Neighbors are priority for Iran, says Raisi

On Friday, President Ayatollah Seyed Ebrahim Raisi stressed that dealing with all countries of the world is on the agenda of his government, and that neighboring countries take priority in developing the country's foreign diplomacy.

In a press statement issued at the end of his visit to Golestan Province in northeastern Iran, Raisi said a balanced view prevails in Iranian foreign policy and attention to the East or West is not on the agenda.

He pointed out that some former officials put their hopes on the West, which resulted in the suspension of the country's activities, but despite Iran’s current negotiations with the Westerners and its efforts to lift sanctions, Tehran relies on its zealous youth to preserve national independence and power.

Raisi stated that some of his government's actions in expanding neighborly relations or strengthening ties with the regional countries are interpreted as “look to the East,” adding, "Our message is that there should be a balance in foreign relations. In the past, the view of the West in the field of foreign policy was heavy and all the government had hoped was in the hands of the West."

"The country cannot be limited to relations with certain countries," he said, adding, "The country must move forward. For example, in the core negotiations, our hope is first in God and then in the Iranian people. We do not hope for a miracle in Vienna. We seek to lift sanctions, but more importantly, we seek to neutralize sanctions."

The President also said his government plans to use the capacity of the North-South corridor to economically develop the eastern part of the Caspian Sea. Pointing to the status of this region in expanding neighborly relations, he said, "The government has put interaction with all countries around the world, especially neighboring countries, on the agenda."

Ayatollah Raisi added, "Today, relations with neighbors are not commensurate with the existing capacities, and our economic and trade interactions with neighboring countries can be at a much higher level. During my travels to neighboring countries, since the beginning of the government, it became increasingly clear to me that the capacities of the country's neighborhood relations have not been realized as they should be put in practice."

The President said, "During our visit to Turkmenistan, which happens to be a neighbor to Golestan province, we came to the conclusion through negotiations that there is a lot of potential for improving the level of relations, and one of these capacities was the gas swap agreement, which contributes to not having gas outages in the northern regions of the country."

Ayatollah Raisi also pointed to his government’s plans to solve the people’s problems. 

Speaking in a press conference at the end of his trip to Golestan province on Friday evening, Ayatollah Raisi said, "The proposals for resolving the problems were prepared and finalized in a meeting with the first vice-president," according to the official website of the presidency.

Saying that Golestan province is one of the agricultural hubs of the country, the president added, "In Golestan province, unlike most parts of the country, the population of villages has not decreased and therefore in this trip, most of the funds allocated to Golestan were allocated to agriculture to address the concerns of the people in the field of agriculture."

Raisi also talked about the state of industry in Golestan province. "We also have industrial towns in Golestan province, but the industry in the province is not as prosperous as it should be and therefore it was decided to form a working group under the Governor General and with the presence of representatives of related agencies including the Ministry of Industry."

 

Bangladesh pledges to do business with Russia despite international sanctions over Ukraine

According to a report by The Bangladesh Chronicle, Bangladesh will carry on with completing its first nuclear energy plant being built by Russia and will not stop doing business with Moscow, despite many other nations imposing sanctions over the invasion of Ukraine. This was the consensus of Sheikh Hasina, Prime Minister and other officials.

Russia is constructing as well as financing 90% of the total cost for the Ruppur Nuclear Power Plant (RNPP) in Pabna, a district in northwestern Bangladesh. In late 2017, the Russian state-run nuclear energy firm Rosatom began constructing the plant, which has a price-tag of nearly US$13 billion, and is expected to complete in mid-2023.

“The work of the Rooppur Nuclear Power Plant is progressing speedily and the government has a plan to install another nuclear power plant,” Hasina announced.

While the Prime Minister said the project remained a go, geopolitical analysts and economists told BenarNews that uncertainty over its implementation has increased after nations including the United States, France, Germany, Italy, the United Kingdom and Canada penalized Russia’s central bank and excluded some Russian banks from the SWIFT system. The system is a network used by banks to allow financial transactions across the globe.

Mustafa Kamal, Bangladesh’s Finance Minister, said officials could look for alternative transaction options following the decision on SWIFT.

A currency swap could be one of the options, he said after approving a proposal to purchase 30,000 tons of potassium chloride fertilizer valued at US$17.4 million (1.5 billion taka) from Russia’s Foreign Economic Corp.

“That purchasing fertilizer from Russia was not a new thing. We will try to continue to import items from Russia,” he said, adding that if Moscow failed to deliver, the government would explore alternative sources.

A spokesman for Bangladesh’s central bank, Serajul Islam, said he expected Bangladesh to continue transactions with Russian banks not affected by the sanctions.

In addition, “Bangladesh Bank already sent a letter to the Finance Ministry to allow us to do a currency swap with the country to avoid SWIFT-related restrictions,” he told BenarNews.

After a National Economic Council meeting chaired by Hasina on Wednesday, Planning Minister Mannan said the construction of the nuclear plant would not be affected by the outbreak of the war in Ukraine because of a bilateral agreement with Moscow.

“Bangladesh is against any war. The Prime Minister has clearly said we are a peace-loving country. We want peace, not war,” Mannan told BenarNews.

“Though they are fighting, both the countries are friends of Bangladesh. Ukraine is our friend. And Russia has been our friend for a long time. We always recognize the Russian role in our Liberation War,” he said, referring to the 1971 war of independence from Pakistan that led to Bangladesh’s birth as a nation.

He made the comments the same day Bangladesh abstained from voting on a United Nations General Assembly resolution, which condemned Russia’s aggression in Ukraine and demanded that Moscow immediately withdraw its troops from its neighbor next-door. As many as 141 UN member-states voted in favor, while five voted no and 35 abstained.

Meanwhile, a Bangladeshi media consultant representing Rosatom released a statement from the company to BenarNews without elaborating.

“No disruption is foreseen in any of the commitments and work schedules in the construction of the Rooppur Nuclear Power Plant,” it stated.

A Bangladeshi who is a worker on the project said he and other employees had always been paid on time for their work in constructing the plant, but many were now concerned about whether they would still receive a steady paycheck because of the Ukraine invasion.

“Though the authorities assured us that payments would be done normally and the work environment is still normal at the project site, many workers are worried about the future,” Hasan Miazi told BenarNews.

If Russian President Vladimir Putin does not end the invasion or withdraw his forces from Ukraine soon, that could have a negative impact on the project in Bangladesh, according to a professor at Dhaka University.

“Not only Bangladesh, but countries who have financial relations or projects with Russia all will be in trouble. This crisis will come into the fore within three months if the war does not stop,” Delwar Hossain, a Professor of International Relations, told BenarNews.

“As such mega-projects must be prepared for unexpected situations, the current conflict will not hamper it if the war ends immediately,” he said.

Bangladesh could end up paying if the ongoing conflict brings an end to the construction project, another academic said.

“Uncertainty over such mega-projects creates serious problems for countries like Bangladesh. Bangladesh would be bound to repay Russia the credit given for the project,” Anu Muhammad, a Professor of Economics at Jahangirnagar University, told BenarNews.

Meanwhile, a security analyst expressed the need to move ahead cautiously.

“Any wrong move in dealing with Russia can put Bangladesh under sanctions. So Bangladesh should be alert of every global development in the Russia-Ukraine issue,” said Abdur Rashid, a retired major-general.

 

Reactions from Middle East and North Africa (MENA) to the Russian Invasion of Ukraine

I am obliged to share with my readers the official statements of countries, usually dancing to the mantra of the United States. This report has been compiled by James F. Jeffrey and Merissa Khurma of Wilson Centre.

On Thursday, February 24, Russia launched a series of missile attacks against locations near Ukrainian capital Kiev, an assault that quickly spread across the country by land, sea, and air. The enormity of the Russian attack, not just on Ukraine but on the long-term global security order, is increasingly clear among states in the Middle East region, and puts pressure on the ‘hedging’ between the US on one hand and Russia and China on the other, commonplace in recent years. 

Middle East countries, including the close military and diplomatic partners of United States, United Arab Emirates (UAE) and Israel, initially hedged their bets between the two superpowers. However, the continued Russian aggression has pushed almost all into the Ukraine camp. Turkey has been particularly vocal from President Erdogan supporting Ukraine bilaterally and in NATO, and then taking the unprecedented step of restricting Russian naval transport of the of the Bosphorous Straits under the war clause of the Montreux Straits Convention, which Turkey controls. 

The regional shift was seen on March, 02, 2022 when 141 countries voted in favor of the UN General Assembly resolution to condemn Russian forces. From Middle East and North Africa (MENA), Tunisia, Libya, Egypt, Saudi Arabia, Yemen, Oman, the UAE, Qatar, Kuwait, Bahrain, Israel, Jordan, Lebanon, and Turkey voted ‘Yes’, Syria voted ‘No’, and Algeria, Iraq, and Iran abstained. Algeria has long been pro-Moscow and Iraq, given its internal situation, avoids taking sides. Syria's vote is not unexpected. Iran clearly seeing itself as a potential target of attack, abstained rather than supporting Russia, not so much for Ukraine but for the principle of non-interference in sovereign states. 

A region mostly united

Initially, most Arab governments maintained a neutral stance on the Russian invasion of Ukraine, unsurprisingly, given their reticence to pick a side that they believe may jeopardize their relations with the United States and the Europeans and their equally strategic relations with Russia. In a statement delivered by Saudi UN representative Mohammed Abdulaziz Alateek at the General Assembly, the GCC countries confirmed “the depth of relations” they have with both parties and called on “all parties to exercise restraint.”

Nevertheless, Saudi Arabia remains firm in standing with its OPEC plus agreement that is keeping oil prices high rather than pumping more crude oil to help the United States and the West, at America’s insistence. Whether the Kingdom maintains this position or contributes to bringing oil prices down in the weeks to come remains to be seen and depends on how far Putin goes in Ukraine. 

The notable exception to the neutral Arab stance was of course Syria, whose President Bashar Al Assad reiterated his support for Russia in his call to President Putin and called the Russian invasion in Ukraine a “correction of history.” A staunch ally of Russia, that kept him in power since the beginning of the Arab uprisings, the Syrian President will likely feel emboldened by a seemingly ‘stronger’ Russia, which also gives other regional powers, namely Iran, more opportunities to strengthen its influence in Syria and destabilize the neighborhood. 

Leaders across the region react

Egypt

On February 25 via Twitter, Egypt's Minister of Foreign Affairs (unofficial translation from Arabic to English), “The Arab Republic of Egypt is following with deep concern the successive developments regarding the situation in Ukraine, and affirms the importance of upholding dialogue and diplomatic solutions, as well as endeavors that would hasten the political settlement of the crisis in a manner that preserves international security and stability, and ensures that the situation does not escalate or deteriorate, and thus to avoid aggravating humanitarian and economic conditions, with their impacts on the region and worldwide.”

Iran

On February 22, Iran’s Foreign Ministry Spokesman Saeed Khatibzadeh commented that the latest developments in Ukraine, noting, "interference and provocative measures by NATO and led by the US have made things more complicated in this region.” Via Twitter on February 24, Iran's Foreign Ministry tweeted, "The Ukraine crisis is rooted in NATO's provocations. We don't believe that resorting to war is a solution.

Israel

On February 27, Israeli PM Naftali Bennett spoke with Russian President Vladimir Putin, offering Israel's support as a mediator in the crisis. On February 24 Israel's Foreign Minister Yair Lipid stated, "The Russian attack on Ukraine is a serious violation of the international order. Israel condemns the attack, and is ready and prepared to provide humanitarian assistance to the citizens of Ukraine. Israel is a country that has experienced wars, and war is not the way to resolve conflicts.”

Jordan

On February 24, Jordan said it is following with "concern" the current developments in Ukraine, and called on the international community and the parties to the conflict to exert maximum efforts for restraint and de-escalation. In a statement, the Kingdom's Ministry of Foreign Affairs called for a peaceful settlement of the conflict and the restoration of security and stability in the region through dialogue and negotiations in these "critical" times. The statement cited Jordan's ambassador to the United Nations Mahmoud Hmoud during a UN General Assembly session, held to discuss the "situation in the temporarily occupied territories of Ukraine", as saying that "Jordan underscores the positive and effective role of the UN and the stakeholders to reach that goal". The envoy stressed Jordan's call for respecting the international law, the UN Charter, the sovereignty and regional integrity of states and the principles of good neighborliness.

Lebanon

On February 24, Lebanon's Minister of Foreign Affairs and Emigrants Abdullah Bou Habib condemned the invasion. 

Qatar

On February 25, Qatar's Secretary-General of the Ministry of Foreign Affairs Dr. Ahmed bin Hassan Al Hammadi met with Ambassador of Ukraine to Qatar Andrey Kosmenko to review bilateral cooperations. On February 24, Deputy Prime Minister and Minister of Foreign Affairs Sheikh Mohammed bin Abdulrahman Al-Thani held a phone call with Russia's Minister of Foreign Affairs Sergey Lavrov, followed by Ukrainian Minister of Foreign Affairs Dmytro Kuleba. According to Qatar's State News Agency, Sheikh Al-Thani, "expressed the Qatar's concern over this escalation and its repercussions and urged all parties to exercise restraint and resolve the dispute through constructive dialogue and diplomatic methods."

Turkey

On February 25, President Tayyip Erdoğan responded to reporters that, "NATO should have taken a more decisive step." On February 24, Turkey’s Ministry of Foreign Affairs released the statement, "We consider the military operation launched by the Armed Forces of the Russian Federation against Ukraine unacceptable and reject it. This attack, beyond destroying the Minsk agreements, is a grave violation of international law and poses a serious threat to the security of our region and the world. Believing in the necessity to respect the territorial integrity and sovereignty of countries, Türkiye is against changing of borders by use of arms. We call on the Russian Federation to immediately stop this unjust and unlawful act. Our support for the political unity, sovereignty and territorial integrity of Ukraine will continue."

United Arab Emirates

On March 1, the UAE suspended visa-free travel for Ukrainians and abstained from the United Nations resolution condemning Russia for the invasion. On February 27 via Twitter, UAE senior politician Anwar Gargash affirmed the country will not declare sides in the war. On Wednesday, February 23 the Minister of Foreign Affairs Sheikh Abdullah bin Zayed conducted a phone call with Russia’s Minister of Foreign Affairs to discuss their strategic partnership. 

 

 

United States supplying arms to Ukraine rather than negotiating ceasefire

The United States has contributed over US$1 billion to help Ukraine’s military over the past year and has pledged more aid as Russia’s week-long war against the country continues. Washington has reportedly sent hundreds of stinger missiles as part of the latest package of defensive aid. 

White House has also asked Congress to authorize an additional US$10 billion in security, humanitarian, and economic assistance for Ukraine.

But as the war presses on, the US will have to change its strategy on how to get that aid to Ukraine, as well as evaluate how to help Ukraine survive a longer-term conflict through security and humanitarian aid.

Over the past six months, President Joe Biden has used his presidential drawdown authority three times, a power that allows a president to respond to unforeseen emergencies without legislative sign-off. The most recent use of this authority is US$350 million in security assistance the president approved.

Jessica Lewis, Assistant Secretary of State for Political-Military Affairs, told the House Armed Services Committee that the package included Javelin anti-tank missiles, which can be carried and launched by a single person. 

“Those are probably the most impactful weapons that we can provide the Ukrainians because they can be used by individuals from ambush positions or in lots of different circumstances and they can pretty reliably kill Russian tanks,” said Frederick Kagan, Director of the Critical Threats Project at the American Enterprise Institute.

The US has also reportedly sent Ukraine hundreds of Stinger anti-aircraft missile defense systems, which can be deployed by ground forces to shoot at targets in the air.

Kagan said it’s harder to take down Russian aircraft with the anti-aircraft systems, but they can absolutely become a nightmare for Russian helicopters.

Secretary of State Antony Blinken said that the US continues to work bilateral partners to rush defensive equipment to Ukraine, and that such equipment is being delivered to troops fighting Russia. But sending additional equipment to Ukraine will get harder as Russia continues its invasion.

Due to time constraints, the Ukrainian military will need things that it can train on quickly—things like ammunition, Javelins, and Stingers.

“That puts a significant constraint on what we can provide, you know, because it has to be very short-term focused,” said Mark Cacian, a senior adviser to the Center for Strategic and International Studies’ International Security Program.

“I think as time goes on; you're probably going to see a lot more munitions flowing because modern wars just use up a lot of ammunition — militaries tend not to stockpile a lot of it,” he continued. “So, some of it's just going to be bullets and things like that.”

The US has also had to reconsider how it delivers weapons, as it cannot fly planes directly over Ukrainian airspace due to the conflict. But smaller weapons systems can still be sent via ground transportation.

Leah Scheumann, a former Pentagon official now at the Atlantic Council, pointed out that some of the ground routes being used to deliver security aid are also being used by Ukrainians looking to flee the conflict.

“No one is better at logistics and the US military,” she said. “So, we can help sustaining these key land routes so that when we're talking about all these aid packages that are under consideration right now in Congress, that aid actually needs to be able to get into the country.”

The Biden administration has been clear about not sending troops directly into the conflict, though it has sent roughly 15,000 troops to bolster NATO’s eastern flank over the past couple of months.

And the idea of establishing a no-fly zone over Ukrainian airspace has been shot down as a non-starter in Washington — as doing so would involve US troops possibly shooting down Russian aircraft, raising fears of rapid escalation into a world war. 

Short of sending troops directly into the conflict, there are still other options on the table for helping Ukraine resist Russia’s invasion, experts say.

“If the war goes on for a long time, then there are other things you could do,” Cacian said. “We could train Ukrainians outside of Ukraine. We could think about introducing a new type of equipment, but you know, that's if the war goes months.”

It will be just as important to send humanitarian assistance, including food, medicines, and fuel supplies, to help the Ukrainian people cope with the war.

“I think as we focus on getting weapons to Ukrainians, we also need to be really focused on getting all of the life support to the Ukrainians that they're going to need to make it through his conflict, and then be okay on the other side of it,” Kagan said. 

China soliciting support for Russia

As the West condemns Russia, President Vladimir Putin has vocal supporters in China, where the ruling Communist Party tells its people they are fellow targets of US-led harassment. “If Russia is destroyed, we will be next. 

This is for sure,” said Wang Yongchun, a retiree in Beijing. “The United States wants to dominate the world.”

Such comments reflect the stance of a ruling party that is the closest thing Putin has to a major ally. The war should stop but the United States is to blame.

President Xi Jinping’s government has tried to distance itself from Russia’s offensive but avoided criticizing Moscow. The government has offered to act as mediator and denounced trade and financial sanctions against Russia.

Ruling party control of all Chinese media and intensive internet censorship make it hard to gauge public opinion. But what the party allows online and requires media to publish make clear what it wants the public to think.

Media outlets were told last week to post only pro-Russian content and to censor anti-Russian or pro-Western views, according to a copy of instructions posted on the social media account of the newspaper Beijing News. The post was later deleted.

Online and in social media, expressions of sympathy for Ukraine and support for Russia appear but not criticism of Moscow.

“When a war begins, is it not the children of ordinary people who serve as cannon fodder”, said a post signed Da Ke Ming Yi on the Weibo social media platform. “Those who died were the children of ordinary people.”

A letter signed by five professors from prominent universities that criticized Russia for attacking a weaker neighbor appeared briefly on social media before being deleted.

“We stand against unjust wars,” said the academics from schools including Tsinghua University in Beijing, alma mater of many ruling party leaders.

Comments posted by nationalists criticized the professors for failing to stick to the ruling party’s official position of neutrality.

The ruling party has spent decades using school textbooks and the entirely state-controlled media to nurture a sense of nationalist grievance. It accuses the United States of trying to block China’s rise to its rightful position of global leadership.

State media repeat Beijing’s position that the United States and its European allies are to blame for the Ukraine war because they failed to respond to Russian concerns that its democratic neighbor should be barred from joining NATO, the Western military alliance.

That echoes Chinese complaints that Washington and its allies are interfering in its domestic affairs and issues of national sovereignty, including its claim over Taiwan, territorial disputes in the South China Sea, and in Xinjiang, the far-western region where China has been accused of detaining over a million Uyghurs.

Russia’s attack, as a historical event, “is not a good one,” but “people think the conflict between Russia and Ukraine is because the United States stirred up trouble,” said Zheng Bowen, a 38-year old engineer.

The state-run newspaper Capital News exhorted the public to line up with the ruling party: “The nation’s attitude is our attitude.”

“China has always upheld a fair and responsible attitude, calling on all parties to exercise restraint and ease the situation, and return to dialogue and negotiation,” it said.

However, the newspaper appeared to support Putin’s demand that Ukraine become a neutral buffer between Russia and Europe and give up the possibility of NATO membership.

“Ultimately, Ukraine should be a bridge between East and West, rather than a frontier of confrontation between major powers,” the Capital News said.

Comments online have called for China to support Russia by purchasing its exports of oil, gas and other goods.

“Let the Russian Embassy sell their goods on livestream. Let’s show them China’s buying power,” said a comment signed Bao Zou Guang Xiao Pang on Weibo. It received 42,000 likes.

A separate comment advocating that China maintain normal trade with Russia, an implicit rejection of sanctions, received nearly 80,000 likes.

Social media platforms have urged users to act responsibly and say they have removed thousands of postings about the attack on Ukraine.

Douyin, a short-video service operated by the Chinese owner of TikTok, said it deleted more than 3,500 videos and 12,100 comments due to “vulgar, war belittling, sensationalist and unfriendly comments.”

The popular WeChat message service also complained about “vulgar posts” that it said have a “negative impact on cyberspace.”

It said some users “took the opportunity to publish bad information about international current affairs,” including comments belittling the war such as crass jokes about “gaining course credits by going to Ukraine and fighting in the war” and asking “Ukrainian beauties to come to China,” the platform said.

WeChat’s post was later shared by a unit of China’s internet watchdog, the Cyberspace Administration of China.

Weibo said it removed more than 4,000 posts that were vulgar and ridiculed war. It said more than 10,000 accounts were closed.

“Peaceful environments do not come easily,” the company said in a social media post. It called on users to “maintain an objective and rational attitude” and take part in discussion “in a reasonable manner.”

Fire breaks out at Zaporizhzhia nuclear plant in Ukraine

Ukraine's Zaporizhzhia nuclear power plant was on fire early Friday local time following a Russian attack, according to Ukrainian officials. If it blows up, it will be 10 times larger than Chornobyl! 

"Russian army is firing from all sides upon Zaporizhzhia NPP, the largest nuclear power plant in Europe," Ukrainian Foreign Minister Dmytro Kuleba said in a post on Twitter. "Fire has already broke out. Russians must immediately cease the fire, allow firefighters, establish a security zone."

Mayor Dmytro Orlov of the nearby town of Energodar said that Russian and local Ukrainian forces have engaged in fierce fighting, resulting in casualties, according to Reuters.

“As a result of continuous enemy shelling of buildings and units of the largest nuclear power plant in Europe, the Zaporizhzhia nuclear power plant is on fire,” Orlov said, according to Reuters. He added that the situation poses a threat to world security.

The International Atomic Energy Agency (IAEA) said in post on Twitter that it was aware of the reported attack on the plant.

IAEA is aware of reports of shelling at Zaporizhzhia Nuclear Power Plant (NPP), in contact with Ukrainian authorities about situation, the agency tweeted.

Ukrainian authorities wrote a letter hours earlier to Rafael Mariano Grossi, the Director Deneral of the IAEA, sounding the alarm that Russian tanks had broken through ‘the block-post’ into Enerhodar.

“The battle is going on in the town of Enerhodar and on the road to the ZNPP (Zaporizhzhia Nuclear Power Plant) site,” the letter read, describing the situation as critical, according to the agency.

This comes after Ukrainian officials warned days earlier that Russian troops had increased their military presence near the plant and pointed a multiple rocket launcher at it. Ukraine's ministry of internal affairs said the country's military was headed to the region to defend the plant.

“The armed forces, national guard and civilian militia will do anything to prevent a catastrophe, we are ready to destroy the enemy. But we have to be ready for anything,” Vadim Denisenko, advisor to the minister of internal affairs, said at the time.

Russian forces previously took control of the Chernobyl nuclear site last Thursday, less than 24 hours after the invasion of Ukraine began.

Fighting between Russian and Ukrainian troops around the still-operating Ukrainian nuclear plant at Zaporizhzhya — Europe’s largest — led to stark warnings from the head of the International Atomic Energy Agency, ABC reported.

Any damage to the facilities, either from the fighting or from interruption of normal operations “could have severe consequences, aggravating human suffering and causing environmental harm,” Rafael Grossi, Director of the U.N. nuclear watchdog, told ABC.

“There is nothing normal,” Grossi added, “about the circumstances under which the professionals at Ukraine's four nuclear power plants are managing to keep the reactors that produce half of Ukraine's electricity working."

Ukrainian officials have asked for a 30-kilometer (18-mile) safety zone around nuclear plants.

Today we’ll look at another rising risk from the fighting — this time in Africa. Then we’ll turn to the passage of a pivotal piece of legislation that could allow victims of water contamination at a Marine Corps base have their day in court.

 

Will crippling Russian economy stop Putin?

A week since Russian forces invaded Ukraine; President Vladimir Putin's economy is feeling the effects of global condemnation. Matthew Boesler reports in Bloomberg Businessweek today, the world has weaponized finance to punish Russia, slapping it with sanctions and limiting its access to capital and currency.

That leaves the country facing what Bloomberg Economics calls “four intersecting crises”, which they predict will unite to tip Russia into a deep recession and cool growth elsewhere.

Crisis 1: A bank run provoked by concern over the safety of deposits

Crisis 2: A credit crunch as lenders retrenches amid losses

Crisis 3: A freefalling ruble amid the freezing of reserves, diminished trade and a rush to safety

Crisis 4: A debt default as assets held abroad are frozen and Russia retaliates

 Just how much pain there will be is hard to say, but this chart shows the implications of each shock:

“Historical comparisons illustrate the difficulty of making a precise estimate of the impact on Russia’s economy,” said Bloomberg economists Scott Johnson, Jamie Rush and Tom Orlik. “What’s clear is that it will be big.”

Capital Economics reckons Russia’s gross domestic product will slide to become the 14th-largest economy from 11th.

The National Institute for Economic and Social Research of UK estimates the conflict could knock US$1 trillion off the value of the world economy and add 3% to global inflation. 

There will also likely be new chapters especially given it's hard to tell how long the conflict will last. Foreign governments may ultimately impose curbs on energy exports and Russia may slow the supplies itself. China could become a backdoor source of money. Moscow also has US$150 billion of external debt due in the next 12 months, which it may choose not to pay.

As for the rest of the world, Bloomberg Economics says Eastern Europe will be especially hurt, while US$120 oil will pose a material hit to growth in the euro-area. Central banks will face even more complicated choices.

For now though, the people of Russia appear more resigned than panicked, as this story from Moscow shows.

Many Russians, who have seen numerous bank runs over the last three decades, are for now approaching the descending hardship with fatalism. 

“As strange as it sounds, in general there’s no panic at stores or ATMs,” said Elmira, who works in education in Ufa in the Urals region. She declined to give her last name.

“There’s clearly no easy solution, but I wasn’t about to run and buy up EUR or US$ or get something just to spend money,” she said.