Day after day it’s getting proved that the West’s boycott of Russia, imposed since the beginning of the country’s military operation in Ukraine, has not worked for many reasons. This is mainly because “the world needs Russia more than Russia needs it”, as had earlier been indicated at the beginning of the war.
The issue has nothing to do with the inevitability of taking a certain position, as clearly manifested by the balanced stand of the GCC countries, represented by neutrality and making every possible effort to find a peaceful solution to the Ukrainian crisis. From the beginning, the conviction regarding the failure of the boycott was built on objective grounds concerning the capabilities of the West and the Russian Federation, which has made countless gains under Western sanctions.
The first of these gains is the rise in the ruble against other currencies, as it is up a substantial 135 per cent in five months, hitting 60 to the dollar. This has promoted the Central Bank of Russia to intervene to stop the rise of the currency, exactly opposite to what the Western boycott was aimed at, which is the collapse of the ruble. This is with the knowledge that the ruble had fallen as low as roughly 150 to the dollar in March.
Hurtling towards a crisis
The collapse of the remaining aspects of the boycott can be referred to by the European measures, notably as manifested first in a report by Germany’s ‘Deutsche Welle’. The report indicated that the EU support for sanctions against Russia is declining due to inflation, while The Economist noted that halting Russia’s gas flows into the eurozone would reduce GDP growth by 3.4 per cent and increase inflation by 2.7 per cent.
As part of the regressive measures, the European Union decided to release Russian bank funds to support the food and energy trade, and the Wall Street Journal reported that the EU decided not to include Russia’s VSMPO-Avisma corporation in the sanctions package due to opposition by France. VSMPO-Avisma is the world’s largest producer of titanium and an important supplier to Airbus. This retreat has promoted Hungarian Prime Minister Viktor Orban to say that the EU needs a new strategy on the war in Ukraine as sanctions against Moscow have not worked.
On the US side, CNBC reported last week that “the US economy has shrunk by 0.9 per cent in the second quarter and entered a recession, along with unprecedented inflation, as the synchronization of these two factors will expose the US economy to stagflation”.
Unlike others, Russia, on the other hand, is adapting comfortably to the Western sanctions. In addition to the rise of its national currency, Russian oil production rose to 10.78 million barrels per day in July, according to Bloomberg.
No let up in demand for Russia’s oil
Russia’s oil has soon found its way to the world markets, particularly Asia, leaving Europe in a serious energy crisis. Germany, whose position is shaken by the energy crisis, is calling on its citizens to bathe in cold water, while its companies are experiencing difficulties that could lead some to bankruptcy. This difficult situation has prompted the government to step in to rescue Uniper, the Russian gas importer, with a $15.2 billion bailout, after the company became the biggest victim of Europe’s energy standoff with Russia.
The above are just examples of the collapse of the Western boycott, which is expected to decline significantly in winter because of Europe’s need for irreplaceable and indispensable Russia’s energy and minerals. This is at a time when the Western media has failed to promote the causes of the boycott by spreading the news to the effect that Russia is stealing Ukrainian grain, while Russia is considered the world’s breadbasket for wheat.
There are several questions being asked now about what the alternative is to resolve the crisis ravaging the world economy and dragging it into the abyss. This suggests a return to the repeated calls from international parties, particularly the GCC, to solve the crisis peacefully. It seems that there are Western approaches to solving the crisis diplomatically, which will be of benefit to the global economy as a whole.
