Russia sanctions: Putin’s war illuminates a new iron curtain | International

A closed H&M store in Moscow as a result of the Russian invasion of Ukraine.
A closed H&M store in Moscow as a result of the Russian invasion of Ukraine.MAXIM SHIPENKOV (EFE)

Vladimir Putin’s war has brought forth a new iron curtain. The invasion of Ukraine has provoked a reaction that, in a few days, has hibernated all the connections built between the West and Russia in the three decades that have passed since the fall of the Berlin Wall and the dissolution of the USSR. The de-westernization of Russia is advancing with impressive speed on multiple fronts, reversing a process that had profoundly marked the daily life of Russian society. As it does, that message is spreading globally, with many countries uncomfortable with dependence on Western financial markets and technologies reconsidering their strategic calculations about whether (and how) to pursue a decoupling.

The sanctions adopted against Russia for the aggression against Ukraine represent a brutal disengagement from the Russian financial system; restrict trade in a wide range of products; prevent direct flights. In parallel, we witnessed a stampede of Western companies operating in the Russian market. Russian citizens today cannot go to an Apple store to buy an iPhone, eat a McDonald’s hamburger or have a coffee at Starbucks. They also cannot watch Netflix, which has suspended its service, or access the global content of Tiktok, which has restricted it by allowing only native operation. Facebook and Instagram have been blocked by the Russian government, Twitter has seen its operational capacity limited.

The impact on Russian society is going to be transcendental, in economic, political and also socio-cultural terms. But, like so many other elements of the war in Ukraine, this one is also global in nature. Russia is no longer the epicenter of an empire as it was during the Cold War, but it does have allies and partners that will be affected, such as Belarus or Syria.

But, above all, many governments that are not allies of Russia and are also not part of the Western orbit, with China in the lead, are closely watching what is happening, and this is likely to trigger an intensification of efforts to increase their autonomy. , either by de-dollarizing economic activity or promoting national productive capacities. In addition, in a process in full evolution, it is possible that increasing secondary sanctions will take shape, for which public and private actors from all over the world will have to weigh their cooperation with Russia carefully. Here are some keys to interpret the future development of these dynamics.

Impact on Russia

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The economic consequences of the sanctions will undoubtedly be painful for Russian society, with a sharp contraction in GDP ―8% this year, according to 18 economists surveyed by the Central Bank of Russia―, runaway inflation ―20%―, product shortages , loss of purchasing power, unemployment or probable stampede of skilled labor. Although China supplies oxygen to a suffocated Russian economy and despite the fact that Moscow had worked to deal with a similar scenario – for example by setting up a parallel system to the SWIFT banking circuit – the blow will be very hard.

In political terms, there is convergence among experts in considering that reprisals will not alter the course of the military offensive launched by President Vladimir Putin in the short term. The great unknown is the medium-long term effect. Will a majority of the population end up holding Putin responsible for the difficulties to come? Or will the majority close ranks before the measures of foreign powers? History is full of societies where there is no freedom of the press or of demonstration in which the regimes in power manage, on the one hand, to convince a significant part of the population that the sanctions of foreign powers are an unjustified attack and, on the other, to silence the rest of the citizenry. Cuba, Iran or Venezuela are examples to take into account.

The authoritarian escalation to control Russian society at this dramatic moment is already very evident, with draconian measures for the media to limit themselves to propagating the official version of a war that is even prohibited from being defined as such and to prevent protests against it ― There are already 14,000 detainees, according to the count of the OVD-info organization. In this context, public opinion is shaped.

“The process of de-westernization in Russia it seems to be a development of historical magnitude”, comments Maxim Suchkov, director of the Institute of International Studies of the MGIMO University of Moscow. “The sanctions are seen by a large majority of the population as a US-led Western effort to ‘cancel’ Russia. No doubt many Russians regret this process. But there is another large part of the population that feels that there is an opportunity for Russia to move towards less dependence on the West, towards more genuine sovereignty. There is optimism and national pride even though those same people realize it will be a tough ride. History will tell who is right”, says Suchkov, from the Russian capital.

The sociocultural consequences, too, are important. In the last three decades, multiple elements of Western societies have penetrated into Russia, in things that mark everyday life such as Ikea furniture or the configuration of vital attitudes linked to the use of large social networks. All this has abruptly dried up, and there are disturbing signs that, aside from the action of Western governments and companies, the Kremlin is considering taking advantage of the circumstance to give a powerful unfavorable twist to freedom and global interconnection on the Internet.

The risk of an authoritarian and autarchic involution is evident.

overall impact

The scope, the speed, the surprising features – such as the blow to the reserves of the Central Bank of Russia – and the size of the affected country make the sanctions in retaliation for the invasion of Ukraine have global relevance. Many countries are carefully watching what happened and its consequences. China the first.

“Beijing is certainly learning lessons from the shockingly rapid way in which Russia has been isolated,” says Mikko Huotari, executive director of the Mercator Institute for China Studies. “With geopolitical tension between China on one side and the US and the West on the other, the Chinese leadership has long been concerned about its vulnerability in that regard, and is becoming more so. This episode reinforces those parts of the Chinese leadership that strongly advocate speeding up the path of autonomy, in sectors such as finance or technology. They won’t catch up right away but they will redouble their efforts.”

China has long thought deeply about its model of global integration. It is clear to him that it benefits his economy, but also that it is in his strategic interest to cultivate elements of autonomy. Huotari points to different crises that have reinforced this thinking, from the financial crisis in the countries of Southeast Asia in the 1990s, to the general collapse of 2008 and the offensive by the Trump Administration.

“The attack on Huawei and other players in the technology sector has accelerated the push in that area, especially with regard to microchips – of which China imports quantities worth more than its crude oil imports – but also in others,” says Huotari. .

How will he act from now on? “I think we will see a two-pronged strategy,” says Huotari. “They will comply as much as possible to avoid secondary sanctions. In the end, Russia is not that important to them. It is for security and strategic reasons, but the West is economically much more important to China. They can’t afford to fundamentally decouple, so they won’t fall into that Russian trap. But they will draw lessons from it, they will work to reduce vulnerabilities, they will build parallel systems ready to be activated, they will seek self-sufficiency. They will opt for an even more conditional integration with the rest of the world”.

All this does not concern only China. There are many countries that feel uncomfortable in the face of financial dependence due to the dominance of the dollar or the inescapable centrality of some Western technologies. Its economic weight continues to be a minority on a global scale compared to the power of the US alliance, the EU, and thriving eastern democracies such as Japan, South Korea or Australia. But it is reasonable to think that there will be those who increase efforts to create alternative circuits that could one day be very useful.

Suchkov underlines how there are many countries that have voted against Russia in the resolution on the invasion of Ukraine in the UN General Assembly, but have not adopted sanctions against Moscow. “The point of view in Moscow is that regardless of how it ends, this confrontation will facilitate the process of deamericanization of the international order, of de-dollarization of the global financial system and of loss of the hypocrisy of the global value system”, comments the expert.

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