This piece does not attempt to be part of the current choose side debate that forces countries to choose one among the two belligerents, Russia or Ukraine. It does not admire any form of violence because in any form of violence there are always innocent people who pay the price. However, It simply wants to remind the global citizens that Russia is part of the globalized economy, it must not be neglected in this world that is interlinked. It, therefore, suggests that any attempts or efforts to persuade the global villagers that sanctions on Russia will not affect the global economy because Russia is a “Bankrupt Petro-gas station” at the corner of the village is more than economic suicide.
In a chapter titled “The Political Economy of Economic Sanctions,” William Kaempfer defines sanctions as penalties imposed by one or a group of countries on another country or countries, to stop its or their acting aggressively or breaking international law. The Post-Cold war era has allowed sanctions to become major tools that are designed to hurt a country’s economy or the finances of individual citizens such as leading politicians. They are among the toughest actions nations can take, short of going to war. This is exactly what western countries and some of their allies have decided to do on Russia, sanctions.
The United States (US), a major former Cold-War warrior and the de facto winner of the Cold War has banned all imports of Russian oil and gas. The US, the European Union (EU), and the United Kingdom (UK) have also banned people and businesses from dealings with the Russian central bank, its finance ministry, and its wealth fund. They have imposed sanctions on some individuals, including a “hit list” of powerful, wealthy businessmen and women close to the Kremlin known as oligarchs. The Sanctioned oligarchs are Roman Abramovich owner of Chelsea FC and have stakes in steel giant Evraz and Norilsk Nickel, Oleg Deripaska has stakes in En+ Group, Igor Sechin is the Chief Executive of Rosneft, Andrey Kostin is Chairman of VTB bank, Alexei Miller is CEO of energy company Gazprom, Nikolai Tokarev is president of the Russia state-owned pipeline company Transneft, and Dmitri Lebedev is Chairman of the Board of Directors of Bank Rossiya. Assets belonging to Russian President Vladimir Putin and his Foreign Minister Sergei Lavrov which are held in the US, EU, UK, and Canada will be frozen. The US has also imposed a travel ban on them.
While the above is aimed at persuading Russia to stop bombing Ukraine, there is a greater need for a very honest and objective conversation that analyses these sanctions and their effect. This suggestion is explained by a plethora of evidence that exposes the subjective broadcasting of mainstream media houses with a global footprint. Their coverage focuses more on the effects of sanctions on the Russian economy than how these very same sanctions would affect the global economy and countries that depend on Russian oil, gas, and food to mention a few.
Data from the European Union Agency for the Cooperation of Energy Regulators shows that the energy supply would be most at risk if Russian decide to freeze its gas or place an embargo. Major European economies that will be affected are Germany, France, and Italy. Germany imports around 50% of its gas from Russia, while France only obtains a quarter of its supply from same Russia. Italy would also be among the most impacted at a 46% reliance on Russian gas.
Wheat is the second most-produced grain in the world after corn, it is essential for making bread, pasta, and other food staples, Russia is its largest exporter worldwide. According to the Observatory of Economic Complexity In 2019, Russia and Ukraine together exported more than 25.4% of the world’s wheat. In 2019, Egypt, Turkey, and Bangladesh bought more than 50% of Russia’s wheat.
According to the U.S. Energy Information Administration, Russia is the world’s third-largest producer of liquid fuels. In 2019, the world’s top exporters of crude oil were Saudi Arabia ($145bn), Russia ($123bn), Iraq ($73.8bn), Canada ($67.8bn), and the US ($61.9bn). China exports almost 27% of Russia’s total oil exports worth $34bn. Germany and the Netherlands export more than 30% of Russian oil. At least 48 countries imported Russian crude oil in 2019. The countries that rely most on Russian oil include Belarus, Cuba, Curacao, Kazakhstan, Latvia – each importing more than 99 percent of their crude oil from Russia.
Taking into consideration the above statistics, it sounds more than myopic for the mainstream media of the global north to neglect the effect of these sanctions on the global economy and how they will affect individual countries that depend on Russia. This piece does not ignore the importance of media in any conflict and how they are used to drive the voice of the most powerful. It is worried by the media campaigns that portray Russia as a “Bankrupt Petro-gas station” that has nothing to offer to the global village. These media campaigns have been able to persuade blindly the global citizens to forget that the Post-Cold War world is a globalized world. Where the Homo economicus has successfully turned the global into a market system where consumers’ dream is to maximize utility and producers ‘aims are to maximize profits.
Russia is not a “Bankrupt Petro-gas station,” it is one of the major countries of this globalized world, an important player in the global economy. Muting the voice of those who want to remind the world citizens that Russia is also capable to sanction the oligarchs and kleptocrats of other countries, other countries do have assets in Russia too, and the Sanctions will not affect Russia only, is economic suicide.
Feruzi Ngwamba
