Reuters
Judy Twigg, National Interest: Russia Is Winning the Sanctions Game
These sanctions were supposed to punish Moscow's elite, but instead they've spurred economic development and patriotism.
The current conversation about Russia sanctions centers around targeting and scope. Are we punishing the people whose behavior we most want to change? Is there pain, well inflicted, on those individuals responsible for creating chaos in Ukraine and Crimea, for reckless attacks on Sergei Skripal and others, and for wanton interference in Western elections? Can we hurt Russian elites in a way that Putin will notice? Have we done enough?
In at least one sector, though, the sanctions are a textbook case of unintended consequences: they’ve put Russian farmers in the best shape they’ve ever been. Countersanctions aimed at imported Western food products—put into effect just days after the initial sanctions in the summer of 2014—initially sent Russian consumers into a tailspin, hungry from a lack of immediate alternatives to tasty European cheeses and processed foods. But palates adjusted quickly, and the import substitution effects boosted Russia, by 2016, to the position of top wheat exporter in the world. As the United States hemorrhages global agro-market share courtesy of Trump-era tariffs and trade wars, Russia is actively and aggressively filling the gap.
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WNU Editor: I concur with the above analysis. I go back to Russia 2 or 3 times a year, and I do not see an economy in decline or economic turmoil. Everyone is working. Starting a small private enterprise is now the cultural norm. There are building cranes everywhere in Moscow. And food is readily available and cheap. I should also add that the meats and poultry are better quality (they do not use hormones and other chemicals in their feed). I do know that sanctions will be lifted one day, but the Kremlin is going to protect critical industries .... especially the agribusiness. And I do not see the mentality of buying Russian changing anytime soon.
6 comments:
You have to respect Russia - given the historical tragedies that Russia has sustained. Mainly the loss of up to 30 million people in WWII. More still under Stalin. Compared to other nations who lost huge numbers of military age males, Russia has shown itself to be resilient and consistent in their national policies/priorities. One has to wonder how powerful Russia would be today if they hadn't suffered those extraordinary generational losses.
What then explains Putin's unpopularity?
RUSSIA'S NEXT LAND GRAB
Anonymous - It's not the economy, stupid. It's that most people don't get nearly as big a cut of this prosperity as they believe (and I believe) they are entitled to, for instance through pensions (that reform was what killed his high ratings in the first place). Also, staggering corruption.
Re: defeating the sanctions, that much is the hope. That said I've heard troubling things re: the oil industry being hampered by being unable to either acquire or manufacture advanced equipment under current conditions. It could just be alarmism, or it could point to a larger problem. We do still need the West for some things after all, sadly.
This is a good example of how semantics can change the nature of the debate. There is no evidence that the West's sanctions - targeted to deny Putin's elite and other key supporters from benefiting from Western financial institutions, and denying Russian access to certain Western technology - have failed. The article doesn't even address it.
(The sanctions in fact are working in the sense that they are effective, but that has not lead to a change in existing Russian policy. However, we lack information to know if it has deterred Russian actions that might have taken. Or if it has degraded certain Russian capabilities.).
Instead, the article discusses how Russia's "counter-sanctions" (actually a trade embargo) have stimulated Russian agriculture by import substitution.
The two are linked politically, but are different phenomenon. But certainly if the intention of the sanctions was to ruin the Russian economy, they have not worked (at the same time, if the West truly wanted to do that, they would have implemented different sanctions than what they did.)
By cutting itself off from trade, Russia has certainly stimulated its local industries who no longer have foreign competition. And the Russian population and resource base allows Russia a greater measure of success than a much smaller country. But that has costs too - Russia is paying more for its food, and it is diverting investment from more potentially productive industries to these lower value industries. In the long run, this risks having a more uncompetitive economy.
Lastly, from the perspective of Putin's cronies, it is not a good thing for an independent middle class/business owners to be produced. Unlike resource rents, it is far harder to steal wealth that is only produced by the people involve because if they choose to resist - that wealth isn't produced. And this group of people are traditionally the ones who demand a greater say in political decisions (democratization) which will undermine the future of the Russian autocracy.
So on one level, the article is correct. But there is a lot of other analysis that should be going on, and the article makes no mention of it.
"RUSSIA'S NEXT LAND GRAB" - Fred
China makes a land grab and Master D___ deigns not to notice.
Deigns not to notice or is not that bright?
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