Current Affairs Ukraine

[devogue]

Read an opinion piece by the Guardian's economics editor the other week where he argues sanctions aren't working and are only harming 'the West' whilst, perversely, pushing up oil and gas prices that in turn benefit Putin. He argues that Russia has found ready alternative markets so are coining it in.

Russia is winning the economic war - and Putin is no closer to withdrawing troops | Larry Elliott

The perverse effects of sanctions means rising fuel and food costs for the rest of the world – and fears are growing of a humanitarian catastrophe, says Larry Elliott, the Guardian’s economics editor

www.theguardian.com

Thoughts? Might already have been discussed in here, so apologies if already discussed. Im never entirely convinced by what a lot of Elliot says, so always take his editorial pieces with a pinch of salt.

I think he is being a bit too positive on Russia's economic future. For example, although China may be buying more oil from them this year, that still won't make up the loss from the West turning away from Russia. Also no mention of the impact sanctions are already having on Russia such as the mass exodus of skilled workers, plus he breezes over the fact that rouble is beyond artificially propped up. The official exchange rate is no longer a good way to look at the value of the rouble.

 

[Deleted member 48881]

Having mobilized substantial manpower, and with access to Western military support, Ukraine now appears positioned to sustain this fight. The Russian campaign floundered not just because it pursued unrealistic political goals, but also because the plan for the invasion did not account for the choices made on force structure, and the limitations they imposed. Russian force employment exacerbated the disadvantages inherent in the force they built. Currently, Russia lacks the manpower to rotate current forces on the battlefield or to conduct further offensives beyond the current campaign in the Donbas. However, Russian forces do appear to enjoy a local-force advantage in the Donbas, and overall long-term challenges raised here may not impede Russian progress in the short term. Much is contingent, and this assessment is not meant to be deterministic.



The arguments we make here are preliminary, and not meant to be predictive of the outcome of battles in the Donbas, or the course of this war. However, contemporary debates on force structure and military strategy would benefit greatly by looking at the choices the Russian military made and how they ended up in this position. There’s much to be said about the primacy of political assumptions, which is one of the most decisive factors in how the Russian armed forces were initially thrown into this war, but equally, it is structural choices that have limited its military’s ability to adjust and sustain combat operations.

from here https://warontherocks.com/2022/06/n...the-russian-militarys-ill-fated-force-design/

 

[Mutzo Nutzo]

Read an opinion piece by the Guardian's economics editor the other week where he argues sanctions aren't working and are only harming 'the West' whilst, perversely, pushing up oil and gas prices that in turn benefit Putin. He argues that Russia has found ready alternative markets so are coining it in.

Russia is winning the economic war - and Putin is no closer to withdrawing troops | Larry Elliott

The perverse effects of sanctions means rising fuel and food costs for the rest of the world – and fears are growing of a humanitarian catastrophe, says Larry Elliott, the Guardian’s economics editor

www.theguardian.com

Thoughts? Might already have been discussed in here, so apologies if already discussed. Im never entirely convinced by what a lot of Elliot says, so always take his editorial pieces with a pinch of salt.

The guardian have gone way down in my estimation lately.

Sanctions are hurting Russia for sure. The major Russian banks are predicting a major recession, one that is of a transformational nature.

Russian GDP is expected to shrink by 8.8% this year and inflation will top 24% by the end of this year.

Sanctions on high-tech imports such as microchips mean that they will be unable to manufacture new aircraft, ships or weapon systems - it’s hurting them and we saw this in Ukraine with the images of those scruffs looting washing machines, microwaves and telly’s. Not for themselves but for the microchips contained within.

Yes they’ve managed to stabilise their economy in the short term by still selling oil and gas to certain countries and also increasing interest rates to 20% but it’s not going to help them in the longer term. As the EU and other countries move away from Russian oil and gas things will get funky for Russia next year.

 

[Diogenes the Cynic]

The guardian have gone way down in my estimation lately.

Sanctions are hurting Russia for sure. The major Russian banks are predicting a major recession, one that is of a transformational nature.

Russian GDP is expected to shrink by 8.8% this year and inflation will top 24% by the end of this year.

Sanctions on high-tech imports such as microchips mean that they will be unable to manufacture new aircraft, ships or weapon systems - it’s hurting them and we saw this in Ukraine with the images of those scruffs looting washing machines, microwaves and telly’s. Not for themselves but for the microchips contained within.

Yes they’ve managed to stabilise their economy in the short term by still selling oil and gas to certain countries and also increasing interest rates to 20% but it’s not going to help them in the longer term. As the EU and other countries move away from Russian oil and gas things will get funky for Russia next year.

Now is not the time to quit or ease sanctions.

We need to turn the screw.

 

[wm02]

The guardian have gone way down in my estimation lately.

Sanctions are hurting Russia for sure. The major Russian banks are predicting a major recession, one that is of a transformational nature.

Russian GDP is expected to shrink by 8.8% this year and inflation will top 24% by the end of this year.

Sanctions on high-tech imports such as microchips mean that they will be unable to manufacture new aircraft, ships or weapon systems - it’s hurting them and we saw this in Ukraine with the images of those scruffs looting washing machines, microwaves and telly’s. Not for themselves but for the microchips contained within.

Yes they’ve managed to stabilise their economy in the short term by still selling oil and gas to certain countries and also increasing interest rates to 20% but it’s not going to help them in the longer term. As the EU and other countries move away from Russian oil and gas things will get funky for Russia next year.

I know a lot of Russia’s government and military has been shown to be lacking, but their central banker is top-notch. She is really one of the best in the world in her line of work which is why Putin was so insistent in not letting her resign after the invasion.

 

[Yarrgh]

The guardian have gone way down in my estimation lately.

Sanctions are hurting Russia for sure. The major Russian banks are predicting a major recession, one that is of a transformational nature.

Russian GDP is expected to shrink by 8.8% this year and inflation will top 24% by the end of this year.

Sanctions on high-tech imports such as microchips mean that they will be unable to manufacture new aircraft, ships or weapon systems - it’s hurting them and we saw this in Ukraine with the images of those scruffs looting washing machines, microwaves and telly’s. Not for themselves but for the microchips contained within.

Yes they’ve managed to stabilise their economy in the short term by still selling oil and gas to certain countries and also increasing interest rates to 20% but it’s not going to help them in the longer term. As the EU and other countries move away from Russian oil and gas things will get funky for Russia next year.

Interest rates are at 11% now. They were cut to 17 then 14 and now 11. That's still extremely high compared to here and a big red warning light.

Russia Central Bank key rates 2026

Russia has lowered its interest rates by 0.5 percentage points, from 15.5% to an annual rate of 15%.The key rates a tool used by Central Banks to implement monetary policy.

countryeconomy.com

I can only see the likes of China and India coming out financially ahead because of the Ukrainian invasion.

 

[Mutzo Nutzo]

Interest rates are at 11% now. They were cut to 17 then 14 and now 11. That's still extremely high compared to here and a big red warning light.

Russia Central Bank key rates 2026

Russia has lowered its interest rates by 0.5 percentage points, from 15.5% to an annual rate of 15%.The key rates a tool used by Central Banks to implement monetary policy.

countryeconomy.com

I can only see the likes of China and India coming out financially ahead because of the Ukrainian invasion.

Ah okay - the 20% figure must have been a very short term emergency measure at the start of sanctions.

 

[Mutzo Nutzo]

I know a lot of Russia’s government and military has been shown to be lacking, but their central banker is top-notch. She is really one of the best in the world in her line of work which is why Putin was so insistent in not letting her resign after the invasion.

Oh I agree - they’ve worked wonders so far to stabilise their economy but the measures aren’t sustainable long-term.

 

[wm02]

Ah okay - the 20% figure must have been a very short term emergency measure at the start of sanctions.

That’s right. It was implemented, along with the capital controls, to prevent bank failures

 

[Mutzo Nutzo]

Now is not the time to quit or ease sanctions.

We need to turn the screw.

Yes indeed I think the next round of sanctions will be secondary and aimed at international corporations who are still trading with Russia.

It would make Chinese and Indian companies think twice about business with Russia.

 

[Yarrgh]

Oh I agree - they’ve worked wonders so far to stabilise their economy but the measures aren’t sustainable long-term.

It's a bit like Wile E. Coyote chasing Roadrunner over a chasm. It's all great until they look down.

 

[Yarrgh]

Yes indeed I think the next round of sanctions will be secondary and aimed at international corporations who are still trading with Russia.

It would make Chinese and Indian companies think twice about business with Russia.

And take the gamble that 1/3 of the world's population calls our bluff? I don't think that we'll get that far and we'll try some compromise measure to get them onside.

China and India are no different from us in that they'll be keeping their own well being as their primary concern.

 

[Mutzo Nutzo]

And take the gamble that 1/3 of the world's population calls our bluff? I don't think that we'll get that far and we'll try some compromise measure to get them onside.

China and India are no different from us in that they'll be keeping their own well being as their primary concern.

I know that the US is considering this action. They have already imposed secondary sanctions successfully against Iran and N Korea. However in this case it could see the US imposing secondary sanctions against Germany for buying Russian oil and gas.

 

[Yarrgh]

I know that the US is considering this action. They have already imposed secondary sanctions successfully against Iran and N Korea. However in this case it could see the US imposing secondary sanctions against Germany for buying Russian oil and gas.

All is possible. We shall see. It may be that we'll be living in interesting times as the Chinese apparently say.

 

[tsubaki]

Yes indeed I think the next round of sanctions will be secondary and aimed at international corporations who are still trading with Russia.

It would make Chinese and Indian companies think twice about business with Russia.

They'll never do that - sanctions are already horrifically overused and the longer that goes on / the wider they are applied the less effective they become (as the more incentive there is to find work-arounds).

Countries are trading with Russia because they need what Russia provides, especially given the current state of the world economy. A much better economic weapon would be to provide those companies with energy or replacement technology (especially renewables) and provide agricultural help so that they no longer need to trade with Russia so much. Expanding renewables will trash the price of oil and gas permanently.