Sanctions and the spectre of deglobalisation
This piece by Shakkar Aiyar underscores the ineffectual nature of the sanctions that are being enforced by the West on Russia. The subtext of the piece is that other than the pulverised population of Ukraine, the other big loser in this conflict is the USA – its weakness as a superpower is now out there in the open. And that Shankkar says sets the stage for the eventual Chinese takeover of Taiwan.
Why are the West’s sanctions on Russia ineffectual? And why will they bring Russia & China together into a formidable new power bloc?: “Neither the sanctions nor threat of new ones appear to have stirred Vladimir Putin nor shaken his resolve.
The record of sanctions to deter invasion or change the behaviour of aggressors/invaders is far from inspiring. In August 1990, the UN Security Council imposed sanctions on Iraq to force it out of Kuwait. Saddam Hussein scarcely moved. In January 1991, a coalition force of 30-plus countries led by the US conducted ‘Operation Desert Storm’ to evict Iraq.
In October 1999, the UN imposed sanctions on Al Qaeda, its leader Osama Bin Laden and the Taliban. Nearly two years on, Al Qaeda operatives carried out the 9/11 terror attacks. While Bin Laden was killed in 2012, the Taliban is back in power. And despite a series of sanctions imposed since 2014 following the annexation of Crimea, Putin has continued on his path. Russia has deployed both conventional tactics in theatres such as Donbas and cyber warfare on global targets pretty much with what can be called Putinesque impunity!
The efficacy of sanctions wholly depends on the filters/fencing that scaffolds it. It is not a secret that the filters are far from perfect. Countries have found ways to beat the system – for instance, Iran has offloaded a part of its crude oil output through proxies even though it remains under sanctions. And the proxy playbook is not unknown to Russia. The current lot of sanctions are aimed at denying Russia monetisation of its resources and access to critical technology and goods. China is Russia’s largest trading partner and the scale of the engagement affords Moscow the opportunity to deal with the sanctions challenge. The expansion of engagement between China and Russia will accelerate the creation of sanctuaries and has the potential to aggravate the spectre of deglobalisation.
The instruments of circumvention could range from the simple yester-year Yuan-Rouble deals to adoption of the digital currency to more complex arrangements – where Russian companies open Yuan accounts with Chinese banks, where Chinese companies deploy/create shell structures to front trading in Russian output in global marts….
The consensus of compromises is visible in the design of the current sanctions package. The logic of sanctions is crippling of economic capacity – by demonetising trade, investment routes and even reserves of the targeted entity – to deny funding of aggression. But by leaving out the energy basket, the sanctions allow Putin to fund the war machine”
And now we wait for the Chinese to make their move: “The crisis in Ukraine is seen by many as the prologue to what will follow. China has made no secret of its aspiration on “reunification of Taiwan”. Fact is Taiwan is yet to be recognised as a sovereign entity by the US and its stance continues to be “strategic ambiguity”. Effectively, the US has not promised to help it fight in the event of a conflict with China but it has also not said that it will not step in. This has been the state of affairs since the days of the Nixon-Mao détente.
There is no disputing that Xi Jinping has made it the cornerstone of his legacy. Xi and Putin have long since scoffed at the ideals propounded by the West. Indeed, the February declaration of friendship with “no limits” symbolises the common aspiration of a united front. The current crisis emboldens China to reinforce the idea that it offers a viable alternative to the Westphalian rule-based world order.”