Can Russia take advantage of Western sanctions?

Living under sanctions is possible, and Russia knows it from international experience. After all, China has been under sanctions since 1989, but it does not stop the country's successful development. It is no coincidence that U.S. Senator Corker was surprised with the growth of the Russian securities market by 20 percent against the backdrop of U.S. sanctions. The head of Russian Technologies, Sergei Chemezov, reported to the president: "We have 23 joint ventures with foreign companies. Basically, we have no serious problems in connection with sanctions yet."

Economist Andrei Parshev said: "The bulk of consumer goods in our stores are made in China. That is, Russia is tied to European and Asian economies, rather than to the North American economy. And it is the United States that initiated the new Cold War. The Americans clearly designated the sectors, where their sanctions are not profitable, and they do not touch those sectors. Why do Europeans have to sacrifice their interests? The economic situation in the EU is not perfect."

Living conditions in Europe are different. Many people in Greece or Bulgaria can only dream about the living conditions in Russia. They have 35 percent unemployment against five percent in Russia that is mainly concentrated in certain "depressed" regions. The salary of a bus driver, migrant worker and even janitor in Moscow is very large for a common Greek or a Bulgarian national.

Of course, life under sanctions by definition can not be easier than life without them, but, as they say, simplicity is worse than theft. Simplicity is not a decisive criterion for decision-making. Simple and effective solutions do not happen, because they must reflect the complexity and all bizarre twists of the reality around us. The head of Lukoil, Vagit Alekperov, said that "sanctions affect all companies. The rankings of all companies, including Lukoil, Rosneft and Gazprom, were downgraded. He said that Lukoil was forced to postpone the placement of Eurobonds from spring to autumn," as banks recommended revisiting this issue in autumn, as the ranking may change, and cheaper long-term money will become more accessible."

Sanctions give an incentive for the development of Russian industry, industrial production, development of high-tech services and most advanced sectors of agricultural industry.

"We have been living under sanctions for 23 years," ex-deputy chairman of the Accounting Chamber of the Russian Federation Yuri Boldyrev said, noting that the West does not sell strategic technologies to Russia.

Russian President Vladimir Putin said: "You know, it does not concern us directly, but what they are now doing with French banks, can raise nothing but indignation in Europe, I believe. We are aware of the pressure that our American partners are putting on France not to deliver Mistral helicopter carriers to Russia. We even know that if the French do not deliver Mistrals to us, the Americans will quietly remove or minimize sanctions against French banks. What is it, if not blackmail? Can one work like that on the international arena? And then, when we talk about sanctions, we always believe that sanctions are applied in accordance with Article 7 of the UN Charter. Otherwise, they are not sanctions in legal sense of the word, but something entirely else, some tool of one-sided policies."

In addition, it is possible to circumvent sanctions in the field of foreign trade. For example, in Iran, under the Shah regime, an export version of combat aircraft was shipped, which was not supplied to other countries and was not produced for the U.S. Air Force. After the Islamic revolution, a ban was imposed against Teheran for the supply of spare parts and components for aircraft, both civilian and military ones, but these aircraft still fly. This can only mean one thing: Western companies supply all necessary spare parts to the Islamic Republic, despite all sanctions. Yet, Russia is still more developed than Iran, and the president already speaks of the need to substitute imports in the defense industry.

In general, restrictions on the supply of goods to any solvent country attract, for example, Chinese or Indian companies (pharmaceutical markets of Iran and Syria are inundated with Indian generics). Trade sanctions can only contribute to the enrichment of all kinds of speculators.

Those living in sanctioned countries realize that the state of affairs in the West is not safe. For example, in Iran, many business people returned their money back home and started to invest in the national economy. Russians have a lot of money abroad, and this money will start to return.

It is obvious that sanctions are mutually disadvantageous, and Russia may respond asymmetrically, destroying the financial hegemony of the dollar, for example, by creating clearing agreements with developing countries or groups of countries. In this situation, our country can automatically become the leader of nonaligned countries and make the economic existence of developed countries very uncomfortable.

Today, Russia must pursue an independent policy - not only domestic, but also foreign policy, to become an independent player, albeit not so strong as the U.S. or EU yet. Churchill said once about the attitude of the British administration to the Soviet Union: "Nobody wants to deal with indecisive leadership and uncertain politics." And if Russia is a country, whose interests should be taken into consideration, we do not need to be afraid of decisive action because of the sanctions.

Sayeed Gafurov
Read the original in Russian 

Author`s name Dmitry Sudakov