RUSSIA HAS GOT A RETALIATION PLAN

Russia may be getting ready for actionable retaliation against the West . The Russian list of sanctions is focusing on individuals, companies, sectors, whether they are comprehensive and systemic, and if they impact the banking system. There is a prescribed action at each of the listed levels. So Russia knows precisely how to react.

Moscow is playing it cool because it may choose among a staggering array of counterpunches. It enjoys the support of the BRICS group of emerging powers, the non-aligned movement (NAM) and the Shanghai Cooperation Organisation (SCO).

As one of the world’s topmost exporter of oil and gas, it cannot only precipitate an energy crisis in Europe but also clinically target the American companies working in Russia. It can also speed up attempts by the BRICS countries and other emerging markets to escape from the US dollar by accepting payment for Russian oil and gas in ruble, yuan, euros or gold, thus delivering a terminal blow to the petrodollar.

The world today is not unipolar and though Russia would have wished to have good relations with its Western partners, especially with the EU due to the volume of deals and joint projects, it can easily replace them with new partners. It has been closely interconnected with BRICS for almost 13 years. The members of this organisation account for 42 per cent of the world’s population and about a quarter of the world’s economy. The cooperation between Brazil, Russia, India, China and South Africa goes beyond political aspects and is also demonstrated by dynamic trade and multiple projects in different areas. Today, there are more than 20 formats of cooperation within the BRICS which are intensively developing.

While the West seeks to hit Russia hard, it is important to notice that Russia is ready to switch to other markets, for instance BRICS, and increase trade volumes with countries from this bloc. Presently, Russia buys significant amount of products from NATO states. Nearly half of its demand for fruits and berries come from Spain, Holland and Poland. Russia imports a lot of consumer goods from Europe, and many big European companies would suffer greatly from losing the Russian market.

Russia is intensifying its economic ties with the developing world. In 2012, Russia was buying 41 per cent of its beef from Brazil. Last year, Russia and Brazil reached an agreement on the long-standing problem of pork exports to Russia and for annual import of millions of metric tons of Russian wheat. It is beyond the power of the EU and the US to make Russian people suffer from products scarcity since they are not the country’s only trade partners.

The US and the EU sanctions against Russia, at best could damage the Russian economy temporarily. But such sanctions can never succeed in destabilising Russia. In fact, this could accelerate in scaling up the Eurasian Economic Union. Russia is also likely to speed up its efforts to pivot its industrial and energy focus toward customers in Asia. The sanctions are unlikely to affect Russia’s ties with China and India or Iran negatively. And if Russia refuses to play ball with the US and Western Europe on energy issues, this could backfire very badly on the West.