Millennial Speech & Debate
Russia Sanctions Release
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Millennial Speech & Debate
Russia Sanctions Release
Background
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Types of Sanctions
Three types of sanctions – (a) threats; (b) those targeted at individuals; (c) those targeted
at the socioeconomic system
Xinhua General News Service, December 18, 2014, Commentary: Double-edged sanctions against Russia
hurt both sides, http://news.xinhuanet.com/english/indepth/2014-12/19/c_133865924.htm DOA: 10-25-15
As U.S. President Barack Obama signed into law a bill aiming for tougher sanctions on Russia, the
seesaw battle stalemated between Western countries and Russia over the Ukraine crisis is expected to
continue.
While touching Russia on the raw, the boomerang is most likely to dart back to its throwers -- the United
States and its European allies.
Since the crisis broke out in Ukraine, the West has adopted a three-step sanction strategy against
Russia -- First, threatening with sanctions; second, imposing sanctions against individuals that
"endanger the sovereignty and territorial integrity of Ukraine"; and third, directing sanctions at
Russia's whole socioeconomic system and its energy,defense and finance sectors in particular.
Ukraine Freedom and Support Act of 2014
Leigh Anderson, Mondaq Business Briefing, January 5, 2015, https://www.highbeam.com/doc/1G1396197708.html DOA: 11-25-15
This alert follows our previous alerts on the Russia/Ukraine sanctions.
U.S. Passes New Sanctions Authorizing Statute - Sends Russia Frigid End of Year Message
President Obama: U.S. will "review and calibrate" sanctions in response to Russia's actions
On December 18, 2014, President Obama signed into law the Ukraine Freedom and Support Act of
2014 ("the Act"), the latest move in a series of sanctions imposed on Russia by the United States and the EU
over the past year (full coverage of the Russia sanctions can be found here). While the Act gives the
president authority to implement new sanctions against Russia, President Obama has declined to
enforce the new provisions at this time. The strategy behind this move is unclear, though it appears to
be a "wait and see" approach with the hope that even just the threat of new U.S. sanctions will curb
Russia's destabilizing efforts in Ukraine and the wider Eastern Europe and Central Asia regions. It is
also believed that the U.S. administration wants to continue to remain in lock-step with the EU and its
imposition of sanctions against Russia.
The provisions of the Act are wide-reaching, and if he chooses to enforce them, would authorize the
president to provide defense articles, services, and training to Ukraine; address humanitarian relief efforts for
displaced persons; and encourage increased investment in Ukraine's energy sector with decreased
Ukrainian dependence on Russian energy sources. The Act also puts forth several key export controls
and sanctions provisions that could be implemented against Russia.
Key Sanctions and Export Control Provisions
Mandated Sanctions. The Act requires the president to impose three or more enumerated sanctions against
Rosoboronexport, Russia's state-owned exporter of defense articles. The Act also requires the president to
impose three or more enumerated sanctions against any Russian entity that transfers or brokers the transfer
to, or knowingly manufactures or sells defense articles transferred to, Syria, or into the territory of a
"specified country" without its government's consent. Those that provide financial, material or technological
support to such entities are also subject to the sanctions. The Act defines "specified countries" as including
Ukraine, Georgia, Moldova, or any other country of significant concern under the Act, such as Poland,
Lithuania, Latvia, Estonia, and the Central Asia republics. Lastly, the Act directs the president to impose
specified sanctions on Gazprom (Russian-controlled natural gas extractor) if the president finds that it is
withholding significant natural gas supplies from North Atlantic Treaty Organization (NATO) member
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countries, or further withholds significant natural gas supplies from countries such as Ukraine, Georgia, or
Moldova.Authorized Sanctions. The Act authorizes, but does not require, the president to impose certain
sanctions targeting Russia's energy sector. Under the Act, the president is authorized to impose sanctions on
investors in Russian crude oil. The investor must have made a significant investment in a special Russian
crude oil project to trigger the sanctions. The president is also authorized to impose additional licensing
requirements on the export of items for Russia's energy sector, including equipment used for tertiary oil
recovery, as enforced by the Bureau of Industry and Security of the Department of Commerce ("BIS"), or the
Office of Foreign Assets Control of the Department of the Treasury ("OFAC").Restrictions on Foreign
Financial Institutions. Under the Act, the president is authorized to impose a prohibition on opening, and a
prohibition or the imposition of strict conditions on maintaining, in the United States, a correspondent account
or a payable-through account by a foreign financial institution that knowingly engages in significant
transactions involving sanctioned persons; or with respect to the Ukrainian crisis, facilitated a significant
financial transaction on behalf of any Russian person included on the list of specially designated nationals
and blocked persons maintained by the OFAC.
Looking Ahead: Russian Response to Authorizing Statute and New Sanctions Targeting the Crimea Region
The Russian response after President Obama's announcement was nothing short of defiant. Russian
President Vladimir Putin decried the sanctions, and a Russian ministry statement released December 20
spoke of retaliatory measures. Given Russia's reaction, it seems that enforcement of these sanctions and
others may be imminent. Indeed, only one day after signing this bill into law, the President issued an
Executive Order "Blocking Property of Certain Persons and Prohibiting Certain Transactions with Respect to
the Crimea Region of Ukraine" (the "Crimea-related Executive Order"). In a letter issued by the White House
Office of the Press Secretary, President Obama described the Crimea-related Executive Order as
prohibiting:
New investments by U.S. persons in the Crimea region of UkraineImportation of goods, services, or
technology into the United States from the Crimea region of UkraineExportation, reexportation, sale, or
supply of goods, services, or technology from the United States or by a U.S. person to the Crimea region of
UkraineThe facilitation of any such transactions.
The Crimea-related Executive Order expands on three previously issued Ukraine-related orders: Executive
Order 13660 of March 6, 2014, Executive Order 13661 of March 16, 2014, and Executive Order 13662 of
March 20, 2014. In line with previous Ukraine-related sanctions and sanctions-related executive orders of the
modern era, the Crimea-related Executive Order contains an asset-blocking feature. Pursuant to this order,
property and interests in property of any person may be blocked if determined by the Secretary of the
Treasury, in consultation with the Secretary of State, that the person is:
Operating in the Crimea region of UkraineA leader of an entity operating in the Crimea region of
UkraineOwned or controlled by, or has acted or purported to have acted for or on behalf of, directly or
indirectly, any person whose property and interests in property are blocked pursuant to the order,
orMaterially assisting, sponsoring, or providing financial, material, or technological support for, or goods or
services to or in support of, any person whose property and interests in property are blocked pursuant to the
order
The Crimea-related Executive Order also blocks such a designated person's entry into the United States.
Relatedly, on December 19, 2014, OFAC issued General License No. 4 "Authorizing the Exportation or
Reexportation of Agricultural Commodities, Medicine, Medical Supplies, and Replacement Parts" to Crimea.
The general license authorizes such exports from the United States or by a U.S. person, wherever located,
to Crimea, or to persons in third countries purchasing specifically for resale to Crimea. Related transactions
(e.g., making shipping and cargo inspections, obtaining insurance, receipt of payment, etc.) are also
authorized. General License No. 4 is limited to EAR99 items, or items that would otherwise be designated as
EAR99 if subject to the Department of Commerce's Commerce Control List.
EU has extended sanctions
Leigh Anderson, Mondaq Business Briefing, January 5, 2015, https://www.highbeam.com/doc/1G1396197708.html DOA: 11-25-15
Millennial Speech & Debate
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EU extends sanctions against Crimea and Sevastopol
On December 18, 2014, the EU extended the restrictive measures in place arising out of the
annexation of Crimea and Sevastopol. Council Regulation (EU) No 1351/2014 of December 18, 2014
(the "Regulation") further amends Council Regulation (EU) No 692/2014 (as first amended by Council
Regulation (EU) No 825/2014).
These new restrictive measures came into effect December 20, 2014.
Executive Summary
The scope of Article 2 of Regulation 692/2014 is significantly expanded by the Regulation. The Article had
originally prohibited the import into the European Union of goods originating in Crimea or Sevastopol, and
providing financing or financial assistance, as well as insurance and reinsurance related to the import of such
goods.
In July, Regulation 825/2014 had extended the above to also prohibit investments in key sectors in Crimea
and Sevastopol, including transport, telecommunications, energy and the exploitation of natural resources,
and an export ban on key equipment and technology related to those sectors.
The EU has rounded off 2014 by extending the restrictive measures to provide a ban on all foreign
investment in Crimea or Sevastopol; a prohibition on services directly related to the investment ban,
as well as services related to tourism activities; and restrictions on goods in the sectors of transport,
telecommunications, energy, and exploration of oil, gas and minerals.
Restrictions on foreign investment
Article 2a introduces prohibitions on:
Acquiring or extending any existing participation in the ownership of real estate located in Crimea or
SevastopolAcquiring or extending any existing participation in the ownership of any entity in Crimea or
Sevastopol, including the acquisition in full of such entity or the acquisition of shares and other securities of a
participating nature of such entityGranting or being part of an arrangement to grant any loan or credit, or
otherwise provide financing - including equity capital - to any entity in Crimea or Sevastopol, or for the
documented purpose of financing such entityCreating any joint venture in Crimea or Sevastopol or with an
entity in Crimea or SevastopolProviding investment services directly related to the activities referred to above
The Regulation provides an exemption for the execution of obligations arising from contracts concluded
before December 20, 2014, or ancillary contracts necessary for the execution of such contracts, provided
that the competent authority is informed at least five working days in advance.
Member State authorities may grant an authorisation for otherwise prohibited activities in very limited
circumstances related to consular missions, organisations with international immunity, projects in support of
health institutions, or appliances and equipment for medical use.
Restrictions on goods for use in the transport, telecommunications and energy sectors, and in the
prospection, exploration and production of oil, gas and mineral resources
Article 2b prohibits the sale, supply, transfer or export of goods listed in Annex II of the Regulation to any
natural or legal person, entity, or body in Crimea or Sevastopol, or where such goods are for use in Crimea
or Sevastopol. The preamble to the Regulation gives guidance on how to determine the "place of use."
The prohibition extends to the provision of technical assistance, brokering services, financing and financial
assistance for the listed goods and technology.
Note that these restrictions do not apply where there are no reasonable grounds to determine that the goods
and technology or services in question are to be used in Crimea or Sevastopol. This highlights the
importance of fully investigating proposed transactions, and obtaining sufficient end-user information.
An exemption is provided for the execution until March 21, 2015 of an obligation arising from a contract
concluded before December 20, 2014, or by ancillary contracts necessary for the execution of such
contracts, provided that the competent authority has been informed at least five working days in advance.
Again, Member States may grant an authorisation of otherwise prohibited goods or technologies in the same
limited circumstances cited above.
Restrictions on involvement in infrastructure
Article 2c prohibits the provision of technical assistance, or brokering, construction or engineering services
directly relating to infrastructure in Crimea or Sevastopol, in the transport, telecommunications and energy
sectors, and in the prospection, exploration and production of oil, gas and mineral resources. This prohibition
is independent of the origin of the goods or technology.
An exception applies in the execution until March 21, 2015 of an obligation arising from a contract concluded
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before December 20, 2014, or by ancillary contracts necessary for the execution of such a contract.
Restrictions on the provision of services related to tourism activities
Article 2d prohibits the provision of services directly related to tourism activities in Crimea or Sevastopol. In
particular, any ship providing cruise services is prohibited to enter into or call at any port situated in the
Crimean Peninsula and listed in Annex III to the Regulation. The listed ports include Kerch and Sevastopol,
the commercial port authorities of which are already designated by the EU as subject to an asset freeze.
The prohibition applies to any ship flying the flag of a Member State, any ship owned and under the
operational control of an EU owner, or any ship over which an EU operator has assumed overall
responsibility for its operation.
The prohibition does not apply where a ship enters or calls at any listed port for reasons of maritime safety in
cases of emergency. The competent authority must, however, be informed of the entry within five working
days.
Notwithstanding the above, it is be permissible to execute an obligation arising from a contract or ancillary
contract concluded before December 20, 2014, or ancillary contracts necessary for the execution of such
contracts, provided that the competent authority has been informed at least five working days in advance.
EU sanctions related to Crimea and Sevastopol
Economist Newswire, December 19, 2014
EU politics: New Crimea sanctions leave EU-Russia position unchanged,
http://www.gfs.eiu.com/Article.aspx?articleType=rf&articleId=1102685494&secId=7 DOA: 11-29-15
EU leaders confirmed at a summit on December 18th that the bloc is imposing further sanctions against
business with Crimea, to take effect on December 20th. The new measures are aimed at addressing
anomalies in-and thus strengthening-the EU's policy of non-recognition of Russia's annexation of the region.
As such, they do not signal a change in the EU's position on the separate question of sectoral ("phase
three") sanctions against Russia, which the bloc implemented following the downing of a Malaysian
passenger plane in July this year. On this issue, EU leaders at the summit held to the bloc's harder line of
recent weeks, but continued to exhibit differences of emphasis. Although the call is finely balanced, we
continue to expect the EU's sectoral sanctions against Russia to be eased substantially when they come up
for renewal in July 2015, owing mainly to the need for unanimity within the bloc for any rollover.
The EU has banned imports from Crimea and Sevastopol (including import financing and insurance)
since June 2014. Under the bloc's new measures, in Crimea and Sevastopol EU firms and individuals
will be banned from investing in companies or property; providing finance; exporting goods and
services in the transport, telecommunications, energy, and oil and gas exploration and production
sectors; and providing tourism services, including the landing of cruise ships. Provided that the
specific item of business does not involve the territory of Crimea, EU entities are not banned from working
with companies outside Crimea that may separately have business there.
EU, US, Norway, Japan, Australia, and Canada have sanctions on Russia due to Crimea’s
accession to Russia and tension in the Ukraine
Banking and Stock Exchange, Finance, Economics (Russia), November 10, 2015
Today Russia is covered by economic sanctions from the EU, the USA, Norway, Japan, Australia and
Canada. The restrictions apply to the banking, oil and defense sectors. International sanctions were imposed
following Crimea's accession to Russia and growing geopolitical tension in Ukraine.
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EU sanctions were extended in June
RIA Novosti, June 22, 2015 EU Extends Sanction Policy, Moscow Readies Response,
http://sputniknews.com/politics/20150623/1023716941.html DOA: 11-27-15
The European Union (EU) on Monday extended its economic sanctions against Russia imposed over the
Ukraine conflict for another half a year.
The decision did not come as a surprise for Moscow. Anti-Russia sanctions have been valid for a year and
the European Union warned last week about their extension.
Commenting on this decision, the Kremlin said it would act on the basis of reciprocity.
Russia's government has already submitted a proposal to the presidential administration on extending the
food import embargo it introduced in response to Western sanctions, press secretary to the prime minister
Natalya Timakova said on Monday.
The European Union imposed sanctions against Russia on August 1, 2014, and expanded them in
September of the same year. It introduced an embargo on new import and export contracts of arms and
dual-purpose equipment. Russian banks and the oil industry were also hit by sanctions.
In response, Russia restricted the import of food products from Western countries.
EU sanctions are extended until the end of January 2016
EJ Insight, June 23, 2015, EU extends Russia sanctions until end-Jan 2016, http://www.wsj.com/articles/euextends-economic-sanctions-on-russia-until-end-of-january-1434960823 DOA: 11-27-15
The European Union has extended its economic sanctions against Russia until the end of January 2016,
keeping up the pressure on Moscow to comply with a ceasefire accord signed with Ukraine.
The decision came at a meeting of EU foreign ministers in Luxembourg on Monday, BBC reported.
Ministers agreed on the extension of the sanctions due to "Russia's destabilizing role in eastern Ukraine", the
EU was quoted as saying.
US won’t withdraw sanctions until the Minsk agreements are fully implemented
RIA Novosti, February 12, 2015 , US to Roll Back Sanctions Once Russia Implements Minsk Agreements State Department, http://www.state.gov/p/eur/rls/rm/2015/mar/238147.htm DOA: 11-27-15
The United States stands ready to ease sanctions on Russia once the Minsk agreements that have recently
been agreed upon are fully implemented, US Department of State Secretary John Kerry said in a statement
on Thursday.
"The United States is prepared to consider rolling back sanctions on Russia when the Minsk agreements of
September 2014, and now this agreement, are fully implemented," Kerry said.
Before the United States decides whether to ease sanctions on Russia, Kerry said that the United States
would need to see a full ceasefire in Ukraine, the "withdrawal of all foreign troops and equipment from
Ukraine," and the "full restoration of Ukrainian control of the international border."
Kerry warned that the United States would judge the implementation of the Minsk agreement by actions and
not by words.
On Thursday, the leaders of Ukraine, Germany, Russia, and France worked out a reconciliation deal
including 13 points aimed at ending the military confrontation between Kiev forces and independence
supporters in eastern Ukraine.
The deal includes an unconditional ceasefire coming into force at midnight on February 15, urges Kiev to
undertake constitutional reform with a focus on Ukraine's decentralization, as well as stipulates the
withdrawal of all foreign armed groups, equipment and mercenaries from eastern Ukraine under the
observation of the OSCE.
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US extended the sanctions for a year in March
Galina Dudina, RusData Dialine - Russian Press Digest, March 5, 2015 Obama extends sanctions against
Russia for one year more, http://www.themoscowtimes.com/news/article/obama-extends-sanctions-againstrussia-citing-threat-to-national-security/516961.html DOA: 11-27-15
U.S. President Barack Obama has issued an order to extend by one year a series of sanctions against
Russia over its role in the Ukraine crisis, the White House said Tuesday.
In a statement published on the White House website, Obama said he was extending U.S. sanctions
imposed on Russia last March and December in light of the continuing "unusual and extraordinary threat to
the national security and foreign policy of the United States."
The U.S. first imposed sanctions on Russia on March 6, 2014, when Obama signed an executive order
imposing travel bans and asset freezes against individuals that had "asserted governmental authority" in the
Crimea peninsula without consent from the Ukrainian authorities.
Later that month, Obama signed two executive orders that expanded the scope of the sanctions,
stating that the "actions and policies of the government of the Russian Federation" had undermined
Ukraine's territorial sovereignty.
Russia in March last year annexed Crimea following the outcome of a referendum that was denounced by
the West as illegitimate and unconstitutional.
Additional sanctions imposed in December also prohibited new U.S. investment in Crimea and restricted the
country's trade with the region.
Tuesday's statement said the extension order would be transmitted to the U.S. Congress.
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Sanctions on Russia Now
Canada has expanded sanctions to target the energy sector
Shawn Neylan, Mondaq Business Briefing, January 8, 2015
Canada: Canada Expands Russia Sanctions, https://www.rt.com/business/270661-russia-canada-economicsanctions/? DOA: 10-25-15
On December 19, the Canadian government announced expanded economic sanctions against
Russia, primarily directed at the Russian energy industry (the "Expanded Russia Sanctions").
As we recently discussed, the Expanded Russia Sanctions were imposed by way of an amendment to the
pre-existing sanctions under the Special Economic Measures (Russia) Regulations. In addition to adding
new designated persons to the existing Regulations against Russia (and also adding new designated
persons to the Special Economic Measures (Ukraine) Regulations) the Expanded Russia Sanctions now
prohibit any person in Canada and any Canadian outside Canada from exporting, selling, supplying or
shipping any specified good, wherever situated, to Russia or to any person in Russia for use in any of (i)
offshore oil exploration or production at a depth greater than 500 meters, (ii) oil exploration or production in
the Arctic or (iii) shale oil exploration or production (the "Specified Activities"). Activities relating to gas
exploration are not specifically covered in the Expanded Russia Sanctions.
The specified goods covered by the Expanded Russia Sanctions are as follows:
Seamless stainless steel line pipe of a kind used for oil or gas pipelines;Seamless iron or steel line pipe of a
kind used for oil or gas pipelines, other than line pipe made of stainless steel or cast iron;Seamless iron or
steel drill pipe of a kind used in drilling for oil or gas, other than drill pipe made of cast iron;Seamless iron or
steel tubing of a kind used in drilling for oil or gas, other than tubing made of cast iron;Iron or steel line pipe
of a kind used for oil or gas pipelines that has circular cross-sections and an external diameter exceeding
406.4 mm;Iron or steel casing of a kind used in drilling for oil or gas that has circular cross-sections and an
external diameter exceeding 406.4 mm;Welded iron or steel line pipe of a kind used for oil or gas pipelines
that has an external diameter not exceeding 406.4 mm, other than line pipe made of cast iron;Welded casing
and tubing of a kind used in drilling for oil or gas that has an external diameter not exceeding 406.4 mm and
is made of flat-rolled steel or iron products, other than casing and tubing made of cast iron;Interchangeable
rock-drilling or earth-boring tools that have working parts made of sintered metal carbides, cermets, diamond
or agglomerated diamond;Power-driven reciprocating positive displacement pumps for liquids, other than
pumps with measuring devices, concrete pumps and fuel, lubricating or cooling medium pumps for internal
combustion piston engines;Power-driven rotary positive displacement pumps for liquids, other than pumps
with measuring devices and fuel, lubricating or cooling medium pumps for internal combustion piston
engines;Liquid elevators and their parts, other than pumps;Non-hydraulic or non-self-propelled boring or
sinking machinery, and their parts, for boring earth or extracting minerals or ores, other than tunnelling
machinery and hand-operated tools;Parts for lifting, handling, loading or unloading machinery;Parts for:
derricks, cranes, mobile lifting frames and other lifting machinery;self-propelled bulldozers, scrapers,
graders, levellers, shovel loaders and tamping machines; andother moving, grading, scraping, levelling,
excavating and extracting machinery; Parts for hydraulic or self-propelled boring or sinking machinery;Mobile
drilling derricks;Floating or submersible drilling or production platforms;Fire-floats, lightships and floating
docks or cranes, other than dredgers.
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EU Will Maintain Sanctions
EU will maintain its sanctions until the cease fire agreement is enforced
Voice of America News, March 19, 2015, EU Likely to Keep Russia Sanctions After Merkel Weighs In,
http://www.voanews.com/content/reu-russia-sanctions-merkel/2686808.html DOA: 11-25-15
The European Union is likely to keep economic sanctions on Russia until the Ukraine cease-fire agreements
are fully implemented.
Speaking to reporters before a two-day EU summit in Brussels, EU Council President Donald Tusk said
Russia should be pressured through sanctions until a Ukraine cease-fire agreement would be fully observed.
"One of the best ways of supporting Ukraine will be through upholding the sanctions' pressure on Russia
until we witness a full implementation of the Minsk agreement. This must ultimately conclude in Ukraine
regaining control of its borders as foreseen in the plan brokered by [French] President [Francois] Hollande
and [German] Chancellor [Angela] Merkel," Tusk said.
Chancellor Angela Merkel told Germany's lower house of parliament (Bundestag), before leaving for
Brussels, that she would strongly encourage EU leaders to maintain sanctions until Russia comes to terms
with Minsk agreements to end the hostilities in eastern-Ukraine.
"We cannot and will not lift the sanctions that expire in July or September until the demands of the Minsk
agreement have been fulfilled. That would be wrong," said Merkel.
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Sanctions Undermine Economy
Sanctions have undermined the economy
Xinhua General News Service, December 18, 2014, Commentary: Double-edged sanctions against Russia
hurt both sides, http://news.xinhuanet.com/english/indepth/2014-12/19/c_133865924.htm DOA: 10-25-15
Rounds of sanctions, like rolling rocks, have rained down on Russia, and severely wounded the
country's economy.
On Dec. 16, the Russian ruble nosedived to an all-time low, hitting 80 rubles per U.S. dollar and
100 rubles per euro in Moscow trade.
The ruble has lost nearly 50 percent of its value against the U.S. dollar and euro since March
despite several currency interventions of the Central Bank, indicating Russia's economy has fallen
into trouble. The once stubborn Russian government has finally admitted the country would fall into
recession in 2015.
Sanctions undermine Russia’s economy
Xinhua General News Service, December 19, 2014
News Analysis: New U.S. sanctions could add to Russia's economic woes, albeit indirectly,
http://news.xinhuanet.com/english/indepth/2014-12/19/c_133866375.htm DOA: 11-27-15
Although a new round of U.S. sanctions against Russia might not have a direct impact, they could
increase Russia's sense of panic and ratchet up pressure on the country's embattled economy,
experts said.
U.S. President Barack Obama on Thursday signed into law a new round of sanctions against Russia, but
for now, does not intend to use them, saying the administration is keeping an eye on the situation in
Ukraine.
"My administration will continue to work closely with allies and partners in Europe and internationally to
respond to developments in Ukraine and will continue to review and calibrate our sanctions to respond to
Russia's actions," Obama said in a statement, adding that he was prepared to roll back sanctions should
Russia take the necessary steps.
Russia's economy has for months been flailing amid a falling currency and Western sanctions over
the crisis in Ukraine. Energy prices have also fallen, dealing a severe blow to the Russian economy, as oil
and gas industry comprises around 50 percent of its revenue. Earlier this week saw the sharpest drop in the
ruble in 16 years.
While it is unclear whether the new sanctions would have a direct impact on Russia, the anticipation alone
is enough to give investors the jitters, and that could in turn lead to even more economic turmoil in the
embattled country, experts said.
Indeed, the greatest effect of sanctions has not been from the sanctions themselves but rather the
broader effect of leaving investors, Russian and foreign, nervous about the Russian economy,
leading to capital flight, RAND Corporation Senior International Policy Analyst Olga Oliker told Xinhua.
"The limits that the sanctions have placed on Russia's access to capital markets have been very
important, but general investor skittishness, over and above the sanctions, has been more important, and
stands to last indefinitely," she said.
The White House is keeping an eye on the situation, with White House spokesman Josh Earnest saying
earlier this week that the administration has "suggested the longer the sanctions regime is in place, the
more isolated the Russians would be and the greater the impact it would have on the broader Russian
economy."
"And every week and month that goes by that the sanctions regime is in place, we see that the toll
that is being taken by the Russian economy grows," he said.
From Russian President Vladimir Putin's annual press conference on Thursday, it is not clear that Russia
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has a plan for the beleaguered economy. Putin said that it may take a couple of years for Russia's economy
to get back on track, which might mean he was betting on a rise in the price of oil, the eventual lifting of
sanctions, or both.
Sanctions undermine Russia’s GDP by 5%
RIA Novosti, June 22, 2015 EU Extends Sanction Policy, Moscow Readies Response,
http://sputniknews.com/politics/20150623/1023716941.html DOA: 11-27-15
Experts note that Russia will be affected by the extension of Western sanctions. Former Deputy Head of
Russia's Central Bank Sergey Aleksashenko told RIA Novosti that Russia will lose about five percent of its
GDP in 2015.
"The effect will be felt because the EU sanctions will prevent Russian banks and companies from getting
loans in Europe and they will have to pay the external debt from domestic resources. This is the price that
the Russian economy will have to pay," Aleksashenko said.
In the meantime, the Ministry of Economic Development, the Central Bank and the Ministry of Finance will
continue to proceed from the premise that anti-Russian sanctions will not be lifted in the near future. The
Ministry of Economic Development predicts that Russia's GDP will fall by 2.8 percent, the Ministry of Finance
predicts a 2-2.5-percent drop and the Central Bank says GDP will decrease by 3.2 percent.
Sanctions will reduce the Russian economy by 9%
Mark Thompson, CNNMoney.com, August 4, 2015
How badly have sanctions hit Russia?
Sanctions imposed on Russia because of its support for separatists in Ukraine could shrink the economy by
as much as 9% over time.
That's the view of the International Monetary Fund, which published a regular report on Russia this week.
Collapsing oil prices and Western sanctions on big banks and energy companies tipped Russia into a
financial crisis at the end of 2014. The ruble plunged and inflation soared.
Russia jacked up interest rates in response, sold dollars and euros to defend its currency, pumped money
into the banks and slashed government spending.
The situation has stabilized this year, although the ruble has come under pressure again recently, but the
economy is already deep in recession.
The IMF expects Russian GDP to shrink by 3.4% this year, as falling real wages, the higher cost of
borrowing and shattered confidence hit domestic demand. And western sanctions, and Russia's retaliatory
ban on imports of food and agricultural products, could be responsible for nearly half that decline.
But longer term, the impact could be even more significant, as the loss of access to foreign finance and
technology hurts investment and makes Russia's economy even less efficient.
"Prolonged sanctions could lead to a cumulative output loss over the medium term of up to 9% of GDP," the
IMF said.
Russians are feeling the pain. Unemployment has begun to creep up from very low levels, and millions more
have fallen into poverty.
Sanctions trigger inflation in Russia and undermine its access to credit
Russia & CIS Military Weekly, June 11, 2015, Corridors of Power,
http://rbth.com/news/2015/06/10/russia_to_extend_counter-sanctions_after_g7s_decisions_46806.html
DOA: 11-27-15
Russia to extend counter-sanctions after G7's decisions - Kremlin chief of staff
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Moscow will not lift its counter-sanctions against Western countries anytime soon, taking into consideration
the G7's decision to extend sanctions against Russia, says Russian presidential chief of staff Sergei Ivanov.
"As far as we know, a G7 summit has just taken place, which has extended the effect of sanctions against
Russia. Therefore, it is absolutely logical to presume that Russia will also extend its sanctions," Ivanov said
at the World Congress of Russian Press currently being held in Moscow.
"When we announced our counter-sanctions, or any sanctions in general - this is a double-edged sword, one
of the edges being negative and the other positive. Of course, the sanctions have had a negative impact
on us, this is obvious. Access to credit resources has been blocked, and our inflation has accelerated,"
Ivanov said.
Sanctions have undermined Russia’s oil sector and its economy
Petroleum Economist, August 2015, Russia's oil: squeezed at both ends, Eugene M. Khartukov is professor
of economics at Moscow State University for International Relations (MGIMO), CEO of Moscow-based World
Energy Analysis & Forecasting Group (Gapmer) and vice-president (for Eurasia) of Petro-Logistics (Geneva),
http://www.petroleum-economist.com/Article/3480382/Russias-oil-squeezed-at-both-ends.html DOA: 11-2715
Russia's oil industry is under pressure from either side: on one hand, there are western sanctions
affecting finance and technology; and on the other, lower oil prices are hitting the budget.
Production is running at a high rate, but given the size of its contribution to the global supply situation, any
threat to its existence needs to be taken seriously.
Last year's sanctions against Russia, first over its involvement in Crimea's secession from Ukraine and then
in the military conflict in southeastern Ukraine, were put in place by the US and then by sanctions from
Canada, the EU, Iceland, Norway, Switzerland, Australia, New Zealand, and Japan.
The sanctions banned companies from supplying technology and services that could be used to
explore for, or produce, oil and gas from the Arctic, deep sea, shale and other challenging areas.
They also limited certain Russian companies' access to western financial markets.
The EU managed to keep Gazprom off the list of companies that were hit owing to their with links to the
president, Vladimir Putin, but Novatek was on the list, affecting its financing for the Yamal LNG project; as
was Rosneft. Other companies affected were LUKoil, Surgutneftegas, Novatek, Gazprom and Transneft.
LUKoil had to trim its investment ambitions as the company's net profit in the third quarter of 2014 was half of
what it had been the year before "" although this problem is common to companies outside Russia too.
And although LUKoil is on a sanctions list, that is only in relation to a specific and very narrow area of
activity. For example, in early August this year it managed to secure up to $1bn of finance for its stake in the
Shah Deniz expansion.
The package includes loans from the Asia Development Bank and the European Bank for Reconstruction
and Development, which are each providing direct financing of up to $250mn each.
Rosneft has applied for rubles 1.5 trillion ($23.3bn) of financial help just "to sustain the liquidity." Novatek has
also approached the government for financial help if its shareholders in Yamal LNG were unable to raise the
funds on time "" China is however also a major shareholder "" and Putin has offered government support.
Since the imposition of sanctions, the market value of Russia's most powerful oil and gas companies
has steadily eroded. Based on trade in over-the-counter shares between September 12, when both
Washington and Brussels announced sanctions against Russia's petroleum companies, and December 16
last year when the dollar-ruble rate hit its nadir, Gazprom was down 32.1% in dollar terms; LUKoil was down
17.6%; Gazprom Neft was down 26.6%, and Surgutneftegaz was down 16.6%. In rubles, the world's largest
oil pipeline transport company, Transneft, was up 65.8%, but the currency lost 64.8% in that same time
frame.
During those three months, the ruble, whose exchange rate against the US dollar is highly dependent upon
the world oil price, undermined by the lesser value of oil export sales, fell from 37.78 to the dollar to 69.67 on
December 16, the lowest level for the currency since the Russian currency market opened in 2000.
So the impact of the sanctions was partially offset for Russia by the weaker ruble, as they earned more
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14
rubles to spend at home.
Still, the sanctions could not but impact Russia's oil production. The deputy head of LUKoil Leonid
Fedun told UK daily Financial Times in late November 2014 that sanctions could limit oil output in Russia by
7%, from 2015. And as the sanctions apply to offshore and tight-oil developments, they could in the longer
term keep about 2mn b/d underground.
Too dependent on oil
As hydrocarbons exports account for over two thirds of Russia's total exports, the country's GDP is
very dependent on the world oil price.
The same may be said about the Russian state budget. Late last year, when Russia reviewed and
adopted this year's budget, the economy ministry and parliament assumed an average oil price of $50/barrel
compared with $98/b for 2014.
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Con
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Sanctions Don’t Reduce the Threat
Sanctions won’t cause Russia to change its behavior – it adapts and develops new
businesses
Xinhua General News Service, December 18, 2014, Commentary: Double-edged sanctions against Russia
hurt both sides, http://news.xinhuanet.com/english/indepth/2014-12/19/c_133865924.htm DOA: 10-25-15
Yet, the "giant rocks attack" has failed to press Russia to yield. President Vladimir Putin has made clear
on various occasions that Russia will stick to its stand and never live with the sanctions.
Admitting Western sanctions seriously damaged Russia's economy, Putin told his 10th annual yearend press conference Thursday that the current situation can be used to offer additional conditions
for production businesses, which would be a start to diversify the economy.
"External conditions would urge us to be more effective and shift to more innovative development ways,"
he noted.
No way to influence Russia except through sanctions
Ukraine General Newswire, April 1, 2015 Sanctions against Russia will be lifted when it behaves properly Danish Ambassador, http://en.interfax.com.ua/news/general/258274.html DOA: 11-25-15
Sanctions against Russia will only be lifted when the leaders of the country behave properly, Danish
Ambassador to Ukraine Merete Juhl has said.
Sanctions are the only instrument to leverage Russia right now. That's why they will only be lifted when
Russia behaves properly. That's the logic of imposing sanctions, Juhl said at a press conference in Kharkiv
on Wednesday.
She also said that Denmark supported sanctions against Russia despite the sanctions causing losses for
Danish businesses.
Denmark is an EU country that strongly supports sanctions against Russia. In Denmark, we understand that
these sanctions won't have an impact at once, but with time they will work. Many Danish companies are
losing money because exports to Russia stopped, but Danish businesses have consciously agreed to that.
They lose income, because there's no trade with Russia, because they want to influence Russia in such a
way and settle the conflict, Juhl said.
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Sanctions Don’t Reduce Russian Weapons Transfers
Sanctions have not reduced Russia’s supply of arms to the rebels
Alwz Kokharov, Jane's Intelligence Weekly, July 8, 2015
Continued ceasefire violations in eastern Ukraine increase likelihood of further Western sanctions against
Russia, http://www.janes.com/article/52881/continued-ceasefire-violations-in-eastern-ukraine-increaselikelihood-of-further-western-sanctions-against-russia DOA: 11-27-15
On 8 July 2015 the Organisation for Security and Co-operation in Europe (OSCE) Parliamentary Assembly
supported a draft resolution condemning Russia's "clear, gross and uncorrected violations" in Ukraine,
effectively acknowledging Russia's military involvement in the conflict.
The resolution, jointly introduced by Canada and Ukraine, received 97 "yes" votes and 7 "against", while 32
delegates abstained. The non-binding resolution is an indicator of renewed attempts to apply political
pressure on Moscow to withdraw its support to the pro-Russian separatists in Ukraine's Donetsk and
Luhansk regions. While the Minsk II ceasefire agreement stabilised the line of contact between Ukrainian
and separatist forces at the end of February 2015, shelling and localised fighting continues on a daily basis.
The number of ceasefire violations, mostly by the separatist militants, ranges from 80 per day at the end of
June to 20 per day in early July, according to the OSCE monitoring mission. After 14 months of fighting,
there is no evidence that separatist stocks of weapons and ammunition supplied by Russia have
substantially diminished.
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Sanctions Don’t Reduce Ukraine Aggression
Sanctions have not limited Russian aggression in the Ukraine
Elise Labot, June 12, 2015, U.S., Europe ready new sanctions to deter Putin on Ukraine, CNN, Europe ready
new sanctions to deter Putin on Ukraine, DOA: 11-27-15
The sources said that while they prefer not to impose the new sanctions, they hope the knowledge that they
are being prepared will deter Putin from taking further action.
READ: U.S. ambassador to U.N. visits Ukraine, slams Russian 'aggression'
"It is both preparation and also a degree of credible messaging," the European diplomat briefing reporters
said. "One is to make very clear that if there are further acts of aggression that we can move quickly. The
other is to let it be known we are serious about being ready to do that as a deterrent."
The diplomat stressed, "We would rather not to have to do that, but it needs to be clear that if that is the
direction Putin's Russia goes in, that we will react."
U.S. officials and European diplomats insist the sanctions are taking a toll on the Russian economy, where
the ruble has plummeted in value.
But they admit the sanctions have done little to prevent Putin from continuing the campaign in
Ukraine or curb aggression by separatists in Eastern Ukraine.
In total, more than 6,000 people have died in the fighting in Eastern Ukraine since the conflict began last
year, according to the United Nations.
Sanctions will not change Russia’s position on the Ukraine
Russia & CIS Diplomatic Panorama, March 4, 2015
Sanctions won't change Russia's principled position on Ukraine,
http://sputniknews.com/world/20141019/194288907/Lavrov-Western-Sanctions-Goal-is-to-Change-RussiaNot-to-Settle.html DOA: 11-27-15
It is about time for Washington to understand that no sanctions can affect Russia's position on Ukraine, the
Russian Foreign Ministry said in a statement. "No sanctions can change Russia's principled position. It is
about time for Washington to understand this," Russian Foreign Ministry spokesman Alexander Lukashevich
said in a commentary on the U.S. decision to extend its sanctions against Russia, which is available on the
ministry website.
Since Crimea is an historical part of Russia, sanctions won’t force Russia to give it up
States News Service December 20, 2014, Russia has dismissed US sanctions as useless,
http://www.huffingtonpost.com/2014/12/20/russia-us-sanctions_n_6359524.html DOA: 11-27-15
The following information was released by Radio Free Europe / Radio Liberty:
Russia has dismissed new U.S. sanctions as useless and underscored its historic right to the Crimean
Peninsula.
The Russian Foreign Ministry said on December 20 that the new sanctions won't push Russia to give
up Crimea since it is a "historic and integral part of Russia."
The ministry referred to Cuba, where it took the United States half a century to restore diplomatic relations,
and said it was prepared to wait as long as necessary for Washington to relent.
U.S. President Barack Obama on December 19 called on Russia to end its annexation of Crimea and
announced new measures prohibiting U.S. companies and individuals from exporting or importing any
goods, services, or technology to or from Crimea.
Obama also authorized the Treasury Department to impose sanctions on individuals and companies
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operating in the region.
The Treasury Department announced 17 names and seven entities blacklisted under the order.
The move comes one day after the European Union banned investment in Crimea.
Crimea has been under de facto Russian control since March, after Russian-backed forces took the
peninsula from Ukraine.
Sanctions fail for Russia
Mufson 14
(Steven, Washpost contributor, April 29, 2014, “Why the sanctions against Russia
probably won’t work”
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/04/29/why-the-sanctionsagainst-russia-probably-wont-work/)
Correction: An earlier version of this story contained incorrect figures for Russia's daily oil exports and the annual revenue they generated.
This version has been corrected. Do
economic sanctions work? In Russia, maybe not. Russia is sitting on
roughly half a trillion dollars in foreign exchange, and it exports about 7.5 million barrels a day
of crude oil bringing in about $300 billion a year — not including its sales of natural gas. It has
will as well as means. Russian President Vladi-mir Putin seems content to suffer some economic
damage for the sake of correcting what he sees as a historical wrong and bringing Crimea and
perhaps more of Ukraine back into the Russian fold. “The whole idea that we are going to defeat
Russians by imposing hardship on them boggles my mind,” said Clifford Gaddy, a Russia expert at the Brookings
Institution, noting that the Russian economy contracted 40 percent after the fall of the Soviet Union. “It’s not a matter of how
much pain you can impose, but how much they can tolerate. And how much they can tolerate
depends on the motivation for behavior,” he said, adding that Russia’s dispute with the United
States and Europe was a “matter of national interest and survival” and not just greed. This is bad
news for foreign companies operating in Russia for whom the gradual tightening of sanctions on Monday by the United States and Europe is
worrisome. So far the Obama administration has tried to zero in on top officials and advisers to Putin. And trade with Russia outside the
energy sector is relatively small; U.S. trade with Russia accounts for less than 1 percent of U.S. overall trade. Still, some international
companies have big stakes there. The biggest U.S. investor in Russia is Exxon Mobil, which has an oil and gas production facility off
Sakhalin Island in northeastern Russia and which has joined with Russian oil giant Rosneft to explore the country’s Arctic region. It also has
an operation extracting natural gas from complex geological formations. Russia accounts for about 6 percent of Exxon Mobil’s global
production, according to oil analyst Pavel Molchanov at the investment firm Raymond James. London-based oil giant BP is even more
exposed to Russia. It owns a 19.75 percent stake in Rosneft, whose chief executive Igor Sechin was just added to the U.S. sanctions list. The
stake is valued at about $13 billion, about 9 percent of BP’s total market capitalization. The Rosneft holding also accounts for about 30
percent of BP’s production, 36 percent of its reserves and contributes about 15 percent to the firm’s net income, Molchanov says. Royal
Dutch Shell has a stake in a Gazprom oil and gas field in Siberia and is a partner in Sakhalin 2, which has a liquefied natural gas terminal that
in 2012 supplied a tenth of Japan’s gas needs. The company’s chief executive, Ben van Beurden, in Russia for the 20th anniversary of the
project, met Putin on April 18 to discuss expanding the facility. “We also know that this is going to be a project that will need strong support
to succeed,” he said, according to Russian media. “So one of my purposes of meeting with you, Mr. President, is to also secure support for
the way forward on this project.” Weatherford, a U.S. oil services company, is also deeply involved in Russia. As of March 2014,
Weatherford had 346 rigs, 74 percent of its international rig count, operating in Russia, Molchanov said. Outside the energy sector,
international companies with investments in Russia range from those selling luxury consumer goods to those investing in other natural
resources. Putin, like other countries’ leaders, has insisted that automakers have certain levels of domestic content if they are selling in
Russia. Ford and General Motors both have plants in Russia. But so far, the United States and European Union have targeted Russian
individuals and companies. The intention is to make clear to Russians that the target is Putin and his close allies, not the Russian people
overall. Gaddy doubts that will work either. “We
are targeting the very best of Russia, the part that’s most
modern, most eager to integrate into the global economy, most progressive,” he said. “Sanctions
will tend to hurt them.” Russia joins a long list of countries that have been subjected to
international sanctions, and the track record is mixed, at best. Even where effective, they work
slowly. The U.S. embargo of Cuba has lasted more than half a century, and the Castros still rule there. The embargo of North Korea has
inflicted suffering and starvation on the populace, but the Kim family remains in power. Both countries received oil and economic support
from Russia and China respectively. The U.S. Congress imposed sanctions on South Africa over President Ronald Reagan’s veto in October
1986, prompting many U.S. companies, such as General Motors and Mobil Oil, to withdraw. The sanctions contributed to ending apartheid,
but domestic foes of apartheid had already shaken the country for two years with demonstrations, consumer boycotts and strikes, sparking a
flight of capital, no-shows for military service and a reassessment by influential members of the ruling National Party. The United States and
European nations are currently negotiating with Iran, which is widely seen to have been brought to the bargaining table by tight sanctions on
oil exports and transactions by Iran’s central bank. But the United States imposed sanctions on Iran after the 1979 hostage-taking, and other
countries added sanctions after Iran resumed its uranium-enrichment program in 2005. Sanctions were tightened again in 2012, leading to a
sharp drop in Iranian oil exports that provide the bulk of government revenue. But Molchanov argues that Russia
is different.
“Even if Russia were to cross the border into eastern Ukraine , it would be hard to imagine a full
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embargo on Russian exports because the world needs the oil,” he said. Iran at its peak was
exporting about 2.5 million barrels a day, and the embargo eventually cut that to about 1 to 1.5
million barrels a day. “The world can lose a million barrels a day from Iran, and it’s not especially painful,” Molchanov added.
“But if it lost 9 million barrels a day from Russia, there is no supply elsewhere that could fully compensate for that loss immediately. If
Russian exports went to zero tomorrow, there would be a global oil crisis.” One argument in favor of imposing economic sanctions on Russia
is the theory that Putin has made a bargain with the Russian people (similar to the implicit bargain made by China’s Communist Party): The
Russian people give him power, and he will give them better living standards. But Russian living standards weren’t that great before the
Ukraine crisis. Moreover, many Russia experts think that is the wrong way to look at Russia. Gaddy says that Russians want a better standard
of living, but not if it means they aren’t treated as a great power. He said that given a choice of being Sweden or Russia, most Russians
would sacrifice Sweden’s comforts and choose Russia for its great-power status. Mark Medish, a National Security Council adviser on
Russia and Ukraine under President Bill Clinton, believes Putin’s behavior has been reckless, but he also doubts the effectiveness of
economic sanctions. “Sanctions may cause economic inconvenience and reputational pain for the targets, and imposing sanctions may also
make us feel correct, that we have done the right thing,” he said. But he warned that “the
stated objective of sanctions is to
get Russia to change its behavior, and this is unlikely to work. Sanctions are more likely to
galvanize the will of the other side.” He added that “great powers, especially nuclear
superpowers, do not allow themselves to be extorted.”
Sanction fail and drive Russia to China
Aris 14
(Ben, Business News Europe, May 6, 2014, “Why western sanctions will fail”
http://russialist.org/why-western-sanctions-will-fail/)
West’s policy of imposing sanctions on Russia is
bound to fail. All this policy has done is to paint both the Kremlin and Washington into their
respective corners, making the chances of military confrontation look increasingly likely. As the
With the violence in eastern Ukraine escalating by the day, the
German foreign minister, Frank-Walter Steinmeier, warned in interviews published in four European newspapers on May 6, “The bloody
pictures from Odessa have shown us that we are just a few steps away from a military confrontation.” Thus the time for both Washington and
Moscow to cut their losses and agree to meet to thrash out a compromise is now. Each day that passes will see the body count rise and drive
the proxies that are actually doing the fighting at the behest of the two Great Game players become more and more invested in the violent
cycle of anger and revenge, so that if the overlords try to pull the plug they might find it is too late. Indeed, this point may already have
passed with the death of over 40 pro-Russian activists in Odessa. German
Chancellor Angela Merkel and US
President Barack Obama warned Russia the West would scale up to phase III sanctions, those
that target sectors like banking and energy, if Russia interferes in any way with the upcoming
Ukrainian presidential poll, slated for May 25. But with the situation in eastern Ukraine clearly
spinning out of control, it will be impossible to hold what the international community considers
to be a “free and fair election”. Having drawn a line in the sand, the West will be forced to take
the nuclear option of doing real economic damage to the Russian economy and so force the
Russians to retaliate in kind. We will be lucky if both sides hold themselves to just attacking on the economic front and not the
military one as well. The irony is the Germans have tied themselves to a policy that they clearly don’t want, or can ill afford. Of all the
European countries, Germany’s economy is the most closely bound to Russia. Germany depends heavily on Russian oil and gas, which
accounts for the bulk of the €40bn it imported from the country in 2012. In the other direction, German exports to Russia totalled €38bn in
2012, which was 31% of all European exports to Russia. Therefore, doing real and significant damage to the Russian economy will do
similar damage to Germany’s nascent economic recovery. The
idea that sanctions, especially the pathetically weak ones that have
have any impact on the Kremlin’s “calculus” is to totally misjudge the
situation. “The whole idea that we are going to defeat the Russians by imposing hardship on
them boggles my mind,” says Clifford Gaddy, a Russia expert at the Brookings Institution and
the author of the “virtual economy” meme that dominated the 1990s discussion of Russia’s
problems. “It’s not a matter of how much pain you can impose, but how much they can tolerate.
And how much can they tolerate depends on the motivation for their behaviour. For Russia it is
a question of national interest and survival. It is not just about greed.” Gaddy’s voice is one of a growing
been imposed so far, will
chorus questioning the wisdom of the sanctions policy. Europe is clearly split on the issue, but the US holds the trump card: if Washington
imposes financial sanctions on a major Russian firm, due to the integration of the global financial system these sanctions will effectively lock
the Russian company out of the international capital and banking markets. “What is less clear, however, is what these sanctions will actually
achieve,” says Dmitri Trenin, the highly respected director of the Carnegie Moscow Center. “Making
Putin back down and
concede defeat in Ukraine is improbable. Driving wedges between the Russian leader and his
close associates is equally hopeless. The Russian liberal opposition, already marginalized, will
20
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hardly get a shot in the arm thanks to the sanctions. As to the bulk of the Russian people, their
instinctive reaction to massive outside pressure against their country is more likely to be a
patriotic surge rather than a regime change. The Russian government will now have an excellent
reason to explain away the coming economic hardships: US sanctions.” Backfire In reality, the
sanctions have so far had precisely the opposite effect to what was intended. Designed to
undermine Putin’s support, they have actually lifted the president’s approval rating to an alltime high of 82% – exactly at the time when his popularity was becoming vulnerable due to the woeful state of Russia’s economy –
while the popularity of Obama is now at a record low of 42%. Likewise, his inner circle, which has been hardest hit
by the current “sanctions-lite”, has closed ranks and mocked their effectiveness. The boost in Putin’s
popularity has also handed him shiny new armour against the slings and arrows of Russia’s young opposition movement, at one of the very
few junctures where it actually had a chance of finding a flaw in the president’s defences. Domestically, the Ukrainian crisis has killed the
nascent opposition dead for the time being. At the same time, other polls show that public approval of the government actions is rising and
Russians now regard the country as being on “the right path.” Finally, Putin is clearly digging in his heels and the transparent divisions in
European support for the US line on tougher sanctions is child’s play to exploit. Not only was Putin not prepared to back down in the face of
western threats, now he is reaping huge domestic political capital from his tough-talking defiance – exactly the capital he needs to weather
the disapproval that was bound to follow the first fall in the standard of living in Russia since he took over 2000. The
West will truly
have to destroy the Russian economy before they can persuade the people that Putin is the
wrong man for the job. And that nuclear blitz option would do just as much damage to the
European recovery. Indeed the only country that is truly committed to imposing tougher sanctions
on Russia is the US, which has virtually no economic interests in the country; those American
companies there are in Russia are for the most part multinationals, which are notorious for their
lack of interest in politics. “There is palpable resistance on the part of various Western business interests – from German
manufacturers to US big oil – against ratcheting up sanctions. The Obama administration’s effort to talk Russia down is countered by the
Kremlin’s outreach to the CEOs of the companies that are doing well in Russia,” Trenin concludes. Perhaps
the biggest irony of
the sanctions policy is that it is driving Moscow into Beijing’s arms. China has been one of the
very few emerging market powers to openly condemn the sanctions policy. Beijing’s ambassador
to Moscow told reporters on May 2 that China “strongly opposes unilateral sanctions against
Russia.” “We are against imposing unilateral sanctions on Russia. They are not a way out,” Chinese Ambassador Li Hui said the day
after Washington released a new sanctions list singling out Putin’s friends and other officials on April 28. If Washington’s policy
is one of containment, then facilitating a closer alliance between Moscow and Beijing is clearly
counter productive. If Russia is cut off from the west, the only place Moscow can go is into the
open arms of the and commodity-hungry east. China is already siding with Russia and said on
May 5 that it would help finance and build a bridge over Kerch Strait to permanently link the
recently annexed Crimean peninsula to Russia. Boris Titov, Russia’s business ombudsman and head of the Sino-Russia
business council for the last decade, has said exports of liquefied natural gas (LNG), ecologically clean food, timber and wine to China will
more than compensate for any losses Russia incurs if relations with the EU worsen.
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Economic Downturn Won’t Produce a Behavior Change
Economic downturn won’t force Russia to change its behavior
Economist Newswire, December 19, 2014
EU politics: New Crimea sanctions leave EU-Russia position unchanged,
http://www.gfs.eiu.com/Article.aspx?articleType=rf&articleId=1102685494&secId=7 DOA: 11-29-15
The divergence between the two positions partly reflects different 'stick or carrot' assumptions about the most
effective way of encouraging Russian compliance with Western demands and its commitments under the
Minsk agreement. Although a full-blown financial crisis in Russia might alter the call, we do not currently
expect Russia to shift fundamentally its position on eastern Ukraine, despite its worsening economic
outlook: rather than abandoning the region's pro-Russian rebels and implementing the Minsk
agreement, we continue to expect Russia to try to win relief from EU sanctions in July 2015 by
maintaining the conflict in eastern Ukraine at a low intensity, relying-correctly, in our view-on the
EU's divisions, and the scope for ambiguity in the bloc's conditions for sanctions relief.
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Russian Economic Downturn Triggers Aggression
Economic decline is the largest internal link to Russian aggression.
Peters 8 (Ralph, Retired United States Army Lieutenant Colonel and Degree in
International Relations from St. Mary’s University, Bankrupt Rogues: Beware
Failing Foes, NY Post, November 29th,
http://www.nypost.com/p/news/opinion/opedcolumnists/item_Sq6rxuaQjf2dV655mfdh9M)
FEELING gleeful at the misfortunes of others is an ugly-but-common human characteristic. The world
delighted in our crashing economy, then we got our own back as Euro-bankers and Russian billionaires
proved at least as greedy as our own money-thugs. Of all the pleasures to be found in the pain of
others, though, none seems more justified than smugness over the panic in Moscow, Caracas and Tehran
as oil prices plummet. We may need to be careful what we wish for. Successful states may
generate trouble, but failures produce catastrophes: Nazi Germany erupted
from the bankrupt Weimar Republic; Soviet Communism's economic disasters
swelled the Gulag; a feckless state with unpaid armies enabled Mao's
rise. Economic competition killed a million Tutsis in Rwanda. The deadliest conflict of our time,
the multi-sided civil war in Congo, exploded into the power vacuum left by a bankrupt government. A
resource-starved Japan attacked Pearl Harbor. The crucial point: The more a state has
to lose, the less likely it is to risk losing it. "Dizzy with success,"
Russia's Vladimir Putin may have dismembered Georgia, but Russian tanks
stopped short of Tbilisi as he calculated exactly how much he could get
away with. But now, while our retirement plans have suffered a setback, Russia's stock market
has crashed to a fifth of its value last May. Foreign investment has begun to shun Russia as though
the ship of state has plague aboard. The murk of Russia's economy is ultimately impenetrable, but
analysts take Moscow's word that it entered this crisis with over $500 billion in foreign-exchange
reserves. At least $200 billion of that is now gone, while Russian markets still hemorrhage. And
the price of oil - Russia's lifeblood - has fallen by nearly two-thirds. If oil
climbs to $70 a barrel, the Russian economy may eke by. But the Kremlin can kiss off its militarymodernization plans. Urgent infrastructure upgrades won't happen, either. And the population trapped
outside the few garish city centers will continue to live lives that are nasty, brutish and short on a good day. Should oil prices and shares keep tumbling, Russia will slip
into polni bardak mode - politely translated as "resembling a dockside
brothel on the skids." And that assumes that other aspects of the economy hold up -
a
fragile hope, given Russia's overleveraged concentration of wealth, fudged numbers and state
lawlessness. Should we rejoice if the ruble continues to drop? Perhaps. But what
incentive would
Vladimir have to halt his tanks short of Kiev, if his
Leaders with failures in
their laps like the distraction wars provide. (If religion is the opium of the
people, nationalism is their methamphetamine.) The least we might expect would be an
increased willingness on Moscow's part to sell advanced weapons to fellow
rogue regimes. Of course, those rogues would need money to pay for the weapons (or for nuclear
Czar
economy were a basket case shunned by the rest of the world?
secrets sold by grasping officials). A positive side of the global downturn is that mischief-makers
such as Iran and Venezuela are going to have a great deal less money with which to annoy
civilization.
Economic weakness will cause Russia to engage in local diversionary wars
Smith ’11 – Director of the Potomac Institute Cyber Center
(David J., former Ambassador and Senior Fellow at the Potomac
Institute, “Vladimir Vladimirovich Putin:¶ The Once and Future
Czar”, Georgian Security Analysis Center, Potomac Institute
for Policy Studies, 10/3/2011,
http://www.potomacinstitute.org/attachments/1073_Tabula_10_03
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_11_Putin.pdf)
How Putin—with his man, Medvedev—manages the Russian economy will be a
major determinant in the ¶ success or failure of his second presidency.¶
The other—and not unrelated—challenge is growing unrest in the North Caucasus.
If the Second Chechen ¶ War of 1999-2000 consolidated Putin‟s power in Russia,
what effect will a third, broader North Caucasus ¶ war have? And recall that any
analysis of this question must take into account the looming 2014 Winter ¶
Olympics in nearby Sochi.¶ The danger for Russia‟s neighbors is that if the
Russian economy sours, Putin could follow the time-honored ¶ Russian
tradition of lashing out at imagined enemies such as Georgia or the
Baltic countries. And a conflict ¶ in the North Caucasus could easily
spill—accidentally or purposefully—into Georgia.¶ Nor should the west
discount the possibility of diversionary Russian obstreperousness in the
Middle East or¶ polemics with NATO. Moscow is skillfully setting the
stage for either.¶ Regrettably, aggression will likely be Putin‟s default instinct
Russian econ decline outweighs – Econ decline causes political upheaval which causes
loose nukes and preemption
And- It’s most likely scenario for nuclear war and causes US draw in
Steven
David, Professor of Political
1999, LN.
Science, Johns Hopkins University, “Saving America From the Coming Civil Wars,” FOREIGN
AFFAIRS, v 78 n 1, Jan/Feb
Only three countries, in fact, meet both criteria: Mexico, Saudi Arabia, and Russia. Civil conflict in Mexico
would produce waves of disorder that would spill into the United States,
endangering the lives of hundreds of thousands of Americans, destroying a valuable export market, and sending a torrent of refugees
northward. A rebellion in Saudi Arabia could destroy its ability to export oil, the oil on which the industrialized world depends.
internal war in Russia could devastate Europe and trigger the use of nuclear
weapons. Of course, civil war in a cluster of other states could seriously
harm American interests. These countries include Indonesia, Venezuela, the Philippines, Egypt, Turkey, Israel,
and China. In none, however, are the stakes as high or the threat of war as
imminent.
And
Russian instability leads to nuclear conflict
Schorr, NPR Senior News Analyst, 4
[Daniel, an American journalist who covered world news for more than 60 years.
He was most recently a Senior News Analyst for National Public Radio (NPR).
Schorr won three Emmy Awards for his television journalism, September 10, The
Christian Science Monitor, “Loose nukes, Russian instability,”
http://www.csmonitor.com/2004/0910/p09s03-cods.html, accessed July 12, 2014, EK]
WASHINGTON — One thing that hasn't changed much in Russia since Soviet
days is the tendency of high officials to cover up when disaster strikes.
So it was with Soviet President Mikhail Gorbachev and the Chernobyl nuclear
accident in 1986. So it was with President Vladimir Putin and the loss of the
submarine Kursk in 2000. So it was in the first days after the schoolhouse
massacre in southern Russia.
While Russian television was told to go easy on the grim footage from Beslan,
officials were understating the death toll and overstating the effectiveness of
the special forces deployed to end the confrontation.
When President Putin finally came out of his shell on Saturday to deal with
rapidly growing popular anger, he went on television to say, "This crime of the
terrorists, inhuman, unprecedented in terms of its cruelty" represents the
"direct intervention of international terrorism against Russia."
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He did not acknowledge that the hostage-takers had demanded an end to the war in
Chechnya. It was clearly in Putin's interest to represent the assault as
connected with international terrorism rather than a homegrown liberation
movement.
With his regime as close to destabilization as it has been in his five
years in office, Putin was reaching out to the West, and especially the
United States, for support in his crisis. In his television speech, Putin
alluded to fears abroad of a Russian nuclear threat that "must be
removed."
The US has reason to worry about an unstable Russia . According to Harvard professor Graham
Allison in a new book, "Nuclear Terrorism: The Ultimate Preventable
Catastrophe," 90 percent of all fissile material outside the US is stored
in the former Soviet Union. And, because of its huge supplies, its shaky
safeguards, and its extensive corruption, Russia poses the greatest threat of loose
nukes.
The Nunn-Lugar program designed to help finance the removal of Russian nuclear
weapons has not been faring well under the Bush administration. But Bush
officials might want to have another look at the danger of Russia's loose
nukes in an unstable country.
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Sanctions Don’t Rally Opposition to the Government
Sanctions enable the Russians to blame the West for their economic problems
Associated Press International, April 1, 2015
American farmer among the winners in sanctions-hit Russia, http://news.yahoo.com/american-farmeramong-winners-sanctions-hit-russia-063447186--finance.html DOA: 11-27-15
Sanctions are routinely cited in state media as the cause of most current economic problems. These include
woes more properly blamed on over-dependence on oil revenue, Gontmakher said.
The government has managed "to shift the responsibility for it onto the West, and not our own systems and
institutions," he said. "In that sense, the initiators of the sanctions have really lost out."
Despite a year of sanctions, President Vladimir Putin's approval rating has hovered well over 80 percent in
recent months.
"Sanctions without popular dissent will hardly work" in weakening the government, said Shevtsova.
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More Pressure Won’t Change Russia’s Behavior
Russia has already absorbed the impact of the sanctions
Russia & CIS General Newswire November 10, 2015
Russia not planning to retaliate if EU sanctions extended
Economic Development Minister Alexei Ulyukayev does not see any sense in taking any additional retaliatory
action in the event EU sanctions against Russia are extended.
"Why do we need retaliatory measures? This is the status quo. The longer the sanctions regime is in place,
the less effect it will have. As a matter of fact, the adaptation to it in the economy is a done deal. Therefore,
there will be no retaliatory measures," Ulyukayev told journalists in Beijing on Tuesday, when asked how
Russia would respond to an extension of sanctions.
On Monday, the German newspaper Handelsblatt reported that the leaders of the EU countries planned to
extend sanctions against Russia for another six months at their summit in December.
The sanctions will only be eased in the event the Minsk Agreements are upheld and after international
observers have been deployed along the Russian-Ukrainian border, Handelsblatt reported, citing unnamed
German government and EU officials.
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Energy Sanctions Useless
Russia would have reduced energy production anyhow due to falling oil prices
Shawn Neylan, Mondaq Business Briefing, January 8, 2015
Canada: Canada Expands Russia Sanctions, https://www.rt.com/business/270661-russia-canada-economicsanctions/? DOA: 10-25-15
The intent behind the Expanded Russia Sanctions is apparently to apply more pressure to Russia in relation
to its activities in the Ukraine by limiting its ability to explore for future resources and to maintain production.
The effect on overall Russian production is not likely to be immediate. Further, in light of the current collapse
of global oil prices, it could well be that Russian oil companies would have been reducing exploration
activities in any event, much as oil producers around the world are already doing.
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Sanctions Only Hurt the Poor
Sanctions hurt the poor, not wealthy Russian individuals
Associated Press International, April 1, 2015
American farmer among the winners in sanctions-hit Russia, http://news.yahoo.com/american-farmeramong-winners-sanctions-hit-russia-063447186--finance.html DOA: 11-27-15
Sanctions aimed at individuals failed to change Kremlin behavior and the broader economic punishment
introduced later is mostly hurting ordinary people this year, according to Evgeny Gontmakher, an economics
professor and former deputy minister of social affairs.
Government estimates say inflation could hit 12 percent this year, hurting workers whose jobs are already
under pressure.
"If the sanctions continue, they mostly hit the ordinary population, not the elite," he said. "Inflation is a tax on
the poor, most of all."
He said the oligarchs have not yet become restive.
"Among the business elite, there's a certain discontent, because the channels for economic cooperation with
the West are blocked now, that's clear. But there's absolutely no sign yet of any open discontent or pressure
on the president."
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Sanctions Undermine Russia-US Relations
Sanctions undermine relations with Russia
Agence France Presse, December 19, New US sanctions law could undermine relations with Russia: Lavrov,
http://www.hurriyetdailynews.com/new-us-sanctions-law-could-undermine-relations-with-russialavrov.aspx?pageID=238&nID=75818&NewsCatID=359 DOA: 11-27-15
New US legislation authorising sanctions on Russia over the Ukraine crisis could undermine relations
between Moscow and Washington for a long time, Russian Foreign Minister Sergei Lavrov was quoted as
saying on Friday.
In a phone call with US Secretary of State John Kerry, Lavrov said that the new legislation "threatening
new sanctions against Russia could undermine the possibility of normal cooperation between our
countries for a long time," said a foreign ministry statement.
President Barack Obama on Thursday signed a law giving him the authority to impose new sanctions on
Russia over Ukraine. He said he was not about to change the sanctions regime on Russia, which is
experiencing a dire economic crisis, but that his administration would "continue to review and calibrate our
sanctions to respond to Russia's actions."
The United States is calling for Russia to pull out of Crimea, Ukraine's Black Sea peninsula that it annexed in
March, and to stop aiding pro-Russian separatists in eastern Ukraine. Russia says it has the historic right to
Crimea and that its troops are not in eastern Ukraine.
President Vladimir Putin at his end-of-year news conference on Thursday made it clear he was not willing to
compromise on Russia's position on Ukraine.
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Undermining Russia-US Relations Increases the Threat from Russia
US-Russian relations key to prevent Iran proliferation, nuclear war, nuclear terrorism
Allison, Former Secretary of Defense, and Blackwill, Council
on Foreign Relations Senior Fellow, 11
[Graham, director of the Belfer Center for Science and International Affairs at
Harvard’s Kennedy School and a former assistant secretary of defense in the
Clinton administration, Robert D., is Henry A. Kissinger senior fellow for U.S.
foreign policy at the Council on Foreign Relations and served as U.S. ambassador
to India and as deputy national security adviser for strategic planning in the
Bush administration. They are co-chairmen of the Task Force on Russia and U.S.
National Interests, co-sponsored by the Belfer Center and the Center for the
National Interest, October 30, PoliticoPro, “10 reasons why Russia still
matters,”
http://www.politico.com/news/stories/1011/67178_Page2.html#ixzz36pGyCdhv,
accessed July 7, 2014, EK]
That central point is that Russia matters a great deal to a U.S.
government seeking to defend and advance its national interests. Prime
Minister Vladimir Putin’s decision to return next year as president makes it
all the more critical for Washington to manage its relationship with
Russia through coherent, realistic policies.
No one denies that Russia is a dangerous, difficult, often disappointing
state to do business with. We should not overlook its many human rights and
legal failures. Nonetheless, Russia is a player whose choices affect our
vital interests in nuclear security and energy. It is key to supplying
100,000 U.S. troops fighting in Afghanistan and preventing Iran from
acquiring nuclear weapons.
Ten realities require U.S. policymakers to advance our nation’s interests by
engaging and working with Moscow.
First, Russia remains the only nation that can erase the United States
from the map in 30 minutes. As every president since John F. Kennedy has
recognized, Russia’s cooperation is critical to averting nuclear war.
Second, Russia is our most consequential partner in preventing nuclear
terrorism. Through a combination of more than $11 billion in U.S. aid, provided
through the Nunn-Lugar Cooperative Threat Reduction program, and impressive
Russian professionalism, two decades after the collapse of the “evil empire,”
not one nuclear weapon has been found loose.
Third, Russia plays an essential role in preventing the proliferation of
nuclear weapons and missile-delivery systems. As Washington seeks to stop
Iran’s drive toward nuclear weapons, Russian choices to sell or withhold
sensitive technologies are the difference between failure and the possibility of
success.
Fourth, Russian support in sharing intelligence and cooperating in operations
remains essential to the U.S. war to destroy Al Qaeda and combat other
transnational terrorist groups.
Fifth, Russia provides a vital supply line to 100,000 U.S. troops fighting in
Afghanistan. As U.S. relations with Pakistan have deteriorated, the Russian
lifeline has grown ever more important and now accounts for half all daily
deliveries.
Lack of cooperation between US-Russia leads to an arms race
Wittner, SUNY History Professor, 7/6/14
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[Lawrence S., A former president of the Council on Peace Research in History
(now the Peace History Society), an affiliate of the American Historical
Association, Professor Wittner also chaired the Peace History Commission of the
International Peace Research Association.He has received major fellowships or
grants from the American Council of Learned Societies, the Aspen Institute, the
John D. and Catherine T. MacArthur Foundation, the National Endowment for the
Humanities, and the United States Institute of Peace., George Mason History News
Network, “Do We Really Want a New Generation of Nuclear-Armed Submarines?,”
http://hnn.us/article/156221, accessed July 6, 2014, EK]
In arguing for the new Trident submarine fleet, U.S. military leaders have
pointed to the fact that other nations are maintaining or building nuclear-armed
submarines. And they are correct about that. France and Britain are maintaining
their current fleets, although Britain is on the verge of beginning the
construction of a new one with U.S. assistance; Israel reportedly possesses one;
China is apparently ready to launch one in 2014; India is set to launch its own
in 2015; and Pakistan might be working to develop one. Meanwhile, Russia is
modernizing its own submarine ballistic missile fleet.
Even so, the current U.S. nuclear-armed submarine fleet is considerably larger
than any developed or being developed by other nations. Also, the U.S.
government’s new Trident fleet, now on the drawing boards, is slated to be 50
percent larger than the new, modernized Russian fleet and, in addition, far
superior technologically. Indeed, other nations currently turning out nucleararmed submarines – like China and Russia -- are reportedly launching clunkers.
In this context, there is an obvious alternative to the current race to
deploy the world’s deadliest weapons in the ocean depths. The nuclear
powers could halt their building of nuclear-armed submarines and
eliminate their present nuclear-armed submarine fleets. This action would
not only honor their professed commitment to a nuclear weapons-free
world, but would save their nations from making enormous expenditures and
from the possibility of experiencing a catastrophe of unparalleled
magnitude.
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Sanctions  Russia-China Axis
Sanctions fail to change leaders behavior and drive Russia into an alliance with China
States News Service, December 3, 2014, Barry Bosworth on the Effect of Sanctions on Russia’s Economic
Slide, http://www.brookings.edu/blogs/brookings-now/posts/2014/12/bosworth-effect-sanctions-russiaeconomic-slide DOA: 11-27-15
The following information was released by the Brookings Institution:
Russian officials are saying that falling energy prices will push their nation's economy into recession in 2015.
Russian President Vladimir Putin, who earlier this week canceled a new natural gas pipeline to Europe, is
expected to unveil his economic agenda later this week. These developments occur in the context of
continued Western sanctions against some areas of the Russian economy.
Brookings Senior Fellow Barry Bosworth, the Robert V. Roosa Chair in International Economics, gave the
following comment to ABC about the effects of the sanctions on Russia, Europe, and the U.S.:
The sanctions have no economic effect on the United States because we do not trade with Russia to any
significant degree. Thus, they are a painless, feel-good action for the United States. They are, however, a
bigger issue for Europe because of extensive trade relationshipsenergy, agriculture, and a wide range of
consumer goods that Europe exports to Russia. Plus, a lot of [Russian] oligarchs have residences and
money in Europe. It is more disruptive for Europe. Still, Germany has been very tough on Russia because of
the invasion of Ukraine.
The sanctions do have a big impact on Russia, largely through its financial system. The United States
exercises a great deal of control over international finance, and has disrupted Russian bank finances. Plus,
foreign direct investment from Europe is very important to Russia, both because of the money and the
technical know how.
The sanctions do have a negative effect, but the bigger short-run impact is from the collapse of oil prices.
The energy price declines are more important than the sanctions for the immediate future, but the long-run
costs of both to Russia are considerable.
I think sanctions have a significant economic impact, but they seldom if ever lead political leaders to
change course. In that sense, they do not work, and their economic impact is gradually eroded as
countries find ways around them. For example, the sanctions are a big plus for China, which will be
an energy market of greater interest to Russia going forward. That, bilateral relationship makes a lot
of sense for everyone.
Sanctions strengthen Russia-Asia ties
RIA Novosti, April 15, 2015 , Anti-Russia Sanctions Unjust, Should Be Eliminated - US Investor Rogers,
http://sputniknews.com/russia/20150415/1020923526.html DOA: 11-27-15
Anti-Russia sanctions over Moscow's alleged involvement in the Ukraine conflict should be removed
because they are unfair, legendary US investor Jim Rogers told Sputnik.
"The sanctions are unjust and an injustice," Rogers said in an interview. "Russia should not have been
affected by sanctions at all because it was America that started that coup and then turned around and
blamed it on Russia."
He added that economic sanctions currently in place against Russia hurt common people more than the
government.
The veteran US investor stressed that US companies are not as affected as European firms, because the
United States is not as economically tied to Russia as is Europe.
The investor said that anti-Russia sanctions will lead to closer ties between Moscow and Asian
countries.
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"It is forcing Russia and Asia closer and closer together, which is going to hurt America and Europe
in the long term. It is going to be good for Russia and for Asia," Rogers concluded.
Jim Rogers is a prominent investor and international financial commentator. In the 1970s he founded the
Quantum Fund with billionaire George Soros. Currently based in Singapore, he is the chairman of Rogers
Holdings and Beeland Interests, Inc.
Sanctions drive Russia to cooperate with Brazil, India, China, and South Africa
RIA Novosti, July 10, 2015
BRICS Countries Not to Impose Sanctions Against Russia - Chinese Official,
http://sputniknews.com/politics/20150710/1024444224.html DOA: 11-27-15
UFA, July 10 (Sputnik) - BRICS member states will not join unilateral Western sanctions imposed against
Russia, the director general at the Department of International Economic Cooperation of China's Ministry of
Foreign Affairs said Friday.
"Unilateral sanctions imposed against Russia do not apply to other BRICS countries," Zhang Jun told
journalists in Ufa when asked whether anti-Russian sanctions would hamper business and trade ties
between Russia and China.
He said that all of the leaders in BRICS had reached a consensus in regard to sanctions against Russia.
"The opposition to the unilateral sanctions is the consensus reached by the leaders of the BRICS countries in
the Ufa Declaration and it represents their political stance," Zhang said.
The West has imposed several rounds of sanctions against Russia since 2014 over Moscow's alleged
participation in the military conflict in eastern Ukraine. Moscow has denied the accusations, calling the
language of sanctions counterproductive.
Following the deterioration of relations with the West, Moscow enhanced cooperation with Arab,
Latin American and Asian countries, including with its BRICS partners - Brazil, India, China and
South Africa.
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Sanctions Destroy the Economy, Triggering Aggression
Sanctions undermine Russia’s global economic integration and wreck its economy,
triggering aggression
Samuel Charap & Bernard Sucher, March 6, 2015, The New York Times, Why Sanctions on Russia Will
Backfire, Samuel Charap is senior fellow for Russia and Eurasia at the International Institute for Strategic
Studies.Bernard Sucher is a member of the board of UFG Asset Management.
http://www.nytimes.com/2015/03/06/opinion/why-sanctions-on-russia-will-backfire.html DOA: 11-20-15
The American government tends to see sanctions against Russia as a low-cost policy that will
eventually force Vladimir Putin to change course in Ukraine.
But this conventional wisdom obscures significant costs. Just as using drones to target suspected
terrorists in Pakistan may have created more converts to Islamic militancy than it has eliminated, sanctions
advocates haven't reckoned with the unintended consequences of the policy -- consequences that could
prove far more damaging to American interests than the Kremlin's aggression in Ukraine.
First, by employing commercial and financial sanctions on Russia for its actions in Ukraine, the United
States -- the architect and largest beneficiary of the globalized system of trade and finance -- is exploiting
post-Soviet Russia's integration into that system. Years of mutually beneficial progress that brought 140
million Russians into the orbit of global economic governance are now in doubt. Even if sanctions succeed
in changing the Kremlin's behavior and are then lifted, the American objective of integrating Russia
into the global economy has been fundamentally undermined.
Second, the use of sanctions broadcasts to others the strategic hazard of integrating into the
American-led global financial system. Whatever the outcome of Russia's intervention in Ukraine and
whatever Mr. Putin's ultimate fate, other non-allies of the United States have now learned the lesson
that hard-won institutional integration can be turned against those states that achieve it.
Third, while there is no question that sanctions have inflicted real costs on the leading state-owned
and state-affiliated companies and harmed Mr. Putin's cronies, the collateral damage to independent,
private enterprise in Russia is incomparably worse. Businesses without political protection will see
atrophied sales, no access to finance and an indefinite postponement of investment. Those enterprises that
put the greatest store on Russia's integration with the European Union and the United States are
being hit hardest. (One of us is an American investor and entrepreneur who has long been active in Russia
and is witnessing this first-hand.)
The most daring Westernizers among Russia's small entrepreneurial class now find themselves without
protection while state banks and energy companies continue to be shielded by their access to government
credit obtained on favorable terms.
Fourth, by imposing sanctions on Russia when it was already falling into a downward economic spiral,
Washington has given Mr. Putin a powerful political instrument to deflect blame for the
consequences of his own baleful decisions in Ukraine. The Kremlin's model of ''state capitalism'' was
already struggling and its performance would have been poor without the geopolitical upheaval that Mr. Putin
has created. American sanctions arrived with perfect timing, providing him an alibi that he has skillfully used
to confuse the Russian people about the cause of their economic woes.
Fifth, even if sanctions are carefully crafted to punish specific actors, ordinary Russians perceive
the West's sanctions to be directed against them and it is they who are being forced to bear the real
costs of soaring inflation, the ruble's collapse and slowing growth. Russians' sense that they are under
attack has generated an understandable ''rallying around the flag'' phenomenon. Mr. Putin's all-time-high
approval ratings are one result; the other is the near-complete marginalization of dissenting voices. Sadly,
Sunday's march to memorialize the slain opposition leader, Boris Nemtsov, will not change this.
If Russia faces greater economic turbulence in the coming months and years, America could face
far more intractable problems than those that exist today. Russia is likely to become more belligerent
if externally inflicted economic blows deepen the country's crisis. Moreover, a deeper downturn in
Russia would worsen the economic woes of the European Union, with potential knock-on effects
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globally.
More sanctions undermine Russia’s economic integration
Samuel Charap & Bernard Sucher, March 6, 2015, The New York Times, Why Sanctions on Russia Will
Backfire, Samuel Charap is senior fellow for Russia and Eurasia at the International Institute for Strategic
Studies.Bernard Sucher is a member of the board of UFG Asset Management.
http://www.nytimes.com/2015/03/06/opinion/why-sanctions-on-russia-will-backfire.html DOA: 11-20-15
The alternative would be open-ended sanctions that escalate conflict between Washington and Moscow
while influencing Russia's economy and politics in ways that contradict American interests. Mr. Putin would
gain greater control over the economy and rally the public around him, and Russia's evolution as a modern,
globally integrated country would be halted. Recognizing these risks is not an endorsement of Russia's
aggressive behavior. Just as opposing drone strikes doesn't imply support for terrorism, highlighting the
strategic costs of sanctions is about crafting an effective policy, not appeasing Mr. Putin.
It is worth recalling that after the dissolution of the Soviet Union, the United States faced a nightmare
scenario of Russia in chaos. The government was bankrupt, and its ability to control its territory and large
nuclear arsenal was threatened. At that time, Washington concluded that such a weak Russia would pose a
grave threat to American national security. Why should that calculation be any different today?
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Sanctions Undermine Global Energy Security
Undermining the Russian oil industry undermines oil production and global energy
security
Energy Monitor Worldwide, February 16, 2015, West bans on Iran, Russia endangering world energy:
Rosneft, http://www.presstv.com/Detail/2015/02/16/397801/Bans-on-Iran-Russia-endanger-world-oil DOA:
11-27-15
The head of Rosneft, the world's biggest publicly traded oil company, says the sanctions the West has
imposed on Russia jeopardizes Europe's energy security and the world oil supplies.
In recent months, Western states have imposed bans on Moscow's financial and energy sectors along with
a number of Russian nationals close to President Vladimir Putin.
"In the long term, sanctions against Russia endanger Europe's security of supply," Igor Sechin wrote in an
article published by Financial Times on February 15.
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A2: Need Sanctions to Enforce the Minsk Agreement
Sanctions have not led to the implementation of the Minsk agreement
Handelsblatt Global Edition, November 10, 2015
Ukraine Crisis; Russia Can Handle Sanctions, Minister Says,
https://global.handelsblatt.com/edition/303/ressort/politics/article/russia-can-handle-sanctions-minister-says
DOA: 11-27-15
When it comes to the European Union's planned extension of economic sanctions against his country,
Russian Trade Minister Denis Manturov is demonstratively relaxed, saying that while they amount to "moral
discrimination," Russia will not retaliate with new countermeasures.
"This is a situation we're used to by now and we'll manage," Mr. Manturov, 46, told Handelsblatt in an
interview on the sidelines of a German-Russian economic conference in Berlin on Monday.
"If that's of any use to the E.U., then please go ahead, but actually European business should decide," he
added.
As previously reported by Handelsblatt, the European Commission and the German government plan to
decide at an E.U. summit in December to extend the sanctions for a further six months.
The sanctions were imposed on Moscow after it annexed Crimea from Ukraine in March 2014, and are due
to expire on Jan. 31, 2016. They include limiting the access to E.U. capital markets for five top Russian
banks, three major Russian energy firms and three defense companies.
Mr. Manturov said the European Commission was "too far removed from the real economy" and even
claimed that a decision to extend sanctions would be advantageous to Russia.
"E.U. nations have agreed that economic sanctions on Russia will stay in place until a ceasefire deal
in Ukraine is fully implemented."
When challenged with the conclusion that the sanctions had cut Russia's economy off from the international
financial markets and that real wages were falling significantly for the first time since President Vladimir Putin
came to power in 2000, he conceded that the measures "of course don't make us happy."
But he added that Russia won't expand its countermeasures. "We aren't suicidal," he said. "We don't want to
ban buying modern technology abroad." He wants more foreign investment in Russia, as well as an
increased technology transfer.
Russia has responded to the sanctions by banning the import of food from the E.U. and U.S.
Meanwhile, pressure is building from German business leaders to end the sanctions. At Monday's
conference, Siegfried Russwurm, management board member of German industrial group Siemens, which
has a big presence in Russia, said the company remained committed to its presence in Russia.
"We're standing by Russia," Mr. Russwurm said. "We will do everything to persuade politicians that some of
the measures don't serve anyone." It would be "dishonest to say that the sanctions aren't a hindrance," he
added.
Former German Chancellor Gerhard Schrˆder, an executive for the pipeline consortium Nord Stream, a joint
venture in which Russia's Gazprom holds a 51 percent stake, said: "We Europeans should deepen economic
and political ties with Russia."
The E.U.'s sanctions weren't in Europe's interest, said Mr. Schrˆder, a personal friend of Mr. Putin. He said
the U.S. had expanded its trade with Russia while E.U. exports there had fallen by around 30 percent.
Mr. Schrˆder was speaking at an event hosted by Austrian energy group OMV, which wants to expand its
Russian operations and is taking part in the planned construction of the planned second Baltic pipeline, Nord
Stream II, alongside companies including German energy giant Eon, gas group Wintershall and Shell.
Volker Treier, deputy managing director of Germany's chamber of commerce and industry, said: "We want to
reach out to our long-standing partner Russia," adding that he hoped the sanctions would end soon.
But according to sources in Brussels and Berlin, that's unlikely to happen. E.U. nations have agreed that
economic sanctions on Russia will stay in place until a ceasefire deal in Ukraine is fully implemented.
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The Minsk agreement signed in the Belarus capital in February between the leaders of Ukraine,
Russia, France, and Germany set a deadline for Ukraine to regain full control over its eastern border
by the end of 2015. But sources in the German government said there's no sign that steps are being
taken toward full implementation of the agreement.
And that means Mr. Manturov and German businesses eager to resume their work in Russia will have to be
patient.
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A2: Russia Arctic Drilling Bad
Russia sees the Arctic as critical to protection of its sphere of influence.
Federation of American Scientists, 97
[No author (approved by Decree #11 of the President of the Russian Federation),
January 11, Federation of American Scientists, “THE WORLD OCEAN CONCEPT of the
Purpose-Oriented Federal Program I. General,”
http://fas.org/nuke/guide/russia/doctrine/CDONEW22.htm, accessed July 7, 2014,
EK]
The World Ocean is a very promising region for economic activity on one side,
and the most important factor in geopolitics, as well as a region of
inevitable rivalry and potential division into spheres of influence.
Traditionally, Russia is considered to be one of the great maritime powers
that play an important role in the exploration and use of the World
Ocean. For the economic and social life of Russia, the World Ocean , and the
seas surrounding the country in the first instance, is of paramount importance .
There are objective considerations for that: the length of the sea border of
Russia is 38800 km (the length of the land border is 14500 km); the shelf area
is 4.2 million square kilometers, of which 3.9 million square kilometers are
prospective for hydrocarbons (at least 80% of Russia's oil and gas reserves are
in the shelf of its northern seas); the vital activity of Russia, especially
of its coastal regions, depends on uninterrupted operation of the sea
transport and the proper support of cargo and passenger traffic.
Currently Russia is in a completely new situation in terms of the
establishment of the bases for sea policy as well as the realisation and
protection of its interests in the World Ocean. The crisis in the national
economy has seriously deteriorated the opportunities for Russia to keep its
presence in the World Ocean at its former level. Forced curtailment of
activities in the World Ocean goes without any order, which aggravates the
negative consequences of this process, and decreases the efficiency of the use
of allocated resources. Restoration of Russia's position in the World Ocean is a
task of national importance. Activities of state, economic, scientific and
defense-oriented organizations in exploration and use of the World Ocean shall
be performed as an essential part of the integrated national policy in
the economy, finance, defense, ecology, science and technology,
international relations and utilization of natural resources.
Loss of Russia’s sphere of influence means war
Yuferov, MGIMO University's School of Political Science
Graduate, 2013
[Ivan, Nov 28, 2013, Russian Direct, “Is a real cold war possible
in the Arctic?,” http://www.russia-direct.org/content/real-coldwar-possible-arctic, accessed 7-12-14, J.J.]
Military conflict can be provoked because of significant economic and
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strategic stakes in an area where boundaries of maritime jurisdiction remain
to be settled. Diplomatic gridlock may lead the region to erupt in an armed mad dash for its
resources . There are a number of driving factors of this scenario: growing
military activity, inflammatory rhetoric, and closer security
coordination among the Western powers. Moreover, the Arctic countries are
likely to grab territory unilaterally and exert sovereign control over
sea lanes by arming icebreakers and military troops to guard their
claims. This scenario of a real cold war is substantiated by some recent
facts. The Russians recently ordered strategic bomber flights over the Arctic Ocean for the first time
since the Cold War . Moreover, Russian armed forces have regularly tested air
and sea defenses of NATO in the region. Finally, the NATO alliance often
organizes military exercises with warships and strategic bombers,
supported by tankers, reconnaissance aircraft and escort fighters.
US Encroachment on Russian Sphere of Influence collapses relations
Merry, American Foreign Policy Council, 9
[E. Wayne, E. Wayne Merry is Senior Fellow for Europe and Eurasia at the
American Foreign Policy Council in Washington, DC. He is widely published and a
frequent speaker on topics relating to Russia, Central Asia and the Caucasus,
the Balkans, European security and trans-Atlantic relations. In twenty-six years
in the United States Foreign Service, he worked as a diplomat and political
analyst specializing in Soviet and post-Soviet political issues, including six
years at the American Embassy in Moscow, where he was in charge of political
analysis on the breakup of the Soviet Union and the early years of post-Soviet
Russia. He also served at the embassies in Tunis, East Berlin, and Athens and
at the US Mission to the United Nations in New York. In Washington he served in
the Treasury, State, and Defense Departments. In the Pentagon he was Regional
Director for Russia, Ukraine and Eurasia during the mid-Nineties. He also
served at the Headquarters of the US Marine Corps and on Capitol Hill with the
staff of the US Commission for Security and Cooperation in Europe. He was later
a program director at the Atlantic Council of the United States., May 22, New
York Times, “A ‘Reset’ Is Not Enough,”
http://www.nytimes.com/2009/05/23/opinion/23iht-edmerry.html?_r=0, accessed July
7, 2014, EK]
A reset seeks to restore a previous relationship, which for former
officials of the Clinton administration now back in office means the
Yeltsin years. This will fail because Moscow views that period as
emblematic of Russian weakness and exploitation by the West, and
especially by the United States.
Relations with Moscow deteriorated under both Bill Clinton and George W. Bush.
The U.S. neo-liberal project of the ’90s not only failed but deeply alienated
Russians. The bilateral nadir was the Kosovo war, a worse episode than last
year’s Georgia conflict. A new opportunity after 9/11 was frankly squandered.
Washington regarded Russia as a loser and treated it as such. It forgot
that Russia would not be weak forever, and would remember.
Two structural problems limit the relationship and its improvement. First, it is
very narrow, with few automatic stabilizers. Unlike Russian-European or U.S.-
Chinese relations, the scant economic and human ties between the U.S. and
Russia provide inadequate ballast when problems arise. Relations are
highly vulnerable to outside events and defined more by disputes than
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cooperation. When malice is added to the mix, the result is dangerous.
Second, for Moscow the relationship is largely zero sum , in that Russian
diplomacy succeeds where America’s fails, as in Iran and Venezuela. This is the
consequence both of the huge asymmetry in real power and influence of the two
countries and an asymmetry of geography in that almost anything the United
States does in Eurasia affects Russia’s interests, often adversely. Thus Moscow
worries that a successful Obama presidency will come at their expense with other
countries. Russian commentators especially fear this may be the case with Iran,
seeing the potential for a shift comparable to Mao’s China or Sadat’s Egypt.
The current Russian leadership bears a disproportionate share of the
blame for our poisonous relations. But Washington needs to adopt new
rules of engagement to not repeat mistakes of the previous 16 years:
One, minimize deliberate challenges to Russian interests and know that none will come free . If we
push NATO, they will push back. When we sponsored an independent Kosovo,
Moscow declared it would do the same in Abkhazia and South Ossetia. Reciprocity
is real.
Infringement on Russia’s Sphere of Influence will result in nuclear war
Keck, Diplomat Associate Editor, 14
[Zachary, Zachary Keck is Managing Editor of The Diplomat where he authors The
Pacific Realist blog. He also writes a monthly column for The National Interest.
Previously, he worked as Deputy Editor of e-International Relations and has
interned at the Center for a New American Security and in the U.S. Congress,
where he worked on defense issues, July 11, The Diplomat, “Russia Threatens
Nuclear Strikes Over Crimea,” http://thediplomat.com/2014/07/russia-threatensnuclear-strikes-over-crimea/, accessed July 12, 2014, EK]
When asked about these comments at a press conference on Wednesday, Russian
Foreign Minister Sergey Lavrov responded, “If it comes to aggression against
Russian territory, which Crimea and Sevastopol are parts of, I would not
advise anyone to do this.” He then added, “We have the doctrine of national
security, and it very clearly regulates the actions, which will be taken
in this case.”
This is a not-so-subtle threat to use nuclear weapons to retain Crimea. Since the collapse
of the Soviet Union, Russia’s conventional military capabilities have
deteriorated significantly. As a result, it has come to be increasingly
reliant on nuclear weapons to protect its national security. This has been
reflected in its post-Cold War military doctrines, particularly the ones since
2000. These military doctrines have greatly reduced the threshold that would
needed to be crossed before Russia would resort to the use of nuclear weapons.
Most notably, Russia’s military doctrines starting in 2000 introduced the
concept of de-escalation, which is “a strategy envisioning the threat of a
limited nuclear strike that would force an opponent to accept a return to the
status quo ante.” In other words, Russian military doctrines have said that
Moscow will use limited nuclear strikes in response to conventional
military attacks against it. The most recent military doctrine issued in
2010, for example, states:
“The Russian Federation reserves the right to utilize nuclear weapons in
response to the utilization of nuclear and other types of weapons of mass
destruction against it and (or) its allies, and also in the event of
aggression against the Russian Federation involving the use of
conventional weapons when the very existence of the state is under
threat.”
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It was this military doctrine that Lavrov was referring to at the press
conference this week. As quoted above, Lavrov began by emphasizing that Moscow
sees Crimea as an integral part of Russian territory. He then stated that Moscow
has a military doctrine that “very clearly” outlines how Moscow would respond to
threats to its territorial integrity. The military doctrine “very clearly”
states that the “Russian Federation reserves the right to utilize nuclear
weapons” in these situations.
This is not the first time a Russian official has issued a nuclear threat against its neighboring
states. For example, as tensions rose between Russian and several former Soviet
Union and Warsaw states in 2011, General Staff Chief Gen. Nikolai Makarov warned
a Russian legislative body that:
“The possibility of local armed conflicts virtually along the entire
perimeter of the border has grown dramatically. I cannot rule out that,
in certain circumstances, l ocal and regional armed conflicts could grow into a large-scale
war, possibly even with nuclear weapons.”
- US-Russia only see the Artic as grounds to cooperate on climate change.
McCormack, Florida International University International
Relations Ph.D, 2013
[Michael, November 16, “The Arctic can defrost icy U.S.-Russia relations.”
Russia Direct. from http://www.russia-direct.org/content/arctic-can-defrost-icyus-russia-relations, Retrieved July 14, 2014, WZ]
At present, Alaska’s geographic location gives the United States a direct stake
in the issue of climate change in the Arctic Ocean, an issue in which Russian
territory is also directly affected. While public attention toward this issue
has focused on the perceived rivalry between countries in seeking out the
Arctic’s potentially vast natural resources—an implication that largely grew
from a 2007 incident in which Russian researchers planted a Russian flag on the
North Pole seabed—the Arctic may actually prove to be a vehicle for positive
cooperation between Russia and the United States.
As Russia and the United States remain at odds over many other global issues of
note, there is reason to be optimistic that the two countries can find common
ground in developing a positive response to Arctic climate change.
Aside from the Arctic’s potential natural resource wealth, another pressing
issue is the impact of melting ice on global shipping routes: As the general
amount of ice in the Arctic Ocean has gradually decreased over the past few
decades, the viability of using the Arctic Ocean for marine shipping is expected
to increase tremendously in the coming years. Along with Canada, Denmark, and
Norway, the U.S. and Russia (collectively known as the “Arctic Five”) have
increased their attention to Arctic issues through institutions such as the
Arctic Council. Given the expected increase in marine traffic in the Arctic
Ocean in the next two decades, Arctic states have considered upgrading port
facilities to handle larger ships that will have gained the ability to operate
in the region.
Another significant concern along these lines is the ability of search-andrescue forces to respond to increased activity. In January 2013, the Arctic
Search and Rescue Agreement—which was signed by Arctic Council members in May
2011—came into force. This was a significant step toward establishing
concrete measures in which Arctic states can collaborate and remain
positively engaged on issues of mutual interest in the Arctic Ocean.
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A2: Russia Military Modernization Bad
Resource problems and corruption kill modernization
Chase et al.,
senior political scientist at RAND, a professor at the Pardee
RAND Graduate School, and an adjunct professor in the China Studies and
Strategic Studies Departments at Johns Hopkins University's School of Advanced
International Studies, and, ‘15
(Michael S., Jeffrey Engstrom specializes in Asia-Pacific security issues and
foreign policy, Tai Ming Cheung, director of the Institute on Global Conflict
and Cooperation (IGCC) located at UC San Diego, Kristen A. Gunness, China
advisor for the Department of the Navy, Scott Warren Harold, Deputy Director,
Center for Asia Pacific Policy; Political Scientist at the RAND Corporation,
Susan Puska, former U.S. Army Attache. works for Defense Group, Inc., and,
Samuel K. Berkowitz, China analyst based in Washington, D.C., “China’s
Incomplete Military Transformation,”
http://www.rand.org/pubs/research_reports/RR893.html)
The PLA also faces shortfalls in terms of its combat capabilities. Many Chinese
strategists identify the inability to conduct integrated joint operations at the
desired level of competence as the central problem China faces as it aspires to
project combat power beyond its land borders. Indeed, Chinese sources highlight
several problems that contribute to the PLA’s shortcomings in the area of joint
operations and suggest that there is still a large gap between China and
developed countries’ militaries, especially the United States. PLA publications
also highlight continuing shortfalls in training, despite years of effort to
make training more realistic and more valuable in terms of addressing
shortcomings and improving the PLA’s operational capabilities. In addition, the
publications point to persistent challenges in combat support and combat service
support functions and forces, as reflected by frequent discussions of
shortcomings in logistics and maintenance capabilities that appear in PLA
newspaper reports and journal articles. Many shortfalls specific to China’s
naval and air forces remain despite major advances in their capabilities in
recent years. While the People’s Liberation Army Navy’s (PLAN’s) new surface
combatants and submarines boast impressive capabilities comparable with those of
a modern world-class navy, the PLAN still faces a number of challenges. These
exist in such areas as the integration of increasingly complex modern weapons and
equipment platforms; the training of PLAN personnel, who currently are not fully
equipped to operate or maintain them; and the mastery of such capabilities as
antisubmarine warfare and amphibious operations. The People’s Liberation Army
Air Force has similarly made enormous strides but must still cope with such
challenges as a large force comprising multiple generations of aircraft, a
shortage of key special-mission aircraft, unrealistic training, and insufficient
strategic transport capability.
The PLA also faces potential weaknesses in its ability to protect Chinese
interests in space and the electromagnetic spectrum and to operate successfully
in these areas to support military campaigns requiring information dominance.
Indeed, as China places more and more satellites in orbit, the PLA is becoming
more dependent on space capabilities for such important functions as
intelligence, surveillance, and reconnaissance; navigation and positioning; and
communications. Chinese military publications suggest that the PLA still sees
itself as less dependent on space than the U.S. military but also appear to
recognize, albeit largely implicitly, that increasing reliance on space brings
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greater vulnerability. China also sees itself as potentially vulnerable in the
electromagnetic spectrum. One area in which this concern has been particularly
pronounced is Chinese concern about cybersecurity weaknesses. Indeed, the PLA
clearly views itself as occupying a relatively disadvantageous position due to
its perceived inferiority in the key aspects of “network military struggle.”
This problem may become more pressing as the PLA increases its reliance on
technology that is potentially vulnerable to disruption, thus creating a
weakness an adversary could exploit.
Although China’s defense industry has made tremendous progress in terms of its
ability to deliver advanced weaponry and equipment to the PLA
over the past two decades, it also suffers from a number of problems that have
yet to be resolved. Indeed, China’s defense industry is still in transition from
central planning to a more market-oriented system, and many major obstacles
remain to be tackled. The main problems the defense industry faces include
widespread corruption, lack of competition, entrenched monopolies , delays and cost
overruns, quality control problems, bureaucratic fragmentation , an outdated
acquisition system, and restricted access to external sources of technology and
expertise.
Equipment and funding problems kill modernization
RAND,
“China's Military Modernization Efforts Fall Short; Significant
Weaknesses Remain,” February 16, 2015,
http://www.rand.org/news/press/2015/02/16.html
Although the drive by the People's Republic of China to modernize its military
has been underway for more than two decades, significant weaknesses remain,
according to a new RAND Corporation report.
In the 1980s and 1990s, the People's Liberation Army was saddled with outdated
equipment and poorly trained personnel, as well as the distraction and
corruption associated with its involvement in an array of commercial activities.
China reacted by pouring money into its military, resulting in double-digit
increases in military spending in most years, but many issues remain unresolved.
“Our research found that China's weaknesses fall in two broad categories:
institutional and combat capabilities,” said Michael Chase, co-lead author of the study
and a senior political scientist at RAND, a nonprofit research organization.
“The army faces shortcomings from outdated command structures, quality of
personnel, professionalism and corruption .”
In terms of combat capabilities, China has problems with logistical weaknesses ,
insufficient strategic airlift capabilities, limited numbers of special mission
aircraft and deficiencies in fleet air defense and anti-submarine warfare, said
Jeffrey Engstrom, co-lead author of the report and a RAND senior project
associate.
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Sanctions Generally Fail
Coercive economic diplomacy generally fails
Ka Zeng, Assistant Professor, Department of Political Science, University of
Arkansas, 2004
(Trade Threats, Trade Wars: Bargaining, Retaliation, & American Coercive
Diplomacy, p. 2-3)
The record of these commercial rivalries presents us with two puzzles. First,
even though the United States has always been the country with greater aggregate
power and bargaining resources in bilateral trade disputes, it has had uneven
success in extracting concessions from its trading partners through the use of
coercive strategies. As my survey in chapter 3 of Washington's attempt to
unilaterally open foreign markets under Section 301 of U.S. trade law indicates,
the degree to which the target countries yield to American demands often varies in
ways that cannot be neatly explained by their dependence on the American export
market. For instance, although Japan is less dependent on the American market for
exports than many U.S. trading partners, it has given in most frequently to U.S.
pressure.2 Interestingly, countries that are more heavily dependent on the U.S.
export market (such as China, Brazil, and India) have turned out to be more
resistant to American demands.3 Despite having fewer power resources, they have
frequently been able to negotiate better dispute settlements than gross measures
of power would predict. Clearly, traditional realist theory, with its emphasis on
nations' underlying raw power balances, cannot explain why, on average, American
coercive diplomacy works less well with countries whose raw material power should
have put them in a more disadvantaged position vis-a-vis the United States. It
seems necessary for us to look at factors other than raw power to understand the
variations in the effectiveness of America's pressure tactics.
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Sanctions Unethical
Sanctions fail all ethical frameworks – responsibility to subject them to rigorous ethical
analysis before endorsement
William Seuffert, Grad Student @ School of International Service, 2000, The
Morality of UN Economic Sanctions: Emerging from the Shadow of Iraq,
http://www.american.edu/academic.depts/sis/sword/Current_Issue/6.pdf., p. 86
Economic sanctions must bear some moral accountability to maintain their
political legitimacy. In response to questions concerning the ethics of
military force, frameworks were established to determine when force is
acceptable. This theory of “just war” established conditions that would justify
involvement in a war and the appropriate actions within that war. Economic
sanctions must go through a similar ethical evaluation to determine when this
coercive tool may be used justly. If economic sanctions are to be justified
during peacetime under a preventive pretense, they must retain the moral high
ground to ensure adherence to international norms. This ethical analysis should
attempt to stay within the perspective of economic sanctions as a preventive
tool. An ethical analysis must first refute the claim that economic sanctions
are a nonviolent alternative to military force and therefore always ethically
acceptable as an act of coercion. Experience from the “sanctions decade” proves
the disastrous results of economic warfare. The humanitarian consequences can
often evoke greater suffering on a population than military force, and they are
often felt for a much greater period of time. The lack of military violence
does not exonerate the sanctioning country of moral responsibility for the
effects of economic sanctions. Jay Gordon argues that from the ethical
perspective of just-war-doctrine, Kantianism and utilitarianism, economic
sanctions are ultimately immoral: ”Sanctions are inconsistent with the principle
of discrimination from just-war doctrine; sanctions reduce individuals to
nothing more than means to an end by using the suffering of innocents as a means
of persuasion, themselves’; and sanctions are unacceptable from a utilitarian
perspective because their economic effectiveness necessarily entails
considerable human damage, while their likelihood of achieving political
objectives is low.”
Sanctions unethical – impose suffering on individuals to punish their government
William Seuffert, Grad Student @ School of International Service, 2000, The
Morality of UN Economic Sanctions: Emerging from the Shadow of Iraq,
http://www.american.edu/academic.depts/sis/sword/Current_Issue/6.pdf., p. 79
Economic sanctions are typically employed to coerce governments to comply with
the demands of the issuing entity. While sanctions lack the direct violence of
military coercion, they often result in situations of expanded and heightened
suffering through indirect and unintended means. While the sanctions target
governments, they typically victimize civil society and civil society and can
often strengthen the regime. This apparent incongruence of intention and
results requires a re-evaluation. The ethical and legal limitations of economic
sanctions, supplemented by their tarnished history threaten their legitimacy and
viability as a political tool. However, economic sanctions, as part of a
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greater framework of economic diplomacy, offer promise in the field of
preventive diplomacy.
48
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Sanctions Generally Fail (Not Russia Specific)
Sanctions fail – historical examples prove.
Ken Blackwell, 10-15-2012, cnsnews.com,
“Sanctions Don't Work Because
Despots Don't Care,” http://cnsnews.com/blog/ken-blackwell/sanctions-dont-workbecause-despots-dont-care
candidates clashed over whose team would be
better able to impose "crippling" sanctions on Iran. The problem with
sanctions is an old one. President Jefferson tried to impose a trade embargo on Britain in 1807 to stop the Royal
Navy from seizing our sailors on the high seas. This Embargo was an attempt to use peaceful
coercion to bring about a change in policy by the British. It failed. It was
During last week's vice presidential debate, the
Jefferson's greatest failure as president. We have a Bicentennial Walking Tour of the War of 1812 at the U.S. Naval Academy. I'd be
happy to take you on that tour. The War of 1812 was the direct result of the failure of Jefferson's sanctions to make Britain changer
At the outset of the Civil War, Confederate President Jefferson Davis imposed a
cotton embargo. Millions of bales of cotton were left to rot on Southern wharves because Davis and his Cabinet were
convinced they could force Britain to break the Union blockade of Southern ports. The British, so this
reasoning went, would become so desperate for cotton for their textile
mills that they would have use force against the U.S. Navy and enter the war as a belligerent on the
her behavior.
side of the Confederacy. Britain was unwilling to risk war with the Yankees and, besides, they found other sources of cheaper cotton-
Jeff Davis's cotton embargo failed--spectacularly. Prior to World War II, the
U.S. imposed an oil embargo on Japan. The theory was that the Japanese military rulers, lacking any
-in Egypt, in India.
domestic sources of petroleum, would cease their aggression against China and be forced by economic sanctions to come to the
You've heard of Pearl Harbor. That was the Japanese Imperialists' answer to the U.S.
The rulers of these countries, especially if they are dictatorships, always
have enough stuff. The gaudy and glittering gangster palaces of the late unlamented Saddam Hussein and Muammar Khaddafi
negotiating table.
economic sanctions.
attest to the fact that despots always take care of their own creature comforts. These two got all the Western stuff--even
we are assured that sanctions will work with the
Why do we think this? These are men who willingly sent
thousands of ten-year old boys through Iraqi minefields during the 10-year war between the mullahs and Saddam Hussein.
These despots get all the stuff they want. And they don't care if their
people suffer from crippling sanctions.
pornography and Viagra--that they wanted. And yet,
Iranian mullahs.
Economic sanctions fail – bad actors perceive them as weak.
Carla A. Robbins, 5-23-2013, is an adjunct senior fellow
at the Council on
Foreign Relations, Bloomberg Businessweek, “Why Economic Sanctions Rarely Work,”
http://www.businessweek.com/articles/2013-05-23/why-economic-sanctions-rarelywork
Sanctions, particularly
economic sanctions, have long been a tool of U.S. foreign
policy,
and few presidents have leaned on them as much as Barack Obama or been as successful at rallying others to do the same.
To thwart Iran’s nuclear ambitions, the U.S. has cajoled and bullied much of the world to slash imports of Iranian oil and freeze out
Iranian banks. Most of the world has similarly choked off trade with North Korea. And for almost two years after the outbreak of
Syria’s civil war, the U.S., Europe, and the Arab League hoped that asset freezes, banking and visa sanctions, and a Western ban on
In a world
bristling with bad actors, and especially at a time when the country is
wary of another war, sanctions have an obvious appeal—and limited impact.
Sanctions have failed to dissuade Iran from continuing to enrich uranium. They haven’t
dislodged North Korea’s repressive and erratic leaders or forced a rollback of their nuclear and missile
Syrian oil purchases would pressure Bashar al-Assad to step down or persuade his cronies to oust him.
programs. For all the international pressure on Syria’s Assad, the regime is getting more ruthless, not less, and the policy debate
That record hasn’t stopped
Congress from seeking to pile even more sanctions on the U.S.’s adversaries. In the House,
in Washington has moved on to how much military support to provide the rebels.
more than 300 members from both parties are pushing a bill that would target Iran’s commercial trade and punish countries that buy
even reduced amounts of oil from Iran. Several senators have proposed bills intended to choke off Iran’s access to foreign reserves
It’s an open question
instead make their leaders
and trade. Lawmakers are working on similar legislation to tighten the economic noose around North Korea.
whether more punishment will actually change the behavior of Iran and North Korea—or
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more defiant. Veteran U.S. diplomat Thomas Pickering says policymakers must understand that sanctions are
only a tool and not a strategy. In the case of Iran, the U.S. has “spent a huge amount of time and attention
developing a sanctions regime and far less on trying to work out a negotiating approach to take advantage” of that pressure, he says.
“There has to be a rebalancing.” The U.S. has punishing restrictions on a half-dozen countries, including Cuba, Iran, North Korea,
Sudan, and Syria. A U.S. Department of the Treasury list of sanctioned individuals, businesses, and government programs worldwide
runs to more than 550 pages. Daniel Drezner, a professor at Tufts University’s Fletcher School, says sanctions “tend to work when the
demand is incredibly well-defined,” like resolving a trade dispute, “and there is some sort of decent relationship with the target
state.” Those governments can compromise without worrying that the country imposing sanctions will keep demanding more. Drezner says
sanctions targeted at adversaries have far lower odds of success.
when administration after administration
has imposed sanctions”—they question whether what Washington is really
pushing for is regime change.
that broad
“Put yourself in Iran’s shoes or North Korea’s shoes,
Dictators only respond to military force – economic action is weak.
Jacob Weisberg, 8-2-2006, is chairman and editor-in-chief
of the Slate Group
and author of The Bush Tragedy, Slate, “Thanks for the Sanctions,”
http://www.slate.com/articles/news_and_politics/the_big_idea/2006/08/thanks_for_
the_sanctions.html
Trade prompts economic growth and human interaction, which raises a
society's expectations, which in turn prompts political dissatisfaction and opposition. Trade, tourism,
cultural exchange, and participation in international institutions all
serve to erode the legitimacy of repressive regimes. Though each is a separate case, these
forces contributed greatly to undermining dictatorships and fostering democracy in the Philippines, South Korea, Argentina, Chile,
Contact also makes us less
clueless about the countries we want to change. It is hard to imagine we would have
and Eastern Europe in the 1980s. The same process is arguably under way in China.
misunderstood the religious and ethnic conflicts in Iraq the way we have if our embassy had been open and American companies had been
doing business there for the past 15 years As another illustration, take Iran, which is currently the focus of a huge how-do-we-getthem-to-change conversation. Despite decades of sanctions, Iran is full of young people who are culturally attuned to the United
there is
little reason to think that more sanctions will bring that day any
closer. The more likely effect of a comprehensive sanctions regime is
that it will push dissatisfied and potentially rebellious Iranians back
into the arms of the nuke-building mullahs. The counterexample always
cited is South Africa, where economic and cultural sanctions do seem to have contributed not only to the fall of
terrible regime but to a successful democratic transition. In his new book The J Curve, Ian Bremmer argues that South
Africa was unusually amenable to this kind of pressure because it
retained a functioning multiparty democracy and because, unlike many other pariah states, it
States. One day, social discontent there will lead to the reform or overthrow of the ruling theocracy. But
a
didn't actually like being a pariah. Even so, sanctions took a very long time to have any impact. It was nearly three decades from
the passage of the first U.N. resolution urging sanctions in 1962 to Nelson Mandela's release from prison in 1990. If they are so
rarely effective, why are Western governments pressing for sanctions more and more often? In a world of trouble, it is partly an
exercise in frustration. We often have no good options and need to feel that we're doing something. Sanctions are a palatable
But we need to learn
that tyrants respond more to a deep survival instinct than to economic
incentives. To understand their behavior, you can't just read Adam Smith. You need Charles Darwin.
alternative to military action and often serve to appease domestic constituencies as well.
Sanctions are just used to score political points – no real enforcement mechanism.
Haider Rizvi, 5-21-2013, is an award-winning journalist who is based at
the
UN in New York, GLOBAL TIMES, “US sanctions policy hurts ordinary people on all
sides of dispute,” http://www.globaltimes.cn/content/783255.shtml
Mirza is not from Iran, nor does he have anything to do with Tehran's
nuclear bomb. But he is suffering a huge financial loss
due to US sanctions. "Oriental rugs have been in the US for more than 100 years," says Mirza, 51, a Pakistani
Nadeem
alleged plans to develop a
businessman who specializes in repairing antique Central Asian rugs for affluent Americans. Last year, he lost hundreds of thousands
of dollars because the US authorities refused to release the shipment of old carpets that he had repaired in Pakistan for his clients
in northeastern US. "It took me 20 years to build credibility in this business, but it seems I am going to be one more addition to
the 27 million unemployed US citizens," Mirza told me in a tone filled with frustration and anger. Mirza says he has suffered a lot
from sanctions. But he is not the only one. In fact, there are tens of thousands of small business owners in and outside Iran who
have lost their livelihood as a result of US trade embargo. The
program suspected of nuclear weapon manufacturing, but they have
US sanctions are meant to press Tehran to halt its
failed to bring about any change
nuclear
in
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Tehran's policy. Iran, for its part, has consistently held that, as a signatory to the United Nations Treaty on the Non-Proliferation
of Nuclear Weapons (NPT), it has a legitimate right to produce nuclear energy and thus it would not abandon its nuclear projects.
Like Iran, North Korea is also facing a tough regime of sanctions aimed at reversing its nuclear program. Though condemned by the
international community in recent weeks for conducting nuclear weapon tests, North Korea seems to be in no mood to bow down to the US
and its allies. Why? North Korea has a long history of struggle against foreign occupation. So does Iran, a nation which abhors
foreign dictates and takes pride in being one of the cradles of world civilization. In both cases, it should be no surprise that
these nations are obsessed with what some scholars of world history might describe as "national pride" and "collective self-esteem."
It seems that Washington is either unwilling or unable to understand that
it need not take punitive measures against these countries and its other
perceived adversaries, but instead rely on diplomatic means to settle
disputes. Nevertheless, those obsessed with the notion that sanctions could subdue other nations don't seem to understand that
history and memory in many parts of the world play a significant role in
shaping a political mind-set that might be more focused on collective
self-esteem than economic concerns. If Iran is trying to develop a nuclear bomb for real, it must be
condemned. But the US has never imposed sanctions against India, Pakistan, and Israel, which remain outside the fold of the NPT while
possessing dozens, or perhaps hundreds, of nuclear weapons. These three countries have no fear of sanctions because they are close
economic and military partners of the US. And Cuba, a small island nation that has no nuclear weapons, has had sanctions imposed by
many in the US believe the sanction
policy is simply absurd because it hurts working people at home and
abroad. "There is little empirical evidence that sanctions can achieve ambitious foreign policy goals," argues Robert Pape, a US
political scientist who has done extensive research on the impact of sanctions. He thinks that in most cases
sanctions are used by policymakers "to rescue their own prestige or their
state's international reputation and rhetoric to […] demonize the target
regime." He calls it the "American way of war," which "democratic leaders may sometimes adopt in order to give peace a chance
the US for well over half a century to no effect. On the other hand,
and thus disarm criticism of the use of force later." Mirza cannot stomach any more. "What is going on? Who is going to benefit from
this kind of policy?" he asks. The Iranian rugs he took from the US and brought back from Pakistan were confiscated by the
authorities for months. "It's just going to hit the US citizens. We are just shooting our own feet without aiming properly," he says.
Economic sanctions don’t work
Henderson 98 (“Why Economic
Sanctions Don’t Work”, David R. Henderson
http://www.hoover.org/publications/hoover-digest/article/7311, David R.
Henderson is a research fellow with the Hoover Institution. He is also an
associate professor of economics at the Naval Postgraduate School in Monterey,
California. He wrote this article for the Hoover Institution at Stanford
University)
Congress has gotten in the habit of imposing economic sanctions in order
to punish foreign governments. It is a habit Congress should break. By Hoover
fellow David R. Henderson. When I was a kid, the boy next door once played a nasty trick on my brother Paul: our neighbor held his
cat in his arms, brought it within a few inches of Paul’s face, and pulled its tail. The suddenly angry cat bit Paul’s face. My
brother and I were upset; the cat, we thought, should have bitten the perpetrator’s face. I think of that incident whenever I hear
When governments impose sanctions, the
officials implementing the policy want to harm the dictator or bad guy
heading the other country’s government. That’s the goal. What they do to
achieve it is intentionally harm many innocent people in those countries
by cutting them off—if the sanctions are effective—from food, medicine,
and other goods that they need or value. The sanctions almost always work in a limited sense:
they impose some harm on innocent people in the target country. But that’s not the goal. Nor is
the goal to cut off the dictator from food, medicine, et cetera. You can be sure
people call for economic sanctions against a whole country.
that Saddam Hussein and Fidel Castro are not hurting for antibiotics or high-quality food. No. The harm that the advocates of
sanctions want to inflict on the bad guys is indirect. They are yanking innocent people’s tails so that those people, like our
neighbor’s cat, will lash out at whoever’s face is right in front of them. They want those people to see their own government as the
enemy and to try to overthrow it. But people are smarter than cats. When people suddenly find food, clothing, medicine, and other
goods in short supply, when they find themselves a lot poorer and focusing desperately on day-to-day survival, they will take the
. Although governments in embargoed
countries like Iran, Iraq, and Cuba strictly control what newspapers,
radio, and television report, one piece of information that is sure not
to be censored is the role of outside governments in the country’s
economic distress. Of course, those governments will exaggerate the harm done by the sanctions. Although socialism is
time to find out who is responsible. And guess what? They do find out
what’s killing poor people in Cuba, for example, Fidel Castro has, for almost forty years, blamed Cuba’s economic problems on the
“blockade,” his word for the embargo imposed by the U.S. government in the early 1960s. But he can plausibly make this claim because
the embargo exists. Likewise, although much of the Iraqis’ pain is caused by Saddam Hussein’s diversion of resources to his war
machine, the pain caused by economic sanctions is quite real.What do people in embargoed countries do when they find out that foreign
governments threaten their survival? They want to do what the cat wouldn’t do: bite the hand or face of the perpetrator. In fact, I
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can think of no case in history where as a result of sanctions imposed by government A on people in country B, country B’s people
To understand how people in
embargoed countries feel, you will have to use your imagination. Picture
yourself back in 1974. President Nixon’s popularity has hit bottom. Many
Americans want him out, but he holds on. Now imagine that the head of a
freer country—say, Switzerland—thinks Nixon is a vicious leader and
imposes sanctions on us. Because of these sanctions, we can’t get
medicine and we can’t feed our families adequately. We spend our days
scraping for the basics we need to survive. (Of course this is implausible in the United States,
overthrew their own government. It’s the stuff of novels, and not very good novels.
which is why I said you would have to use your imagination.) Now ask yourself: Is your first thought that you should organize and try
to overthrow the president? You can be sure that Saddam Hussein and Fidel Castro are not hurting for antibiotics or high-quality
food.
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Pro
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Sanctions Prevent Further Russian Aggression in the Ukraine
Sanctions deterring Putin from further Russian aggression in the Ukraine
O’Hanlon 3/3/14
Michael Edward O'Hanlon is a senior fellow at The Brookings Institution,
specializing in defense and foreign policy issues. He began his career as a
budget analyst in the defense field.
http://blogs.reuters.com/great-debate/2014/03/03/the-power-of-sanctions-againstputin-on-ukraine/
The main reason for my relative lack of anxiety derives from the fundamentals of
the situation in Ukraine. It is serious, to be sure. But it does not look
likely to become catastrophic. As coercive as Russian President Vladimir Putin
has been in this crisis, there have been limits. He hasn’t killed people (so far
at least, as of this writing on Monday, March 3). He is apparently trying to
make a show of force in a way that gets a specific task done. He wants to
protect his military bases in Crimea, where the Russian Black Sea Fleet
(historically one of Russia’s big four) is based. He also wants to assert
certain prerogatives in a former Soviet republic. He wants, he says, to protect
fellow ethnic Russians and Russian speakers — of whom there are many in Crimea
and eastern Ukraine. There is nothing to admire about how Putin has
proceeded. His approach is indeed 19th century-ish, as Secretary of State John
Kerry said on Face the Nation Sunday. But it’s not totally surprising for the
way great powers behave. Even in this century. For example, the main distinction
to draw between what Putin has just done in Crimea and what Washington did in
Panama in 1989 — when a dictatorial government started to mistreat its own
people badly and jeopardize our bases and access to the Panama Canal — is that
we were more patient, and more justified, in making the decision to invade. In
fact, we went further in that crisis than Putin is likely to do here. But Putin
saw a government in Ukraine that he believed illegitimate. From a certain
perspective, it had violated the February 21 deal that would have led to early
elections, almost as soon as it was reached. He also saw the Ukrainian
parliament last week look to degrade the status of the Russian language within
Ukraine — an understandable reaction by angry Ukrainians at one level, to be
sure, but also a provocation and a pointless one. I am hardly defending Putin.
But I doubt very much that he is seeking to forcibly annex part of
Ukraine. Part of his worldview may desire that, to be sure. But we have a
pretty strong set of potential economic sanctions and Putin knows it. The
West has gotten a lot better at applying sanctions — largely because of the Iran
experience, and also our dealings with North Korea, and before that Serbia. The
international community now knows how to do this — how to go after the banking
sector, the individual wealth of top Russian leaders, their visa travel rights,
and so on. We can try to help Europe gain new sources of energy as well, a point
Danielle Pletka of the American Enterprise Institute wisely made when we
appeared together Sunday on Face the Nation. Russia cannot thrive if the Western
world collectively seeks to punish Putin and to do so for a considerable period.
Were the current crisis to escalate to a bad situation — which it hasn’t yet
— and Ukraine to face civil warfare and an invasion by Russia to back up one
side, then I think these kinds of tools would be applied. They’d be
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effective and Putin knows it. So I’m relatively confident he won’t take this gamble,
provided we are clear in our communications about how we would respond.
55
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Sanctions Needed to Support Minsk Agreement
Sanctions needed to support the Minsk agreement
RIA Novosti, June 7, 2015, West Needs to Maintain Sanctions on Russia - European Council President,
http://sputniknews.com/world/20150607/1023048966.html DOA: 11-27-15
GARMISCH-PARTENKIRCHEN, June 7 (Sputnik) - Anti-Russia sanctions should remain in place, as
there is a clear violation of the Minsk agreements on Ukraine reconciliation, European Council
President Donald Tusk said Sunday adding that the decision will be taken before the upcoming EU summit.
"If it comes to Russia and the sanctions, obviously I think it is the most important thing today, because we
need to maintain sanctions against Russia, because of the clear violation of Minsk agreements," Tusk said
ahead of an annual Group of Seven (G7) summit in Bavaria, Germany.
"The European council wants to have Russia as a partner, and not an enemy ... but I think that this European
decision ... on maintaining [sanctions], which we decided in March, this is something more grave, but also
consistent," he stressed adding that the decision would be taken "before our European Council meets."
West imposed several rounds of economic sanctions on Russia in 2014 over its alleged involvement in the
conflict in eastern Ukraine, a claim which Moscow has firmly denied.
The EU leaders agreed in March 2015 that anti-Russia sanctions, which expire in July, will stay in place if the
peace agreement reached in February in Minsk would not be fully implemented. The Minsk deal stipulates
a ceasefire and withdrawal of heavy weapons from the line of contact in Donbas.
The final decision on prolongation of sanctions against Russia is expected to be announced during the EU
summit, due to be held June 25-26 in Brussels.
Sanctions have not altered Russia’s foreign policy
Associated Press International, April 1, 2015
American farmer among the winners in sanctions-hit Russia, http://news.yahoo.com/american-farmeramong-winners-sanctions-hit-russia-063447186--finance.html DOA: 11-27-15
U.S. and EU sanctions were meant to force Russia to back down in the Ukraine crisis - first over Crimea,
then over its support for separatist rebels in eastern Ukraine.
That has not happened.
"The sanctions did not produce a change in Putin's foreign policy," said Brookings Institute fellow Lilia
Shevtsova, although she added that the threat of further sanctions may have prevented open Russian
military intervention in Ukraine.
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Supporting Minsk Critical to US Leadership
Failure to protect Ukraine causes global prolif cascade by invalidating Budapest
Memorandum – japan, Taiwan, Saudi Arabia
Boyes 3/6/14
http://www.theaustralian.com.au/news/world/the-lesson-hang-on-to-your-nukes-ifputins-on-the-prowl/story-fnb64oi6-1226846228761#
Editorial writer, the Times
Twenty years ago Ukraine had the third-largest strategic nuclear weapons stock
in the world after the US and Russia, having inherited its share of the Soviet
arsenal. It gave up those stocks in return for Western cash and a piece of
paper, the 1994 Budapest memorandum that was meant to guarantee its
territorial integrity. Today, it seems that Kiev made a bad deal. The
agreement, signed by the US, Britain and Russia, has done nothing to shield
Ukrainians. Had Ukraine stayed nuclear Russia would have thought twice about
snatching Crimea. The invasion is thus not just about the regional
manipulation of power and Russian President Vladimir Putin’s effective threat to
foment a European civil war unless Ukraine stays in his orbit. It is about the
new international order and about nuclear security’s role in it. How safe do non-nuclear Japan and
Taiwan feel at the moment? How much are their security agreements with the US
worth if Washington is powerless to deter a Russian land-grab in a country
that borders four NATO members? How credible as world policemen are the five
leading nuclear powers - the US, Russia, China, Britain and France - as the
permanent members of the UN Security Council? In the 1990s it was briefly
possible to believe in the merits of unilateral disarmament and the dream of
global non-proliferation. South Africa admitted to having had secret nuclear
plans and promptly dropped them. The threat of Soviet encroachment had
evaporated. So, too, had the Soviet Union. Ukraine, Kazakhstan and Belarus had
more pressing economic problems than keeping their nukes in working order.
Ukraine in 1991 boasted inter-continental ballistic missiles, almost two dozen
strategic bombers, more than 1000 long-range cruise missiles and several hundred
tactical nuclear weapons. To turn that into a purely Ukrainian force, to target
it on Moscow rather than NATO, would have meant an investment of $US30 billion
to replace Russian-owned early warning systems and communication centres. Some
in Kiev argue it would have been worth the effort. “If we had hung on to even a
fraction of that force it would have been like hanging a gun on the wall of your
living room,” said one Ukrainian politician. “Maybe the gun has no bullets but
when the neighbour comes round for dinner, he’s afraid of it.” Neither the West
nor Russia bought into the idea of a Ukrainian deterrent. The US did not trust
the 90s Ukrainian leadership to keep tight control of the weapons. It paid
Ukrainians to load their nuclear kit on to 100 trains and send it to Russia. In
1996 Ukraine officially became a non-nuclear nation - and soon afterwards the
Kremlin piled pressure on Kiev to pay more for its gas. Unilateral disarmament
doesn’t pay. It only results in nuclear weapons becoming the sole property of
those nations that do not renounce them. The quest for nuclear advantage can
poison the politics of the whole region . Iran is pushing its nuclear program
not only to “balance” Israel’s undeclared weapons but also to win a pivotal role
in the Middle East. That prods Saudi Arabia towards getting its own atomic deterrent,
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perhaps with the help of Pakistan - an enormous challenge to non-proliferation
efforts.
Ukraine is the litmus test of US primacy
Kanat 3/17/14
http://setav.org/en/the-ukrainian-crisis-as-a-new-chessboard-of-globalgeopolitics/opinion/14586
Kilic Bugra Kanat is an Assistant Professor of Political Science at Penn State
University, Erie and a Research Fellow at the SETA Foundation at Washington,
D.C. He received his doctoral degree in Political Science from Syracuse
University. He holds a master’s degree in Political Science from Syracuse
University and a master’s in International Affairs from Marquette University. He
completed his undergraduate education in the International Relations Department
of the Middle East Technical University. Dr. Kanat also holds a Certificate of
Advanced Studies in Middle Eastern Affairs and Certificate of Advanced Graduate
Study in Conflict Resolution. His research interests include foreign policy
decision-making, foreign policy change, and domestic politics and foreign policy
interaction. Dr. Kanat’s writings have appeared in Foreign Policy, Insight
Turkey, Middle East Policy, Arab Studies Quarterly, Journal of South Asian and
Middle Eastern Studies, and Journal of Muslim Minority Affairs. He also
regularly contributes op-eds to Star, Sabah, Today's Zaman, Zaman Daily, Radikal
Daily, and Hurriyet Daily News. He is also co-editor of an edited volume –
History, Politics and Foreign Policy in Turkey – published by the SETA
Foundation.
Halford Mackinder, one of the founding fathers of geopolitics, once wrote "Who
rules East Europe commands the Heartland; who rules the Heartland commands the
World-Island; who rules the World-Island controls the world." Ukraine was one of
the integral parts of the Heartland that he stated. Now, the crisis in Ukraine
is becoming an arena for a major geopolitical confrontation. The problem in
Ukraine that has been overshadowed in recent days with the mysterious loss of
the Malaysian Airlines plane is quickly being transformed into a global
problem instead of a regional challenge for countries in Eastern Europe. The
crisis not only brought Western powers and Russia face to face in Crimea but is
becoming a global chessboard in which global powers have stakes . The most significant
centers of gravity in international relations, namely the United States and
China and their positions and diplomatic steps regarding the crisis will be
very important for the future of the conflict in Crimea, their bilateral
relations, as well as the international system . The crisis and its outcomes will be
a major determinant of future global geopolitics. The crisis in Ukraine is yet another serious test of U.S.
leadership in terms of its international alliances, guarantees and assurances. The world is watching the
reaction of the U.S. after Russia's invasion of Crimea.
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Arctic Drilling
Sanctions have blocked cooperation with western oil companies that is needed for
drilling in the arctic
Associated Press International, April 1, 2015
American farmer among the winners in sanctions-hit Russia, http://news.yahoo.com/american-farmeramong-winners-sanctions-hit-russia-063447186--finance.html DOA: 11-27-15
One of the main state-owned companies to be targeted by punitive measures is oil producer Rosneft.
It had to postpone plans to drill in the Arctic with U.S. firm ExxonMobil. At the same time, sanctions
have largely cut off state firms from international lending, making refinancing difficult, costly and a burden on
the government.
Howard Lafranchi, The Christian Science Monitor January 30, 2015, West eyes new Russian sanctions amid
renewed fighting in eastern Ukraine, Sanctions don’t threaten Russia, http://muckrack.com/howardlafranchi/articles?page=7 DOA: 11-27-15
As fighting once again rages in eastern Ukraine between government forces and Russian-backed
separatists, charges and counter-charges between the principal geopolitical backers on each side are
spiraling to new heights.
Yet even as the United States and European Union prepare another round of sanctions on Russia,
and Russia warns of "catastrophe" if the West pursues its support of what it considers to be the aggressor
government in Kiev, there are no signs of either side heeding the dire warnings of the other.
After President Obama and German Chancellor Angela Merkel agreed in a phone conversation earlier this
week on the need to "hold Russia accountable" for stoking a return to violence in eastern Ukraine, the
European Union (EU) moved Thursday to expand the list of mostly Russian individuals hit with sanctions
over Ukraine.
EU foreign ministers also moved to prepare "further action" to pressure the sides to halt the fighting,
signaling that EU leaders could adopt new sanctions against Russia when they hold a summit Feb. 12.
Such action could be the moment for the US to proceed with the additional sanctions it has been threatening
against Russia, since the two Western powers have moved in tandem at each step of the gradual ratchetingup of Western sanctions targeting Russia. This week Treasury Secretary Jack Lew said the US is ready to
turn the sanctions screw if Mr. Obama issues the order.
The ratcheting up of tensions occurred as the State Department announced Friday that Secretary of State
John Kerry would visit the Ukrainian capital, Kiev, next week to "highlight the United States' steadfast support
for Ukraine and its people."
Even Russian President Vladimir Putin acknowledges the impact Western sanctions are having on Russia's
increasingly fragile economy. On Friday, the Russian Central Bank unexpectedly cut the interest rate,
shocking markets and potentially causing more volatility for the ruble. But there are no signs the sanctions
are succeeding with the intended objective of altering Russia's support for the separatists.
If anything, Mr. Putin is lionizing the separatists before the Russian public as a kind of defensive wall
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holding back a NATO reach into Russia's historical sphere of political and economic influence.
Reports from the conflict zone indicate the separatists are fighting with fresh supplies of heavy weaponry that
could have only come from across the border in Russia.
Russia has a very different perspective on the conflict, however, labeling the Ukrainian forces fighting in the
east as the aggressor.
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A2: Sanctions Hurt US Relations with the EU
US in lockstep with the EU on Russia sanctions
RIA Novosti, June 18, 2015, US to Continue in 'Lockstep' With EU on Anti-Russian Sanctions
The United States will continue to closely follow the lead of the European Union (EU) in extending existing
sanctions on Russia, Director of the Office of Foreign Assets Control (OFAC) John Smith said on Thursday.
"I expect you will continue to see us move in lockstep with the European Union, our European partners, as
much as possible," Smith said in a speech hosted by the Venable LLP law firm. On Wednesday, EU leaders
announced they would extend existing sanctions against Russia for an additional six months, until January
2016. OFAC is the branch of US Treasury Department in charge of implementing economic and financial
sanctions. Smith noted that the "keeping the US and EU sanctions as identical as possible" is critical to the
success of sanctions aimed at Russia.
EU planning to renew sanctions
Banking and Stock Exchange, Finance, Economics (Russia), November 20, 2015, The EU is planning to
renew sanctions against Russia regardless of the intentions to jointly struggle against the Islamic State,
http://www.wps.ru/ru/digests/en/wps-ru-digests-en-banks.pdf DOA: 11-27-15
Berlin, London and Paris do not want Moscow's assistance in Syria "at the cost of Ukraine", say WSJ's
sources. "Any change in the U.S. and EU current position in respect of Ukraine will be very harmful not only
to Ukraine, but to Europe as well," said a source close to the Ukrainian government.
The EU high-ranking official emphasized that there are no signs at the moment that the countries'
position concerning the extension of anti-Russia sanctions could change. "Today there is a general
understanding that sanctions must be renewed," he said.
A meeting of foreign affairs ministers held on November 16, 2015 did not discuss a revision of the
anti-Russia sanctions which could push Moscow to jointly struggle against Islamists in Syria, said
Edgars Rinkevics, Latvian Minister of Foreign Affairs.
The USA, too, has no intention to review its stance, said WSJ's sources. At the G20 summit on
November 15, 2015, U.S. President Barack Obama discussed the question of sanctions at a meeting with
the leaders of France, Germany, Italy and Great Britain, WSJ notes. When in Berlin on November 17, U.S.
Assistant Secretary of State Victoria Nuland stressed that sanctions against Moscow must be renewed,
declaring further support to Kiev.
Today the West is looking into three possible scenarios for the sanctions policy continuation, according to
WSJ: the restrictions may be extended for six, twelve or only three to four months. In the latter case, the EU
will show an approval of some of Moscow's concessions in respect of Ukraine.
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A2: Sanctions  Russia-China Alliance
Partnership is self-defeating
Baker & Glosserman 15
(Carl Baker is the director of programs and co-editor of
Comparative Connections at Pacific Forum, CSIS and an adjunct professor with the International
Studies Department at Hawaii Pacific University. P A graduate of the Air War College, he has an M.A.
in public administration from the University of Oklahoma and a B.A. in anthropology from the
University of Iowa. Brad Glosserman is executive director at Pacific Forum CSIS and co-editor of
Comparative Connections.J.D. from George Washington University, an M.A. from Johns Hopkins
University’s School of Advanced International Studies (SAIS) and a B.A. from Reed College. May 2015
“Comparative Connections A Triannual E-Journal on East Asian Bilateral Relations”,
http://csis.org/files/publication/1501q.pdf)
As a result,
China and Russia have been reluctant to turn their strategic partnership relationship into
an alliance, even if they perceive that their strategic space is been
squeezed by tightening of the military alliances by the world’s most
powerful countries (NATO and the US-led alliances with Asian countries) in the name of
collective defense. It that sense, China and Russia are not just being
haunted by the ghost of WWII , but also that of World War I, when major powers in the West
(except the US) declared war on each other in 10 days. If anything, the world today is more
dangerous than 100 years ago with the proliferation of weapons of mass destruction in the
hands of nation-states in a far less balanced world than either the pre-World War I era or the Cold
War. In this context, one wonders how long the current strategic
partnership relationship (not alliance) between Russia and China would
continue.
Russia-China alliance doesn’t cause wars.
Ikenberry 14 (G. John Ikenberry, Albert
G. Milbank Professor of Politics and International
Affairs at Princeton University and George Eastman Visiting Professor at Balliol College, University
of Oxford. MAY/JUNE 2014 ISSUE, “The Illusion of Geopolitics The Enduring Power of the Liberal
Order”)
Not only does Mead underestimate the strength of the United States and the order it built; he also
overstates the degree to which China and Russia are seeking to resist both. (Apart from its nuclear
ambitions, Iran looks like a state engaged more in futile protest than actual resistance, so it
shouldn’t be considered anything close to a revisionist power.) Without a doubt, China and
Russia desire greater regional influence. China has made aggressive
claims over maritime rights and nearby contested islands, and it has
embarked on an arms buildup. Putin has visions of reclaiming Russia’s
dominance in its “near abroad.” Both great powers bristle at U.S.
leadership and resist it when they can.
But China and Russia are not true revisionists. As former Israeli Foreign Minister Shlomo Ben-Ami has said,
Putin’s foreign policy is “more a reflection of his resentment of
Russia’s geopolitical marginalization than a battle cry from a rising empire .” China, of course, is
an actual rising power, and this does invite dangerous competition with U.S.
allies in Asia. But China is not currently trying to break those alliances or
overthrow the wider system of regional security governance embodied in the Association of
Southeast Asian Nations and the East Asia Summit. And even if China harbors ambitions of eventually doing so, U.S.
security partnerships in the region are, if anything, getting stronger, not weaker. At most, China and Russia are
spoilers. They do not have the interests—let alone the ideas, capacities, or allies—to lead them to upend existing
global rules and institutions.
In fact,
although they resent that the U nited S tates
stands
at the top of the
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current geopolitical system, t hey embrace the underlying logic of that framework, and with
good reason. Openness gives them access to trade, investment, and technology
from other societies. Rules give them tools to protect their sovereignty
and interests.
Despite controversies over the new idea of “the responsibility to
protect” (which has been applied only selectively), the current world order
enshrines the age-old norms of state sovereignty and nonintervention . Those Westphalian
principles remain the bedrock of world politics —and China and Russia have tied
their national interests to them (despite Putin’s disturbing irredentism).
It should come as no surprise, then, that
China and Russia have become deeply integrated into the
existing international order . They are both permanent members of the UN Security
Council, with veto rights, and they both participate actively in the World Trade Organization,
the International Monetary Fund, the World Bank, and the G-20. They are geopolitical
insiders, sitting at all the high tables of global governance.
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Unchecked Russian Aggression Causes War
Unchecked Russian influence risks extinction
Fisher 15 (Max, Foreign affairs columnist
@ VOX, "How World War III became
possible," 6/29, http://www.vox.com/2015/6/29/8845913/russia-war)
today's tensions bear far more similarity to
World War I: an unstable power balance, belligerence over
peripheral conflicts, entangling military commitments, disputes over the
future of the European order, and dangerous uncertainty about what actions will and
will not force the other party into conflict. Today's Russia, once more the strongest nation in
Europe and yet weaker than its collective enemies, calls to mind the turn-of-thecentury German Empire, which Henry Kissinger described as "too big for Europe, but too small
for the world." Now, as then, a rising power, propelled by nationalism, is seeking
That is why, analysts will tell you,
the period before
to revise the European order .
Now, as then, it believes that through superior cunning, and perhaps
even by proving its might, it can force a larger role for itself. Now, as then, the drift toward war
is gradual and easy to miss — which is exactly what makes it so dangerous. But there is one
way in which today's dangers are less like those before World War I, and
more similar to those of the Cold War: the apocalyptic logic of nuclear weapons . Mutual
suspicion, fear of an existential threat, armies parked across borders
from one another, and hair-trigger nuclear weapons all make any small skirmish
a potential armageddon .
Russia, hoping
has dramatically
In some ways, that logic has grown even more dangerous.
to compensate for its conventional military forces' relative weakness,
relaxed its rules for using nuclear weapons.
Whereas Soviet leaders saw their
nuclear weapons as pure deterrents, something that existed precisely so they would never be used,
Putin's view appears to be radically different. Russia's official nuclear doctrine
calls on the country to launch a battlefield nuclear strike in case of a
conventional war that could pose an existential threat. These are more than just
words: Moscow has repeatedly signaled its willingness and preparations to use nuclear weapons even
in a more limited war. This is a terrifyingly low bar for nuclear weapons use,
particularly given that any war would likely occur along Russia's borders and thus not far from
Moscow. And it suggests Putin has adopted an idea that Cold War leaders considered unthinkable: that
a "limited" nuclear war, of small warheads dropped on the battlefield, could be not only survivable
but winnable. "It’s not just a difference in rhetoric. It’s a whole different world," Bruce G.
Blair, a nuclear weapons scholar at Princeton, told the Wall Street Journal. He called Putin's
decisions more dangerous than those of any Soviet leader since 1962. "There’s a low nuclear
threshold now that didn’t exist during the Cold War." Nuclear theory is complex and disputable;
maybe Putin is right. But many theorists would say he is wrong, that the logic of nuclear warfare
means a "limited" nuclear strike is in fact likely to trigger a larger
nuclear war — a doomsday scenario in which major American, Russian, and
European cities would be targets for attacks many times more powerful than the bombs
that leveled Hiroshima and Nagasaki. Even if a nuclear war did somehow remain
limited and contained, recent studies suggest that environmental and
atmospheric damage would cause a "decade of winter " and mass crop die-outs that could kill
up to 1 billion people in a global famine.
World War 3
Butters 15
(analyst citing British Intelligence Experts from Chantam House
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which is a independent policy institute based in London. The report was authored
by two former British ambassadors to Moscow.
http://www.inquisitr.com/2143988/world-war-iii-the-west-must-face-up-tovladimir-putin-or-risk-moscows-use-of-tactical-nuclear-weapons-britishintelligence-experts-warn/
If the West fails to stand up to
initiate
Vladimir
a chain of events which would lead to
Putin
and Moscow, then
World War 3 ,
it could
British intelligence experts have
warned. The U.K’s foreign affairs think-tank, Chatham House, has issued a report which states that
Putin and
Moscow could easily use
create a
possible
for Western planners
tactical
nuclear weapons on Europe
in the future
and
World War 3 scenario . “Just because something is unimaginable
does not mean it is not considered a viable option by
Russia.”
The authors of the report include Sir Roderic Lyne and Sir Andrew Wood. The two former
ambassadors to Moscow are well-aware just how ruthless Vladimir Putin can be. They are hypercritical
in their condemnation of the Western leaders’ failure to predict the Ukraine crisis, and its
potential to be one of the contributing factors to a World War 3 scenario. The report accuses U.S.
President Barack Obama and U.K. Prime Minister David Cameron of suffering from a “collective
amnesia,” and whose “weak and unconvincing responses” have encouraged Putin to further his global
interests and ambitions. “The Kremlin perceives that the West lacks the will to pay the necessary
price to defend its principles.” The report states that lack of effective support for the “outgunned
and outmanned” Ukrainian government by the West would have far reaching consequences for the Western
alliance, namely the possible risk of a World War 3 situation. “The
defining factor for the future of European security .
conflict
in Ukraine
is a
Russia may have the greater interest in Ukraine,
but the West has an even bigger interest in preserving the post-Cold War environment. If that is
dismantled ,
it is conceivable that Nato and the EU could collapse too.”
The report, which indicates
World War 3 could be a possible outcome of current global situations if the West refuses to act
accordingly, also admits that Putin currently faces the biggest challenge of his 15-year rule.
However, the British intelligence experts stress that Putin’s fragile position could make the
Russian bear even more dangerous if provoked. “Indeed one school of thought holds that Moscow is at
its most dangerous when weak.” The Express reports that the intelligence paper arrives at a time
when both Europe and the U.S. are facing increasing aggression and bullish manoeuvres from Putin. In
May of this year, both Britain and Sweden scrambled fighters to intercept Russian bombers who were
close to violating their respective airspaces, and a Russian fighter’s “sloppy and unsafe”
interception of a U.S. reconnaissance plane in international aerospace above the Baltic Sea has
caused the United States to file a complaint with Russia. Europe Minister David Lidington has
announced, in no uncertain terms, Europe’s intentions to curb Putin’s aggressive tactics. “The blame
for the current crisis lies squarely with Russia and the separatists in eastern Ukraine, who are
backed by the Russian authorities. The UK is working closely with EU and G7 partners in response to
Russian actions in Ukraine. By imposing a robust sanctions regime, we have shown Russia that its
unjustifiable and illegal actions will not be tolerated.” What respect Putin will give to such words
is questionable, but as the British intelligence report indicates,
standing up to Putin
War 3 scenario.
and defend what it holds dear if it is
the West must start effectively
to prevent the hell and horror of a World
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Ukraine Aggression Risks War
Aggression in Ukraine risks extinction
Baum 14 - Executive Director @ Global Catastrophic
Risk Institute [Seth Baum (Ph.D. in
Geography @Pennsylvania State University and a Post-Doctoral Fellowship @ Columbia University Center
for Research on Environmental Decisions), “Best And Worst Case Scenarios for Ukraine Crisis: World
Peace And Nuclear War,” Huffington Post, May 7, 2014, http://tinyurl.com/lxx49og]
The best case scenario has the Ukraine crisis being
through increased Russia-Europe cooperation, which would be
big step towards world peace. The worst case scenario has the crisis escalating
into nuclear war between the United States and Russia, causing human extinction .
Here's the short version:
resolved
diplomatically
a
Let's start with the worst case scenario, nuclear war involving the American and Russian arsenals.
How bad would that be? Put it this way: Recent analysis finds that a "limited" India-
nuclear war could kill two billion people via agricultural declines from
nuclear winter. This "limited" war involves just 100 nuclear weapons. The
U.S. and Russia combine to possess about 16,700 nuclear weapons. Humanity
Pakistan
may not survive the aftermath of a U.S.-Russia nuclear war.
It seems rather unlikely that the U.S. and Russia would end up in nuclear war over Ukraine. Sure,
they have opposing positions, but neither side has anywhere near enough at stake to justify such
extraordinary measures. Instead, it seems a lot more likely that the whole crisis will get resolved
with a minimum of deaths. However, the story has already taken some surprising plot twists. We
cannot rule out the possibility of it ending in direct nuclear war.
A nuclear war could also occur inadvertently , i.e. when a false alarm is
misinterpreted as real, and nuclear weapons are launched in what is
believed to be a counterattack. There have been several alarmingly close
calls of inadvertent U.S.-Russia nuclear war over the years. Perhaps the most
relevant is the 1995 Norwegian rocket incident. A rocket carrying scientific equipment was launched
off northern Norway. Russia detected the rocket on its radar and interpreted it as a nuclear attack.
Its own nuclear forces were put on alert and Boris Yeltsin was presented the question of whether to
launch Russia's nuclear weapons in response. Fortunately, Yeltsin and the Russian General Staff
apparently sensed it was a false alarm and declined to launch. Still, the disturbing lesson from
this incident is that nuclear war could begin even during periods of calm.
World war III – military simulations prove
Chossudovsky 3/12/14
http://www.globalresearch.ca/ukraine-the-worst-case-scenario-is-world-wariii/5373075
Michel Chossudovsky is an award-winning author, Professor of Economics
(emeritus) at the University of Ottawa, Founder and Director of the Centre for
Research on Globalization (CRG), Montreal and Editor of the globalresearch.ca
website. He is the author of The Globalization of Poverty and The New World
Order (2003) and America’s “War on Terrorism”(2005). His most recent book is
entitled Towards a World War III Scenario: The Dangers of Nuclear War (2011). He
is also a contributor to the Encyclopaedia Britannica. His writings have been
published in more than twenty languages. He can be reached at
crgeditor@yahoo.com
Ukraine: The Worst Case Scenario is World War III
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We are at a very dangerous crossroads . We are observing the confrontation
between the two major nuclear powers, namely the US and Russia. The worst
case scenario is World War III . I’m not suggesting that it is going to occur, but I
should also mention, having reviewed military documents over the last 10 years,
that WWIII, from the point of view of US military planners – Pentagon and
NATO – is not an abstract concept. They have been involved in various
exercises with the so-called WWIII scenarios . One of these famous exercises was
called TIRANNT, which stands for Theater Iran Near Term. That’s when Iran was
the object of military threats from the West. But in fact, this particular
WWIII scenario involved several countries, including Russia, China and Iran,
and North Korea. These were the stated enemies of the Western military alliance.
That particular WWIII scenario was leaked to the Washington Post. It is welldocumented and it is a very detailed simulation of different actions and
failures of diplomacy leading up to a WWIII scenario. So, let’s be under no
illusions – the weapons systems are devastating, the decision-making processes are very complex
and errors and misjudgments can take place .
World war III and depression
Von Greyerz 3/8/14
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/3/8_The_Ukraine
_Crisis_%26_A_Terrifying_Global_Economic_Meltdown.html
ounder and Managing Partner of Matterhorn Asset Management AG (MAM) and
GoldSwitzerland based in Zurich, Switzerland.
EvG forecasted the current present problems in the world economy well over 10
years ago. In 2002 when gold was $300 per ounce, MAM recommended to its
investors to put 50% of their investment assets into physical gold stored
outside the banking system. Egon von Greyerz started his working life in Geneva
as a banker and thereafter spent 17 years as Finance Director and Executive
Vice-Chairman of a FTSE 100 company in the UK, Dixons Group Plc. Since the 1990s
EvG has been actively involved with financial investment activities including
Mergers and Acquisitions and Asset allocation consultancy for private family
funds. This led to the creation of Matterhorn Asset Management in 1998, an asset
management company based on wealth preservation principles. The GoldSwitzerland
Division was created to facilitate the buying and storage of physical gold and
silver for private investors, companies, trusts and pension funds. EvG makes
regular media appearances such as on, CNBC, BBC and King World News and speaks
at investment conferences around the world. He also publishes articles on
precious metals, the world economy and wealth preservation.
We have also discussed the potential catalysts around the world that could
trigger the world falling into the black hole.
These can be economic events
such as Japan defaulting, or it could a collapse of the dollar. It could also be
geopolitical like the Middle East. Each one of those risks can create a major
disaster. But we also have the possibility of black swan events. These are
events that very few people can forecast, and Ukraine is such an event. Very few
people thought the problems in Ukraine could be the trigger for the collapse of the world
economy but we have to remember that any of these events are just catalysts.
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The world is bankrupt economically, financially, and morally. And if Ukraine now
will be the trigger for the inevitable economic collapse , it’s also possible that it will be the
beginning of World War III as Paul Craig Roberts has indicated. Ukraine is an
important pawn for both Russia and the West, which is led by the United
States. Russian President Vladimir Putin has a strong hand with almost 40
percent of Europe’s gas requirement going through Ukrainian pipelines from
Russia. But Ukraine is bankrupt and needs money either from Russia or the West.
The $1 billion the U.S. has offered would pay only half of Ukraine’s debt to
Russian giant Gazprom. And I’m sure the U.S. does not want to pay $1 billion to
Putin. This crisis will have a major impact on both the Ukrainian and
Russian economies. Ukrainian bonds are collapsing and interest rates are up to
47 percent now, from 10 percent in January, and the currency is falling fast.
The same thing is happening in Russia, with the ruble down 10 percent this year
and the stock market falling. The Russian central bank had to raise interest
rates from 5.5 percent to 7 percent in order to stabilize markets. But in spite
of economic problems, I doubt that Putin is going to give in on Ukraine. And for
Obama, a war would be a good solution to the U.S. economic pressure. So with
this potential black swan event in Ukraine, the risks are extremely high and
the consequences could be devastating. But whether Ukraine is the catalyst
or some other event is, the outcome is inevitable. The world is already set
up to go into a hyperinflationary depression. That in itself is bad enough,
but a major war would also be horrific. Today we are looking at commodities
that are still going up strongly, and pointing out that inflation is coming.
Most currencies are weak, not just emerging-country currencies but also the
dollar. The falling dollar will be the trigger to the hyperinflation I
expect, and to higher precious metals prices. Investors should ignore eventdriven price movements. Gold went up this week on Ukraine, and then down today
on non-farm payrolls. Precious metals investors must understand that long-term
price movements in gold and silver have nothing to do with events. Gold is going
up because currencies are being destroyed by virtually every nation due to
deficit spending, debts, and money printing. So precious metals investors must
ignore these short-term moves. The trend is clear and will not change. So it
won’t matter what happens in the world politically or economically. With regards
to the non-farm payroll figures today, it had to be a good figure. The U.S. had
to counteract the bad Ukraine news with some good unemployment figure. But what
is interesting and important is that the dollar did not move higher on the bogus
jobs release. Currently the euro is just under 1.39, and the U.S. Dollar Index
is around 79.7. This is what precious metals investors must focus on. The weak
dollar indicates that the 1-percent move down in gold today will be short-lived.
What investors must realize is that the time for protecting their wealth is
running out. Ukraine could be the black swan event or there could be
another. Therefore, it is critical to own physical gold and protect against the
inevitable consequences of the mess that the world is in. You must ask yourself
if you are prepared for such a collapse. If not, as I said, time is running
out.
Massive global food price spikes, depression and political instability
Brombry 3/1714
First, an update on my decades-long jack-of-all trades career. You can read me
each Monday in "The Australian", each Thursday on Miningnews.net, each month in
"Australia's Mining Monthly" - and then at least three times a week (discussing
rare earths, graphite, potash and others) on the Toronto-based
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investorintel.com. 1. First and foremost, I'm a mining and resources writer,
having carved out a niche within a niche with critical and strategic metals.
Latched on to the rare earth story in 1996 (somewhat before most others) and
have branched out into what I see are the more fascinating commodities from
potash/phosphate to graphite/graphene, not to mention antimony, tungsten and
tin. Defending gold's corner takes up a fair bit of my time, too. 2. Forging a
new path in book publishing, using both print and electronic formats. The books
reflect my interests: "The Farming of Australia", "German Raiders of the South
Seas" (my contribution to the present Great War publishing tsunami - this one
deals with merchant raiders operating in this region from 1914 and Australia and
New Zealand's naval dramas), "Australian Railways: Their Life and Times". And,
before the year is out, a book on minerals and metals. No, not a "copper is used
for ..." tome, but trying to make sense of how the world is changing and how
this will affect future metals demand. Others to follow. How to get them?
Highgate Publishing (www. highgatepublishing.com.au) is issuing titles available
as paperbacks (via Amazon), for e-book readers (Amazon Kindle, Smashwords, Nook,
etc.) and also can be purchased as PDF books for downloading on computer through
my website. Fifty-one years in this racket, one way or another. Written for and
edited newspapers, written a handful of books, made radio documentaries,
reported for TV and made a television wild life documentary, written and
published books, started a magazine which actually found its audience and would
go on for more than 30 years.
http://www.theaustralian.com.au/business/opinion/russian-invasion-of-ukrainecould-drive-global-food-prices-up/story-fnciihm9-1226856346079#
Russian invasion of Ukraine could drive global food prices up The last thing the
shaky global recovery -- and the mining industry in particular, we would add -needs now is a further spike in food prices caused by disruption to farming
in eastern Ukraine. Ukraine is the world's third-largest exporter of corn,
the sixth-largest of wheat, and almost all of that is grown in the Crimea and
other eastern parts now trembling under Moscow's boot (voting in Crimea was due
to begin late yesterday). Any denting of the fragile global recovery sentiment
would (probably) have severe consequences for metals demand, a blow this sector
can barely afford, with copper down 13 per cent so far this year and fears of a
huge unloading of physical metal as financing deals are unwound (as explored
here last week). Copenhagen-based Danske Bank says of potential disruption of
Ukrainian food exports that this is the last thing the "shaky global economy" needs. It adds
that both Russia's and Ukraine's economies are struggling and they need every
cent of revenue they can lay their hands on. Ukraine supplies about 40 per cent
of all the wheat grown in Europe, 20 per cent of the corn and 10 per cent of the
rapeseed. While the wheat and corn are grown mainly in the threatened eastern
part of the country, the rapeseed is produced mainly in the west, so is not
(yet) threatened by Russian acquisitiveness. Up to 60 per cent of Ukraine's
output of wheat and corn is exported while 95 per cent of rapeseed is shipped
abroad. Disruption, especially of grain exports, would have "severe repercussions" for the global grain
market, the bank says. Here's another cruncher: there are just a few months before the
wheat harvest is due . Unavailability of Ukrainian grain is not what Europeans would
like to see. This past week we have seen what the Commonwealth Bank termed
"massive speculative investor and fund" buying of wheat positions, all pushing
the prices higher. Food prices do, indeed, pose a threat to the global economy
-- and global stability (remember the food riots in Tunisia and Egypt that brought
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down those governments). As of last week, coffee prices have risen 78 per cent
since January 1, sugar by 23 per cent and soybeans by 11 per cent. Now wheat
prices are on the march.
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