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Sanctions, what sanctions? This appears to be the question Russia is asking

Russian President Vladimir Putin has been upbeat about economic recovery in Russia. Picture: Dmitry Lovetsky AP

Russian President Vladimir Putin has been upbeat about economic recovery in Russia. Picture: Dmitry Lovetsky AP

Published Jun 19, 2022

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Johannesburg - Western sanctions against Russia were supposed to have brought the Vladimir Putin regime to its knees by now, yet by all accounts, the question in the uppermost mind of the Russian leadership is: What sanctions?

State-owned entity Gazprom, Russia’s global gas supplier – has baulked the bleak market outlook as they marked the month of June by announcing record high dividends on its stock for 2021. This amounted to 1.24 trillion rubles, or USD $20.7 billion US dollars.

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Also this month, Gazprom announced that it has immediately halted gas supplies to two more customers in Europe after both had declined to pay for gas in Russian rubles instead of their preferred Euros or US dollars.

In a short statement, Gazprom identified the two customers as Denmark’s Orsted Salg & Service and UK-based Shell Energy Europe.

In recent weeks Gazprom – controlled through the majority Russian government ownership – halted gas supplies to hostile neighbours Finland, Poland and Bulgaria.

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Germany, Europe’s biggest Russian gas customer, appears next in line of Moscow’s ire.

Gazprom has last week implemented a reduction of gas supply to Germany, and Italy.

The gas behemoth announced a new 33% reduction in natural gas deliveries to Germany, with shipments via the Nord Stream pipeline down to 67 million cubic metres per day.

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Although in a statement Gazprom attributed the Nord Stream problem to an outage on yet another compression turbine since June 16, the EU’s fears of a Russian backlash to their sanctions is beginning to hit home. Italy’s imports of Russian gas were delivered via the conflict-laden Ukraine. Italian authorities have confirmed that their imports “via Ukraine are diminishing”. Bloomberg news agency quoted Italy’s Eni saying gas supplies to the country from Russia had declined by 15% recently “without any explanation from Gazprom”.

Geopolitical critics of the Kremlin accuse Russia of “weaponising gas”, a charge Moscow dismisses outright, blaming glitches in its supply of goods and services on the protagonists of the so-called “rules-based world order” behind the unprecedented sanctions.

A series of punitive packages of Western sanctions against Moscow – released in strategic batches – were unleashed following the outbreak of the Ukraine conflict on February 24. In addition to the sanctions, the US, EU and Nato continue to arm the Ukrainian army to the teeth in what has become the West’s proxy war against Russia.

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Fears of the outbreak of direct conflict between Nato and Russia abound, fuelled by growing hostilities of Nato-aligned anti-Russian regimes of neighbouring Poland and Bulgaria, among others. The only reason Nato is yet to confront Russia directly in the Ukraine conflict is as a result that Kyiv is not a Nato member yet.

To invoke Nato’s Article 5, which refers to “an attack on one is an attack on all”, is therefore not on the cards, at least for the moment. The dynamics are susceptible to rapid and constant changes that create an atmosphere of frightening military uncertainty.

President Putin's administration seems to be ready for a long haul in the conflict.

This weekend, Putin has been hosting in Moscow the Saint Pietersburg International Economic Forum (Spief).

Due to international travel hiccups caused by the sanctions, most participants are online – thanks to technology – engaging directly with the Russian leadership on economic recovery plans and programmes.

In his main address to the conference an upbeat Putin outlined several areas of positive economic performance amid a challenging period. He said: “I would like to start with the dynamics in the production sector. Russia’s industrial output increased by 3.9% in the first four months of 2022.”

According to Putin, in April this year the unemployment rate across the entire Russia stood at a mere 4%. “This is the lowest rate on record,” Putin said, before adding: “In the current conditions, this is a very serious achievement.”

He also said there is the need to remain alert, saying that the challenges Russians face would not go away any time soon.

There can be no doubt that Russia’s economy is under an external threat never seen before. The fact that the US-led Nato and the EU are disinterested in joining the UN initiatives aimed at bringing about a truce in the conflict indicate that the situation could become worse before it gets any better.

Russia’s allies in India and China have steadfastly refused to join the regime of Western sanctions and have continued to do business with Moscow in spite of US threats.

The EU and the Global North itself is not as united in the anti-Russian sentiment as has been made to look. Surreptitiously, several Western businesses are doing business with Russia. In fact, the EU itself has conceded that some of its member-states may pay in rubles while purchasing Russian oil as per the demand of Moscow.

The truth about sanctions in the 21st century is that they have become trickier. The world has become one massive global village. The social sciences describe modern international world order as “inter-connected and inter-dependent”.

No country or a bloc of like-minded countries can prosper as an island. The example of Turkey blocking the membership application to Nato of Finland and Sweden shows the complex nature of international politics and the extent to which they are influenced by regional and national interests of individual states.

Sanctions against Russia may sound like music across the Western capitals that have grown accustomed to Russophobia. However, the truth is that Europe, in particular, requires Russian oil and gas to survive in similar ways that Russia itself cannot survive without the import of critical goods and services.

War-mongering leaders who place their personal interests ahead of humanity and the global human race do a huge disservice to the planet. In any case, there can be no winners. Europeans caused the First World War from 1914-1918. Two decades later, from 1939-1945, the Europeans caused World War 2.

It is therefore not unreasonable to describe the Europeans as boasting a propensity for war. Only this time, how we pray that they do not drag Africa, Latin America, the Caribbean, Asia and the rest of the peace-loving world in their silly old nostalgic ways.

* Mkoe is a Freelance Diplomatic Writer

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