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Mar-22-2022 00:41printcomments

Russia Vows To Reduce Foreign Dependency as Sanctions Grow

Russia supplies Europe with a third of its gas needs.

Russian bicyclist
Russian bicyclist delivery service.
Photo by Plato Terentev, Pexels

(SALEM, Ore.) - The Russian Federation has been in the news for some time now for obviously the wrong reasons. On February 24, 2022, the country launched a military attack on its neighbor Ukraine for what it termed “military oppressions to denazify and demilitarize Ukraine.”

Prior to that, Russian President Vladimir Putin signed a decree recognizing Ukrainian breakaway regions of Donetsk and Luhansk as independent republics.

The unilateral act received worldwide condemnation and it was followed with various sanctions from the European Union, the United States, and its allies. That notwithstanding, Mr. Putin ordered the invasion of Ukraine.

The economic conditions in Russia have worsened since then, due to the various economic and financial sanctions being rained on the country. Numerous companies have also started redrawing their services and workers from the country.

History of Sanctions on Russia

Russia has been facing various sanctions for some years now; hence, the current situation is not new. After the annexation of Crimea in 2014, the country came under several sanctions, especially from Western European countries and the United States of America.

These included the restrictions on trade, imports, and exports of certain products among others. Nonetheless, the country managed to adopt several measures to avert the effects.

However, the new sanctions resulting from the Russian-Ukrainian war are hasher and unprecedented and likely to break down the economy of the country. There are various sanctions on Russian banks, businesses, oil and gas sales, high-profile government officials, and individuals among others. So what is Russia’s response to these crippling sanctions?

How is Russia Responding to the Sanctions?

With the various sanctions and likely isolation of the country, Russia now seeks to row out various homegrown strategies to mitigate the impact and cushion them.

President Putin refers to the sanctions as an act of war on Russia and plans to retaliate. In a recent address, he said the country would bounce back stronger and better. So what does he plan to do?

Reduce Reliance on External Internet
According to a Twittersource, Russia is taking measures to cut its overwhelming reliance on external internet services. As of March 11, companies must get a ".ru" domain name and enroll on Russian domestic servers.

What does this mean for domain brokerage firms who did business with firms in the country? The instruction issued gives institutions up to 5 days to comply, with reasons being looming cyber-attacks.

Last year in June and July, Russia disconnected itself from the global internet during a test of its internal services to bolster cyber security. A sort of “practice run”, the project goal was to save the country in case of any potential cut from foreign internet infrastructure.

Build Resistance
During a meeting with government officials on March 10, President Putin indicated that all the sanctions imposed on Russia by the West would rebound.

According to him, Moscow was not ready to compromise on its sovereignty and security for any short-term economic gains. He admitted that the impact of the sanctions was being felt, but was optimistic that Russia will emerge stronger.

“In the end, this will all lead to an increase in our independence, self-sufficiency, and our sovereignty,” he stated. Putin added, “gradually, people will orient themselves, they will understand that there are simply no events that we cannot close off and solve.”

Retaliate
Russia plans to retaliate squarely and forcefully to the sanctions imposed by the European Union countries and the US. As a major energy producer, Russia supplies Europe with a third of its gas needs, aside from other energy supplies. If Russia cuts the energy supply, Europe would be found wanting.

However, Putin says his country would respect contractual agreements regarding the supply of oil and gas to Europe. With that being said, he has suspended the export of over 200 items including tech equipment, agricultural products, auto, telecom, and medical equipment until the end of 2022.

How the War is affecting the World’s Economy

Although the various sanctions are intended to cripple the Russian economy, its ripple effects have been devastating worldwide. The world is now facing a surge in oil and gas prices, the cost of living is rising; food prices are surging, with inflation skyrocketing.

If the war is not stopped, the world faces an imminent shortage in food supplies, especially for grains. Russia and Ukraine supply about 30% of the world’s grains, with the majority being sold to North African countries and the Middle East.

In addition, Russia is a major producer of fertilizer and accounts for about 13 percent of the world’s supply. The fall in supply is currently accounting for the surge in fertilizer prices, which will adversely affect food production worldwide.

Source: Salem-News.com Special Features Dept.

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