Russia’s economic growth will leave U.S. without sanctions trump cards

The growth of the Russian economy will leave the United States without sanctions trump cards.

Russia's economic growth will leave U.S. without sanctions trump cards

Russia needs to prepare for further tightening of sanctions, said Boris Shmelev, Doctor of Historical Sciences, Professor of the Moscow Higher School.

The Financial Times reported on two approaches to anti-Russian sanctions prevailing in the Biden administration.

There are two points of view: tough and constructive. Supporters of the hard line, where Victoria Nuland, known from the Ukrainian events, stands out, who is today the acting US Undersecretary of State for Political Affairs, advocate increased sanctions.

The press associates this approach with a draconian version of the sanctions. This package includes US sanctions against the Russian government debt, operations of Russian state banks in dollars and the disconnection of Russia from SWIFT. Other variants of restrictions are possible, but their principle is to further strengthen sanctions for ideological reasons, regardless of the consequences that they have for the United States.

Nuland also doubts that Americans should take into account the opinion of Europeans. The thesis concerns the story with Nord Stream-2: on other issues, the positions of Russia and the European Union seriously differ.

A constructive position is taken by the personnel bureaucrats of the US Treasury and State Department, concerned about the effectiveness of the sanctions and their negative consequences for the American economy and Washington’s relations with European partners.

The United States had a negative experience of imposing sanctions against Oleg Deripaska and Rusal in 2018: restrictions led to an increase in aluminum prices.

The events with Rusal were unpleasant both for Russia – the ruble then dipped after strengthening to below 60 units per dollar – and for the United States. The restrictions were lifted after a cosmetic reshuffle of the ownership of the Russian company.

According to The Financial Times, two people are involved in sanctions against the Russian Federation in the US administration: Peter Harell, who is a senior director at the US National Security Council, and adviser to the US Deputy Treasury Secretary Elizabeth Rosenberg.

Harell began his political career at the election headquarters of Barack Obama in 2008 and later moved to the US State Department, where he was responsible for the economic strategy of the head of the department at that time, Hillary Clinton. Then he continued his career in the Bureau of Economic and Business Relations of the US State Department, and today he is positioned as an expert on sanctions against Russia, China, Iran and other countries.

A similar career was built with Rosenberg, who was involved in sanctions against Syria and Libya and the Middle East energy in the US Treasury.

Harell and Rosenberg are individuals whose professional careers have been linked to sanctions. A circle of people who have been brought up in such a culture of relations with the outside world has formed in the United States, so the sanctions line will continue.

As for Biden, he withstands statements in the spirit of the supporters of the hard line, but, according to The Financial Times, he will not impose sanctions except for a few Russian officials and businessmen of not the highest rank, that is, he will preserve the status quo.

US will not abandon sanctions policy

“The general mood in the political and intellectual elite of the United States, including President Biden and persons from his administration, does not allow hoping for a softening of American policy towards the Russian Federation”, – states Shmelev.

The tightening of US policy towards Russia will continue, sanctions will grow and become more severe.

“The voices of those persons in the United States who believe that it is necessary to take into account the consequences of sanctions and look at the economic effects will drown in the general chorus of anti-Russian sentiments of the so-called hawks”, – sums up Shmelev.

An anti-Russian sanctions trend has formed in the United States, which is difficult to reverse or stop.

“There are many things that happen in politics, its main principle is “never say never”, and there have been many reversals in history, but taking into account what we observe in the United States, how the strategy is formed there and how people define goals and objectives, count on improving the relationship is impossible. The United States has taken a course towards worsening relations with the Russian Federation and the PRC, and Moscow is viewed as an enemy”, – Shmelev concludes.

Biden and the head of the US State Department, Blinken, distinguish two principles of the foreign policy line in the Russian Federation: tough containment and cooperation where it is beneficial to the Americans. So the sanctions will continue, but the bridges in the United States will not be completely burned.

“Russia needs to prepare for further tightening of sanctions and not give the United States a reason for this. Moscow’s main response to sanctions should not be new frigates and missile systems – this is great, but it does not solve the problem – but economic achievements. Its development, the way out of the crisis, new technologies, leaps and bounds”, – states Shmelev.

Russian policy to counter US sanctions should focus on economic development.

“This approach will be an effective response to the problems that Russia is facing”, – concludes Shmelev.

We need to talk less about sanctions. Obviously, they will continue to be introduced, stirring up the stock market and the ruble exchange rate, but such measures have little effect on the structure of the Russian economy, and the Americans will refrain from radical and really effective steps.

Dmitry Sikorsky, Economy today


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