On April 6, the US Treasury Department extended sanctions against a number of Russian billionaires, including:
- Heads of state owned energy giants Sechin (Rosneft) and Miller (Gazprom)
- Putin’s circle of silovarch chums and friendly billionaires, e.g. Kirill Shalamov (Putin’s former son-in-law), Fursenko, Patrushev, Zolotov, Dyumin (a long rumored successor)
- The “oligarchs” (which they are not) Deripaska (Rusal/EN+), Vekselberg, and Kerimov
Positive side is that this helps Putin’s stated goal of “nationalizing” Russia’s infamously comprador elites and repatriate their money back to Russia.
Negative side is that these sanctions really are quite serious, constituting a major upgrade over the meaningless Russian Forbes list from January 2017.
The individuals and companies in question have been added to the Specifically Designated Nationals (SDN), which forbids US nationals from doing business with them, freezes their US assets, requires US persons to sell any company stock they have within 30 days, and crucially, opens the possibility of secondary sanctions against non-US companies that continue to do business with them.
Companies in this category include some of the commanding heights of the Russian economy:
- EN+/Rusal – World’s largest aluminium producer
- Rosoboronexport – Russia’s weapons expert monopolist
- Russian Machines – Major industrial conglomerate
These come in addition to previously enacted sectoral sanctions on the Russian oil industry, which makes it difficult for Russia to get access to the equipment and software needed to drill for unconventional oil (its own capabilities in this sphere are limited thanks to Putin’s relative disinterest in developing domestic R&D).
The new sanctions will further up the pressure on the long-term viability of the Russian economy:
- The US market is an order of magnitude larger than Russia’s, so it is not only US corporations that will defer to Uncle Sam. This will also hold true for European corporations (most of Russia’s trade is still with Europe), for Chinese corporations (unless the CPC expressly orders them to flout US restrictions), and even for other Russian corporations (e.g. Russian state banking giant Sberbank still doesn’t have any branches in Crimea in what is probably a futile effort to avoid US sanctions).
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The fact that the US continues to introduce even more severe sanctions against Russian companies – and we haven’t even gotten to the fallout over the Douma alleged chemical weapons attack – will make foreigners even warier of doing business in Russia than they already are, and raise the cost of business across the board.
It is now well past time to admit that the US is engaged in a long-term project to cut off and strangle the Russian economy, and to react vigorously to this threat.
The dominant view in the US is that Russia is a gas station masquerading as a country, with an economy smaller than that of Italy/Texas, and is consequently too much of a small fry to hurt the US itself. The longer Russia sits still, the more certain the Americans will become in that conviction, and the more untied the Americans’ hands will become in enacting further anti-Russian sanctions and seizures. It is well past time to move beyond symbolic measures if Russia wants to survive and thrive as a sovereign state.
Some ideas for Russian sanctions against the US:*
1. Although kicking out select American corporations will be viscerally satisfying – I have seen McDonald’s suggested – in reality this would be very counterproductive, making foreigners even more loth to invest in Russia.
- Get Roskomnadzor to do something useful for once and block Google, Facebook, and Twitter (as opposed to harassing Russian patriots and threatening to shut down Russian services such as Telegram). These companies all have an anti-Russian agenda and are deep in bed with USG and its global surveillance program. They should not be allowed free access to the Russian market, not least because Russia has viable alternatives to all of them ready to go (e.g. Yandex, Vkontakte, Odnoklassniki).
Those few Russians who really, really need Google/Facebook will be free to use VPN to get round them.
Russia needs its own sovereign information ecosystem like China has instead of feeding its adversary’s.
- Since the US is now targeting Putin’s “oligarchs”, while leaving pro-Western Russian billionaires alone (e.g. Friedman’s Alpha Bank, which has acknowledged the Donbass and Crimea as occupied territories), this creates perverse incentives for Russian oligarchs to kowtow to Uncle Sam.
There are two ways to rebalance incentives:
(a) Compensate the material losses of Russian billionaires affected by Western sanctions. But this is going to be very unpopular with ordinary Russians, and Navalny and liberals are at the ready to make political hay from this.
(b) Pressure pro-Western billionaires. Associating with the US and its most supplicant satraps (e.g. the UK) should become as toxic for a Russian businessman, as it is now for American businessmen to associate with Russia. A couple of demonstrative trials should instill the message.
- Since Trump wants protectionism so much, he can have it.
There have been several campaigns to shift from Microsoft products to Linux, but the former remains ubiquitous on Russian government systems. This is a totally bizarre state of affairs, not least considering that the US banned Kaspersky on government systems last December. There need to be real punishments and demotions for heads of bureaucratic departments who continue (for all intents and purposes) to feed yet another US surveillance apparatus within Russia.
Another company that comes to mind is Boeing. Russian airlines should be mandated to buy non-US planes, and preferably Russian ones. Russia has the SSJ-100 regional plane, the Irkut MC-21 will enter mass production from 2019, and there is a large wide-body jet jointly developed by Russia and China that may be coming to market by the late 2020s.
This is just the beginning. I’m sure one can think of many other good targets.
Fortunately, Trump/deep state/whomever have been dumb enough to engage in a trade war with China and Europe at the same time as they further the squeeze on Russia, so there’ll be plenty of opportunities for cooperation on this.
- The US in 2017 made a special exemption to allow NASA and other American companies to continue buying Russian rocket engines.
Russia should just ban it anyway.
SpaceX is still a couple of years off from developing the heavy reusable rockets that would annul the need for Russian rocket engines.
- I have long been arguing that Russia should adopt the Chinese method of keeping a secret blacklist of very hostile Western journalists (so that would be most of them) and denying them visas.
First, this works. Western coverage of China is far nicer and fairer than of Russia.
Second, frankly, these people deserve it, having played a major role into getting us all into this mess.
- I believe that sooner or later RT is going to get ejected from a swathe of Western countries.
When that happens, Russia should be prepared to shut down the relevant country’s news bureaus in Moscow (making exceptions for any pro-Russian outlets, if they exist).
* Some good ideas/inspirations from this Reddit thread.
…and finally bomb Voronezh. That will show Trump who is the master!
Really. Easy, dude.
I’m all for some counteraction, but can you please come up with something that does not make the life of millions people here in russia materially worse? Not an easy task, but seriously, caring about your own population as opposed to shitting to their heads on every occasion is what separates europe and some fuckingstan.
I also need my daily fix of frogtwitter.
China is indeed a good role model from a wider perspective.
But then blocking google/facebook (effectively requiring VPN to use them) is not much fun – I use these sites everyday, including when in Russia.
Banning Radio «Svoboda» or BBC or euronews would be costless. But nobody uses this media anyway, so it would have little effect (except to save Westerners money they waste on these things).
Denying visas to Julia Ioffe et al, is a good idea, since her career is based on the idea she is an first-person reporter who is regularly living in Moscow.
EU seems to be using bezviz as a weapon; there’s no way Georgia, Ukraine and Moldova would’ve got visa free entry to the Schengen zone without the events of 2014. Gulf Arab countries with real terrorism risks also have it, but not Russia. So possibly unilateral bezviz to India and China?
Get a new drug.
Unless you offer something, you are not.
Situation too serious for letting “fun” play such a decisive role.
https://twitter.com/matthewstoller/status/983343196586553345
WAS: if this kind of thing had been done selectively from the early 2000s it might’ve made a difference, or not… who knows. It’s unlikely to do much now. I’m not saying that it’s a bad idea, just that it won’t put a dent in the relentlessly bad press the country gets. UK tabloids are now seriously comparing the place to north Korea!
Unilateral visa free travel would be the only thing that would have any effect at all on the western public, no matter how humiliating and how slight.
It won’t be much fun for me either, since on most things Google/FB are just better than Yandex/VK, but the national interest supersedes ultimately rather petty individual concerns.
This is not going to affect the majority of Russians, and will only be a substantive issue for perhaps 5% of the population.
Sorry, but none of this is going to matter much…
A facebook block is probably the best one to do. It’s already hurting. It’s the one where it’s most easy to say “hey, they’re in bed with American security forces”. It’s the most dangerous. It’s the one with the best replacement. Of course, facebook owns instagram which is hugely popular in Russia. Banning instagram in Russia would make a lot of people mad but would also really hurt instagram. I would block tumblr just for shits and giggles.
I have to say, I lost almost all of my putinphilia when I saw him say so much that seemed technologically illiterate. And because of that I don’t think he’s up to the historical task set before him.
“Russia should be prepared to shut down the relevant country’s news bureaus in Moscow”
This is a no brainer.
The biggest problem with Russia is that it’s so damn insular. America does a good job capturing people’s imagination. America gets people out of America to buy into America culturally. If I were Russia I would invite Europeans of a nationalist bent(filtered for skills) to create small charter cities on the black sea and the russian far east. Make it easy for Europeans to vacation and enjoy Russia. Make these areas good for culture creation(movies, music, video games, animation). I’m not really a fan of this, but one thing that would really screw with peoples heads is if Russia let China build a charter city in either Kalingrad or the Black Sea.
As a compensation, Russia could stop protecting American intellectual property. Downloading American movies, music, software etc for free would become legal. Hosting too, so that everyone in the world could download.
What can America do in response, ban Russian movies?
Next step would be breaking drug patents. That could be huge boost for Russian pharmaceutical industry.
(I have to say that this situation sucks and I wish it wouldn’t come to that.)
I’m pretty sure Sechin was sanctioned in one of the earlier rounds and has been on the list for a while now. Miller, however, is a new one.
Russia’s shrinking workforce means eroding livngmstandards unless productivity is raised sharply. The means above all, EU capital goods, investment and technology transfer. Russia has been played like a fiddle by the phobes. Russia’s reactions are too predicrable. It is busy digging it’s hole deeper and deeper. There seems no way out while the siivoki remain in charge. When Putin goes the relative decline will accelerate. The competition between the May and Putin governments for the Useless Idiot of Europe is intense.
Or maybe Russians could start thinking they can do better than Putin and the government of crooked gangsters he heads. How much better off are Russians compared to eight years ago?
Yes, unilateral visa free travel is the way to go but it will anger common Russians.
Better than with 8 years of Navalny.
There have been several campaigns to shift from Microsoft products to Linux, but the former remains ubiquitous on Russian government systems.
I strongly agree with you on this. The desktop PC and office software suite is a mature technology that’s already out there to be adopted tomorrow.
http://astralinux.com
https://www.youtube.com/watch?v=Jy6EU5Begds
Yes! Linux for Russia! Linux for the world!
It would be great for me personally. The Russian Astra Linux is pretty much identical to what I run at home and for work.
Choudary Chamar।।
New investment from American corporations will not be forthcoming even though it is currently legal. I wouldn’t even consider it in this environment, despite the fact that my products would be quite useful in Russia and there aren’t comparable local products.
Non-Americans will understand that this constitutes retaliation.
I think the trade-off is worth it.
The stakes of American oil corporations such as Sakhalin-1 could be subjected to a compulsory purchase at a fair price (expropriation would indeed be a disincentive to invest).
American capital goods where substitute goods exist are a very obvious choice. Farm machinery (Deere has a plant in Russia), heavy equipment, power machinery, aircraft (as mentioned), and jet engines. Use domestic substitutes in general, Europe if necessary (e.g. Rolls Royce engines may be preferable for long haul routes for economic reasons).
Cultural imports from America should simply be prohibited outright. In addition to closing off a large market to Hollywood, why would you want to poz your own population?
In addition to shifting to Linux from Windows, import substitution efforts should begin for enterprise software in general. Programming talent is one genuine bright spot in Russia’s emergent technology (or, often, lack thereof).
American automakers are present in Russia. The state should put its thumb on the scales for their competitors.
Apple products should be banned, which in addition to harming the world’s most valuable corporation will trigger Russia’s domestic liberasts.
Commodities futures contracts denominated in both Rubles and the currencies of Russia’s main trading partners should be launched in Moscow and the relevant local exchanges, as well as any international exchanges (e.g. London’s out, but Hong Kong’s in) will to host the product. This should have been done years ago. Likewise, Russia must accelerate efforts to de-Dollarize trade with China.
If you really want to have some fun you can even profit from this. Establish companies in Caribbean financial centers and capitalize them. Prior to announcing retaliatory measures, short the affected American companies. The US government will get wise to this quite quickly and shut it down, but a few billion in profits can be made and then touted as propaganda.
Ultimately, Russia can’t do much to harm America economically or financially. Better retaliation option is arms exports. In particular the S-400 and Su-35 should be sold to Iran and North Korea (assuming the Norks can pay, which is dubious).
Long-term the country needs comprehensive import substitution and technological modernization. Perhaps Russia can become a joint partner for Made in China 2025. Long-term efforts also need to be made to cultivate Germany, South Korea, and Japan. Russia could plausibly become a larger market for advanced production machinery from targeted firms in these countries than the United States, leaving it less vulnerable to secondary sanctions disruption.
This is something which greatly amuses me about America’s sactions-crazy foreign policy. The same Ecommunist-reading Starbucks-swilling Davos wannabes who worship “free trade” as a holy sacrament immediately resort to protectionist measures far harsher than mere tariffs when another country is deemed to be non-compliant.
Also to my fellow Americans reading this I don’t want to come off as unpatriotic, but our country’s Russophobic foreign policy drives me nuts. And our government hates us and wants us dead anyway.
Honestly, if I were a Russian billionare in this situation, stuck between the anvil of US sanctions and Kremlin’s show trials, my solution would be sell off all my assets and run to Singapore. Being an “oligarch” in Russia isn’t worth all that stress. 🙂
Things our government should be doing is dumping treasuries and converting Russia’s energy sales into non-dollar currencies, but that will be much harder to accomplish than banning Facebook.
Two more ideas (for symbolic value and giggles):
1. Make Crimea Special Economic Zone, free from certain import restrictions. I.e. one can import Belgian apples to Russia but only through Crimean companies and using Crimean ports.
2. Law that automatically makes null and void all patents for companies and technologies that do not have unrestricted sales in Russia. I.e. if Siemens does not allow placing their gas turbines to Crimea Russian companies will not be prosecuted for copying Siemens patented technologies.
Anatoly, what are your thoughts on using the current crisis in Western-Russia relations as a justification for expanding into Novorossiya/Belarus/northern Kazakhstan?
Also, do you think that Russia is ever going to get kicked out of the SWIFT banking system?
Dumping Treasuries is easy. You place a sell order.
http://ticdata.treasury.gov/Publish/mfh.txt
Russian Treasury holdings aren’t that large as you can see. Average daily Treasury volume is in the neighborhood of $500 billion. Even a coordinated dump with the Chinese wouldn’t achieve much. Trillion dollar trading days aren’t unknown, and the Federal Reserve System can purchase any volume Treasuries it likes on the open market.
The main outcome of this action would simply be to lose all your Dollar reserves.
As for energy sales, it seems there is definitely a problem here. The SPIMEX Urals Crude Futures contract is traded in Dollars. This appears to be the only crude futures contract offered on the SPIMEX (the other petroleum products are refined fuels prices in Rubles for delivery within Russia).
Euro and Yen contracts should be launched immediately, and there need to be other durations than simply 12 months. Needless to say FOB Primorsk cannot be the only delivery option either.
The RMB isn’t freely convertible, but the Shanghai International Energy Exchange intends to offer RMB oil futures with gold convertibility. Logically a Russian crude contract should be sold on this exchange.
See here: http://spimex.com/en/derivatives/products/types/
My understanding is that Gazprom prefers to export its gas through long-term bilateral supply contracts (and the Chinese prefer to buy this way). However, it might be worth marketing its product on the European Energy Exchange if nothing else to increase the number of Germans interested in good relations with Russia.
Why on earth would Russia want to extract “unconventional” oil? It can produce more cheap oil than it can sell at the right price.
no, first you stop scr*wing with them.
How Can Russia Hurt the US?
Moscow: Cryptopia 2020.
Mandate not only that government offices use Linux, but also public-key cryptography, particularly for government identification, with transactions at government offices stored on the blockchain. This will have many benefits in terms of efficiency and transparency. And the greatest benefit of all: almost certainly this will entail laying off “Lyuba” the office manager and half of her staff. Finally, open up small old factories (of which there are many) as public coworking spaces provided with fast internet.
The point is that you need to do something not only to annoy your adversaries, but also to help yourself. But I fear that not only is Putin not up to the task, Russian society as a whole might not be. I know forty year olds who can’t even search for and download apps for their phones.
Any country that wants to survive should do that. It’s incredible that Russia has not yet done it.
But Yandex and VK is just a good.
Russia is at war with Israel, the lobby is driving this, and it does seem as if the Kremlin is finally acknowledging this. Start squeezing Israel, don’t just take the Tsarist approach and expect it all to go away.
Start squeezing US companies from the Russian economy, replace with European, Asian or domestic. Cut visa costs for European tourists.
Go after the weak fanatial proxies and seek to build relations with the reluctant allies with skills and tech you need.
The big problem is that if the US wants to economically strangle Russia, then Russia could only develop its economy long term with Chinese help. And at least in 2014 China wasn’t so eager to help Russia out.
It’s very difficult to do anything. For example someone suggested banning Apple products. I think it will lead to smuggling and the rich will be showing off Apple products they bought abroad (or at exorbitant prices smuggled in) anyway. But maybe it’d be at least useful in the sense of hurting Apple’s sales numbers. But how much do they rely on the Russian market anyway? I’d guess not much.
Then there was the suggestion of not enforcing copyrights on American movies. That might be good (especially if Russian government servers were set up to make it easy to download from abroad), but it’d probably make it easier for Russians to watch them, and thus expose them to poz. Maybe it’s better that they stay expensive? I’m not sure.
Selectively invalidating Western patents might be good, but it’d make it likely that new counter-measures would immediately be instituted. I’d go for it anyway, probably.
I think selectivity could be important: for example check which US companies gave money to US political campaigns and punish those that did the most, while not punishing the rest. Even better, just selectively punish one company without hurting any of the rest (the Americans more or less do the same, their sanctions often just target random individuals, but that just makes fear of sanctions more widespread).
Punishing Russian companies for complying with American measures (e.g. not setting up branches in Crimea etc.) is probably inevitable.
Selling S-400s to North Korea is difficult, because the Chinese will probably be unhappy. But selling it to Iran is a no-brainer. I’d actually sell a lot of military hi-tech to Iran. Iran cannot really compete with Russia in weapons exports, and I don’t think rivalry with it won’t be important for the foreseeable future. Whereas it’ll be targeted by the US regime for a long time to come.
Altogether, I think Russia can do very little, and if it does anything, it’ll just invite further sanctions on itself, so any kind of further escalation in the “sanctions war” will inevitably hurt Russia more than the US.
Re, Oil drilling technology capability see https://www.ft.com/content/cca94692-2061-11e7-a454-ab04428977f9
which talks about how Russia is managing to overcome sanctions impacting oil extraction surprising Westeen analysts.
Worth reading.
Retaliating is shooting yourself in the foot. Reality is the EU is drifting away from the US, China will dominate the world economically, Russia has not just stronger ties with Iran and Syria but with Iraq and Lebanon. The US is reclining and is in political and social turmoil. Let things keep on developing.
Yes become cucks…
I fear Putyara and the lot will once again “chew on their boogers ” as they say in Russian. Russia needs a better leadership, more ruthless…
My position is that the LDNR should be formally recognized regardless. Otherwise, there is currently no good casus belli. However, any attacks on Russian forces in Syria should be counteracted on the Ukrainian vector.
The US will need to have the EU countries and Japan on board for that.
Because Russian supergiants are in decline, as in much of the rest of the world.
To keep production constant, it needs to replace it with harder to access oil, e.g. Arctic deep sea drilling, which is capital intensive and very technologically complex.
Before 2014, Russia tended to turn to Western oil majors for the former, and Western oil services companies for the latter.
The Donbass should have been incorporated the way Crimea was, that opportunity has passed now. Look at the leaders being elected now in Europe like Salvini and Kurz, Merkel will go soon too. Now is not the time to act rashly, Russia can act when they are in a position of strength.
I actually disagree with that. It was ready to help – Russia just wasn’t desperate enough to need it:
* Economically: https://russia-insider.com/en/china/ruble-crash-china-pledges-support-russia/ri2105
* Politically: http://thediplomat.com/2014/03/china-backs-russia-on-ukraine/
* From the horse’s own mouth: http://www.globaltimes.cn/content/846263.shtml
I think I have said several times that in my opinion building up the China relationship was Putin’s greatest legitimate foreign policy success.
Though it’s something that China was and remains very much interested in as well, American “Bear vs. Dragon” fantasies to the contrary.
Agree with most of the rest of your post, as well as Thorfinnsson’s.
So long as China doesn’t join in, I think the ultimate limits of what the US can do are limited: http://www.unz.com/akarlin/punishing-putler/
That’s highly encouraging.
Can access it by searching for the title on Google in Chrome Incognito, but article reprinted without paywall for convenience below the More tag.
Russian oil groups brave cold of western sanctions to explore Arctic
A rig operator confirmed his request. Moments later, a drill began its 5,000m journey downwards, in search of oil deposits that the country is banking on to provide more than a quarter of its future output.
Perched on the edge of a peninsula deep in the Arctic Circle, Tsentralno-
Olginskaya-1 will be Russia’s northernmost oil well. Closer to the North Pole than to any city, it is a feat of engineering that uses equipment shipped 3,600km through icy waters navigable only for two months of the year.
The well is one of the most technologically challenging ever attempted in Russia. With the deposits located beneath the icy, frequently frozen waters of the Laptev Sea, cutting-edge horizontal drilling techniques will be used to reach up to 15,000m from the main site.
But it was also a moment of triumph for Mr Putin, who was beamed in via video conference from St Petersburg as Mr Sechin braved the frigid elements and who celebrated the start of drilling as an act of homegrown ingenuity. Three years ago, when the US and EU imposed sanctions on the country that restricted companies such as Rosneft from foreign capital and technology, complex wells were exactly the kind of ambitious projects that were supposed to be rendered impossible. Western governments hoped that pressure on Russia’s main energy companies would help change Mr Putin’s political calculations.
But as projects like Tsentralno-Olginskaya-1 attest, Russia’s oil and gas majors have found ways to carry on regardless. “Horizontal drilling is a complex and high-tech operation. This is just the first well. There is much more work ahead,” Mr Putin told Mr Sechin in the heavily scripted conversation.
The ability of the companies to overcome the impact of sanctions is critical for Russia’s economic future. Preliminary estimates suggest as much as 9.5bn tonnes of oil equivalent lie below the ice where Rosneft’s drill is headed. Experts believe Russia’s Arctic shelf region in total holds as much as $20tn worth of oil and gas, and will provide 20-30 per cent of its oil production by 2050. State-run Rosneft and Gazprom have been granted the sole rights to exploit it.
“I would like to wish you good luck and I hope for this undertaking’s success,” Mr Putin said.
Mr Sechin nodded. “We will keep you informed.”
The US, EU and other western countries first imposed sanctions in March 2014 after Moscow invaded and annexed Crimea and provided military assistance to separatists fighting in the east of Ukraine. They targeted some of the country’s major banks, defence and oil and gas companies that are largely controlled by the Kremlin and are the country’s economic heartbeat.
Foreign financing dried up, as banks pulled funding streams directly targeted by the sanctions, and took a safety-first approach to others as lawyers began to pore over the small print. International joint ventures came shuddering to a halt, and prospective investments were abandoned.
“At the outset, a lot of companies were scared off from doing business with us or investing,” says a senior executive at the Gazprom group of state-run oil and gas companies. “The sanctions were brought in, and straight away the lawyers and compliance teams [at foreign companies] got way more powerful.”
The sanctions remain firmly in place despite Donald Trump’s election as US president. Given that Mr Trump had called for closer relations with Russia and he appointed as his secretary of state Rex Tillerson, who in his previous role as chief executive of ExxonMobil signed an agreement worth $300bnto work with Rosneft in the Arctic, there was initial speculation that the sanctions could be diluted or removed. But given the scrutiny the Trump administration has received over its ties to Russian officials, the prospect of a shift in policy has diminished.
Yet the penalties have not had a lasting impact. Sanctions may have caused some short-term headaches for the Russian economy — Rosneft requested more than Rbs2tn ($36bn) from a state bailout fund in October 2014 to meet foreign debt repayments. However, the much more important factor was the simultaneous crash in oil prices — a blow that is being partly reversed.
As the price of oil sunk to decade lows, Russia pitched into recession: real gross domestic product fell 3.7 per cent in 2015 and 0.2 per cent last year. But over the past nine months, as the oil price has staged a mild recovery, Russia’s economy has done likewise. Even without any sanctions relief, GDP growth of about 1.5 per cent is forecast next year, according to the economy ministry.
“There is a pretty uniform consensus that the oil price shock dwarfed the sanctions,” says Apurva Sanghi, lead economist for Russia at the World Bank in Moscow. “If you look at what the authorities have done over the past few years for macro stability, it has been pretty outstanding and the results are there to be seen.”
Rosneft chief executive Igor Sechin © Bloomberg
At the same time, energy companies have found ways round the restrictions. Indeed, 2,000km south-west of Tsentralno-Olginskaya-1 in western Siberia, Gazprom Neft, Russia’s third-largest oil producer, is showing few ill effects.
Late last year, it became the first Russian company to demonstrate shale oil fracking expertise with a 1km-long horizontal well 2.3km below ground at a site in the vast Bazhenov field, estimated to be the world’s largest shale oil deposit. Gazprom Neft was able to use homegrown technology that it was forced to develop after the sanctions prompted its international partners to walk away from the project. “We are like a snowball,” says Sergey Vakulenko, head of strategy and innovation at the company, a unit of gas giant Gazprom. “The harder you squeeze, the harder we get.”
“In terms of today’s projects, we are not at all affected [by the sanctions],” he says in an interview at the company’s St Petersburg offices, where engineers use vast computer screens to remotely control drills at more than 600 wells across the country. “At their current configuration, they aren’t and won’t be painful, irrelevant of how long they are in place.”
Between 2013 and 2016, Russian crude oil production rose almost 6 per cent, more than twice as much as the rise in combined output from the Opec group of countries. Revenues at the country’s three largest producers have risen 11 per cent in that period.
The curtailment of foreign cash forced many to restructure their balance sheets with the help of domestic lenders, cut lossmaking or costly new projects, and increase their efficiency. Acquisitions and international expansion projects have followed.
“The accepted narrative is that there is only upside risk from sanctions [being lifted] as the majority of the companies affected have shown few ill effects,” says the head of a western bank in Moscow. “In fact, lots of them have been forced to be smarter and have increased their competitiveness.”
A $11bn agreement in December to sell 19.5 per cent of Rosneft to a consortium including Qatar’s sovereign wealth fund and Swiss commodities trader Glencore served two purposes for Mr Putin’s administration: it raised much-needed cash for the recession-battered budget, and sent a message to those who thought such a transaction impossible under the sanctions regime.
US secretary of state and former ExxonMobil chief Rex Tillerson © Getty
The international oil and gas community is beginning to show a change of heart in response. In meetings with Russian energy ministry officials and company executives at a recent energy conference in Texas, sanctions were barely mentioned by delegates from European and US oil companies, two people present told the Financial Times.
Gazprom Neft held talks with major oil services companies at the conference and expects to co-operate with them on upcoming projects, deputy chairman Vadim Yakovlev said last month. He estimates that just 1 per cent of Russian oil projects are affected by the sanctions, and that the “emotional” reaction among US or European energy companies to their imposition is receding.
Russia’s energy companies still lag behind the technological might of their western rivals, and would be keen to restart the knowledge-sharing agreements and joint ventures terminated by the sanctions. Mr Sechin, whose good relations with Mr Tillerson helped seal ExxonMobil’s 2012 deal to develop Arctic deposits with Rosneft, says foreign partners could join his company in exploring the deposits targeted by the Tsentralno well, known as the Khatangsky block.
“It is possible, we do not rule it out,” he says, without providing examples. “We can after some time work to attract a partner.”
Rosneft drilling activity in Khatanga Bay near the Laptev Sea © Getty
But isolated examples such as Tsentralno and Bazhenov have buoyed hopes in the industry that even if the restrictions remain, domestic expertise is advancing quickly enough to ensure future exploration and production.
Gazprom Neft estimates that in-house technological advances since the sanctions were imposed have increased average production per well by about 11.5 per cent, and it extracted an additional 25.3m barrels last year thanks to deploying new techniques.
Some experts even suggest that the majority of the projects hit by sanctions, such as the offshore Arctic deposits, are so technically challenging and expensive that they are not viable at current oil prices. If prices stay at current levels of about $55 a barrel, it could be some time before full exploitation of the Arctic shelf is profitable.
“Sure, in terms of shale technology, we are a little behind the Americans. But in time, and definitely before we absolutely need to, we will get to where we need to be, sanctions or no sanctions,” says Mr Vakulenko.
“We could do it now, but we don’t need to,” he adds, referring to even more complex fracking techniques that will be required to fully exploit the Bazhenov field’s 75bn barrels of estimated reserves. “Why go after the high-hanging fruit when there is lower stuff available right now?”
Frozen Dreams: Russia’s Arctic obsession
The high-hanging fruit will be picked soon enough, given Moscow’s heavy reliance on keeping crude production and exports high to pay the bills.
Mr Putin last month used a trip to the remote Franz Josef Land archipelago, the northernmost point in the eastern hemisphere, to reiterate his desire for development of the Arctic region.
Following its drilling under the Laptev Sea, Rosneft will shift its exploratory work west, to the Barents Sea next year and the Kara Sea in 2019. The latter project was initially planned in conjunction with ExxonMobil, but Mr Sechin says the work will stay on schedule, sanctions or no sanctions.
“It is important to demonstrate our consistency in dealing with partners,” a spokesman for the company said. “Sanctions may last for years, but business relationships last for decades.”
Russians find ways to adapt
“I Love AK” T-shirts, soaring sales of St Petersburg feta cheese and the confusing appearance of Belarusian kiwi fruit, despite it not growing there, are some of the side-effects of the three-year trade war between Russia and the west.
While oil and gas companies targeted by sanctions suffered a financial squeeze or the suspension of some projects, other companies adapted in more novel ways.
Kalashnikov Concern, manufacturer of the famous AK-47 assault rifle, was targeted by an export ban and responded to falling sales by opening a clothing and accessories line. It even has a shop at Moscow’s Sheremetyevo airport. where travellers can buy rifle-themed souvenirs.
But Russia’s response to the sanctions has had more of an impact on the lives of ordinary citizens. Four months after the US and EU’s restrictions were imposed in 2014, Moscow announced an embargo on almost all food imports from the EU.
That was a boon to domestic farmers and food producers that found themselves with less competition and eligible for funds under Kremlin plans to spend about $40bn on import-substitution initiatives. Shipments from the EU to Russia fell by €45bn between 2013 and 2015, a drop of almost 40 per cent. As Swiss Gruyère and English cheddar disappeared from Moscow supermarkets, local alternatives took their place. Russia imported more than 400,000 tonnes a year of cheese before the sanctions, and half that since. St Petersburg’s Sirtaki became its best-selling brand of feta cheese.
Belarus has denied accusations of acting as a conduit for illegal imports by rebadging transiting products from the bloc. Kiwi fruit imports from Belarus rose 151 per cent in 2015 and papaya, which grows in the tropics, began appearing in shipments to Russia. The landlocked country also began exporting shrimps and sea fish.
“5. The US in 2017 made a special exemption to allow NASA and other American companies to continue buying Russian rocket engines.
Russia should just ban it anyway.
SpaceX is still a couple of years off from developing the heavy reusable rockets that would annul the need for Russian rocket engines.”
ULA has Delta witch does not use Russian engines so what difference would it make? SpaceX already has the largest rocket that can easily replace Atlas and Delta.
It seems to me that most (if not all) of the measures proposed are “toothpicks” that will have little effect, or will wind up hurting Russia (or Russians) more than the US. The bottom line is that, at the present time, Russia is far more dependent on the (US-controlled) outside world than the US is on Russia.
What scares me is that some point Russia is going to feel that it has to push back more tangibly, and this is obviously fraught with all sorts of dangerous possible consequences. Indeed, it almost seems to me that this is the objective of “Western” policy, which in some ways is not too different from US policy towards Japan in the months leading up to Pearl Harbour.
Unfortunately that was impossible, the place was infected with too many “Ukrainians”. (Read: self-hating Russians with third-world mentalities.) Nobody wants to be saddled with those.
as much as I’d like America (esp. its SJW and sh*tlib class) get its just deserts, there’s nothing wrong with remaining calm (while waiting for your opportunity.)
https://ru.m.wikipedia.org/wiki/Последнее_китайское_предупреждение
also, as they say in those self-defense videos, “don’t draw on a drawn gun”
Mostly Russia should just get its own house in order. Cut corruption, stronger property rights, lower/clearer regulations, tax consumption instead of income to encourage savings, etc. Basic econ 101 stuff. If Russia becomes a better place for Russians, then they won’t be as upset about not being invited to the cool kids party.
Just for fun though they could also try the following:
by waiting, I meant waiting and getting your sh** together, like China did. Time really works for Russia now.
I’d tell the Indians that if they’re not interested in the Su-57, then the technology will be shared with the Chinese. It looks like the Chinese will be ahead of Russia within a couple decades anyway, at least by sharing technology with them their goodwill could be secured. I’m sure the Chinese will be interested in the Su-57, and would be willing to share their railgun or J-20 or whatever technology with Russia.
I think it must be possible to make deals with the Chinese on military tech, or any other tech. At least if we’re to believe Karlin’s recent links.
Is saving the way to go though ?
Saving is understandable in the case of Japan where you develop your manufacturing to export , this also is the case with China and SK. Russia though does not have open acess to big markets like the EU or the US, so the only way is to consume this manufacturing inside.
I think the KGB stole many Western technologies in the 1970s, but they weren’t used because of the shitty command economy. For example in the early 1980s the KGB managed to import tens of thousands of PCs (theoretically all forbidden by CoCom) at great costs, and were handed out to all the bigger companies. The PCs then were put into the offices of directors, party secretaries and other high ranking officials as status symbols, and they weren’t even turned on (because the dweebs didn’t know how to use them), so it all came to waste.
With a more market oriented economy, it’s possible that Russia will now be able to just steal Western technologies. Long term, it will probably be somewhat pricier than just buying them off the shelf, but maybe it won’t hurt Russia as much as the US deep state types and neocons hope.
IMEIs are manufacturer-defined. Smuggled in iPhones would be unable to connect to Russian cellular networks and thus only be useful as tablets.
The entire purpose of Macbooks is to use them in coffee shops in order to demonstrate that you worship homosexuals. Since the Macbooks would be displayed in public, it would be a simple matter to arrest people for smuggling and publicly shame them for betraying the nation in an hour of decision.
The main utility is not in damaging Apple itself, where I agree not much damage will be done, but psychological. Apple is the world’s largest corporation, and abroad at least it’s a symbol of American business and culture.
America is not used to this sort of treatment. Clever countries exploit our companies and markets which leads to trade complaints (even before Trump), but no one ever punches us in the nose the way we routinely abuse foreign countries.
Russia up until now has basically not been responding at all to endless American provocations. No one really has since the Cold War.
Additionally, there’s a possibility that a hard enough punch against enough US megacaps will accelerate our slide into a bear market for us. “Tech” is now one quarter of the stock market’s market cap, and tech is the area where Russia can most easily apply pressure. Throw in sanctions against some other large blue chips operating in Russia like Exxon Mobil, Chevron, Boeing, Coca Cola, GE, GM, Ford, Caterpillar, United Technologies, Deere, etc. and Russia might get lucky in sparking the bear market.
Fundamentally harmless to us, but people always freak out over bear markets.
Russia has a 13% flat income tax rate and 18% value added tax.
Maybe specific drug patents to be broken could be “targeted” at certain American “oligarchs”?
(Quotes to mirror American language)
I would put greater stress on China, to be frank. All three above are US colonies in all but name. Germany in particular is completely slavish to US dictates. Merkel even spied on EU “allies” on behalf of Washington when Obama was president. The only thing keeping her to a more strident EU-line lately is Trump’s constant attacks on the EU. The moment he gets booted out and a neoliberal is elected, preferably a woman if the ZOG elites have their way, Merkel will turn on a dime to become the biggest supplicant possible.
China is already quite advanced in numerous industries and the fact that the latest tariffs against them have, in part, been motivated by the rapid advances in Chinese AI capabilities underlines this point.
The only argument against China, and it’s a good one, is to avoid putting all eggs in one basket. Diversification is always a good strategy. But to the extent that any non-Chinese country should be approached, I would focus on SK and Japan over any European country. I think Japan in particular would be a good partner, given that SK is much more in need of immediate US military protection due to the obvious problem above the 38th parallel, which in turn increases Washington’s leverage over SK.
The Chinese have shifted their gaze away from Japan and now focus more intently on India, especially post-BJP rule, which means that the geopolitical glue will gradually become weaker. Still, the US influence over both SK and Japan is still substantial and the room for serious co-operation will be hindered by this alone. China really is the best bet, to the extent this can be played.
The best way to hurt the US is to do none of the things mentioned above, the most damaging thing for any white nation is non white immigration, and to really hurt America is to push for mass immigration into America**. It can provide Sub Saharan Africans with education on the best ways to find transport into America, it can fund NGOs with boats that can cross the Atlantic, it can provide a migrant route from South Asia into Alaska via Russia (it must just make very sure that these people don’t end up staying in Russia). It does not even have to do this via nefarious means, since the cucks and SJW anti Russians can hardly complain about Russia pushing to have millions of non whites enter America as being a bad thing
**For those that are pro white and American that are aghast at this, as a white nationalist the number one priority should be to save the white race not the USA, as long as the utterly anti white US regime exists then all whites all over the world are facing extinction, so the USA must fall.
What about closing off Russian airspace to some airlines in a “targeted” manner?
For example they’d close the airspace for Lufthansa (except for flights to Russian destinations), but not for Air Japan, or something. Based on Lufthansa’s “close ties to Merkel” or something. This would hurt European airlines over Far Eastern competition.
This is a bad idea for the same reasons and in the same way that sending Lenin into Russia and funding him was a bad idea for Germany.
rT’s #50 sounds interesting.
The plan clearly did work as Russia fell into revolution and thus was not able to wage war for the rest of WW1. As for later regarding Hitler vs Stalin, the big difference here is that a non white America (lets say less than 30% of the population) will be ungovernable, and even if it wanted to still rule the world it would not be capable to do so with so many inferior people living in the land.
Russia already has excellent relations with China, so no further cultivation is needed.
China is indeed climbing the technology ladder, but the most advanced production machinery comes from Germany and Japan. Increasingly South Korea is competing in this space, and Switzerland and Italy also operate in the top tier.
Merkel is not going to last forever. Horst Seehofer, the head of the CSU, is in the process of styling himself after Kurz and even Orban. He has long advocated lifting sanctions on Russia. The German business community is very interested in Russia for obvious reasons. Russia should import more machinery from Germany, invite more German investment, and create Euro-denominated commodities futures to be traded on German exchanges.
China remains far behind in advanced production machinery, which is why China itself remains the world’s largest importer of these capital goods.
The reason is not just diplomatic, but economic as noted previously.
Japan and South Korea have already generally demonstrated a willingness to ignore or barely comply with sanctions, which makes them good economic partners. Not much can or should be expected from them diplomatically (if Germany gets a new government they will provide diplomatic pushback),
Since Putin wants to build a bridge to Sakhalin, why not also build a bridge to Hokkaido? Along with pipelines and HVDC transmission cables.
This strikes me as quite extreme and not very likely to aid in increasing support from the German business community.
Additionally Russian airspace is easily bypassed by the “superconnector” airport in Dubai, which gives Airbus an excuse to sell more A380s which is otherwise a commercial failure owing to the Boeing 787.
diversity would justify tightening of the screws (it already does) which means more governable, not less. unless they go the Brazil route (lefty anarcho-tyranny.) but that 30%, they are Prots (acute sense of justice and a high measure of social idealism) so they will tighten the screws. So instead of a diverse, dysfunctional America you’ll have a Stalinist, higly functional and efficient, America.
Even Merkel had to be pulled kicking and screaming in to sanctions. Give it ten more years and Germany will be more like Austria. Germany doesn’t pay much attention to sanctions anyway, they see the future lies to the east.
This makes it impossible to sell weapons to North Korea, even if the Chinese agreed to it.
Which highly functional and efficient non white nation exists? Excluding East Asians of course, a non white America will not be East Asian anyway, it will be a big brown mess.
The sanctions need to be targeted. Target British airlines, but not Germans. Because of their proximity to May and the British regime.
I just threw in Lufthansa as an example.
https://twitter.com/LaurisKaplinski/status/983703844050886656
Let me get this right, Anatoly?…the only reason that you can see that would have a downside is that “Navalny and liberals’ might benefit from it?…Any particular Russian billionaires that you deem as being worthy of such a government bailout? Stumping for billionaires while having to resort to panhandling yourself – now that’s real patriotism, Russian style. ‘Love is indeed blind’ 🙂
But Dubai is used by Emirates. Are other airlines allowed to operate from there?
Nothing should be banned. Apple, etc should be simply over-taxed. Heavy tariffs will do the same job and the Russian state can profit from these goodies.
Some with titanium expor for USA. Just over-tax it.
Bridge to Sakhalin (which Karlins likes to poo-poo) was proposed as part of exactly such a scheme. I expect something like this will be built within 30 years.
Seehofer is a fraud, his recent tantrums about refugees and Islam aren’t to be taken seriously imo. He’s probably just scared because of the Bavarian state elections in October. It may even be possible that the mutual recriminations between him and various CDU people are part of a deliberate “good cop, bad cop” strategy aimed at suppressing AfD.
I haven’t noticed him saying much about Russia recently (I vaguely recall he made some trip to Russia some time ago, but not much came of this iirc). In any case, both Christian Democrats and Social Democrats are chock-full of Atlanticists and this won’t just change suddenly after Merkel’s gone. These issues are closely linked to questions of German identity (Westbindung is one of the central elements of the identity West Germans adopted to become respectable again after Nazism), any change will take time and will be bitterly contested.
AfD of course would like better relations with Russia, but so far they’re completely locked out of power.
And unless things change drastically, it’s probably too optimistic anyway to think Germany will be around in recognizable form in ten years time.
none, tbh, but then I don’t know any state with that hypothetical demographic config.
If they don’t lose power it would be essentially like old South Africa (slightly better even), which was so-so (medicine, nukes).
If you want to create a mass disorder of millions of teenage girls to storming government buildings.
I broadly agree with this, with some reservations. We can rest assured that data from Google, Facebook, and their like is used for some serious spying on Russian citizens, so these platforms pose a national security risk and should be banned right away. In the case of Facebook, I also believe that the Russian moderators are based in Kiev, so not only are they collecting data on Russian citizens, but they are also very likely pushing all kinds of subversive narratives on its Russian users. Blocking these kinds of sites also acts as a powerful check on the ever spiraling Americanization that has already done such damage to Western European culture.
I fully agree with those who would like to see a unilateral visa-free regime toward the EU. It’s a brilliant idea, but one, I fear, that the Russians are too proud to consider.
Ok, all probably true, but what would be the correct reaction? That’s the harder question.
led by Kadyrov.
Though I agree with you that the current US government is virulently hostile to whites, especially perhaps within its own borders, your proposal would make a bad problem worse.
First, there is little support for Russia in the West today, and the little there is, it is usually concentrated on the right-wing. Your proposal would effectively kill the last remaining bastion of support with no discernible upside.
Second, the demographic trends you ascribe are already in motion and I doubt Russia would be able to do much if anything to materially speed them up (nor that it should want to, see #1).
If the US would ever to break up (I remain very skeptical), then any remaining romanticism of Russia would be dead and buried. Any ex facto spin by Russian diplomacy that “don’t worry guys, we flooded your country with negroes for your sake” is extremely unlikely to win much respect, let alone credibility.
This is a great idea.
His Instagram has already been deleted a few months ago.
Actually it was closed down by Instagram (sanctions).
I dislike Kadyrov, but this is one more reason for Russia to excise these entities from itself.
The end of the USA will also mean the end of the EU, which would be a very positive development for white people. Whether Russia has sympathy or not from some segments of the right wing does not matter as the right wing has no power and no influence, the faster the demise of the USA the better. The question you should ask what the upside is of the continued existence of the USA is?
I put that down as normative behaviour rather than sanctions, a lot of countries block US social media and restrict foreign media. I would do that. Similarly I would have an unofficial not buy American policy, you almost always have alternatives. Otherwise I would be as open to Asian or European investment as possible.
By definition, all operating fields are in decline. But if you look at production/ idle capacity figures, Russia has zero problems in this regard.
Instagram is mostly harmless. People surfing it for cooking pictures, or to see their friend’s holiday. And photogenic women showing off to their friends.
Ban on Hollywood films in the cinemas (people will still watch it online) and American television shows would be a better idea and have a healthy impact on life and culture. The only issue is that it would have to be replaced with support for domestic talented people, including those like Zvyagintsev which are unpopular with the government for socialist realism kind of justifications (what is even the problem with him – that he is too pessimistic about society, as if this is not typical of good art).
Why did China abstain from the voting today in the UNSC? Why not vote no, if they disagree?
I’m still skeptical of the level of Chinese support for Russia.
I heard they did vote for the Russian draft resolution, though.
True. (Along with five other countries.) It still doesn’t give the impression of a united front against the US sphere. Which would probably be needed if they were to deter a US attack on Syria.
Many people still have the impression that it’s just a rogue Russia against the world. I think many western decision-makers are under the same impression. I don’t think that Lindsey Graham or Tom Cotton fully understand the situation. If they don’t understand that what they are proposing could easily lead to a nuclear war, then they probably don’t understand that Russia is not alone either.
China has a tradition of abstention. I wouldn’t read too much into it.
It would be nice if someone could accurately summarise the principal concrete differences between the 2 resolutions.
China doesn’t get so involved in Middle East conflicts either – sign of high intelligence.
One country not being mentioned here is Russia aggressively cultivating the India relationship. Though in the global perception, India is not seen as a player (in the way china is) and it lags in various per capita and infrastructure metrics, the reality is that it is a huge market with a rapidly growing middle class (larger in absolute number than the US/EU combined) and with a median age of 27 (youngest among major countries).
Though projections are typically notorious, it’s a common consensus that India will be 3rd in terms of PPP by a distance from Japan/Germany by 2030 behind US (in 2nd) and China in 1st and projected to become 2nd during 2040-50.
Point is cultivating India – something the US has aggressively been doing – is key. While India and China have strategic differences, not only are they both part of BRICS and SCO but Russia can (and is) playing an important bridge.
My government does not need any help to harm the American people. The list of incursions into the affairs of sovereign nations since 1952 when I was born is as long as my arm. In the process, it has wrecked havoc, destruction, and despair, sucking wealth from its citizens, the taxpayers. They do not notice, like putting a frog in a pan and slowly heating the water, because they have been dumbed down by mindless entertainment foist on them by Hollywood and the television networks. Additionally, they are slaves to their mortgages, credit cards, car payments, and digital devices. It is amazing that more of them are not killed crossing the streets not looking for cars as they stare at their smartphones texting meaningless messages.
Our form of government by design depends upon the vigilance of our people. That is what our Founding Fathers both envisioned and warned us about. Our citizens are not evil. We are a product of unbridled Capitalism. Our economy depends upon conspicuous consumption. If we all used our money only for food, clothing, and shelter, the economy would collapse.
Is this picture not fraught with irony? During the Soviet era, the Iron Curtain in part was to protect its citizens from Western decadence and excess. Was this a correct assumption. To some degree, the answer is yes. This also explains the inexplicable, insane behavior of our government prosecuting war after war, tiling at non-existing windmills. Why? It is for the same reason that wars have been fought throughout history. There is money to be made. When I drive around the DC Capital Beltway and the DC suburbs in Maryland and Virginia, I can see the names on many buildings, SAIC, CACI, DynCorp, Lockheed Martin, Boing, GE, Northrop Grumman, our famous Beltway Bandits, some of them better known as part of our unelected shadow government for their connection with the intelligence community. (An oxymoron if ever there was one.) Just after WWII the Central Intelligence Agency was born. Today, there are 17 so-called members of our intelligence community. Some are proud members of our military industrial complex. Their insatiable addiction for money has to be met. Some make our weapons. If you make weapons you have to sell them. In order to sell them, you have to have a war. In order to have a war, you must have an enemy. Do you think it matters whether that enemy is real or imagined?
They are certainly going to a lot of trouble….the British try to foist an attempted murder of a man who had been tried, convicted, sentenced, jailed and given to the Brits in a swap on those who once had him in their custody. You really have to be an idiot to believe that story. Another Syrian gas attack on their own people…..of course….who else….blame it on the Russians. Beleive me, I am not alone. There are many of us that took the Red pill, gone down the Rabbit hole, and know the truth about many things…the US soft coup in Ukraine that started all the problems….the non-“annexation” of Crimea (how does one annex what one once/already had,) the recurrent false-flag gas attacks in Syria, Mrs. Clinton’s single-handed destruction of Libya and the murder of its leader, just to name a few. However, we are unfortunately not a majority. We lost control of our government long ago and we need to get it back.
Russia has done amazingly well since the end of the Soviet Era and it will continue to do well and thrive despite the insanity perpetrated by the West. The analysts in the CIA predicted that the Soviet Union would break up on its own. I wonder if they have figured out that America is headed in the same direction, or at least fall into irrelevancy if its people do not wrest control and put it back on course.
Finally, the sad truth is that the American people are the biggest losers. We could benefit from increased security, commerce, mutual technological and scientific research, general global stability, tourism, and commerce just to name a few. If America does have a potential enemy, probably at this point a competitor with an unfair advantage, it would be China. Russia has not violated our patent protections or stolen corporate secrets, deflated its currency, or done anything to gain a trade advantage over America. So, one could ask, just like in the commercial….” where’s the beef!?” The answer is there is now nor has there been one, nothing to justify the American government’s actions over the past two decades.
Russia and India have had friendly relations for decades, and India remains a major customer for Russian arms. India also allows in Russian metallurgical products tariff free.
India isn’t able to provide Russia with any useful capital goods (or, really, any goods) or diplomatic support.
Another issue is that India and China are traditionally hostile and growing more so, and Russia and China are drawing closer.
Thanks for letting us all know you’re a doctor (white-robed terrorist quack).
One no cited thing usable for asymmetric retaliation: the ISS. Three options are available: 1. Grab it. 2. Detach or trash the western side. 3. Ban Americans astronauts.
Re diplomatic support for Russia: India, like China, has traditionally either supported/abstained from Russian resolutions in the UNGA or abstained from any that criticize Russia (eg Crimea). True that India has nowhere near the diplomatic clout that China does both because it does not have a permanent UNSC seat, is not as economically powerful as China and (like China a few years ago) does not know how to throw its slowly increasing weight around. India’s global soft power – its diaspora, culture, cuisine, movie industry – are in total quite considerable for a non-Western country (and more so than Russia)
Re strategic support: Indo-Russian ties have traditionally been very good with very good defense industry ties. These ties tho are under stress partly because as you noted the Chinese angle as well as being aggressively wooed by US to form an alliance vs China in the Indian Ocean. Russia has also started courting Pakistan (a traditional US ally), which is strategically allied to China and vehemently anti-Indian which has led to Indian disquiet.
Having said all that, IMO, Russia cannot afford to lose India especially to the US. The untimely death of a long time, well respected Russian ambassador to India also has not helped. India remains an under utilized market for Russian goods other than arms (which has seen its monopoly slip with Western nations and Israel making significant inroads) and increasingly oil. eg https://oilprice.com/Geopolitics/International/What-Is-Behind-The-Surge-Of-Russian-Oil-Exports-To-India.html).
In terms of what goods India can provide: there have been promising deals in the pharma, biotech arenas as well as heavy industry. But various regulations on both sides cause less mutual investment than is desirable. Indian PM Modi and Putin have tried to spur this on but quite a lot has to be done further downstream to cause trade to grow.
Overall it seems Russia and India don’t figure in each other’s radar at a business/citizen level as much as they could (and did when the Soviet Union existed and India was socialist). News about Russia in India is virtually all from Western sources (CNN,BBC et al) and newswires (AFP, Reuters). Not sure what news of India makes it to Russian news except some exotic stories. Given that India’s economic growth potential is second/third only to China/US in absolute terms over the next two decades, a more concerted wooing such as Russia’s China effort is strategically needed.
My feeling is there’s not much anyone can do short of applying violence at this point.
Which may be what they have resigned themselves to:
https://twitter.com/LepontDahu/status/983686950149378048
There were several of them in last two years.
April 10, 2018
Because the Russian diplomatic corps is getting old.
Old = increased mortality.
China is not close to the Middle East either.
Again. This sounds a little bit frightening.
So you’re a collectivist?
My impression is they are making reasonable progress on this kind of thing (eg see Karlin’s various comments on the campaign to raise Russia on the ease of doing business index), and I’m not sure it’s all that much of an issue around now.
Rich Russians will always like to party in the world’s glitzy luxury spots, just like elites from every country do, and big Russian criminals will always like having stashing points in the US sphere for their loot, but my impression is that ordinary Russians are nothing like as west-struck as they were in Soviet times.
That’s true.
On the other hand, in the wider picture now would be a very good moment for a Chinese gesture or two. China has always seen US military adventurism as wholly negative, and it should be strongly in their interests to try to defuse this Syria business by helping to deter US action. Not that they have the military clout to intervene directly, at least in theatre, but that doesn’t prevent symbolic gestures of support, or even ramping up a bit of tension in the Pacific to try to divert the Yanks.
I still feel the Chinese are rather complacent about the US, as the Russian leadership was a decade or two ago.
As a matter of interest, how easy would this be to “spoof”?
I have no relevant technical knowledge on this, which is why I ask the question, but I’m generally of the view that black markets will usually find ways round state restrictions.
A ban on Apple, like many of the suggestions, seems sensible. Overall there’s been a good discussion here of Russia’s options. But such bans will only succeed without undue costs, imo, if there is general patriotic support for them, so that cheaters will be shamed rather than become trendy icons.
Why do you libertarian losers still exist?
Fuck off.
I am a petroleum geophysicist with extensive FSU experience
You are somewhat correct as the supergiants are declining but there are extension, rehabilitation programs on some of these fields, there are also many small fields which infill the production profile. Russia also has extensive tight oil resources particularly the Bazhenov shale in Siberia which has a productive area the size of Texas.
There has been very little exploration in Russia since 1990, if this resumes we are likely to see significant new reserves.
Finally there is the Lena delta in Siberia, the same size and shape as the Niger delta and likely to yield huge reserves
Besides counter-sanctions, the best action Russia can take is to in very visible ways back China. This changes the balance of power in the Asia-Pacific, and causes some real regret among Washington strategists who would like the Quad (Japan, India, Australia, and the US) be able to prevail over China.
But this means Russia has to discard its current mentality. Russia has to relent on its ambiguous posture about Chinese infrastructure construction and investment in the Far East. Russia should borrow from China for as many inter-connection infrastructure projects as shovel ready, allow in as many Chinese workers as requested, get rid of ownership percentage caps on Chinese mining and oil investment (unbelievably the 2007 enacted Strategic Investment Law aimed squarely at China is still in place). A small step to making this possible is to simply commission a million dollars worth of studies on the Chinese population in the Far East to demonstrate definitely that there just aren’t that many Chinese in the Far East. That could put some in Moscow at ease. Chinese corporates also need a lot more Russian professionals to augment the decent sized population in Beijing and Shanghai currently, particularly capable English speaking women in marketing, branding, sales, as Chinese vendors are the worst in the world in promoting themselves and presenting a polished image. That has genetic roots so isn’t going away anytime soon.
A Russian could legitimately ask, where is China right now at the moment we need them most?
If China won’t step up now (China lacks the military capability to intervene directly in theatre but there are plenty of ways it could help deter US military aggression), then Russia might legitimately choose to escalate direct military assistance to Syria and Iran in order to punish the US, rather than tie itself further to a China that will have failed to demonstrate any utility at the crucial time.
Increased coordination between Russia and China is of course sensible, indeed vital to both sides in the long run, but China isn’t doing itself any particular favours at the moment, as far as can be seen publicly.
I believe it is big blunder for China not to provide a lot of non-military aid to Syria. At least large cargoes of grain and medicine should be going to Syria.
However, in terms of optimal Chinese strategy. It is to as quietly as possible (meaning in the military sphere but not with economic initiatives like Belt and Road) build up the economy from currently 2/3 of the size of the US to 2-times the size in under 20 years. This is quite possible to do within the time frame if South Korea is a model. At the point of 2-x it will be very hard to imagine a military confrontation. Unfortunately, with the Djibouti base opening last year, this ideal is not completely followed even though it’s apparent that the school of quiet (non-military) rise has the upper hand in Syria policy.
The US and Japan are largely notable by their absence in both Trade and Investment in Russia. This is of long standing. Japan has never been active. The US backed off after 1998.
The South Koreans were all over Russia in the 1990’s looking for technology. Rather than subcontract the work in Russia, they cherry picked the people and took them back to Korea on 3-5 year contracts.
Medvedev’s faction with Lavrov’s assistance is trying hard to improve economic relations outside the EU and China. There have been charm offensives in the GCC and, as you suggest Japan. There was much discussion of the Kuriles. The Siivoki factions in the Russian government frustrated the deal.
The other BRICS have little to offer. The Indians and South Africans on my books won’t even invest in sales far less production. Same for Iranians.
If the Silivoki lose the present power struggle (the push back against the Skripal affair might work against them), Russia might be able to repair relations with the EU and improve them with Japan. The US will remain a difficult partner.
There is a budget airline, (Dubai air?) which flies to a number of Russian provincial cities amongst many other places.
Stepmone. Rebuild credibility. Georgia wasn’t an example of truth in war but Ukraine was a travesty. In PR terms, the Skripal case was even worse. The Russian Ambassador refused to engage with the UK and the foreign ministry went into denial and obfustication by reflex.
Putin personally lied to Merkel, who previously trusted him about Ukraine That’s not repairable.
So first stop digging.
Next, re-engage on trade. Drop sanctions against the EU. This will happen soon any way. The original plan was five years. The EU will forget Crimea if Russia withdraws (fails to support) it’s nationalists in Donetsk. Holding on to Donetsk is stiff necked pride anyway. It’s a lose-lose situation for Russia. The US will not forgive Crimea but that is no big deal.
Tackle the Korean and Hong Kong King crab pirates in the sea of Okhostsk and give the Japanese fishing licenseS. Arrange visa free travel with Japan.
Russia also has had low recovery rates. Applying enhanced recovery to existing wells can greatly enhance recoverable reserves in older oil provinces, especially Volga Urals.
Something I would do if I was Putin was to be creative.
For example, one could air the dirty laundry of western firms like f.e. Monsanto (which does very marginal business in Russia, but quite a bit in Ukraine, gotta gobble up that Chernozem after all).
I have some very mainstream green acquaintances, and had some success with converting them to proper pro Russian basedness with the following approach:
Me: Are you certain that you share absolutly no policy positions with Putin?
Green:”Of course, how could I possibly?
Me:What is your take on genetically modified foodstuffs from Monsanto?
Green:”Heresy! Sadly, it is allowed everywhere due to evil lobbyists!”
Me: But there is a tiny gallic village I mean pretty large country on the Eurasian landmass called Russia which banned that stuff?
Green: Cognitive dissonance… What? Why?
Me: Well, there are basically 3 possible reasons for that. A) Putin is secretly an enviromentalist.
Green: Lol
Me: Yeap, Lol. B) Putin is secretly really christian and dislikes playing god
Green: You mean Putin the guy with the 3000 Nukes red button?
Me: Yeah, Lol again, C) Lets assume that 2 or so guys, lets call them Oleg and Ivan from SVR, did their totally normal 9 to 5 industrial espionage on Monsanto because Russia is pretty big on industrial espionage.
While doing that, they found something that read like a pro Umbrella resident Evil fanfic but was actually Monsantos business plan. They showed it to the boss and shit got banned. I would guess that, Monsantos cunning secret business plan did not likely not involve giving Putin a cut.
Green: Starts thinking
Me: Well, I cannot see whats inside of Putins head, but its up to you to assess which of these scenarios is the most likely.
In reality, the whole GMO ban happened because Russia A) isnt very competetive in Genetics and outlawing GMOs means this lack of competetiveness will not result to Monsanto gobbling up the Russian market, B) there are several sizeable constitioncies in Russia who dislike GMO (f.e. Church, Communists) and C) there are indeed some solid concerns about GMO drawbacks, particularly about GMO monopolists, that approach still works fairly decently though.
Psychologically speaking, the current anti Russian rapid Russophobia does somewhat result in the Russians being 10 foot tall, and opening the possiblitiy “look, maybe Russia and you actually share some enemies” is much more effective that persuading people that Russia is not 10 foot tall.
Generally speaking, declaring that they will publish dirty company laundry of companies that do not do much business in Russia could be hilarious and actually even effective.
To rebuild relations with America/West should be an economic priority, I agree. Visa free travel with Japan – would be very cool (increase in interaction with Japanese civilization).
But I don’t think this ‘credibility’ stuff sounds like some kind of effective strategy. The government is highly incompetent and lacking credibility, but this goes in all directions on these matters (EU, America, etc).
The food embargo can probably be elapsed in 2019. At the same time, a strong policy against NGOs inside the country, and certain restrictions, are not bad at all – the success of Lukashenko and China here is role model.
Actually, there is historical precedent for this.
Imperial Russia, pre-1917, used to have many expatriates (or were they immigrants?) from Prussia, the German States, Austria-Hungary and Sweden living and working there. It was, it seems, a successful program in order to inject economic and industrial dynamism into old Russia.
Russia could end up being a sort of Eurasian “land of opportunity”, a larger and far more populous Canada, with the consequent hold on the global imagination of such a country.
This is actually a very interesting direction for Russia, if they could implement it.
There is very little chance that China joins the anti-Russia camp, indeed almost zero.
Russia would have to display Nazi-level stupidity and actually turn on China first. Barring that, Russian relations with China will remain smooth, whatever the West does.
Also, it must be pointed out that, whatever crusade the West thinks it’s undertaking, South Korea and Japan will also continue trade relations with Russia.
Essentially, Russia’s East is secure, to varying degrees. Russia should focus on breaking the Western cordon.
Germany is not entirely happy under Washington’s domination, and never has been. So they make the most profitable target to split the “Western Alliance”.
This appears to be a big exercise in “blaming the victim”.
If Merkel didn’t want to be lied to, she shouldn’t have insisted on responses to questions that could only result in a lie. For instance, Russia supported the Donetsk rebels as an absolutely legitimate response to US/EU aggressive meddling in the Ukraine, but there’s no way any Russian leader is going to formally admit as much under pressure, even in a private conversation, any more than German or US leaders are going to formally admit their own involvement in the Kosovo and Ukraine aggressions.
Press for a response, get a lie, fine. But don’t then whinge and whine about being lied to, as Merkel does (mostly as an excuse to rationalise caving in to US pressure).
As for the PR issue, the Russians are up against the most effective and lavishly funded PR machines in the history of humanity. Yes, they can and should step up their game (and they have to an extent) but in cases like the Skripal issue there is no winning it for the Russians – it’s designed that way. US sphere governments can make any accusations they like, because they know their establishment media will carefully refrain from asking awkward questions and will report their allegations as though they are facts, will present their outrageously provocative “ultimatums” to Russia as reasonable and “strong”, and misrepresent inevitable Russian responses as unreasonable. There’s no way Russia can respond except with denials, which are then painted as “evidence” of guilt.
Could they have done better? Doubtless. But don’t criticise them without recognising the scale of what they are up against.
This call for reasonableness basically flies in the face of experience. All the experience of the past three decade suggests that the more Russia compromises, the more it gets pushed. Concede the Cold War – get NATO expansion. Be “reasonable” about western anti-Yugoslav propaganda – get the Kosovo war. Rely on UN treaty agreements to constrain US sphere actions – get the Iraq war. Make what appear to be reasonable concessions to the US sphere’s “concerns” in the UNSC – get the overthrow of the Libyan government. Accede to US “democracy promotion” and EU “economic diplomacy”, get an attempted “color revolution” in Russia and the overthrow of the Ukraine. Etc, without end.
The problem is not Russia. The problem for the past three decades has been US and EU triumphalism and systematic, lawless push for achieving maximalist objectives. Until that is recognised and dealt with, no proposals such as the ones you give here amount to anything but a plan for slow surrender.
Valid point – there were a lot of poor reservoir management practices in Soviet times when oil managers were driven by annual production quota (5 year plan) rather than good oil field practice. Technology has also moved on in the last 30 years and Russian petroleum engineers who have always been innovative have taken on international ideas and come up with some innovative solutions.
Another point is that about 70-80% of Russian oil costs are in Roubles, with 20-30% in dollars. The Russian oilfield services industry is good but not as great as it should be. The rouble cost base has meant that the break-even prices are significantly lower than US Shale and Russian companies have had positive cash-flows throughout the oil slump unlike virtually all US companies
Its important that if Russia hopes to sell more jets and military equipment to India, to build more in India itself. India is the country of the future as demographic decline pulls down other countries, and the ability to cultivate a positive relationship with a future superpower will have significant dividends in the line.
https://www.nytimes.com/2018/04/12/business/india-defense-lockheed-boeing.html?&moduleDetail=section-news-0&action=click&contentCollection=Asia%20Pacific®ion=Footer&module=MoreInSection&version=WhatsNext&contentID=WhatsNext&pgtype=article
https://timesofindia.indiatimes.com/city/mumbai/India-will-be-a-superpower-in-20-years/articleshow/428484.cms
The vedas have also predicted this, as Tamil poet Bharati saw, he is a poet who strongly believed in the power of words. He prayed to goddess to give him words that are Mantras, like the ancient Vedic seers. All the poets see what even Sun cannot see according to Hindi saying, “Jahan na pahunche Ravi, Wahan pahunche Kavi.” He predicted:
1.India becoming World Guru, i.e, Big Super Power
2.All children worshipping Undivided India (Akhand Bharat)
A Bridge between India and Sri Lanka like Rama setu.
Yes, Russia’s solution to backwardness has àlways been to import a few tens of thousands of “Germans”. Unforunately, bringing Welsh engineers to the Donbass was the last big import. The next one is already a century overdue. Yeltsin’s reluctance to allow foreign companies to participate in Russian privatisation was a mistake in so many ways.
Australia, Brazil and Canada don’t get these problems. Interesting or not?
In my opinion that is the intended goal of all this for Putin.
After WW2 Charles de Gaulle threatened that unless it was allowed to keep its colonies, France would side with the USSR. Putin could announce a major reduction in battlefield nukes, and as Russia’s zillions of clunky old tactical nuclear weapons are there for deterring China from a conventional attack, it would be seen as a very negative alteration in the balance of power for America. A total non-aggression pact between China and Russia( and possibly even technical cooperation on ICBMs) would be the ultimate threat to the US.
The US does not see them as a potential threat to be neutralized. And they aren’t nuked up.The US moves into everything that Russia does not defend, like Ukraine. Obama did not intervene in Syria with a massive airstrike and Russia almost immediately took advantage. That is just the way the world works when you are big enough to be a rival of the top dog.
Not particularly interesting as far as I can see, Those countries are broadly obedient serfs on almost all important issues, though Brazil recently felt the slap of US correction when it got a little uppity:
Brazil: Lula, Dilma, Mujica, Correa Condemn US Interference
Why do you think I should find them interesting in this context?
Brazil deserved to be corrected.
While I don’t agree with our stupid policy on Iran, Brazil attempting to intervene in the issue was simply outrageous.
Latin America is our backyard and no country in Latin American deserves to act independently of us.
The Latin American countries are also completely inferior and have nothing to offer the world.
Brazil in particular is a culture based on dancing and miscegenation.
Looking forward to Jair Bolsonaro reestablishing order.
It started:
Russia to stop exporting titanium to Boeing in counter-sanctions against US – draft law
https://www.rt.com/business/424003-russia-will-stop-exporting-titanium/
Depends on the level of participation.
Letting foreigners take over the Russian economy would be an even bigger mistake than letting Russian thieves do that.
I guess with Brazil it might just be lack of state capacity, and the elite enjoying their life too much.
The impressive governments for me – for staying out of relative trouble with the world – are China and Belarus. And places like Singapore, also maybe Hungary and Poland (who are taking EU money, without EU obligations).
China’s “advances” are actually American advances, stolen by China.
Regarding software, dumping Micro$oft should be a number one priority whether sanctions are involved or simply for software reliability and convenience. It was very sad to see, in Oliver Stone’s fascinating interview series with V. Putin, that the Kremlin computers still run Windows!
It should be a no-brainer to dump Windows and other Miro$oft products and run GNU/Linux and open source software like Libre Office.
Regarding inviting foreign visitors, this is a great idea, but Russia makes it very hard. I was invited to attend a film festival in Russia about ten years ago (when relations with the US and Britain were comparatively good), and received in the mail a document in Cryllic script which contained my name and which I assumed was a visa. I neither speak nor read Russian, but booked a flight to Frankfurt with an on-going flight to Moscow. In Frankfurt I learned that the document was not a visa, but an invitation to apply for a visa. I was not allowed to proceed, and returned to the US at my own expense.
This was to say the least an unfortunate experience!