While Russia remains unscathed by the Western sanctions, the world is reeling under global inflation worsening with every passing day
The world has been suffering consequences of the on-going Russo-Ukraine war since February 2022. Russia invaded Ukraine, angered by Kiev's increasing ties with Nato. The war has not only caused huge loss of life and property in Ukraine, but also triggered global crises in the form of rising oil prices, supply chain disruptions, food shortages, while consequently slowing down growth and giving legs to global inflation.
Punitive economic sanctions were imposed by the US and its European allies against Russia. The US believed that the Russian economy would collapse due to sanctions. But Moscow remains unscathed, while the impact of sanctions is definitely seen on the western countries. Russia is the largest exporter of petroleum products and the second largest exporter of crude oil. The US and Europe banned Russia from their payment system SWIFT, hoping to stop Moscow selling its oil to the rest of the world. They thought that this would break Russia's financial backbone. But Russia's strategy dashed their expectations and today the U.S. and more importantly its friendly European countries are going through a major economic crisis.
Realising that due to the rising oil prices, all countries, including Europe, will take refuge in Russia in search of cheap oil, Russia started supplying its crude oil to India at discounted prices and in rupee terms. India increased her oil imports from Russia by 50 times. Besides, Russia faced no obstacle in oil payments from European countries, as the countries from the continent have increasingly become dependent on cheaper oil from Russia. They continue to buy oil from Russia, bypassing their own sanctions. In such a situation, the impact of these sanctions on the Russian economy was minimal. After that, perturbed with the continuation of economic sanctions by European countries, Russian President Vladimir Putin decided to reduce the supply of oil to these countries.
Germany, which was still unaffected by the economic crises of the European countries for the last few decades, is now in the grip of oil shortage. This naturally had an impact on electricity generation in Germany. Not only has the cost of power generation increased there, the supply of electricity has also come under threat. Due to rising oil prices in Germany, it has now decided to restart its closed thermal power plants. Other countries in Europe are also in trouble today due to supply constraints of gas and crude oil. While winter is nearing, it is natural for the governments of European countries to be worried. The German government is saying that this is an economic attack by Russian President Putin on Europe and that Putin's strategy is to engineer inflation, create energy insecurity and create division amongst the countries of the European block.
Today, when the US and European countries are providing economic and security aid to Ukraine against Russia and jointly carrying out economic sanctions, Russia's action can be understood as a natural retaliation.
All projections of America and Europe have failed. It is true that the countries of the world, including India, believe that Russia should stop this war. No doubt the world's sympathies are with the people of Ukraine. When India carried out a nuclear explosion test in Pokhran in 1998, the US had imposed economic sanctions, while threatening punitive economic measures against New Delhi on one or the other pretext. America has also imposed economic sanctions on many countries, including Iran and Venezuela. For all these reasons, the rest of the world has no sympathy with the US and Europe.
While Russia is ridiculing the western economic sanctions, the demand for their withdrawal by other countries is also gaining momentum. Brazil's President JairBolsonaro has said that the economic sanctions against Russia are not working and his country has started buying fertilizers from Russia keeping in mind the interests of its country.
Bangladesh Prime Minister Sheikh Hasina has also urged the US to withdraw their economic sanctions. She says that due to these economic sanctions, the common man is suffering from inflation of oil and gas, food items, fertilizers and other commodities. Therefore, these economic sanctions are against human rights. While the economic sanctions are wreaking havoc all over the world, including the US, and European countries, the western block is pressurizing others to become a part of them too. But India, Brazil and other countries are not only continuing their relations with Russia, but also deepening the same, ignoring the US advice. What is needed today is that the US and European countries understand the reality and find a solution to this problem through diplomatic efforts other than economic sanctions. Deep understanding between India and Russia and their relations can also be used to end this war.
(The author teaches at PGDAV College, University of Delhi.)