Moscow undeterred by sanctions threat

Haitham Nouri , Thursday 3 Feb 2022

Western leaders are vowing to impose sanctions against Moscow should it invade Ukraine.

Local residents train close to Kyiv, Ukraine, amid fears that Russia is preparing to invade
Local residents train close to Kyiv, Ukraine, amid fears that Russia is preparing to invade photo: AP

The UN Security Council met on Monday at US request to discuss the Ukraine crisis as Western leaders vowed to impose a barrage of sanctions against Russia should it invade the country.

The inconclusive but heated session was an occasion for both the United States and Russia to trade accusations.

Vasily Nebenzya, Russia’s permanent representative to the UN, began the meeting by questioning Western claims of Moscow’s plans to attack Ukraine. He said that Washington wanted to create a “state of hysteria” over Ukraine and was “deliberately misleading” the international community with “unverified” information.

There is no evidence to support the West’s allegations that Russia has amassed over 100,000 troops on the Ukrainian border, he said. Nebenzya recalled the US invasion of Iraq in 2003, justified by allegations of Baghdad’s possession of weapons of mass destruction that were never found.

Accusing Russia of “threatening behaviour against Ukraine,” Washington’s UN envoy, Linda Thomas-Greenfield, said that more than 100,000 Russian troops had been deployed on the Ukrainian border as Russia engages in “other destabilising acts aimed at Ukraine, posing a clear threat to international peace and security and the UN Charter.”

The US and its allies have repeatedly warned of an impending Russian invasion of Ukraine and demanded that Moscow withdraw its forces from the border.

Although Russia has staged military exercises near its border with Ukraine, it stated on Monday that 6,000 troops that had taken part in separate drills in Rostov and Volgograd had returned to their barracks, most of them located in the Crimean Peninsula, which Russia annexed in 2014.

The previous day, Kiev called on Russia to pull back the forces it had amassed on the border and continue dialogue with the West if it “genuinely” wanted to halt the escalating tensions.

Moscow has repeatedly denied any intention of invading Ukraine and has called on Washington to treat it as a peer and show some regard for Russia’s security concerns. 

In recent months, Russia has reiterated its opposition to the inclusion of another former Soviet republic into NATO and called on the largest military alliance in the world to withdraw its forces from Eastern Europe and return its military potential and infrastructure to their positions in 1997.

The US this week rejected Russia’s security demands in a written response. The Kremlin has said that it is thinking of returning the letter. 

“The US and NATO responses did not take account of key Russian concerns,” it said, adding that they had ignored a central issue, namely the “indivisibility of security” or the fact that no state should enhance its security at the expense of others.

Washington and other Western nations have proposed an alternative to the Russian demands in restrictions on the deployment of short-and intermediate-range missiles in Europe and a ban on military exercises in areas near the opposing camp’s borders.

Although NATO has incorporated many Eastern European nations since the collapse of the former Soviet Union and the Warsaw Pact 30 years ago, Ukraine has not been able to join them because of recurrent bouts of upheaval since 1991 and due to the influence of Moscow and the large ethnic Russian minority in the country.

Russia supports separatists in the Donbas region of eastern Ukraine in the war that began in 2014.

Last week, the US announced that it had put 8,500 troops on the ready to support NATO. France is planning on sending “hundreds” of its soldiers to Romania, which borders Ukraine from the south.

Kiev plans to receive French Foreign Minister Jean-Yves Le Drian, his German counterpart Annalena Baerbock, and Polish Prime Minister Mateusz Morawiecki this week, although dates for these visits have not been announced. 

Canadian Defence Minister Anita Anand, whose country provides military assistance to Ukraine, visited Kiev on Sunday for a two-day visit. Moscow accused Canada of pursuing an anti-Russian agenda after Ottawa extended its military training missions in Ukraine for three years and announced plans to send over more troops.

While senators in the US have indicated that they are close to reaching an agreement on a bill to sanction Russia over its actions in Ukraine, the Russian Duma Council is considering a proposal to unilaterally recognise the breakaway regions in Donbas. Such a move would considerably raise the stakes in the crisis.

Sanctions that London and Washington are considering against Russia would target the NordStream 2 gas pipeline between Russia and Germany and cut Russia off from international financial transactions in dollars. 

Washington has long opposed the NordStream pipeline out of fears that its allies in Europe could fall prey to a Russian monopoly over their energy supplies.

Europe currently relies on Russia for more than a third of its natural gas needs. Should Russia decide to turn off the tap, Europe’s energy bills would climb further, especially given the lack of an immediate alternative. Qatar, one of the world’s largest producers of liquid gas, has made offers to meet European needs, a step that the Western media have described as “opportunistic.”

Western sanctions aim to hit Russia where it hurts the most, which is to say financially, and this is why they have set their crosshairs on the Russian energy industry, one of the country’s main sources of income. 

Some in the West have suggested freezing the bank accounts of senior Russian officials, but Moscow has shrugged off the threat, pointing to a law prohibiting Russian officials from possessing bank accounts abroad. However, being banned from the SWIFT system, the main means for moving money from bank to bank around the world, would be painful, as Iran can testify as a result of its also being under Western sanctions.

Russia has introduced an alternative, which may assuage the pain, however. The Mir payment system, which serves a number of former Soviet republics, was initiated in 2015 as a means to offset the wave of sanctions that followed Russia’s annexation of Crimea the previous year. 

It is based on the Russian Sovereign Wealth Fund, which stood at $182 billion at the beginning of this year, or about 12 per cent of the country’s GDP. Russia also has a relatively low national debt compared to other industrialised nations and large cash reserves in the Russian Central Bank.

Moscow has asked international partners such as China and India to make payments to Russia in currencies other than dollars. It has also introduced an import-substitution strategy which Russian President Vladimir Putin has hailed as an opportunity to stimulate domestic industry by replacing imported products with locally manufactured equivalents.

US President Joe Biden has pledged that Russia will not be able to open NordStream 2 if it invades Ukraine, but no one in Washington has explained how he would deliver on this. 

As the Western countries consider other sanctions, such as withholding resources and technology crucial to Russian industry, the Russian economy is already in trouble. The ruble is declining in value, costs of living are rising, and Russians now have to pay more for imported product such as smart phones and computers. 

Travel and tourism are also becoming more expensive. 

The Kremlin remains firm in its stance on Ukraine, however. Moreover, according to Russian opinion polls, Putin’s popularity rating at home continues to be strong.

*A version of this article appears in print in the 3 February, 2022 edition of Al-Ahram Weekly.

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