Because the Russian economy is growing strongly, the sanctions of the West are becoming irrelevant.
by Rubicon’s World Editorial Office, Mac Slavo
The hybrid warfare of the USA has long relied on economic sanctions as a measure of subjugation and discipline. There are, however, increasing signs that the method is gradually being phased out, says Mac Slavo.
The USA has the problem that its sanctions are no longer effective because states are increasingly disregarding what governments of other states want them to dictate. Despite the sanctions imposed on Russia, the Russian economy continues to grow.
Russia’s inflation rate remained low last year, while the economy has grown, according to the World Bank. “Although economic sanctions have been tightened, Russia’s inflation rate has remained stable at a relatively low level and oil production has increased. As a result of the robust domestic economy, Russia’s economic growth last year was 1.6 percent,” the World Bank report says.
The US has long used sanctions to damage the economies of other countries for a variety of reasons, but more recently such sanctions no longer seem to be effective. According to an RT report, the World Bank has pointed out that Russia and other oil exporters “had stable growth in 2018 due to rising oil prices”. In Russia, “growth was supported by private consumption and exports”. For the current year, the World Bank predicts a short-term decline in growth to 1.5 percent, but expects Russia’s gross domestic product to increase by 1.8 percent in both 2020 and 2021.
In October, the International Monetary Fund (IMF) raised its forecast for Russia’s GDP growth in 2019 to 1.8 percent. His chief economist Maurice Obstfeld stated that the positive influence that rising oil prices on the world market would have on the Russian economy more than compensated for the negative effect of the sanctions imposed by Washington (1).
In May 2018, Bloomberg reported that the effect of US sanctions was reaching its limits. The states affected by US sanctions dropped the dollar “like a hot potato” in their trade transactions, rendering US sanctions ineffective.Six years ago, when the New York State Revenue Service investigated the London-based bank Standard Chartered Plc (2) on suspicion of having disregarded the sanctions imposed by the US on Iran, a department head of this bank complained in an e-mail to New York as follows:
“You damn Americans, who are you to ban the rest of the world from trading with Iran?”
Russia is not the only state that the sanctions imposed on it can hardly affect. China has founded the Asian Infrastructure Investment Bank, AIIB, a commercial bank that competes with the World Bank and the IMF, both of which are based in Washington, and through which international business can be transacted in yuan (1 Chinese yuan equals 0.13 euros). And China is likely to expand its trade with Iran, no matter how Trump reacts.
What China has done could also be done by Europe if it also wants to override US sanctions. “Out of justified self-interest, China will certainly find ways not to rely on US banks,” said Jeffrey Sachs, an economics professor at Columbia University.
translated by Alfonso