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Wednesday, March 21, 2018

Is there life under sanctions

Members “the Big seven” have agreed on the continuation of sanctions against our country. In response, Moscow has decided to extend food embargo against the EU and the United States. The balance of power is not change. Russia has shown that it is able to live under restrictions. Of course, Moscow will not give up Crimea, and the West will not forgive the joining of the Peninsula. But sanctions over the Crimea are of a personal nature and have little effect on the Russian economy. Prohibitions for support of the Donbass is more difficult. They cut us off from modern technologies and financial loans. No one doubts that the restrictions will be lifted. However, when it will happen in a year, two, three — is anyone’s guess.

photo: morguefile.com

It’s like deja vu: the West supports Ukraine, is not going to forget Russia’s annexation of Crimea and assistance to the independent republics of Donbass.

On last week’s G7 summit in Tokyo adopted a Declaration on the conservation of Western sanctions against Russia. Our country responded immediately — Dmitry Medvedev instructed to prepare proposals on the extension of the food embargo against the EU, USA and other countries that joined the sanctions until the end of 2017.

Recall what restrictions they imply. The prohibitions vary by country and by nature. Part concerns the restrictive measures specifically “for the Crimea”, some for “Donbass”.

Crimean sanctions was insignificant for Russia, because they concern imports manufactured in the Crimea products, the purchase of real estate and tourism. Financial constraints prohibit the sale to Crimean companies products and technology. Plus a ban on entry to the US, EU and other countries in the number of officials and businessmen.

Biggest problems they brought. Someone had to curtail business in Ukraine, but it is not fatal. Another thing is the sanctions that have been taken after Russia began to support the Donetsk and Lugansk. These restrictions started to be introduced in July 2014. They are more serious and contain a ban on raising funds in Western markets, the supply of arms and oil production equipment.

The shot reached the goal. A year ago Vladimir Putin declared that because of the sanctions the country has lost $160 billion. There are pluses — the Russian enterprises, according to the President, began to quickly repay external debt, decreased by capital outflows. By the end of the first quarter of 2016, the external debt of our country has decreased by 28%. Net capital outflows declined from $154 to $ 53 billion. This shows that living under sanctions is possible. They even provide an incentive — give them an opportunity to Express themselves. Volumes of production of the agricultural sector in 2015 increased by 2.9%. Increased production volumes of pharmaceutical and metallurgical enterprises. The manufacturing industry also gets on his feet. In General, the volume of purchases of your own products in the domestic market grew by 15%.

But there are also negative factors.

The restriction on financial loans we can get around — Russia has successfully placed sovereign Eurobonds, most of which were bought by foreign investors.

However, oil and gas technologies remain a cornerstone. We had to abandon the development of promising deposits on the Arctic shelf.

It is hoped that sanctions are not eternal. The damage from the EU sanctions war with Russia in 2015 amounted to €50 billion a Year earlier, the EU has lost €100 billion, Many countries call for an end to “war”. As stated by the French Minister of economy Emmanuel macron, his country intends to push for the lifting of sanctions against Russia by the summer of this year. There are doubts in Italy, Greece, Slovenia, Bulgaria, Cyprus, France and even in Germany and Austria. But the term, when you remove the sanctions, it can be stretched. Russia insists on retaliatory sanctions until the end of 2017. So, at this time, according to our officials, they will not be cancelled.


Stanislaw Werner, Vice President of IFC Financial Center:

— Russia will not relinquish Crimea. But the time when we find a common denominator regarding the status of the Peninsula, will last for years. Crimean sanctions symbolic and indefinite. Another thing Donbass. In the Declaration, the G7 stated that sanctions will be in effect until full implementation of the Minsk agreements, related not only with military but also a political settlement. The agreement provides that the LC and the DNI remain part of Ukraine. These conditions include constitutional reform, decentralization, and so on. It’s still not done by Kiev. Limitations on access to capital markets, Russia has learned to avoid. In the future we can figure out the technology for the extraction of oil and gas.

Nikita Maslennikov, a senior expert of the Institute of contemporary development:

— Recently, a number of EU countries oppose the extension of the sanctions. It is expected that the EU will try to have a discussion. What is happening at the summit of the G7 countries, fits into this outline. Sanctions can withdraw after the full implementation of the Minsk agreements. But even with some “half-hearted” we and the West can count on relief. On a fundamental change of the question. We need less hope for a change in the sanctions policy, and most focus on economic growth strategies.

Sanctions . Chronicle of events

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