I can’t add anything to the discussion of the war itself,although I will note that much of the commentary I’ve been reading says that Russian forces are regrouping and will resume large-scale advances in a day or two — and has been saying that,day after day,for more than a week.
What I think I can add,however,is some analysis of the effects of sanctions,and in particular an answer to one question I keep being asked:Can China,by offering itself as an alternative trading partner,bail out Putin’s economy?
No,it can’t.
Let’s talk first about the impact of those sanctions.
One thing the West conspicuously hasn’t done is try to block Russian sales of oil and gas — the country’s principal exports. Oh,the United States might ban imports of Russian oil,but this would be a symbolic gesture:Oil is traded on a global market,so this would just reshuffle trade a bit,and in any case US imports from Russia account for only about 5 per cent of Russian production.
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The West has,however,largely cut off Russia’s access to the world banking system,which is a very big deal. Russian exporters may be able to get their stuff out of the country,but it’s now hard for them to get paid. Probably even more important,it’s hard for Russia to pay for imports — sorry,but you can’t carry out modern international trade with briefcases full of $US100 bills. In fact,even Russian trade that remains legally permitted seems to be drying up as Western companies that fear further restrictions and a political backlash engage in “self-sanctioning.”
How much does this matter? The Russian elite can live without Prada handbags,but Western pharmaceuticals are another matter. In any case,consumer goods are only about one-third of Russia’s imports. The rest are capital goods,intermediate goods — that is,components used in the production of other goods — and raw materials. These are things Russia needs to keep its economy running,and their absence may cause important sectors to grind to a halt. There are already suggestions,for example,that the cutoff of spare parts and servicing may quickly cripple Russia’s domestic aviation,a big problem in such a huge country.