Russian Counter-Sanctions Receive Mixed Reactions

Following Western announcements of sanctions on the Russian economy, the Russian Federation approved a counter-measure to ban the importation of many foods from the very countries that joined in on the sanctions; namely the EU, the USA, and Australia. To certain industries, such as fishing, the sanctions can be significant. In the UK, the BBC reports, certain fishing firms have expressed remorse over the Russia sanctions because the Russian market was an increasing presence in their operations. On the flip-side, the same sanctions could be good for consumers because now there is an excess of foods in the market which could lead to a drop in prices, unless the concerned businesses decide to store the food en masse. In Latin America, the sanctions represent an opportunity to increase bilateral relations with Russia which are especially notable after Russian President Vladimir Putin’s official tour of the region last month. It is suspected that the new accords between Russia and Latin American nations amount to almost $6 billion. Domestically, the sanctions have proved extremely popular in Russia, as they represent a defiant stance to what is seen as Western attempts to “contain” Russia. Outside Russia, the sanctions are seen as an attempt to sow discord among European partners who would see themselves adversely affected by them. Recently, on August 15, Hungarian Prime Minister Viktor Orban, who was recently re-elected on a pro-European platform, called for a rethinking of Europe’s Russia strategy alleging that sanctioning Russia amounted to “shooting oneself on the foot”. To his judgment, sanctioning Russia has caused more harm for Europe than it has for Russia, as every time a new round of sanctions are imposed, Russia surprises the West by increasing confrontation over Ukraine. Similarly, Slovakian Prime Minister Robert Fico and Czech President Milos Zeman have warned that the sanctions on and from Russia will harm Europe’s economic growth. The comments from the three Eastern European countries’ leaders demonstrate how reluctant the region is to pursue the West’s sanction policy. Nonetheless, the complaints from the bloc will not be enough to trump the sanctions on Russia, and the EU has begun motions to compensate affected firms from the expected losses.

Much of the Western media attention following the announcement of the import ban proclaimed that Russia would bear the biggest burden as consumer prices would rise in the country. However, with these sanctions, the Russian government has been able to provoke public discord about sanctions in the EU, various countries such as Egypt, Turkey and Brazil have jumped to fulfill the gap in food imports, and it has proved considerably popular in Russia. The latter point is due to the fact that the most avid consumers of Western foods in Russia are high class citizens that normally do not like Mr. Putin’s government to begin with. Furthermore, since the Ukraine crisis erupted, Russia has experienced a nationalist resurgence that has called for Russia to break more ties with the West and adopt a more assertive foreign policy to restore Russia’s former might. This crowd has widely approved of the import ban, seeing it as a way to promote self-sufficiency and independence from economic entanglements.

Nonetheless, the import ban, which is set to last just one year, has led to significant rises in food prices across Russia. In the Far-Eastern province of Sakhalin, the price of chicken thighs has risen 60% since the implementation of the ban. In Moscow and St. Petersburg, the effects have been similar with a consistent rise in food prices. These developments are dangerous to an already precarious Russian economy on the verge of recession. However, the year-long duration of the ban indicates that Russia does not intend to isolate itself from the world, but rather it is seeking a strategy – a bargaining chip – with its adversaries. Another complication over the explicit temporary nature of the ban is the future of Russo-Latin American cooperation. Since the announcement of sanctions by Russia, South American nations have jumped to fill the vacuum in food imports in hopes of increasing their economies; for the Argentine Milk Industry, new agreements with Russia could represent up to a 20% increase in exports. Nevertheless, it is unclear what direction the Russian economy will take once the sanctions are lifted and they are free to choose from whom they purchase food.

This latest move in the Ukraine crisis, the deepest collapse in East-West relations since the end of the Cold War, does not signify that Russia is willing to end its ties with the West in a bet to become more independent from the global economy; it is a testament that both East and West are interconnected enough to inflict damage on one another. Recently, President Putin delivered a speech in Crimea where he struck a conciliatory tone with the West, arguing that it was not in Russia’s interests to “fence itself off” from the rest of the world. Perhaps the import ban has the purpose of convincing Europe to reassess its strategy with Russia – as some leaders have called for – and a potential path for serious negotiations over Ukraine. Unfortunately, the aftermath of the sanctions has only been an escalation in Ukraine and another pitfall in trust between Russia and the West.