Economic Statecraft
Fear or Fearless: On the Current Crisis in Ukraine and the Sanctions Against Russia

While the "special military operation" of Russia in Ukraine is still underway, the US and its Western allies have already announced several waves of sanctions against Russia over the last couple of days. Op-ed articles that have appeared in both Russian and Western media are feeding readers around the world with opinions of well-known scholars from Russia, Europe and the US on the background and root-cause of the on-going crisis in Ukraine, let us turn to look at those sanctions against Russia that have also taken the world by surprise.  

Some may say that Russia is now doomed and cannot survive the large-scale sanctions imposed by the West, I would argue that not only some of the announced actions are evidently irrational and unreasonable, such as cancelling the performing contracts of world famous Russian artists in Europe, but also for many of the declared sanctions, their enforceability might still be questionable simply because they seem to have been rushed out under political pressure without a careful reasoning on their practical implementation.

Admittedly, unlike most of the previous unilateral measures taken often by the US against Russia and other countries, this new wave of sanctions from the West against Russia is unprecedented in terms of their sheer scale and multi-front nature which may easily sound extremely daunting, including freezing Russian assets across many of the Western country banks and removing Russia from SWIFT. It is obvious that these measures have been developed with an objective to tear down and destroy the entire Russian economy which is so far heavily dependent on the export of the country's energy and mineral resources. 

It is obviously wrong for Russia to underestimate the serious consequences on the country's economy and political stability that can be caused by such a massive series of sanctions declared against it by the US and its allies. But equally wrong perhaps is for the West to underestimate the resolve of the Russian leadership to confront whatever difficulties it is facing and the nationwide morale and self respect that has been built up among the Russian people who have gathered closer to stand by their government in time of a "national crisis". 

Whatever the case, the following arguments are not to be neglected:

While the EU may hence speed up its process to turn to alternative and renewable energy sources such solar and wind power, its dependence on Russian oil and gas will not stop immediately and cannot disappear completely just like that. That Europe can also turn to the Middle East and North America for energy supply may also result in a massive disorder of the current energy distribution setup worldwide, and hence the global economy.

Economic recovery is a painful process for any country engaged in a military conflict with others. But Russia is a world power with a large landmass, rich in natural resources, is one of the very few countries that can be self sufficient in the traditional sense. The same holds true for Ukraine from an economic perspective.

History has proven that all unilateral economic sanctions are more often than not a double-edged sword and the destructive effect of economic sanctions is never a one-sided play. What is worse is that Europe will eventually suffer the drastic increase in its energy cost in that after all it is Europe that is seriously in need to import energy.

The recent voting on the proposed sanctions against Russia shows that countries including China, India and UAE have not joined the West in the almost reckless sanction initiatives against Russia are still likely to continue to trade with Russia that may take new forms such as barter trade and also find settlement solutions by using other means available. 

There are still quite a number of countries including Singapore, one of the leading countries from ASEAN, that have reluctantly said that they are considering to impose a certain degree of sanctions against Russia's military operation in Ukraine. This has clearly shown that not all countries are following blindly the US' directives. 

Normal conscience would expect that delegations from both Russia and Ukraine will meet again to hopefully discuss about a ceasefire and that perhaps a charismatic  statesman from a third  country might hopefully stand up as a trusted middleman to bring both sides to reason to finally reach a peace agreement.   
People in Russia might have been seriously bothered to experience the impending consequences of the sanctions imposed on their country across board and the negative impact these sanctions might have on their daily lives, but realities must be accepted as a matter of course including the steep devaluation of the ruble. However, hard as it may sound, this can perhaps serve as a wakeup call for Russia to realise the imperative need to truly re-examine the overall structure of its national economy to make it a more balanced one for sustainable growth in the long run. 

On this note, the rapid economic achievements of China over the past 40 years and its flexible and proactive policies might be of a reference to Russia in its subsequent phase of development. Although the difference between China and Russia is largely recognisable in the context of history, culture and their respective national characters, the declared  strategic partnership and synergy between the two countries as has been demonstrated over the years is believed to be solid and unshakable, which has provided the basis for further cooperation and mutual assistance as the world is now set to move into a new era of multi-polarity.   

Whatever the outcome or the cause of the unfortunate happenings, it is right to believe that this crisis in Ukraine has marked the beginning of an end of the US-dominating era with Russia having exhausted its patience and taking the lead to challenge the US-led West by force. However, whether this will lead to WWIII or rather the real beginning of a multi-polar world, as has been much talked about and anticipated by the many, still remains to be seen.
The undeniable fact is that, aside from those governments that have taken their stand and made their decisions, public opinions across the world do differ on the question of who is guilty of the current crisis in Ukraine. For the many that are still waiting to form their opinions on Russia's military intervention in Ukraine, we can at least share the same compassion for the innocent Ukrainians and Russians who have been trapped in unwanted battlefields and pray for those who have already lost their lives. 

No matter what, let us all hope that peace in Ukraine will be restored in a matter of days. 
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.