Contrary to Western calculations, recent anti-Russian economic sanctions have turned into yet another example of a major financial decision going disastrously wrong. The 7000-odd sanctions were intended to cripple Russia within days ---to ‘reduce the ruble to rubble’, thundered President Joe Biden ---- and to end European dependence on Russian oil / gas for good. There were Western prophecies gleefully describing Russians pulling out of Ukraine within days, begging Brussels to resume buying their fuel, at reduced prices Eighteen months on, the fantasies peddled by the almighty Western media remain,as before, the stuff of fond dreams !
Russia has been hurt, forced to lower the price of its oil/gas, but the ruble has not collapsed. Its annual GDP growth has declined only by 2% between 2022 and 2023 as against the 10% forecast by the West. Its economy is poised to grow by about 0.7% by end 2023, according to IMF estimates. This record is far better than France, Germany (where negative growth has been reported for three successive quarters !) and the UK, where the economic decline has been palpable...
The US dollar remains strong. But sceptical Republicans and Democrats are questioning the financial wisdom of funding Ukraine over $150 billion to fight Russia. Nobody expects Kyiv to ever repay a fraction of the amount spent already, war or peace ! Ironically the unforeseen side-effects of the sanctions have been notably positive for major Asian powers China and India. China and Russia have imparted a much-needed momentum in their drive to de-dollarise World business/trade by working out massive long term deals---something they had been working on since 2015. Currently over 80% of world economic transactions are conducted in US dollars. However, post sanctions, Russia and China are using national currencies to conduct over $ 400 billion worth of trade / business, consisting mostly of Chinese imports at special rates of Russian fuel, for the next decade .
Russians are now using the yuan instead of the dollar in international trade. Even Indian companies have used the yuan in recent transactions with Russians. This hurts the dollar. The new trend has not gone unnoticed among experts. US Treasury Secretary Ms Janet Yellen warned US authorities that the dollar could lose its dominance. Many countries seeing the west seize $600 billion Russian reserves held in US banks, are looking for alternatives. Incidentally, the Indian rupee is emerging as a strong regionally acceptable currency, on a smaller scale. Bangladesh and India are using the rupee to run their export-import trade, enabling Dhaka to save $200 million annually. The UAE and India are using rupees and dirhams in bilateral trade. Sri Lanka could also follow suit. Talks are on with fourteen other countries including the UK, Singapore, Malaysia and Indonesia, as they have expressed a similar intent.
Question : How could the mighty US-EU bloc fail to anticipate the possible negative impact of their anti Russia sanctions ----- another case of Western hubris ?
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