The West’s own goal

Although the sanctions severely harm countries such as Cuba and Venezuela, they are a great gift for Russia. The American economist Galbraith provides a well-founded explanation.

Felix Abt

“Ich glaube nicht, dass der das ernst nimmt.”

The people of smaller, more vulnerable nations suffer from sanctions.

America’s go-to hunger weapon of choice when it comes to nations that defy its will is sanctions. A former secretary of state of the US admitted that they had murdered 500,000 defenseless children in Iraq.

The ban on the importation of essential pharmaceuticals is causing a death toll in Iran.

Because fertilizers, farming equipment, and replacement components are prohibited from entering the country, North Korea is experiencing a food crisis. Food meant for North Korea’s citizens is also decaying in the fields since vehicles are unable to move because of the Western prohibition on the import of diesel.

Amnesty International states that the “sanctions that violate international law” have been causing decades of agony for the people of Cuba, while Venezuela is suffering a GDP loss of USD 700 billion as a result of the US sanctions.

The attempt to plunge the Russian people into misery

Western sanctions against Russia were meant to ruin Russia, as the German foreign minister made clear.

According to the American political scientist and international relations realist, Professor Mearsheimer, it was retaliation for the alleged “unprovoked war” against Russia, which Russia never wanted but felt compelled to wage in order to defend itself (against the otherwise unstoppable expansion of the offensive, anti-Russian military alliance NATO and the existential threat it poses to Russia).

Larger, more resource-rich nations like Russia and China can take advantage of the sanctions imposed by the West to strengthen their own economies and lessen their reliance on and vulnerabilities to the West.

Sanctions against Russia have, however, backfired. They didn’t bring Russia to its knees; instead, they bolstered the economy overall and gave local businesses a boost, making “Russia great again.”

James Galbraith, an economist and professor at the University of Texas in Austin, deftly analyzes the conventional wisdom regarding Western sanctions and their purported effects on Russia in a YouTube video. Galbraith reveals conclusions for the European and Russian economies that defy conventional wisdom. Here is a synopsis:

The economist explains that the penalties’ main goals were complicated. Initially, the West attempted to deprive Russia of its export earnings in order to deny the Russians the means to wage war. Attempts were also undertaken to prevent Russia from obtaining vital technologies. Lastly, the plan anticipated that pressure from the oligarchs and the general public would eventually be applied on the Russian government.

“The overarching goal was to weaken Russia’s military capabilities and the Russian government,” states Galbraith.

Their expectations were not fulfilled by the sanctions. The result refutes the proponents’ claims that Russia’s military and economy will be irreversibly weakened by the sanctions. Galbraith concludes that the misleading claims are due to inaccurate facts, misinterpretations or faulty analysis.

“One notable aspect of the sanctions policy was the reduction in Russian oil, gas and metal flows. Contrary to expectations, this did not have a significant impact on Russia’s international purchasing power. Even with a lower volume of oil and gas sold, Russia managed to sell at higher prices, so export revenues increased rather than decreased,” says Galbraith.

Additionally, the sanctions, which also prohibited imports from the West, caused Russia to spend less on consumer goods, which increased the country’s current account surplus.

The sanctions should also have prevented the Russians from gaining access to parts and equipment deemed necessary for warfare. “But prudent war planning by the Russians foresaw stockpiling of such components as semiconductors. So there is no evidence that the Russians lacked important components.”

In 2022, there was a significant decline in production indices, as the production of certain goods, including cars and household appliances, had to be discontinued due to the sanctions. Nevertheless, production capacities for these products remained intact:

“The capacity to manufacture these products has not simply disappeared — the factories, the workers, the engineers and the managers are still there. Some designs and equipment had to be replaced with the help of the Chinese so that the production lines could be put back into operation.” According to Galbraith, it will take some time for the Russians to bring their production volumes back up to the previous level. But the Russian economy will be completely independent of the West.

“Before the sanctions, the Russian economy was heavily dominated by Western companies, particularly in sectors such as the automotive, aircraft and fast food industries. The withdrawal of these companies, whether under pressure or voluntarily, led to a transfer of formerly Western assets into Russian ownership,” Galbraith continued.

Low raw material costs have, contrary to predictions, fueled the development of the Russian economy without the involvement of Western firms. Galbraith pointed out:

“The sanctions have inadvertently created market opportunities for capable Russian companies in an area that was previously dominated by Western companies.”

Being a large producer of raw materials, Russia has an advantage over Europe in that its economy can advance with very low raw material costs. The Europeans themselves now pay about twice as much for their energy as they did prior to disengaging from the cheap Russian energy, thus hurting their ability to compete with Russia (as well as with the US and China).

Galbraith emphasizes that the sanctions were necessary for this economic change to take place. Before the sanctions in 2022, the Russian government would not have wanted to and could not have ousted Western companies and oligarchs.

“The opportunities offered by the sanctions favored the long-term independent development of the Russian economy,” Galbraith concluded.

He argues that the goal of a relatively self-sufficient economy would not have been achievable without Western sanctions. “Unlike island states like Cuba or resource-oriented countries like Venezuela, Russia, with its vast land mass, abundant resources, impressive expertise in science and technology, and global trading partners like China, Brazil, Mexico, the Brics and African countries, was well positioned to adapt to and overcome the challenges of Western sanctions.”

Unexpectedly, the Western sanctions — meant to weaken and isolate Russia — had inadvertently made it possible for the Russian economy to grow on its own.

Galbraith’s conclusion: “The sanctions have become an unintended gift to Russia. The sanctions imposed by the West are cutting Europe off from resources it needs — while cutting Russia off from goods it doesn’t need and can do without.”

China, another “beneficiary” of Western sanctions

Western sanctions have been imposed on a wide range of products, from cotton and tomatoes to services such as TikTok, chips and other products necessary for the high-tech industry to halt or reverse China’s development. What their opponents don’t understand is that this gave the Chinese a massive motivational boost to make China great again by investing in world-class infrastructure and the world’s leading railroad industry, among other things.

The same applies to China, which is using the economic war waged by the US and its Western vassals to fully exploit its own potential with the best engineers and scientists in the world and a middle class of 500 million people with growing purchasing power. The West, especially Europe, will live to regret its illiberal, coercive imperialist policies: it is once again cutting itself off from a lucrative procurement and sales market, which will lead to a loss of jobs and prosperity in Europe (not in China). At the same time, China is increasing trade with the rest of the world, where, to make matters worse, the West is losing its competitiveness.

This article was written for the Asian internet magazine Eastern Angle.

The West’s own goal

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