What are the effects of the West’s sanctions against Russia?

by Wahid Nabizada

Following the order of Russian President, Vladimir Putin, regarding the attack on Ukraine the oil prices rose to more than $100 per barrel for the first time within seven years.

The value of the Russian ruble fell sharply. Russia’s financial markets have plummeted in the past few days as a result of the Ukraine crisis, which caused a stroke in Russian banking operations that has limited the operation of “sberban” ATMs.

It is mentionable that Russia alongside with Ukraine, allocate 29 percent of world wheat, 80 percent of oil and 19 percent of world corn exports for itself. On the other hand, the country’s food exports show that the Middle East and Africa are the places that 70 percent of goods come in these countries. Experts believe that the tension between the two countries will push food prices to a new high price, which will be alarming for the Middle East, Africa and especially Afghanistan.

On the other hand, by intensifying of the Russia’s attacks on Ukraine, the West has imposed sanctions on Russia.

Russia has prepared itself for such days for years. In 2014 while Russian troops entered Crimea to annex this area to Russia. It was alarming for Russia that the Western countries started to sanction, which was a lesson to this country, too.

After that Kremlin took appropriate measures to counter the situation and not to be dependent on dollar. Putin believes that Russia can resist against sanctions more than the time that Western countries suppose.

It is highly mentionable that earlier Russian ambassador to the US warned the US that sanctions will not resolve anything.

Antonov added that Russia will not change its foreign policy, by renewing of restrictions.

“I can’t remember a day when our country lived without any western restrictions. We have learnt to work in such conditions, and not only to survive, but to develop the state,” he said.

But China opposed to the West’s sanctions against Russia. Chinese foreign minister, Wang Yi, announced that China does not support imposing sanctions against Russia to solve the problems, and emphasized that this country opposes the unilateral sanctions which are against the universal law.

China recently rejected a resolution condemning Russia’s invasion of Ukraine at the UN Security Council meeting.

However, according to the Central Bank of Russia, the value of the Russian government’s financial reserves in the form of currency and gold by January 2022 was more than $630 billion; this way Russia becomes the holder of the fourth largest financial reserves in the world, which can be used for a significant period of time to prevent the devaluation of the national currency (ruble).

In fact, only 16 percent of Russia’s foreign exchange reserves are currently in dollar, while five years ago, Russia’s dollar reserves were 40 percent.

As a precautionary measure, Russian government has also taken the first steps to establish a native global payment system so that it will not be shut down if access to the “Swift system” is cut off.

It should also be noted that the European Union supplies 40% of its gas through Russia. However, Germany’s recent move to suspend the Nord Stream 2 pipeline project could hurt Russia. But on the other hand, it will increase the price of energy in Western Europe, which will also be a big problem for Europe.

Lastly, Putin seems to be ready for any Western pressure, but what may not have been anticipated is the possibility of a prolonged war that would cost Moscow a lot. However, only the passage of time will show whether the Ukraine war will be long and devastating.

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