Anti-sanctions coalition: from partnership to strategy

Anti-sanctions coalition: from partnership to strategy

The August wave of synchronized political and economic strikes by the United States against Russia, Turkey and Iran has challenged these three states to coordinate their macroeconomic policies. Have all the necessary conditions to create an "anti-sanctions union" been really set in place? What are its risks and opportunities?

Matryoshka doll algorithm

The configuration of the new Cold War fronts has rather complex. There are two trade fronts at the center: the U.S. - China, the U.S. - the EU, which affect more than half of the world's economy. The U.S. blow to Turkey, caused by completely non-trade reasons, has been caused by precisely economic instruments (tariffs on steel), which, in fact, makes it a fragment of the U.S. trade war with the EU.

It is expected that by the end of the year the total U.S. profits from the duties imposed on the EU, Turkey, Canada and Mexico will amount to $7.5 billion. It is unlikely that it's a battle for the notorious $10 billion. The meaning of this war is complex.

And if we do not know real causes, we can only conclude that this expansion has no reasonable barriers.

U.S. sanctions against Iran is a different story - they are of an open political nature and have an independent basis, connected with the very genesis of the modern Iranian state. However, they are not supported by many EU countries. Probably, for now. Nevertheless, to date, that's a fact.

Now let's look at Russia. It's been in conflict with the West for years. The outbreak of conflict can be considered NATO's attempts to expand into the territory of the former Soviet Union, and its formal reference - Vladimir Putin's speech at the Munich Conference on Security Policy on February 10, 2007.

At the same time, after the annexation of Crimea and the war in Donbass, during the four years the sanctions were of a selective nature, were not catastrophic and seriously threatening up to the present moment. Perhaps, the U.S. acts on the principle of gradual fomenting.

The new stage under discussion is to prohibit operations with Russian public debt 90 days after August 22, that is, at the end of November, and, most importantly, prohibit dollar transactions through correspondent accounts in U.S. banks for Russian state-owned financial institutions (Sberbank, VTB Bank, Vnesheconombank, Gazprombank, Rosselkhozbank, Promsvyazbank, Bank of Moscow).

If adopted, the ban will seriously damage Russian projects in the EEU and CIS countries, destabilize the exchange rates of national currencies, which will l necessitate loans or other support from Russia to stabilize the neighbors' currencies. Another dimension of this global conflict is objective fluctuations in the commodities market. Taken together, they are ale to provoke dramatic collapses.

As for political measures, at least six months after the document enters into force, the draft law will oblige the US President to impose sanctions on "political figures, oligarchs and other persons that facilitate illicit and corrupt activities, directly or indirectly, on behalf of the President of the Russian Federation," against family members of such persons, as well as against Russian state structures that contribute to such "illicit and corrupt activities".

The possibility of blocking correspondent accounts will place Russia on the same front line with Iran. Since August 7, the first round of new sanctions against Iran came into force: it prohibited Iran's purchase of U.S. dollars, its trade in gold and precious metals. Transactions related to Iran's currency and the issuance of sovereign debts were banned. Transfer to or from Iran of graphite, aluminum, steel, coal, and software was also restricted. At the same time, the main stage of restrictions, which is designed to prevent the sale of Iranian oil, as well as those against Russia, is scheduled for November ...

Five against fifteen

Taken together, the economies of Russia, Iran and Turkey account for about 3.5% of world GDP (according to current dollar rate) or about 5% (at purchasing power parity). Russia currently places about 12th in rankings of world economies. Russia's share of the global GDP is about 1.5%. The United States makes up almost one quarter of the world economy. But the volume of GDP in current dollars is not an objective indicator. Such an indicator as per capita gross domestic product gives a more realistic picture. Here, Russia is at the 8th place in the world (Turkey is 15th). And then Russia's contribution to the world economy is estimated at 2.75% (2017). However, this is not much, compared to the leaders. China's contribution to the global economy is at the level of 17.5%, the United States' contribution - at the level of 15%.

The main problem of economic stability is well known - a significant share of our exports is raw materials. For example, in 2017, Russia's exports of fuel and energy products (oil, gas, coal) to non-CIS countries accounted for 62% of all exports. Another 10% were metals and metal products.

Hence the main task for network integration (unions without legal restrictions) - an increase in mutual exports of goods and services; creation of a single currency market free from external shocks; development of own transport infrastructure; the development of tourism and visa-free travel, which stimulates small and medium-sized businesses in the general labor market. Finally, this is military-technical cooperation as a prologue to overall defense.

Concurring mobilizations

The sanctions caused coincidence of the three nations' responses both within the current agenda and in the long term - in the field of publicly discussed options. One can talk about the three types of mobilization that Russia, Turkey and their EEU allies have to undergo. To a large extent, Iran walked this road, and has its own unique experience - both successes and mistakes, which should be carefully studied.

The first coincidence is foreign policy mobilization. We already have a common field of strong external pressure, perceived by the leading communities of Russia, Turkey, Iran by consensus. The consequences of American policy are obvious in all three countries - they are perceived as a form of soft intervention.

The second coincidence is economic mobilization - an increasing number of economies and population of these three countries are involved in the process of import substitution and modernization on their own resources. Large-scale economic mobilization like in the 1930s is unlikely to be technically feasible, it's unnecessary during an era of digital technology. But sanctions become the main motive in the policy of social and economic modernization, their impetus.

The problem is that this is not an informed choice of elites, but a necessity.

Vladimir Putin in his messages to the Federal Assembly spoke for many years about the need for actions that are being implemented in aircraft construction, infrastructure construction, agriculture, industry. But a wave of "return" and mobilization arises only after there were personal sanctions lists threatening confiscation of assets, sanctions against state corporations. It's not us leaving the world of liberal values, but it's us being forced out of there. Of course, the conformism of business elites plays its role here.

Finally, the most radical and profound thing is moral mobilization: a request for justice. The civil societies of Turkey, Iran, Russia, regardless of religious structures, are increasingly assessing its authorities at high rates of conscience. It seems difficult to describe the current situation as easy because of the sharpening criteria of justice. Each country has its own nuances. Russia's public inquiry is as follows: "If this ruling elite, which allowed such a catastrophic stratification in Russia, found itself in such a situation due to some reasons, is it ready (strong enough), on moral criteria, to take an external punch?"

Naturally, the responds of the authorities, both in Russia,Turkey and Iran, are similar. Namely - strengthening of all types of anti-corruption mechanisms, and tighter control over the shadow economy. In addition, we can expect the turn of media empires and educational policy toward the value of personal modesty and limited consumption, instead of frills, as well as popularization of savings in everyday life. Moderate entertainment and an emphasis on self-education have always led to a decent result in the historical perspective...

The current type of Cold War is sometimes called hybrid. It is difficult to find the right image. If in the 20th century the Cold War was like vertical, hard-to-penetrate barriers. Then now this barrier became horizontal - the border is not between countries, but between groups of elites, between medialians and corporations, some of which stubbornly rely on the dollar, due to the specifics of their activities. Barriers are not between states, but in thei minds. The side we chose is matter of our personal choice to a greater extent than in the 20th century.


Vestnik Kavkaza

in Telegram