Sanctions Process Highlights US Manipulation of EU

Foreign policy is based not only on principles of economic benefit

Among liberal economists and political scientists there is a widely held belief that strengthening economic ties and large-scale trade and investment is the best foundation for harmonious international relations, including bilateral relations. According to this theory, the more countries trade with each other, the less important their political differences.

Unfortunately, historical experience and the international situation in recent years suggest otherwise. No matter how successful the mutual trade between nations, there are times when politics, ideological attitudes, historical prejudices and civilizational differences prevail over the interests of economic order. A similar situation arose, for example, in 1914, when, despite strong trading ties between them, Russia and Germany went to war.

The last US and EU sanctions against our country once more confirm the fact ignored by economic determinists: foreign policy is based not only on principles of economic benefit, but also on an extremely complex set of intangible factors - ideology, morality, historical myths, stereotypical thinking.

The New Cold War, which pits the West against Russia, cannot but cause concern. Festering anti-Russian sentiment in the West will, of course, to some extent affect our country’s economy, which in the past year or so was already manifesting some negative trends - accelerated capital flight, falling share values, reduced credit ratings and less attractive investment prospects.

However, the situation has its advantages.

First of all, external pressure consolidates the various hitherto fragmented segments of Russia’s population, as demonstrated by opinion polls. Russian society can now cast off that idealistic, blissful, conflict-free picture of the external world, which the Russian liberal intelligentsia and American consultants so successfully inculcated into our consciousness during the 1990s. The unbridled baiting of Russian by the western media and the anti-Russian actions of the US and EU will continue to promote the unification of the Russian society, helping to form what is known as social capital. [1]

A positive effect will also be observed in the economic sphere. The US and EU sanctions will force entrepreneurs and unscrupulous functionaries who withdraw funds from Russia, to think about the safety of their capital abroad. Western banks are no longer a safe haven, and many Russian business people and other lovers of Western life have to think about whether the capital they hid in the West should be returned to Russia.

The main problem of the past twenty years is that the growth of the Russian economy was largely due to an expansion in the export of raw materials. Meanwhile, the domestic market of the Russian Federation with its population of 140 million people has enough capacity for the economic development of the country by means of stimulating domestic demand.

The development of domestic demand is a complicated and time-consuming process, but one that yields good results with proper planning and goal-setting. This includes  tourism services. It is worthy of note that this year Russian tour operators report a decline in the demand for tours to Europe, which decline is estimated at 30-50%. That decline was partially affected by fluctuations in the rouble to euro rate of exchange as well as negative trends in the Russian economy, and yet political factors have also played a role.  Russians are hesitant about travelling to countries with a known anti-Russian policy, especially against the backdrop of Crimea joining Russia and the creation of a modern tourist infrastructure in Sochi.

It's time to rethink the economic strategy of Russian business from the standpoint of patriotism and national dignity. There is already some movement in this direction. Anti-Russian sentiment in Latvia moved arts figures to consider closing the "New Wave" contest (entry to which was barred for those representatives of Russian culture who, in the opinion of the Latvian government, take an active patriotic position).  And really, why not move "New Wave", KVN, Comedy Club and "Jurmalina" to some Russian resort, in the Crimea, for example?

In the context of large-scale pressure on our country all Russians should think about how and on what they spend their hard-earned rouble: whether to support domestic producers and the manufacturers of friendly and neutral countries, or the anti-Russian West. It is unacceptable that countries economically dependent on the Russian Federation can pursue an anti-Russian foreign policy at the same time as increasing their exports to our country. Obviously, it's time for public organisations  to think about picketing chain stores and other forms of protest to boycott goods from certain countries and certain companies.

The process of issuing anti-Russian sanctions once again demonstrates how Washington manipulates the European Union. And who knows, perhaps US pressure on Europe will mark the beginning of a political awakening of national consciousness in the EU, where right wing parties are slowly but surely gaining weight, and whose electorates don't want to see their governments as "American shills." The anti-Russian coalition cobbled together by the US may yet backfire. However, the process will not be quick - first ordinary Europeans will have to feel the effects of these sanctions, and only after that can a dissatisfied European electorate affect policy changes in European governments and their relations with the United States.

Events in Ukraine and anti-Russian sanctions are a manifestation of a systemic crisis in the global influence of the United States and the West in general. In an emerging polycentric world their attempts to weaken Russia as an autonomous player in the global political scene and an independent centre of power is ultimately doomed to failure.

economics USA EU sanctions