultimately, significantly reducing carbon dioxide emissions into the atmosphere.

The second Forum of the “One Belt, One Road” Initiative (April 2019) supplemented the already approved Greening plans of the Chinese initiative. Thus, during the forum, it was decided to launch several international initiatives in the context of the International Coalition of the Green Development of BRI and the principles of a green economy.

In November 2019, the Chinese Institute for Energy Research proposed the “2C Asia” initiative (developed by government officials and climate scientists from Japan, Cambodia, Laos, Bhutan, the Philippines, Indonesia, and Malaysia) to study energy supply and demand in Asian countries, as well as to work on decarbonization systems and achieve the goals of the Paris Agreement.

However, even though in the Paris Agreement China committed to peak carbon emissions by 2030, due to the great economic impact of Covid – 19, the country has announced that it may delay the implementation of a new economic growth target in 2020, reflecting how these uncertainties affect top-level planning. The economic downturn caused by Covid – 19 has also raised concerns about China’s commitment to a transition to a low-carbon “green” regime.

As a result of taking the virus under control within China’s borders, the government decided to resume implementing the previous plan. Shortly thereafter, in May 2020, the China Energy Authority announced a public consultation on a draft energy law defining an agenda for “green, low-carbon” production and a “safe and efficient” energy system. It should be noted that today China is also the world’s largest producer and investor in clean energy, and while coal still ranks first in the country’s energy balance, its share declines every month.

Today, the international community has high hopes that close Sino – European cooperation under the Paris Agreement can lead to more standardized commitments by China, which is likely to significantly increase China’s efforts to develop green logistics and the economy.

At the EU – China bilateral summit (June 2020), all participants pledged to develop “green” economic and investment strategies to address both economic and environmental crises. P2P diplomacy, a closer partnership in action to address global warming and the gradual transition to a green economy in Eurasia, will be tools for implementing these strategies.

In September 2020, Chinese President Xi Jinping announced in the UN General Assembly that China will achieve carbon neutrality by 2060. Later, on October 12, The Institute for Climate Change and Sustainable Development (ICCESD) at Tsinghua University published a study on a possible path to this goal. Thus, if China follows the report’s recommendations, it could mean tougher energy and emission reduction goals for the 14th five-year plan (2021 − 2025), and more ambitious national − level contributions (INDCs) for 2030 with even faster and deeper decarbonization.

Soon, China’s five-year Green Economy Summit policy plan was called “one of the most important documents on the planet” for global development, setting a target for the share of non-fossil fuels in the structure of energy consumption.

According to the roadmap presented in it, China intends to achieve zero net carbon emissions by 2050, with all greenhouse gas emissions reduced by 90% compared to 2020 levels if it (China) wants to achieve carbon neutrality by 2060. The authors did not offer a specific roadmap for reducing emissions between 2050 and 2060 but stated that the reduction in emissions should be increased with negative growth in emissions in the energy sector and more intensive carbon binding using CO2 sinks and decarbonization technologies of Chinese enterprises.

But since the economy and the energy sector are extremely complex systems, the transition will take time. Thus, in the first stage, the priority to reach the peak of carbon emissions should be to prevent additional emissions, and not reduce existing ones. But after 2030, the rate at which China is reducing emissions “will be far ahead of developed countries”.

Analysing the current impact of Green BRI, researchers made proposals to save energy and reduce emissions in fiscal year 2021, for example, 20% of unburned fuels in primary energy consumption by 2025, with the carbon emission limit should be less than 10.5 billion tons (it was expected that by 2021 these figures will be 16% and 10.3 billion tons, respectively).

It is also recommended that China strengthen and update its INDCs for 2030, reducing carbon dioxide emissions per unit of GDP by more than 65% compared to 2005 levels and reaching 25% of the share of unburned fuels in primary energy consumption.

2021 marked the beginning of the implementation of China’s 14th five-year plan. Officially adopted on March 11, it marked a departure from Beijing’s previous quantitative growth plans. As an alternative, a plan aimed at implementing a more intra-Chinese “new stage of development” aimed at “qualitative development” was chosen.

It should be noted that the number of projects related to the environment and green development was only half of the number of projects of the 13th plan. The 14th plan also does not contain detailed information on reducing carbon dioxide emissions into the atmosphere or on strengthening the country’s environmental policy. However, it notes that CO2 emission standards and compliance with China’s climate commitments for 2030 and 2060 are now the responsibility of provincial ministries and administrations. This decision was made considering the impact of the pandemic on the Chinese economy. Hence, it can be assumed that the PRC has not yet determined the exact national trajectory of actions and the country’s green development strategy.

Despite this, the document describes a clearer trajectory for reaching the peak of CO2 emissions by 2030 and achieving CO2 neutrality by 2060. For the 2021, the government has announced a goal to reduce energy intensity by about 3%. Over the next five years, the Chinese authorities intend to reduce energy intensity by 13.5% and carbon intensity by 18%.

Thus, the plan notes that by 2025, non-excavated fuels will account for 20% of energy consumption, compared to 15% at the end of 2019. However, while strengthening its renewable energy strategy, China has not completely abandoned the “clean coal” approach.

Towards conclusions

Commitments to reduce CO2 emissions by 2025 have shown the world that China is gradually moving towards fulfilling its commitments to improve climate (plans for 2030/2060). Despite this, given the trajectory of China’s green development, it is reasonable to assume that currently CO2 emissions into the atmosphere will continue to grow until 2025. This trajectory could delay the important progress needed to decarbonize Eurasia’s logistics until the second half of the decade.

Now (especially during the global pandemic) China continues to meet the huge energy needs of its growing economy, moving towards green development.

The impact of the pandemic on the development of Chinese investment and economic policy has shown that now China has no alternative to the green trajectory of its further development. If China starts actively implementing this green strategy (both domestically and within the framework of the “One Belt, One Road” initiative), it will significantly reduce economic costs (and improve environmental standards) for the country itself and for Eurasia as a whole. As an example of a green economy, China, through green logistics and investment, can make this strategy more accessible to other industrialized countries located along the Silk Road. Thus, China’s “decarbonization strategy” will lead to a Eurasian (and possibly global) “decarbonization strategy”, even if it is partly related to the danger of increasing Chinese investment in coal energy under the initiative.

Prior to the adoption of the new decarbonization trajectory, it could be seen that China’s support for fossil fuel projects had significant negative environmental and social consequences in the countries of the “One Belt, One Road” Initiative. Thus, changes to China’s draft Energy Law were a necessity. As a result, they have brought (or will bring) many BRI infrastructure projects in line with generally accepted international green development practices.

As China’s economy emerges from the Covid – 19 pandemic, it can be expected to focus even more on this green growth strategy. Moreover, considering that in this aspect, China has the most important competitive advantages in terms of exports of industrial products and in the field of energy, as well as resource security and logistics.

Dr. Maria Smotrytska is a senior research sinologist and International Politics specialist of the Ukrainian Association of Sinologists. She is currently the Research Fellow at International Institute for Middle East and Balkan Studies (IFIMES), Department for Strategic Studies on Asia. PhD in International politics, Central China Normal University (Wuhan, Hubei province, PR China) Contact information : officer[at]ifimes.org SmotrM_S[at]mail.ru

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Reskilling Revolution: Leaders Preparing 1 Billion People for Tomorrow’s Economy

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Investing broadly in the skills of the future for both today’s and tomorrow’s next-generation workforce could add an additional $8.3 trillion in increased productivity to the global economy by 2030.

The Reskilling Revolution initiative, a coalition of 50 CEOs, 25 ministers and 350 organizations committed to realizing these gains for their economies, societies and organizations, marked two years of progress at the World Economic Forum Annual Meeting 2022 in Davos today. Their work will benefit over 100 million workers on their journey towards reaching 1 billion people by 2030 with better education, skills and economic opportunity.

Accelerating the Reskilling Revolution

Global inequities in lifelong learning and childhood education, a pandemic that closed schools and workplaces and rapid technological change are highlighting the need to double down on reskilling, upskilling and the future of learning. The Reskilling Revolution initiative, launched at the World Economic Forum’s 50th Annual Meeting in January 2020, is working to provide 1 billion people with better education, skills and economic opportunity by 2030.

At its heart is a commitment from over 50 CEOs to inspire global business leadership on the upskilling, reskilling and human capital investment agenda. By working together with a growing network of national-level country accelerators launched to date in 12 countries – Bahrain, Bangladesh, Brazil, Cambodia, Georgia, Greece, India, Oman, Pakistan, South Africa, Turkey and the United Arab Emirates, with knowledge support from Denmark, Finland, Singapore and Switzerland – the Reskilling Revolution has mobilized a multistakeholder community of over 350 organizations across 12 countries and is on track to benefit 100 million people on its journey towards 1 billion.

“In an era of multiple disruptions to the labour market – the pandemic, supply chain changes, the green transition, technological transformation – the one ‘no regret’ investment all governments and business can make is in education, reskilling and upskilling. It is the best pathway to expanding opportunity, enhancing social mobility and accelerating future growth,” said Saadia Zahidi, Managing Director, World Economic Forum.

Enabling Education 4.0

Two years into its work the initiative will expand beyond adult reskilling and upskilling and integrate a focus on education for children and youth. These efforts will be taken forward by a new Education 4.0 Alliance, bringing together 20 leading education organizations at the Forum’s Annual Meeting 2022.

A new report from the project, Catalysing Education 4.0 Investing in the Future of Learning for a Human-Centric Recovery, focuses on preparing today’s generation of school-age children with better collaborative problem-solving that could add $2.54 trillion – over $3,000 per school-age child – from this one skill alone.

The report, developed with support from the LEGO Foundation and in consultation with leading education experts from the public, private and educational sectors, finds that investment in the skills of the future for primary and secondary school learners would create an additional $489 billion in Europe, $458 billion in South Asia, $333 billion in East Asia, $332 billion in Latin America, $266 billion in the Middle East, $235 billion in North America, $179 billion in sub-Saharan Africa, and $163 billion in Central Asia.

Meanwhile, China ($356 billion), the United States ($218 billion), Brazil ($143 billion), Mexico ($80 billion) and Italy ($72 billion) are the five countries standing to gain the most, while the benefits relative to the size of their economies today would be greatest in sub-Saharan Africa and Latin America.

To unlock this education transformation, the Education 4.0 initiative will focus on three key investment areas: new assessment mechanisms; adoption of new learning technologies; and empowerment of the teaching workforce.

Expanding the Accelerator network

Complementing the Skills Accelerators, the World Economic Forum’s Annual Meeting also featured the official launch of the first school-age focused Education 4.0 Accelerator, a national-level public-private collaboration platform for action. The Education Accelerators – complementing a network of successful Closing the Skills Gap Accelerators – aim to mainstream technology-enhanced learning experiences, implement new measurement mechanisms, empower educators and mobilize investment in the sector.

Bangladesh will be the first country to pioneer this new model in Asia. Dipu Moni, Minister of Education, Bangladesh, said: “Bangladesh is committed to ensuring high-quality education for all children and youth. We are delighted to partner with the World Economic Forum to launch the first Education Accelerator in South Asia and to be part of this global network to advance the Education 4.0 agenda.”

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Sanctions against Russia: do they have any point?

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It’s hard to recall a day since the beginning of the conflict in Ukraine when there was no mentioning about new sanctions being imposed against Russia. On May 9th, the EU announced that it had almost finished preparations for the sixth package of sanctions, and rumors on the Internet are already mentioning the seventh.

What are sanctions?

In brief, sanctions are a list of political and economic decisions applied by states and organizations in order to protect national interests, international law, and defense from threats to international peace and security. As a rule, they are temporary and are removed when the cause/threat has been eliminated.

According to the EU’s official website, “Restrictive measures (sanctions) are an essential tool in the EU’s common foreign and security policy (CFSP), through which the EU can intervene where necessary to prevent conflict or respond to emerging or current crises. In spite of their colloquial name ‘sanctions’, EU restrictive measures are not punitive. They are intended to bring about a change in policy or activity by targeting non-EU countries, as well as entities and individuals, responsible for the malign behaviour at stake.”[1]

How many sanctions have been imposed against Russia in total?

On May 8th, the Chairman of the State Duma of the Russian Federation Vyacheslav Volodin shared a post on his Telegram channel that “10 128 sanctions have been imposed against our country. More than against any other state in the entire history of their existence.”[2] From this number, 2,754 were introduced in the period from 2014 (the Crimean issue) and before the beginning of the special operation in Ukraine.[3] The rest – more than seven thousand – were introduced in a short three-month period. According to The Castellum.AI, a service which takes a record of sanctions and updates weekly, as of May 9, their number has already exceeded 7,600, making Russia the state with the largest number of sanctions imposed. For comparison: 3,161 sanctions have been imposed against Iran, 2,608 – against Syria, and 2,077 – against North Korea.[4] Other states can “boast” with the list containing less than 1,000 sanctions. Thus, in a short period of time, Russia not only got on the list of sanctioned countries, but also topped it.

The sanctions have affected almost every sector of Russia – from individuals, which list already counts numbers in the hundreds, to the spheres of energy, economy, trade… The enumeration can go on for a long time. It can be said that there is practically not a single area left that wasn’t affected by sanctions: for example, one of the articles published by the Atlantic Council had the heading “What’s left to sanction in Russia?” And yet, at almost all the examples given, it is mentioned that sanctions have already been imposed in this area.[5]

So is there anything else that can be included in the sanctions lists? The question itself is good, but alas – it will take quite a long time to search for the answer: sanctions are already everywhere.

So is there any point in sanctions?

This is quite an interesting question, although in this situation it would be more accurate to say that sanctions have not only a point, but also consequences.

As it was mentioned above, sanctions are usually temporary, but Russia has been living with almost 3,000 sanctions imposed against it for more than 8 years. Has it brought any tangible results in influencing Russia? No. Have those who introduced them achieved the result what they had introduced those sanctions for? No. Have these sanctions been lifted? No. Therefore, is there any point in imposing them on Russia? The answer is still the same – no, because as it can be observed,  these sanctions are in the list of existing ones, and Russia still continues to exist, quite successfully adapting to them. And there are a lot of sanctions – 2,754 (for the period before the Ukrainian issue), but the thing is that the country against which they were introduced does not complain about its size and capabilities either.

There is a point in sanctions, and first of all – for Russia.

Following numerous bans on the export of various kinds of products, as well as the departure of many companies operating in various fields, the Russian government introduced a number of measures to support different areas, and which have already started to show positive results. According to Rosstat, several sectors of the Russian economy showed positive dynamics as soon as measures were introduced (compare to the same period of 2021): the mining industry grew by 7.8%, energy, heat and gas supply – by 1.5%, water supply and waste disposal – by 7.2%.[6] There is also an increase in the food sector – by 1.1%, and medical production increased by as much as 46.8% compared to March 2021, and turned out to be 9.1% higher than in February 2022. As Rosstat data shows, according to a preliminary estimate of the country’s GDP for the 1st quarter 2022, there is a positive growth of 103.5% compared to the same period last year.[7] The Economist noted that “as imports slide and exports hold up, Russia is running a record trade surplus.”[8] The Institute of International Finance estimates that “in 2022 the current-account surplus, which includes trade and some financial flows, could come in at $250bn (15% of last year’s gdp), more than double the $120bn recorded in 2021”. As a result, the world sees that rather than damaging Russia, sanctions are contributing to its strengthening. [9]

The consequences of the sanctions, however, were faced not only by Russia and Belarus (which also got quite an amount of them because of good relations with Russia), but also by the rest of the world, including even the part that had nothing to do with this issue. And the consequences of those 7 thousand+ recently imposed sanctions are especially severe.

Some countries are already complaining about food shortages, as their supplies have been seriously reduced due to sanctions. People are dissatisfied with the increase of prices for various products and goods, but this is caused by the increase of fuel prices – which people are also dissatisfied with. Shocks and turmoil in the social and economic sectors started to affect the political situation both within countries and their international policies, as they have to choose whether to join the sanctions or try to stay away.

Why “try”?

Even at the first weeks of the conflict, the United States were seen trying to put pressure on states to either join the sort of “sanctions coalition” or stay away, preventing any attempts to help Russia. As it turned out, one of these countries was China: back in April 2022, the US Deputy Secretary of State Wendy Sherman said that the sanctions imposed against Russia should give China (and President Xi personally) an idea of the consequences that it could face in case of providing assistance to Russia: “<it> gives President Xi, I think, a pretty good understanding of what might come his way should he, in fact, support Putin in any material fashion.”[10] If there was an attempt to put pressure on China, which is far from being the last figure in the international arena, then what can be said about other states – especially European ones?

Hungary is now becoming one of the stumbling blocks, as it refuses to support sanctions with regard to the embargo on fuel imports. According to Prime Minister Viktor Orban, it will be equal to an atomic bomb dropped on the Hungarian economy, since it simply will not have time to adapt – it will take at least five years and a large number of investments. Nevertheless, he noted that Hungary is ready for negotiations – if the proposals are consistent with the interests of the state.[11] However, according to information, a video conference between Ursula von der Leyen and Viktor Orban, held on Monday last week, did not lead to a compromise, thus delaying the adoption of the sixth – the heaviest, according to EU representatives – package of sanctions.[12] Against this background, Polish Prime Minister Mateusz Morawiecki expressed the opinion that the sixth package of sanctions could be adopted in a reduced form, since “we must observe unity in the EU.”[13]

So…what can be expected in the future?


[1] https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/overview-sanctions-and-related-tools_en

[2] https://t.me/vv_volodin/427

[3] https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en

[4] https://www.castellum.ai/russia-sanctions-dashboard

[5] https://www.atlanticcouncil.org/blogs/new-atlanticist/whats-left-to-sanction-in-russia-wallets-stocks-and-foreign-investments/

[6] https://rosstat.gov.ru/folder/313/document/163079

[7] https://rosstat.gov.ru/folder/313/document/165370

[8] https://www.economist.com/finance-and-economics/2022/05/13/russia-is-on-track-for-a-record-trade-surplus

[9] https://www.economist.com/finance-and-economics/2022/05/13/russia-is-on-track-for-a-record-trade-surplus

[10] https://www.reuters.com/world/us-says-china-could-face-sanctions-if-it-supports-russias-war-ukraine-2022-04-06/

[11] https://www.reuters.com/world/europe/hungary-cannot-support-new-eu-sanctions-against-russia-present-form-pm-orban-2022-05-06/

[12] https://www.ft.com/content/abba000b-992a-45a3-941a-3616e335ccc5

[13] https://tass.ru/mezhdunarodnaya-panorama/14676015?utm_source=yandex.ru&utm_medium=organic&utm_campaign=yandex.ru&utm_referrer=yandex.ru

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Economy

Anglo-American Axis Needs Common Market, not Common Alliance

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With the eruption of the war in Ukraine, and considering the post-war situation, the alliance system in the West and its future should be something worthy of concern.

Anglo-American Axis is a concept that I proposed well before Brexit, and such an axis has already been fully formed today. With Brexit, the United Kingdom is now no longer part of the continental European alliance. It has instead re-aligned with the United States, and reverted to being a maritime nation that it used to be.

Such an axis would not be moved by the independence inclination of France, the wish of Germany to become the leader, nor the ambition of Turkey to be a regional hegemon. It cares even less about countries like Israel, Iran, and India. What the Anglo-American Axis focuses is to control the high ground of fundamental values, so that it can win the historic future as long as civilization continues to progress. Wars in other regions do not carry much significance to it. For NATO to play a role, it must negotiate conditions with the United States. It is not the Anglo-American Axis that needs NATO, but that NATO needs the Anglo-American Axis.

The United States, Canada, Australia, and New Zealand, the former members of the Commonwealth, have formed the largest single market in the world, with a coordinated monetary policy for the U.S. dollar and British pound. Such a market can consider certain African and South American countries, as long as they remain stable, and this usually means some “friendly dictatorships with open economies”, similar to Chile in the past.

Civilization is a dynamic force. Although many have studied monetary issues and finance, they fail to link these with civilization. In fact, these are appendages of civilization, and they are products of it. Humanity will inevitably move towards civilization.

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