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It’s Time To Walk The Talk To Defend Ukraine

Stronger sanctions necessary to stop Putin

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President Vladimir Putin has brought Europe to the brink of war. He seems to be employing his ally, Beijing's "salami tactic," to take control of Ukraine one region at a time.

Moscow is playing an old hand. In 2008, Russian troops occupied breakaway provinces in Georgia, effectively thwarting its plans to join NATO. Keeping the western bloc away from Russia's borders and ensuring the security of the Russian lands is President Putin's declared agenda.

Moscow is well aware that the U.S. and NATO are committed to defending their member states that border Russia and Ukraine. At the same time, President Biden has made it clear that he will not send American soldiers into Ukraine to fight Russian troops should Moscow invade the country. It is uncertain how much the Ukrainian army will benefit from the supply of arms and ammunition at this late stage.

The U.S. Secretary of State, Antony Blinken, stated after meeting with Russia's foreign minister in January 2022 that there would be a "swift, severe and a united response" if Russia invades Ukraine. Even as Russian tanks roll into separatist-territories in Ukraine, which Moscow now recognizes as "independent," and shelling is reported in the region, foreign leaders are still debating whether this constitutes an "invasion."

They have resorted to pretty much the only recourse open to them – sanctions.

But the first tranche of sanctions announced by the U.S. and its western allies seemed neither "severe" nor "swift." One would wonder, as President Putin lined up over 150,000 troops across the Ukrainian border and kept the world guessing for weeks, why weren't the world governments preparing counter-strategies to be rolled out immediately in case he made a provocative move?

Surprisingly, Russian embassy personnel continue to work at their diplomatic missions around the world. Nor has any country called back its diplomats from Moscow. This would suggest that most governments are sticking to the "wait-and-watch" mode, unwilling to take steps to close diplomatic channels.

Sanctioning two major Russian state-owned financial institutions (leaving out Russia's largest banks) and imposing additional restrictions on Russian sovereign debt is hardly "severe" when Moscow faces no restrictions on the export of gas, oil, or other major commodities like platinum, iron, steel, fertilizers, etc.

Sanctions-infograph

The EU reacted to the invasion by sanctioning members of the Russian Parliament and entities that are "undermining or threatening Ukrainian territorial integrity." Australia and Japan have expressed solidarity with Ukraine and support for such sanctions. Even China, Russia's trusted ally, has struck a more cautious tone; it has not expressed support for Moscow's latest moves.

Germany's decision to halt the commissioning of Nord Stream 2 is welcome. The price of gas is bound to increase, especially in Europe. Russia, many believe, is banking on its position as a significant oil and gas exporter as a bargaining chip.

But, Moscow continues to have access to SWIFT, the Society for Worldwide Interbank Financial Telecommunication. Far-sighted in his plans, President Putin has steadily reduced Moscow's dependence on the dollar. The country settles its trade accounts with Eurasian Economic Union members by circumventing the dollar. Trade with BRIC also eschews the dollar to a large extent.

While sanctions will hurt the Russian economy, the pain may not be as swiftly inflicted as many hope. Russia's foreign exchange reserves are estimated at $630 billion, the fourth largest globally. At the same time, foreigners own only 21 percent of Russian bonds. The country's external debt is only 14 percent of GDP, one of the lowest by global standards.

It must be acknowledged that sanctions have been pretty ineffective in curbing or deterring autocratic leaders from following their nefarious agendas, endangering peace and stability, as seen in the cases of North Korea and Iran.

President Putin may well be willing to take the economic hit to realize his plans to restore past glory. Penalties on the energy sector will reverberate across Russian society as much as around the world. More than a third of Moscow's revenues come from energy sales. It makes up 60% of its exports. Suppose Russia is cut off from SWIFT, and Russian oligarchs, businesses, and the banking system come under stiff sanctions, then, President Putin may no longer be able to stoke up Russian pride to fuel his expansionist agenda.

Russia is a nuclear power led by a determined, ruthless autocrat. Yet, no one country can withstand the collective ire and sanctions of the rest of the world. It is time the world executed the "swift, severe, and united response" that it had promised Moscow and came to the defense of a sovereign state – Ukraine.


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