Sanctions against the Russian Federation cannot be canceled. It will return the world order to the Caribbean crisis
One of the most important arguments of opponents of sanctions is the "Boomerang effect": since international trade is mutually beneficial, refusing it to harm both parties. Moreover, the sanctions side may suffer more. Indeed, modeling shows that the losses for the first year will be about 10% of its GDP (about $ 130 billion), and for the countries of the Antiputin coalition - almost 0. 5% of their GDP, in absolute figures - about 3. 5 times More than Russia's loss.
However, such a calculation is methodologically false: it compares the losses of two different independent economic agents. It is correct to compare the cost of sanctions (and together with Ukraine as a whole) with an alternative cost (Opportunity Cost) to abandon such actions.
In this case, the rejection of sanctions and assistance will mean, with high probability, the victory of the Russian Federation in the war, which, in turn, would be the end of the world order that was de facto after the end of the Cold War, and returning even in the 80s The years of the last century, and in the 1950s, to the Caribbean crisis, when the USSR did not fulfill its threats of destruction of imperialism by nuclear weapons. What are the consequences of sanctions already have 1.
The strategic positioning of Russia as an exporter of raw materials has deteriorated, since now the occupying state from a weak position is dealing with the loss of former main markets. 2. Since the beginning of a full -scale invasion of Ukraine, a lot of Western business has been gone from Russia, accounting for about 40% of its GDP. Yes, the Russian Federation has lost almost all foreign investments in three decades.
The cost of the shares of Western companies that came out of the Russian market has increased more than the value of their assets and income in the Russian Federation, the world stock markets have estimated such a step. 3. The Russian Federation has problems providing important resources, spare parts and technologies, which leads to a lack of supply in the national economy. 4.
Despite the illusion of Russian President Vladimir Putin on self -sufficiency and import substitution, Russian internal production is reduced without the opportunity to replace lost enterprises, goods and talents; The extermination of Russian internal innovation and production base has led to a rapid increase in prices and consumer anxiety. 5. Russia resorts to non -viable, sharp fiscal and monetary intervention to smooth these structural economic shortcomings.
The consequence is a shortage of the State Budget of the Russian Federation for the first time in many years and the depletion of foreign reserves, even at high prices for energy. According to reports of the Ministry of Finance of Russia, oil and gas income fell by 22%, in the non-naphtogazic sector-by 29%. The main contribution to this fall made the internal VAT (-41%); income tax (-32%); in terms of income related to imports -44%.
At the same time, Russia's expenditures continue to increase: by 25% in July and 21% following the seven months of 2022. The Ministry of Finance of the Russian Federation has closed the structure of expenditures so that it is not clear how much money goes to military needs. According to the International Monetary Fund, at the end of 2022 the unemployment rate in the Russian Federation will reach 9. 3% (3. 8 million Russians). This trend will affect the regions differently.
According to the Russian Center for Strategic Studies, by the end of 2022, unemployment in 16 regions of the Russian Federation will increase two or more times relative to January-March, and in 53 regions-one and a half times or more. First of all, it concerns the sphere of transport, automotive, wholesale trade, e -commerce, forest industry. All this happens at a time when the most important sanctions - oil and gas embargo - have not yet been worked.
In December 2022, the European Union and the G7 countries should completely abandon Russian oil, and the EU plans to reduce Russian gas consumption. These are the most critical sanctions for the Russian economy, which will lead to its further decline, inflation and deficit of the country's federal budget. What else should be done to enhance the impact of sanctions on the Russian Federation 1.
The "smart" oil embargo at the recent G7 Summit has come to apply to the global restriction of prices for Russian oil. The option of implementing this strategy with the help of insurance is now being considered: tankers that will transport Russian oil brands to the price of a higher certain limit - will not be insured by the leading world insurance companies.
This mechanism can work, but it is extremely important to supplement it: - pan -European (and other developed countries) criminal responsibility for failure to comply with joint sanctions; - to predict secondary sanctions or certain restrictions for all insurance companies that will continue to insure the vessels (Russian National Reinsurance Company, General Insurance Corporation of India, China Re, Nigeria Reinsurance Corporation), and Transfers.
An alternative mechanism for limiting the global price of Russian oil is the use of a single significant duty on Russian oil, which will reduce its market value to the required limit. 2. It is important to apply the "White List" principle to importers and carriers that supply dual -use goods to Russia and Belarus with the requirements of complete transparency and rigid control by the states that have proclaimed sanctions (instead of the "black list"). 3.
Introduce restrictions on transportation to Russian ports, expand sanctions against vessels that are directly or indirectly belonging to residents or citizens of the Russian Federation and RB, regardless of the flag. To extend sanctions on the prohibition of cargo insurance to all types of vehicles, not only maritime. 4. To concentrate sanctions on Russian banks that are not 100% capital from the US and the EU. Swift systematically important Russian banks such as Gazprombank.
For the purpose of organizing "Windows" to pay debts to the Russians and organization of payments for export to the west through banks controlled by the US and the EU. 5. Introduce sanctions against all members of the governing bodies of Russian state and controlled enterprises, in particular banks and companies, with the participation of the Russian state or quasi -state legal entities in capital from 25%.
Regardless of the citizenship of a person - to distribute to enterprises that are successors of state -owned enterprises, which changed ownership after August 8, 2008. It is important - to impose sanctions for the entire leadership of the Central Bank of Russia. 6.
Expand the list of sanctions for exports to the Russian Federation of all types of technologies, software and equipment and materials used in: - extraction and processing of minerals (including equipment for remote sensing and geophysical research); - maintenance of high power turbines; - development and production of computer equipment and sensors, precise mechanical devices and structures, etc.
To create a mechanism for regular monitoring of military and dual -purpose technologies and a corresponding supplement of this list. 7. To deprive the Russian Federation of membership and to blacklist the FATF as a terrorist state. This will significantly complicate the relationship between the occupier state with different countries of the world, will make the relationship with it "toxic" even for those countries that have not joined sanctions.
The good news is the recent exclusion of the Russian Federation from the governing bodies of FATF, but it is necessary to continue this work. 8. To provide funding with international organizations of reports of journalistic investigations as to how international business is bypassed sanctions and continues to work with Russia through third countries. Introduce remuneration to calling companies. 9.
Introduce penalties (fines) for critical technologies, equipment and software prohibited for exports in the Russian Federation if the relevant goods or information are exported there, regardless of whether the company has been sanctioned by goods or technology officially . Then they will form private investigative bodies that will be more effective than any state to follow the secondary sanctions. 10.