The Impact of Sanctions

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Juan Abbas

Unlike Pakistan, where price indices don’t seem to matter, nations around the world are seeing price hikes for most commodities in the supply chain series

Since the so-called third world war began over a week ago, attempts to defuse and rebuttals are afoot. So far, images of a full-scale invasion circulate on social media, as many try to make out the mere outreach and scope of this “incursion.”
As per Ukrainian Media, over 350 civilians have lost their lives as a result of rocket attacks and other such events, including 14 children. Protests against the war are escalating. From Paris to New York City, to London, around the world, people are coming together to dissent the commencement of this invasion.
And as Russia continues to send more signals for its intention to capture Kyiv, and major metropolitans in Ukraine, they’ve seemed to have joined forces with Belarus. Foreign media reports that the state of Belarus is plotting to send in troops from its side of the Ukrainian border. As some may recall, Belarus is a major ally of Russia, especially after President Alexander Lukashenko, won the 2020 election, by a “landslide.” This all, after many ballots were seen being dumped from windows, and his rival, Sviatlana Tsikhanouskaya, had to flee to Germany, after “threats to her life.”
New developments in the region suggest Russian Nuclear forces have been placed on alert. Such chilling news for the region would surely be consequential for the potential of a major war in Europe. To avoid further escalations, and damages spilling over to other sides of the world, many nations have turned to sanctions and indirect aid to Ukraine.
The United States has pledged support to Ukraine and has already sanctioned multiple companies with ties to the Kremlin. Energy giant Gazprom and Sberbank, Russia’s largest financial institution, has been banned from functioning economically in the United States. Other sanctions, including long-term, and immediate, would follow in Congress.
A ban on technology trade, including those of semiconductors, chips, and other such electrical advancements will further deteriorate the country’s position to develop its economy, with its only apparent ally at its southern border.
“We will continue on a remorseless mission to squeeze Russia, from the global economy, piece by piece. Day by day, and week by week,” Johnson announced in Parliament on Monday, to chart out the UK’s individual plan for sanctions. This includes the sanctioning of dozens of individuals and the Russian banking sector.
The European Union also vowed to sanction the Russian President’s assets in Europe. They followed in a statement to navigate, and activate their Response Force, which is a number up to 40000 troops that can be deployed in areas around Ukraine.
Areas in Europe, including Ramstein Air Base, one of the United States’ largest overseas bases, which serves as the HQ for US Air Force in Europe, is prepared to deal with any Russian offensive that may come their way. Germany has also supplied Anti-tanks, with the help of NATO Members to the Ukrainian Forces. The EU has also added a 500 Million Dollar aid package to the aid deal, to support Ukraine in its endeavour, and help the purchase of lethal weapons, in the face of aggression.
Other nations such as Japan, South Korea, and Canada, have all announced their support for Ukraine, by sanctioning Russian assets globally, as well as banning Russian products. Taking a step further, Belarusian forces are also being called out for their potential involvement in the attempt to capture Kyiv.
The Ukrainian Government has also requested the general public, locally and internationally, to write to firms and companies near them, and demand that they stop functioning with the Russian market in what they call, “financing” a war.
Being removed from SWIFT, the world’s largest platform for sharing secure transaction information, regarding respective monetary sectors, Russia faces a threat of being economically suppressed. Sanctions such as these are disastrous for the Russian economy, and can truly hinder their ability to move further into Ukraine. The Russian Central Bank has already moved interest rates from 9.5 per cent to 20 per cent; creating unprecedented levels of fear, and adding to the 40 per cent loss of the Russian rubble in global exchange systems.
The ban on Russian products includes a ban on the consumption of Russian-made commodities, like Russian alcohol. Others include social media absence and the closing of respective airspaces for Russian interaction.
The only sanction Russia can use is its oil. Russia can sanction the whole world with its expansive supply of Oil, and Gas. While Germany may have announced an end to the Nord Stream 2 pipeline deal with Russia, oil prices are likely to be inflated to put further pressure on the world. The Blackmail will be the Black Gold.
After crossing 100 dollars on the price index, the WTI oil is expected to jump higher than 10 per cent for the next quarter, regardless of potential recessions, the Russian economy may be forced to face. Unlike Pakistan, where price indices don’t seem to matter, nations around the world are seeing price hikes for most commodities in the supply chain series.
The fact of the matter is: Nations, primarily democratic nations, see themselves siding with Ukraine. Against Russian oppression, they move much forth. But an inability to directly engage is useful to prevent an over-escalation and the needless loss of life. Sanctions must be the first step to de-escalation. Bullets don’t win wars.