Steve Hanke, Professor of Applied Economics, founder of the Johns Hopkins Institute of Applied Economics, Global Health and Entrepreneurship Studies, believes that the consequences of the sanctions that were imposed on Russia against the backdrop of the special operation in Ukraine would be overwhelming for the whole world. It is the whole world, but not Russia herself that will suffer from those sanctions, the professor said in an interview with Asia Times.
The losses that Russia is suffering as a result of the Western sanctions seem significant. However, they pale in comparison with the staggering consequences that the United States and the European Union are going to deal with. The sanctions will boomerang on them, but it is the whole world that will have to deal with the greatest damage from them, Hanke said.
"In terms of incidence, the EU will bear [a huge] cost, much greater than the US. But the costs and disruptions caused by sanctions won't be limited to the EU and the US. They will spread throughout the world, putting significant burdens on poor countries and poor peoples," Steve Hanke said.
The EU has repeatedly assessed the possible damage from the anti-Russian sanctions too. Thierry Mariani, former French Transport Minister, declared an economic disaster in Europe because of the restrictions against Moscow. No one seeks to support the sanctions policy outside the West, he said.
The embargo on the imports of Russian energy resources and their transportation will strike a very negative and serious blow on EU countries. These consequences will not affect Hungary though, since the country refused to accept the EU ban on fuel from Russia.
The United States will not be left unharmed in the confrontation with Russia. World oil and gas markets will become politicized and balkanized, while oil will not be supplied as freely as it has been for the past four decades. As a result, everyone will end up paying more than they would have otherwise, Steve Hanke said.
In addition, Hanke criticized US President Joe Biden who said that that the inflation rate in the United States accelerated because of Russia's actions. Problems in the United States arose because of the decisions of the Biden administration and former president Donald Trump. During the pandemic, Trump and Biden were printing and spending money like drunk sailors.
"They spent money during the Covid pandemic like drunken sailors and the Fed ran the printing presses at a high speed to finance the spending spray. Inflation always and everywhere only has one cause: the excess production of money," Hanke said.
The anti-Russian sanctions are counterproductive and completely ineffective, because they have not been able to cause Moscow to change its behavior, the professor believes.
"We do have a scattering of cost estimates on the Russian sanctions from investment banks, central banks, international organizations like the IMF, and NGOs. Those estimates, which are somewhat ad hoc and partial — just the tip of the iceberg — indicate that the costs of sanctions will be eye-popping," the professor said.
Noteworthy, Swiss Minister of Economy Guy Parmelin earlier said that the Western sanctions against Russia did not reached their goal because the hostilities on the territory of Ukraine did not stop.
At the request of Ukraine, Turkey detained a Russian-flagged cargo ship as it was carrying grain from the port of Berdyansk. The problem will exacerbate when Recep Erdogan leaves politics.