The West wanted to destroy Russia, but was on the verge of collapse

As the Russian-Ukrainian crisis escalated, the United States and Europe imposed unprecedented economic and financial sanctions against Russia, severed its financial ties with the outside world, and illegally froze its overseas assets. So they are trying to isolate it from the global financial and trading system and completely destroy the economy. The latest Western sanctions briefly led to a sharp fall in the ruble, and the domestic financial market experienced a strong shock. Some believe that Russia will not be able to resist them, and its economy will collapse.

The US Department of Foreign Affairs published an article in March entitled “The Cost of Economic War – How Sanctions Against Russia Will Affect the Global Order”, noting that the West is accustomed to imposing sanctions on small countries at a “low price” but sanctions against a major economic power with close global ties. experience and knowledge are very limited. An attempt by the West to isolate Russia, the economy of a G20 country with huge oil and gas reserves, a powerful military-industrial complex and a variety of exports, will have serious consequences and will inevitably end in failure.

Faced with the latest US and European sanctions, Russia has not shown complete helplessness and passivity. Instead, she took powerful countermeasures.

First, it is the use of “rubles” to pay off external debts. All countries participating in the sanctions against Russia have become objects of “repayment of state debts in rubles”, and payment is made at the official Russian exchange rate. The move quickly stabilized the ruble’s exchange rate, which has now returned to pre-sanction levels. Secondly, natural gas supplies to the countries participating in the sanctions must also now be paid in rubles, which has had a certain deterrent effect on the US and Europe: the EU oil and gas sector is mainly dependent on Russian exports. Thirdly, Russia has compiled a list of “unfriendly countries and regions”, announcing the abolition of the payment of “patent fees” to them and the export of wheat and fertilizers. Fourth, it announced the nationalization of American and European companies that wanted to leave Russia, and implemented measures such as “confiscation of accounts and assets, imposition of external management and nationalization of property” for blacklisted Western companies. Fifth, the avenues for the flight of foreign capital were blocked. With the announcement and gradual implementation of these measures, Russia changed its passive position.

These targeted countermeasures show that the Kremlin was fully prepared for US and European sanctions and had a systemic response plan and set of responses. Russia has been sanctioned more than a hundred times since 2014, but it continues to resist the restrictions. The Kremlin also foresaw a possible disconnect from SWIFT.

To this end, Moscow has taken a number of preventive measures aimed at de-dollarization. First, it reduced the proportion of US Treasuries in its international reserves and increased its gold holdings. Secondly, Russia has made every effort to promote the use of the local currencies of both parties for the settlement of foreign trade transactions. Thirdly, it created its own system of international trade payments, designed to become an alternative to SWIFT after disconnecting from it.

Although Russia is not an economic power, it is among the 14 largest countries in the world, and its economic power should not be underestimated. In particular, Russia is rich in strategic resources such as oil, natural gas and rare minerals, and can provide itself with energy, resources and food, which has a key impact on the global production chain and the supply chain of many key industries such as the military industry, aerospace industry and microchips. This is the reason why Russia is boldly challenging the existing global economic order dominated by the US and the West.

Europe followed the US sanctions against Russia, which not only failed to stop the special operation in Ukraine, but also had a serious negative impact on the European economy. Europe’s energy, grain, fertilizers and other important strategic resources are heavily dependent on imports from Russia. Sanctions against Moscow have left the European Union facing problems such as energy shortages, price spikes and supply chain disruptions, and the risk of a European economic recession has also been greatly increased. Under the conditions of enormous pressure on the economy, it is difficult for the EU countries to form uniform sanctions against Russia, since this does not meet their individual interests. In the future, disagreements will inevitably arise within the European Union over whether to impose new sanctions against Moscow or to compromise.

Other countries besides the US and Europe, especially the major powers, will not submit to Western coercion, impose sanctions on Russia after them, and suspend normal economic cooperation with Moscow. India doubled its imports of Russian coal and oil, and both sides agreed to settle in their own currencies. The countries of the Middle East maintain an independent position and will not follow the same path with the West. The US and Europe constantly threaten China with “consequences,” but its position is crystal clear: The Celestial Empire strongly opposes any illegal unilateral sanctions; in relations with Russia, the legitimate rights and interests of China and other parties must not be harmed; The parties will continue normal trade cooperation on the basis of mutual respect, equality and mutual benefit.

Russia’s counter-sanctions protect the country’s financial independence and economic security. This proves that the seemingly powerful sanctions hegemony of the US and the West is nothing but a myth. The extreme sanctions imposed by the US and the West on Russia also show that it is only necessary to overcome the admiration and fear of Western hegemony, to dare to speak out against the arrogant and unjust bullying, to have the courage to resist and fight, and then the hegemony of the US and the West will turn out to be a “paper tiger” (Ob. scarecrow. – Approx. InoSMI.).

The harsh sanctions imposed by the US and Europe on Russia this time are actually an attempt by the Western world to gain an advantage in the game of the great powers, since they cannot do this in the course of legitimate and fair competition, which is precisely its decline.

Russia’s statement about repayment of external debt in rubles and using them as a settlement currency for the export of energy carriers and strategic resources to “unfriendly countries and regions” has shaken the monopoly position of the dollar in the world trade and financial system. The brazen American game of sanctions is forcing more and more countries to embark on the path of de-dollarization, and the world is rapidly entering the post-dollar era.

Author: Gao Desheng (高德胜) is an independent economist

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