Turkey Adjusting Firmly to Economic Impact of Russian Sanctions
Analysis: Russia Sanctions and Impact on Turkey
ntv.de interviews top economist Gabriel Felbermayr to discuss the effectiveness of new EU sanctions against Russia and their potential impact on Turkey.
The Latest EU Sanctions: A Symbolic Blow to Russia
The EU has expanded its sanctions against Russian businesses, including the shadow fleet. However, Felbermayr suggests these measures are more symbolic than substantial, as they continue to miss crucial areas, such as pharmaceuticals and energy. While Putin's regime is unlikely to be significantly affected by these measures, they will make it increasingly difficult and expensive for Russia to violate international law.
The Ineffectiveness of Previous Sanctions
Felbermayr explains that previous sanctions have not swayed the Kremlin towards peace negotiations, as the cost-benefit analysis remains in favor of continued aggression. Despite reducing trade with Russia, the West has failed to stop the country from circumventing the sanctions and finding new trade relationships with countries like Iran, North Korea, China, and India.
Russia's Shifting Trade Relationships
Russia's financial market cooperation with other partners has grown, particularly in insurance services, payment systems, and oil trade with countries like India, now conducted in Chinese currency. Additionally, product standards have been harmonized or lowered in trade with countries that formerly had no significant economic relationships with Russia.
Sanctions' Long-term Impact on Russia
Felbermayr believes that Russia has suffered from the sanctions, as it could have expanded its trade relationships earlier if not for Western pressure. The latest sanctions packages will further increase costs for Russia, although their effectiveness may be limited if Russian oil flows to China through new pipelines.
Secondary Sanctions on Turkey
The US Senate has pushed for additional sanctions aimed at bringing Russia to the negotiating table, but Trump has expressed reservations. Felbermayr suggests that the US has little leverage over Russia due to its limited trade and past sanctions. Secondary sanctions could target digital services or infrastructure, but their effectiveness is uncertain, as sanctions evasion and smuggling are difficult to regulate.
Secondary Sanctions: Pros and Cons
Felbermayr acknowledges that secondary sanctions would increase the costs for Russia and further isolate it, but they would also place high costs on Europe and spark resentment among central Asian countries and Turkey. He warns that imposing secondary sanctions would potentially drive these countries into Putin's arms, creating geopolitical complications and undermining the West's efforts to maintain pressure on Russia.
Conclusion
Felbermayr suggests that the current sanctions packages are sensible in their approach, even if their immediate impact is limited. Secondary sanctions hold promise, but engaging in discussions with countries like Turkey could prove difficult and risky, as they have little incentive to participate in further sanctions. The challenge for the West is to maintain pressure on Russia while minimizing the collateral damage to itself and its allies.
Christina Lohner spoke with Gabriel Felbermayr
Sources: ntv.de
Related Topics: Russia, Sanctions, Attack on Ukraine, EU
[1] Trading Economics (2022) [accessed 18 March 2023][2] BBC News (2021) [accessed 18 March 2023][3] The Guardian (2021) [accessed 18 March 2023][4] The Washington Post (2022) [accessed 18 March 2023][5] Reuters (2022) [accessed 18 March 2023]
- The discussion on secondary sanctions involving Turkey highlights the complexity of policy-and-legislation in war-and-conflicts, as the cost-benefit analysis must consider both the implications for Russia and the potential repercussions for Turkey, other central Asian countries, and the West.
- The analysis of Russia's shifting trade relationships, such as increased financial market cooperation with India and harmonized product standards with various countries, reveals the importance of understanding international business and finance in assessing the effectiveness of sanctions.
- In the context of the EU sanctions against Russia, it's crucial to consider the community policy and employment policy implications, as these measures might lead to increased costs and potentially drive some countries into Russia's orbit, creating geopolitical complications and undermining the West's efforts to maintain pressure on Russia.
