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Published: March 5th, 2015

Article of the MEF expert Grzegorz Kolodko

It is amazing how two opposite phenomena can simultaneously exist: on the one hand, rational refusal from sanctions imposed on Cuba, and on the other, their expansion towards Russia. If the first step taken by the US President-Democrat, can rejoice, because it is a reasonable solution, the second should be condemned, because it is at least reckless.

Sanctions against Cuba, with its 50 years of history compromising the USA, has proven ineffective, and it is a pity that it has taken some people in Washington (and not only there) so much time in order to understand this fact. Even worse, among conservative people, if not reactionary Republicans, there were those who were going to block in the Senate (where the Republicans have the majority) a desire to resume the U.S.-Cuban relations and normalize the contacts between the countries. Sanctions against Russia are inefficient too. The West could not force small, poor and weak Cuba to change its course, it will not be able to do this with big, full of useful resources and human capital with great potential, as well as militarily strong Russia. Western sanctions against this country, zealously encouraged by various Polish right-wing politicians, to some extent, result in deterioration of the economic situation; however, they do not lead to change of the political regime or the foreign policy of the Kremlin. The result is exactly the opposite and is very similar to the situation that lasted many years with Cuba.

This allows the government to shift responsibility for their mistakes and failures in economic policy at the foreign "enemy", which officially declares that the sanctions are aimed at the deterioration of the economic situation of the country against which they are entered. I have very often heard (from good people as well) not only in Havana and Moscow, but also in Tehran and Caracas, that everything is bad and getting worse, because of abroad but not their own authorities. This does not encourage identification with the values of Western liberal democracies, but rather strengthens its own values, which, in their turn, the West does not like in many parameters.

When the oil prices start to rise

The only thing that actually seriously harms Russia, and at the same time other major producers and exporters of oil from Mexico and Venezuela to Nigeria, Libya, Iraq and Iran is a radical reduction in oil prices. However, it is not due to sanctions but because of other factors that, in its turn, is becoming an increasingly difficult problem for producers of shale oil in the United States. Oil becomes cheaper for several reasons. Two of them are of a fundamental, far more serious than a small decline in the effective demand for this product, value. The first is departure (temporary!) of speculative investors from this market, who were previously buying oil at a lower price for the future, and a few months ago started to sell it intensively and at a profit. Before the oil plummeted in price, it became much more expensive, and this happened not because of an increased demand from China that some "well-known economists" tried to tell us, but because of the aggressive actions of global speculators.

The second reason is fixing by the cartel that controls the prices, affecting the offer size, of the production volume, following a moderate restriction of demand on world markets. It is the OPEC (that does not include neither Russia nor the USA), where the main role is played by the countries of the Arabian Peninsula, primarily Saudi Arabia. Thus in particular the latter (the largest exporter and the largest oil producer in the world along with Russia) tends to weaken or to remove from the market competitors, including those who produce shale oil in the USA.

Saudi Arabia spends on producing one barrel of oil from under its sands eight times less than the Americans - from shale. At current prices, shale oil production is unprofitable in many cases. And that is why it is only a matter of time when the price of oil goes up again. Then analysts and "well-known economists" will, of course, say the opposite of what they say now...

Meanwhile, at a regular meeting of the European Union leaders, on which a new chief of this organization proclaimed a few old anti-Russian slogans, new sanctions against Russia were approved. What sanctions? For example, cruise ships were forbidden to go in the Crimean ports, and tourist agencies of the EU, it means including Poland, were forbidden to arrange trips to the Crimea... And this should scare Putin and his regime! It is a pity that less our compatriots will go there now, because it is a very beautiful place. It is a pity that tourists from other European countries travelling in organized groups will not see what is worth seeing, but it will be cheaper and freer for Turks and Arabs, Indians and Chinese, Koreans and Japanese, and especially for people from the former Soviet but not anti-Russian republics. Such sanctions would harm not Russia but our tourists and tour agencies.

Economic sanctions that cause obvious reaction of the Russian side in the form of an import ban on agricultural products, harm Russian consumers. But in Moscow "the government will subsist" as once a spokesman for the Polish government Jerzy Urban said, when more than 30 years ago the Americans imposed sanctions against Poland.

But now even greater harm sanctions cause to Polish producers and exporters. The resulting losses will be four billion PLN (about 65 billion roubles – approx. trans.) for a year In 2014 the volume of our exports to Russia (primarily because of the restrictions that followed the European sanctions) decreased by approximately 1.3 billion to $ 10.8 billion in comparison with the year 2013. In 2015 this figure is probably not going to be nine billion.

The error of our leadership was cancellation of the year of Poland in Russia and symmetric cancellation by the Russian authorities of the year of Russia in Poland. If politicians are not able to talk to each other like human beings, they should not prohibit or complicate it for the people of science and culture. It only hurts both sides: and mostly not politicians, but the people who consume cultural goods, which should not be ashamed of by neither Poles nor Russians. It harms science and knowledge, which not only economics, but also politics must increasingly rely on. But it is far from it...

Maybe I should withdraw from my Moscow publisher the right to publish my books in Russian? Why should they know more about the world and globalization? Maybe I should refuse invitations to conferences and lectures for students? Why should they learn something clever?

Political stupidity

"I will get my ears frostbitten to spite my grandmother," – a wise proverb says. Or rather, not wise but stupid. And in front of us a political stupidity stretches. Because obviously the deterioration of the economic situation of the Russian state, including the context of the international sanctions impact, worsen the economic situation in the world, especially in countries located closer to it and interrelated stronger to it. Some Western companies that have much invested in Russia even say that bloody slaughter awaits them, not the Kremlin. It is quite clear that Poland does not win from anti-Russian sanctions, and at the same time loses a lot. And the fact that in a short-term perspective only some politicians from the right flank want and can earn profit from it at the price of Polish interests, only shows bad traits of these politicians. It has more to do with stupidity than with patriotism, with myopia than with adherence to principles, with misunderstanding of the modern world, than with trying to change it for the better.

It is amazing, why it is so hard for some people to understand the simplest things that are demonstrated in numerous, including expert comments. If their ignorance is sometimes amazing, fragments of such thinking in amateurish form are less surprising, they can be found, for example, on my page www.facebook.com/kolodko: "sanctions are not a perfect solution, but it is better than military intervention of the West against Russia." This alternative is deceptive, because it offers to choose between inefficiency and madness, while the choice lies between ineffective sanctions and diplomacy with the negotiations. In the end, when a period of political adventurism passes, their time will come. And now, unfortunately, Ukrainians suffer most of all.

Such naive judgments repeated in network are inspired (often absolutely thoughtlessly) by bad politicians, and are highlighted by the discourse dominant in media. In fact, everything like this: first, sanctions are meaningless because they do not bring the intended effect; secondly, they harm not only (and most often) those against whom they are imposed, but those who imposes them; third, a more rational way can and should be used to condemn and criticize what we don't like than to insert ourselves sticks in wheels by sanctions; fourth, there is a lot of hypocrisy in all this political and propaganda noise, as sanctions are imposed against different unpleasant regimes not because they are Pro-Western or Pro-American.

Publication source: inosmi.ru