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71. Energy Markets and the Design of Sanctions on Russia

Author:
Christof Ruhl
Publication Date:
03-2022
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Sanctions against the citizens, institutions, and products of the Russian Federation are evolving rapidly. Energy sanctions started late, but the number of countries embargoing oil, gas, or coal imports from Russia is expanding. These sanctions are likely to increase global fuel prices while depressing the price of the sanctioned fuel. The experience to date suggests that the current, gradual approach of reducing oil and gas imports from Russia one country at a time may have room to go further. Before the invasion of Ukraine, the sweeping and unprecedented sanctions promised in the event of a Russian invasion were often conceived as a two-pronged pincer movement. The idea was to isolate Russia from the global financial system while limiting its commodity and energy exports. Both moves were aimed at the source of the financial strength of “fortress Russia,” namely, its persistent balance of payment surplus.
Topic:
Energy Policy, International Trade and Finance, Sanctions, Financial Markets, and Conflict
Political Geography:
Russia and Europe

72. International Practice of Sanction Evasion and Circumvention Possibilities for Russia

Author:
Davit Shatakishvili
Publication Date:
04-2022
Content Type:
Special Report
Institution:
Georgian Foundation for Strategic International Studies -GFSIS
Abstract:
Sanctions play a special role in the economic and political life of the world. Historically, despite their various forms of use, sanctions have acquired an essentially functional substance in the 20th century. The goal of the sanctions is primarily to ensure global peace. In case of violation of market principles, military aggression, or disregard for the rules established between nations, the violator is sanctioned by specific countries and/or groups of states, who, in doing so, aim to bring it back to the norms of international law. Sanctions increase political and economic pressure on the target country, which are reflected in various dimensions and quantitative figures. Consequently, the country loses some of its political leverage and experiences tangible economic regress. For the sake of universal peace and global security, the policy of sanctions has not lost its relevance in the 21st century. As a result of Russia’s aggressive military intervention in Ukraine, the world community has applied an unprecedented package of sanctions against the aggressor, which has spread to almost every industry of the country and is still being added to. In this regard, Russia broke the anti-record and surpassed countries such as North Korea, Iran, Syria, and Venezuela. Over the decades, sanctioned countries have accumulated extensive experience on how to circumvent the imposed sanctions, so as to at least partially help the country overcome the economic difficulties. It is interesting which ways and schemes such countries use to circumvent the restrictions, and based on that experience, what opportunities there are for the Russian Federation to do the same and evade the sanctions imposed on it, a move which will not only limit but also further pave the way for its aggressive foreign policy and threaten world peace.
Topic:
Security, Foreign Policy, International Trade and Finance, Oil, Sanctions, Global Markets, Cryptocurrencies, and Russia-Ukraine War
Political Geography:
Russia and Eurasia

73. China - A Non-neutral Party in the Russo-Ukrainian War

Author:
Medea Ivaniadze
Publication Date:
01-2022
Content Type:
Commentary and Analysis
Institution:
Georgian Foundation for Strategic International Studies -GFSIS
Abstract:
In the Russo-Ukrainian war, we cannot call the position of one of the main challenges of the 21st century, communist China, “neutral”. Beijing’s position was obvious even before the war: it is pro-Russian, clearly antiWestern, and especially anti-American. China does not condemn Russia’s actions in Ukraine, nor does it call it an invasion. At the same time, reports have emerged of the prospect of Beijing providing military assistance to Moscow, and it is not beyond imagination that China will also help Moscow avoid the sanctions. The course of the war, and time, will show China’s level of support for its strategic partner, Russia. However, despite Moscow’s support and negative attitude towards the West, Beijing will still act according to its long-term strategic goals, and if China distances itself from Russia on specific issues, it will not be because of solidarity with Ukraine, but for its own strategic interests.
Topic:
Security, Sanctions, Military Affairs, Partnerships, and Russia-Ukraine War
Political Geography:
Russia, China, Ukraine, and Eastern Europe

74. Economic Consequences of Sanctions on Russia

Author:
Davit Shatakishvili
Publication Date:
01-2022
Content Type:
Commentary and Analysis
Institution:
Georgian Foundation for Strategic International Studies -GFSIS
Abstract:
Russia’s military intervention in Ukraine, coupled with Western political support for Ukraine, was followed by a tough economic response through an unprecedented package of sanctions against Russia set forth by the West. Their decision to do so seeks to make Russia pay an economic price for its military aggression, aiming to reduce its economic and martial capabilities, which are currently costing the lives of thousands of innocent people. The sanctions have already had quite severe economic consequences for Russia, but it is interesting to see whether they will achieve the West’s political goals and push President Putin to suspend the military aggression. Generally, a medium- to long-term period is required to see the effects of sanctions, and, currently, despite heavy economic losses, Russia is managing to coexist with the restrictions. Today, Russia is experiencing its biggest economic downturn since the end of the Cold War. The World Bank estimates that gross domestic product in Russia will reduce by 11% in 2022 (World Bank, 2022), while the International Monetary Fund forecasts this figure to be 8.5% (IMF, 2022). According to some estimates, the economic scale of the reduction may even reach 15% (IIF, 2022). Clearly, this largely depends on the potential consequences of the sanctions already imposed and the possibility of enacting new sanctions, including in terms of energy embargoes. As a result of the global economic crisis of 2008, the Russian economy shrank by about 8%, and now this figure is almost twice as high. Consequently, we can get some idea of its scale. The losses caused by sanctions will become more visible and tangible over time, resulting in much more severe social and economic effects in the coming years. According to the International Finance Institute, Russia will have lost the wealth it generated over the last 15 years by the end of 2023 (IIF, 2022). One of the main reasons for this will be reduced domestic demand, and if the trade-related sanction package is expanded, exports will fall further than expected, which in turn will lead to a sharp decline in budget revenues. Clearly, the Russian military aggression has also caused global economic consequences, such as rising prices for basic consumer goods, disruption of supply chains, and delays in international trade. However, since invading Ukraine, Russia’s financial losses have been high. It is interesting to take a look at what actual consequences the Russian Federation has faced in terms of sanctions, and how the country will be able to continue coexistence with the restrictions and expand its own aggressive foreign policy.
Topic:
Economics, Sanctions, and Russia-Ukraine War
Political Geography:
Russia, Ukraine, and Eastern Europe

75. Military Effects Of Economic Sanctions On Russia

Author:
Davit Shatakishvili
Publication Date:
01-2022
Content Type:
Commentary and Analysis
Institution:
Georgian Foundation for Strategic International Studies -GFSIS
Abstract:
Russia’s military industry is a fundamental factor of its national power. The enterprises operating in its defense sector are largely state-owned. Consequently, Russia’s sizeable military corporations and their subsidiary organizations operate not on the principles of a competitive domestic market, which is one of the key foundations of technological progress, but their main goal is to pursue Moscow’s political interests and ensure the stability of the regime. Accordingly, along with military capabilities, having a powerful economic leverage in the form of energy resources, encourages Russia not only to pursue its own economic interests but also intimidate neighboring countries and extort their territories to satisfy its imperialist intentions. The responsibility of the defense industry in Moscow’s current governing model is exactly on what the Russian government itself has based its legitimacy - military modernization, restoring Russia’s strength and greatness. One of its ill-favored manifestations is the military aggression in Ukraine which is claiming the lives of thousands of innocent people. The unprecedented scale of sanctions imposed by the West will clearly affect Moscow’s defense capabilities but the only questions are - when and to what extent? Russian military production, on the one hand, helps the country to pursue an aggressive foreign policy and, on the other hand, arms exports are an important source of country’s budgetary revenues. At the same time, this allows it to exert political influence over the purchasing states. The collapse of the Russian attack on Ukraine may not only sacrifice the hegemonic goals of the latter but also lead to the loss of existing and potential customers of its military weapons. There is no doubt that Russia is experiencing colossal military losses as a result of the war and, at the same time, questions are being raised about the quality of its arms and heavy equipment. Until now, there has been a consensus that Russian armaments were a viable and affordable alternative to Western weapons, although this statement could also be another victim of the war. As a result of the sanctions, Russia faced not only financial but also technical problems. In addition to Western countries, Asia’s leading technology powers have restricted Russia’s access to critical components needed for military production. Existing restrictions apply to advanced technologies such as semiconductors, telecommunications equipment, software and encryption, microelectronics, aviation systems, oil extraction equipment and other manufacturing components. In this context, it is important to discuss the impact that economic sanctions may have on Russia’s military capabilities, its recovery prospects and its aggressive foreign policy in the future.
Topic:
Sanctions, Military Affairs, Economy, and Russia-Ukraine War
Political Geography:
Russia, Ukraine, and Eastern Europe

76. Designing a Geo-Economic Policy for Europe

Author:
Markus Jaeger
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
Geo-economic policies have become an increasingly important feature of international politics – and not just since the war in Ukraine. The EU has proposed an economic anti-coercion tool to deter third-party coercion. This policy brief analyses the risks and benefits as well as the challenges related to the EU’s proposed deterrence policy based on a review of the academic literature on coercion and the effectiveness of economic sanctions.
Topic:
Sanctions, Coercion, Geoeconomics, and Russia-Ukraine War
Political Geography:
Russia, Europe, Ukraine, and Germany

77. Sanctions Against Russia: Five Lessons from the Case of Iran

Author:
Stefan Meister and David Ramin Jalilvand
Publication Date:
06-2022
Content Type:
Policy Brief
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
Russia’s war of aggression against Ukraine has led to the most comprehensive economic sanctions imposed on a country of this size since the end of the Second World War. Yet sanctions are only an effective tool of foreign and security policy if they are embedded in a sustainable political strategy that considers the cost-benefit analysis for both sides. Looking at the sanctions against Iran can be helpful when it comes to learning lessons about how to deal with Russia.
Topic:
Security, Foreign Policy, Sanctions, and Russia-Ukraine War
Political Geography:
Russia, Iran, Eurasia, and Ukraine

78. Underreporting of Russian Investments Abroad: Are the Sanctions Undermined?

Author:
Haggy Etkes
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
Institute for National Security Studies (INSS)
Abstract:
There are indications of underreporting to Western authorities of Russian investments worth about 90 billion dollars, when Russian reports of investments abroad are compared with Western data. If correct, this undermines the effectiveness of the asset freezing that is part of the sanctions imposed by the West following Russia’s invasion of Ukraine
Topic:
Foreign Policy, International Cooperation, Sanctions, and Conflict
Political Geography:
Russia and Europe

79. Eighth sanctions package: Which side will be the economic loser?

Author:
Nigar Islamli
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
Center for Economic and Social Development (CESD)
Abstract:
Since February 24, 2022, Russia's invasion policy towards Ukraine has been tried to be prevented by several series of sanctions by the European Union. These sanctions include trade, travel, asset freezes, oil, transport, and SWIFT bans. Since the start of the war, 7 sanctions packages have been presented and many of them are being implemented. In response to Russia's invasion policy against Ukraine, the European Commission presented the eighth package of sanctions covering visa issues and asset freezes.
Topic:
Economics, Sanctions, European Union, and Russia-Ukraine War
Political Geography:
Russia, Europe, and Ukraine

80. Assessment of Initial Impacts of Western Sanctions against Russia: Effects for Azerbaijani Economy

Author:
Emin Mammadov
Publication Date:
08-2022
Content Type:
Working Paper
Institution:
Center for Economic and Social Development (CESD)
Abstract:
Repercussions of the western sanctions on the Russian economy increasingly arise that negatively affect the total economic structure. National GDP shrank by 4.3% in the first quarter of the current year. As forecasted by the Russian Central Bank following the exposure to sanctions, a 7 percent reduction in the GDP could be expected in the third quarter. Russian ruble lost its value by 7 percent against the dollar in less than a month which even resulted in an inevitable devaluation in the official exchange rate.
Topic:
Sanctions, Economy, and Russia-Ukraine War
Political Geography:
Russia and Azerbaijan