Two or Three More Years of Sanctions, Please!

Only cheap oil is more beneficial for Russian morale and the rebirth of its economy

Wed, Apr 13, 2016
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The dream that didn’t come true

When the US, Canada, the European Union and even Japan implemented sanctions against Russia, when they expelled it from the G8 and published “black lists” of personae non gratae, when they brought down world gas and oil prices, “our western partners” expected very different results.

The population of Russia was supposed to rise up in a year or two against falling living standards and the suffering imposed as a result of Ukraine. Mass protests inside the country would increase business pressure on the Kremlin as the incomes of the top 1% also suffered from the sanctions.

This was to be expected in a country with a market economy where His Majesty the Dollar reigns. From a dollar/ruble rate of 30 over many years to over 70 in two years, it seemed poised to break through to 100. A lot of Russians with foreign currency loans really suffered, and many stopped spending holidays abroad, while others felt a real drop in living standards. And?  

And nothing. As it turned out, almost 15 years of "building capitalism" couldn’t change the essence of these barbaric people. Having learned to live according to the rules of capitalism with the help of the West, they have remembered that they were actually Russians. They were Russians regardless of their genotype, native language and place of residence. (Moreover, they remembered that there were Russians in the Ukraine.)

By the way, here is a curious bit of information: according to the census, 81% of those living in Russia call themselves Russians. According to Gallup, 83% of Ukrainians regard themselves as Russians. And Russia suddenly remembered that after the coup in Kiev.

Over the last two years, the number of people who support compulsory military service in Russia increased by one and a half. Two-thirds of the population are sure that a secret war is being conducted against Russia and that the Motherland is in danger. An absolute majority didn’t just approve of the government’s policy in relation to the war in the Ukraine – thousands of Russians were members of the militia in the Donbas, attended rallies and peaceful protests in Kharkov, Odessa and other cities, and took part in non-military aid to the Lugansk and Donetsk Republics. Millions of Russians gave money, medicine and clothes to the Ukrainians.

The saddest thing for the West was that the majority of the population proved not in words but in actions that they would put up with economic difficulties rather than see their President on his knees begging the US for forgiveness. When Russia punched “our partners” in the face, together with the terrorists they supported in Syria, there was no limit to our delight. People felt for the first time in many years that Russia had stood up after the accursed 1990s and can now do it all!

It can be a real state independent of Western hegemony. It can solve its own problems. It can choose its own friends and allies and build its own future. But there was one thing that prevented Russia from doing these things before the sanctions: the world conjuncture.

The price of energy shot up before and soon after the 2008 crisis. Hundreds of billions of petrodollars flowed into Russia, money made money and warnings of the need to save for a rainy day were heard only from the Kremlin. And despite the growing opposition and white-ribbon protesters, it invested in rearmament and a new type of army.

It’s one thing to save money, but rebuilding the economy in a new way is another. Yes, we had revamped state programs since the beginning of the 2000s. Yes, we had begun moving some critical industries from the Ukraine after the first coup occurred there. But it was very slow, because private business was profiting and wasn’t interested in being totally self-sufficient. In fact, that would have been impossible – everyone dreamed of selling abroad.

Then they implemented sanctions. Everyone felt them and got used to their negative consequences. But this winter, it suddenly turned out that pork prices dropped! It’s unbelievable, but it’s a fact. The author of these lines was shocked when, having come to Russia almost a year later, instead of 320 rubles he spent, it was only 260 rubles for a boneless thigh! It turned out Russia could produce!

It was not only able to breed pigs but also to switch the whole economy to the self-sufficiency that scares the West to death. Of course, complex high-tech industries are not the same as breeding pigs – they can’t be built in a year or two. Nevertheless, it is not us but the Yankees who are forced to partially cancel sanctions to keep flying into space. The 180 rocket Engine that the USA counts on before it will be able to start producing its own is just an example of that.

Sanctions and devaluation of the ruble resulted in another unexpected outcome. China understood that it was economically profitable to relocate production to the Far East of Russia, closer to cheap raw materials and energy resource. A pool of states that occupied Russia’s various markets became available after the US and its toadies cleared the space.

Two years of sanctions and cheap oil turned out to be an advantage that was only a dream before. If it hadn’t been for that, Russia would have been stuck in the Western market for 20 years, with expensive oil and 30 rubles to the dollar and self-sufficiency and economic independence out of the question.

We are almost there. Although it will be hard (but when it was easy for Russians?), we need to keep sanctions going for a few years. A few years that Russia needs, not to create absolute autarchy, but for a reasonable limitation of foreign trade to noncritical items. Bananas, for example. Or some other exotic products that don’t grow in Russia.

It has now become more profitable to produce automobiles in Russia, as well as to relocate high-tech industries. The time will come when the European Union asks Russia for mutually beneficial co-operation. But right now, it would be better if everyone remains as they are. Let the European Union digest millions of Muslims from Asia and Africa, spend billions on supporting ‘European unity’, and fight its overseas ally for the right to make some independent decisions.

Russia will live under sanctions and get used to a new role in the world, built by itself from its own patterns.

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