The rouble is soaring and Putin is stronger than ever – our sanctions have backfired
Energy prices are rocketing, inflation is soaring and millions are being starved of grain. Surely Johnson knew this would happen?
Vladimir Putin and the Russian energy minister, Nikolai Shulginov, in Moscow, 21 July 2022. Photograph: Mikhail Klimentyev/APFri 29 Jul 2022 07.00 BSTLast modified on Fri 29 Jul 2022 09.35 BST
- Western sanctions against Russia are the most ill-conceived and counterproductive policy in recent international history. Military aid to Ukraine is justified, but the economic war is ineffective against the regime in Moscow, and devastating for its unintended targets. World energy prices are rocketing, inflation is soaring, supply chains are chaotic and millions are being starved of gas, grain and fertiliser. Yet Vladimir Putin’s barbarity only escalates – as does his hold over his own people.
To criticise western sanctions is close to anathema. Defence analysts are dumb on the subject. Strategy thinktanks are silent. Britain’s putative leaders, Liz Truss and Rishi Sunak, compete in belligerent rhetoric, promising ever tougher sanctions without a word of purpose. Yet, hint at scepticism on the subject and you will be excoriated as “pro-Putin” and anti-Ukraine. Sanctions are the war cry of the west’s crusade.
The reality of sanctions on Russia is that they invite retaliation. Putin is free to freeze Europe this winter. He has slashed supply from major pipelines such as Nord Stream 1 by up to 80%. World oil prices have surged and eastern Europe’s flow of wheat and other foodstuffs to Africa and Asia has been all but suspended.
Britain’s domestic gas bills face tripling inside a year. The chief beneficiary is none other than Russia, whose energy exports to Asia have soared, driving its balance of payments into unprecedented surplus. The rouble is one of the world’s strongest currencies this year, having strengthened since January by nearly 50%. Moscow’s overseas assets have been frozen and its oligarchs have relocated their yachts, but there is no sign that Putin cares. He has no electorate to worry him.
The interdependence of the world’s economies, so long seen as an instrument of peace, has been made a weapon of war. Politicians around the Nato table have been wisely cautious about escalating military aid to Ukraine. They understand military deterrence. Yet they appear total ingenues on economics. Here they all parrot Dr Strangelove. They want to bomb Russia’s economy “back to the stone age”.
I would be intrigued to know if any paper was ever submitted to Boris Johnson’s cabinet forecasting the likely outcome for Britain of Russian sanctions. The assumption seems to be that if trade embargos hurt they are working. As they do not directly kill people, they are somehow an acceptable form of aggression. They are based on a neo-imperial assumption that western countries are entitled to order the world as they wish. They are enforced, if not through gunboats, then through capitalist muscle in a globalised economy. Since they are mostly imposed on small, weak states soon out of the headlines, their purpose has largely been of “feelgood” symbolism.
- A rare student of this subject is the American economic historian Nicholas Mulder, who points out that more than 30 sanctions “wars” in the past 50 years have had minimal if not counterproductive impact. They are meant to “intimidate peoples into restraining their princes”. If anything they have had the opposite effect. From Cuba to Korea, Myanmar to Iran, Venezuela to Russia, autocratic regimes have been entrenched, elites strengthened and freedoms crushed. Sanctions seem to instil stability and self-reliance on even their weakest victim. Almost all the world’s oldest dictatorships have benefited from western sanctions.
Putin’s attack on the grain deal was despicable. It also shows he’s desperate
- Moscow is neither small nor weak. Another observer, the Royal United Services Institute’s Russia expert Richard Connolly, has charted Putin’s response to the sanctions imposed on him since his 2014 seizure of Crimea and Donbas. Their objective was to change Russia’s course in those regions and deter further aggression. Their failure could hardly be more glaring. Apologists excuse this as due to the embargos being too weak. The present ones, perhaps the toughest ever imposed on a major world power, may not be working yet, but will apparently work in time. They are said to be starving Russia of microchips and drone spares. They will soon have Putin begging for peace.
If Putin begs, it will be on the battlefield. At home, Connolly illustrates how Russia is “slowly adjusting to its new circumstances”. Sanctions have promoted trade with China, Iran and India. They have benefited “insiders connected to Putin and the ruling entourage, making huge profits from import substitution”. McDonald’s locations across the country have been replaced by a Russian-owned chain called Vkusno & tochka (“Tasty and that’s it”). Of course the economy is weaker, but Putin is, if anything, stronger while sanctions are cohering a new economic realm across Asia, embracing an ever enhanced role for China. Was this forecast?
- Meanwhile, the west and its peoples have been plunged into recession. Leadership has been shaken and insecurity spread in Britain, France, Italy and the US. Gas-starved Germany and Hungary are close to dancing to Putin’s tune. Living costs are escalating everywhere. Yet still no one dares question sanctions. It is sacrilege to admit their failure or conceive retreat. The west has been enticed into the timeless irony of aggression. Eventually its most conspicuous victim is the aggressor. Perhaps, after all, we should stick to war.
- Simon Jenkins is a Guardian columnist