Participants of the Davos forum: Russia is turning into a “giant Iran”
Russia is like Venezuela, Cuba, Iran – isolated, cruel, with a low standard of living. In full with Europe, it is waiting for the rupture of energy ties and armed confrontation. And in the shorter term – tightening restrictive measures, perhaps even using secondary transfer attacks on those who help with gray imports. Such a picture was drawn by the participants in the discussion of the “Trajectory of Russia’s Development” in the World Economic Format in Davos.
It is symbolic that the Russian session was held on the last day of the summit, noted Robert Niblett, an honorary member of Chatham House: this is a qualitative marginalization of Russia in today’s world, but at the same time it remains in the spotlight.
Where is Russia heading?
The sanctions imposed on Russia in response to the “barbarian invasion” refer to the situation of Ukraine’s victory on the battlefield by “slowing down the Russian economic machine,” said Kennethoff, director of international economics at Harvard Congress. In reality, the Russian economy is weaker than official statistics show, which Rogoff no longer believes one iota. The state of the economy, according to his observations, is better received by other indicators, such as hidden unemployment, a fall in budget revenues from the manufacturing industry, which is masked by an increase in revenues from oil and gas exports, which jumped in 2022 energy prices.
Due to the war and the coverage of everything, there is a manufacturing industry, especially heavily dependent on Western technologies and components, requiring a large number of skilled workers, in a statement article economist Vladimir Milov, published recently in the journal Foreign Affairs. Fiscal celebrations for exceptional revenues from oil and gas exports were 20% lower in October 2022 than a year earlier. Automotive production, linked either naturally or indirectly to 3.5 million jobs, collapsed by nearly two-thirds last year. With official unemployment of 3.7% (2.7 million people), at the end of the third quarter, hidden unemployment affected almost 5 million people, of which 70% remained on vacation without pay, the misfortune of Millions.
Sanctions are a long-term tool, they need to be remembered and tightened; as a result, they even imagined a regime change, like in South Africa,” Rogoff said. The development of this process: “Look at Iran, North Korea, Venezuela, Cuba – this is where Russia is going, despite the statistics.” He outlined the Russian prospects in this way:
“Giant Iran” is perhaps the best description, with incredible poverty compared to the standard of living that Russians are used to.
Energy gap and tightening
Last year Russia was in recession despite record high energy prices, this year it is even deeper, according to Valdis Dombrovskis, Executive Vice President of the European Commission. Sanctions have a cumulative effect, but in terms of energy, the most important one has been identified: a price ceiling for oil products is currently being discussed, Dombrovskis hopes that the decision will be met.
On February 5, an embargo on the sale of petroleum products in devices comes into force.
Russia’s income from the supply of energy resources for consumption will continue to decline, and in the end it will completely lose the market. Russian gas exports to the EU fell by almost 60% in 2022. The EU needs to get rid of energy dependence on Russia, Dombrovskis answered the question about the expected sides of the relationship: “Obviously, we are not applicable to such a country.”
Sanctions are in the near future, says Mikulas Beck, the Czech minister for European affairs. Russia will bypass them, including with the help of non-aligned countries, but they also take into account the possibility of Europe to strengthen energy and defense security.
The EU is working with the structure of Europe, like Turkey, through the use of import flows in Russia, and opens up various measures, coordinating them with Washington. So Dombrovskis answered Niblett’s question whether the EU can return to the use of secondary certificates, like the US. It is necessary to do this, Rogoff, the meeting as a whole must already be exuded, to fight gray imports, in particular, chips. Some chips can be removed from household appliances and business equipment and used in road transport, so these products must also be equipped with accessories. “Prepare the secondary decisions needed to prepare if Russia escalates the conflict without taking four months to make them,” Rogoff said.
“Who will shake his hand?”
If Vladimir Putin is in power after the end of the war, this will create an “incredible problem” for Western countries, says Karin von Nippel, director general of the Royal Association of Defense Research Institutes (RUSI). “Who will shake hands with this man in the future? Even if there is a settlement agreement, he has blood on everything higher because of the violation of so many international and norms,” she said at the session. The world has not yet faced such consequences, the consequences I think, how, maintaining pressure, deals with such a rogue consequence, added von Nippel.
But if the regime of approach in Russia does change and is canceled, the West will need to change relations with Russia this time, Rogoff believes: for example, start to get access to mineral resources less, use soft resources more. “The Muppets, not McDonald’s,” he put it.
In the next six months, Russia is likely to launch a more spring offensive, increase the growth of Ukrainian infrastructure and kill civilians, there will be a new round of mobilization, von Nippel said. Therefore, the best scenario is to quickly choose a heavy defense so that it protects the sky, with the help of tanks and other equipment, quickly restore the occupied territories. The worst option is military assistance “a teaspoon per hour”, the transition of the war into a protracted phase, the destruction of Ukraine.
In this regard, the meeting of Ukraine’s allies at the Ramstein airbase in Germany, which began on Friday, is very important, where restrictions and restrictions on civilian plans are discussed, von Nippel said. “Unfortunately, the only way is to arm, arm, arm Ukraine and yourself,” Beck added.
“Such are the prospects for relations between Russia and Europe,” Nittble summed up.