Many countries, including the US, Britain, Australia and Germany, have imposed tough sanctions on Russia amid fears of an attack on Ukraine. By declaring Ukraine’s two provinces of Luhansk-Donetsk as independent countries, Russia has forced Western countries to do the same.
US President Joe Biden has issued an order banning all new investment, trade and funding of the American people in Donetsk and Luhansk. The 27 countries in the European Union spoke of sanctions against Russian politicians and industrialists. Britain has banned five Russian banks and three billionaires. Their assets are also being frozen. Australian Prime Minister Scott Morrison has also announced many sanctions against Russia.
At the same time, Japan has also come with the Western countries on this issue. Germany, on the other hand, has decided to close the Nord Stream-2 gas pipeline project coming from Russia. The sanctions have rattled Russia and warned that the sanctions would hurt global financial and energy markets. Russia has said that Americans will fully feel the consequences.
What is the meaning of this threat from Russia?
This simply means that there will be a cloud of instability in the energy sector. These restrictions can increase oil prices in the global market as well as take inflation to a higher level. Europe depends on Russia for about a third of its gas. About 40 percent of the natural gas supply to the European Union and about three percent to the UK comes from Russia. Europe worries that if Russia cuts off gas and oil supplies, it will raise energy prices.
Now after the sanctions are imposed, Russia can cut gas supply to Europe, which will have a direct impact on oil prices. Europe and Japan are concerned that Russia could restrict energy and chipmaking supplies. At the same time, US President Joe Biden acknowledged that the crisis could lead to higher gasoline prices.
What is the threat to America?
America is also worried about cyber attacks. The US has warned its business to be prepared for possible cyber attacks. Given Russian President Vladimir Putin’s track record of disastrous “hybrid warfare” and cyberattacks, US security officials fear he could cyber-attack the US due to sanctions imposed in the wake of a possible attack on Ukraine, according to international media reports.
America has already been a victim
According to reports, the Department of Homeland Security issued an intelligence bulletin on January 23, 2022, warning that Russia could carry out a number of cyberattacks ranging from websites to disrupting critical infrastructure such as the power grid. The department has sent this report to law enforcement agencies, state governments, local governments and critical infrastructure operators.
Russia reportedly got access to computer systems of several US government agencies and private businesses in the SolarWinds attack in December 2020. The FBI also accused Russian hackers of infiltrating US energy and infrastructure networks in March 2018. However, the US is the most capable cyber power in the world and has 20 years of experience in dealing with Russian cyber attacks.
Cyber attack on Ukraine
Russia has reportedly carried out a cyber attack on Ukraine on 16 February. At least 10 websites had stopped working due to cyber attacks on government agencies and big banks. America blamed Russia for these attacks. It was said that a similar attack took place on Ukraine in January as well. Then 70 websites stopped working.
How can Russia reduce the impact of this sanction?
It is believed that many economic sanctions imposed on Russia will be like a blow to the Russian economy. There is no doubt that sanctions can have an effect, but for a number of reasons, Russia may be able to bear these sanctions for some time. With the help of Russia, China and other friendly countries, the effect of Western sanctions can be reduced.
According to reports, Putin could face sanctions longer than Western countries. As of January this year, Russia’s international reserves in foreign exchange and gold stood at a record high of $630 billion. This is the fourth largest amount of such reserves in the world and Russia may use it to push its currency, the ruble, for some time.
What is Russia’s preparation?
Reports suggest that even if it is cut off from SWIFT (a global messaging service used by thousands of financial institutions in 200 countries), Moscow has already taken the initial steps to create its own system of international payments.
According to a statement by Coriolis Technologies Chief Executive Dr Rebecca Harding, “Russia is virtually building an alternative financial system so that it can withstand some of the shocks of sanctions imposed by the West.” But there will definitely be some trouble in all this for a while.
Russia may move closer to China
Russia may also move closer to America’s arch rival China in the midst of the Ukraine crisis. China’s Global Times newspaper claims that relations between Russia and China are at their closest.
When the Winter Olympics were inaugurated in China earlier this month, Vladimir Putin also reached Beijing at the invitation of Xi Jinping. In such a situation, it is believed that China can help in reducing the effect of economic sanctions imposed on Russia. In 2014, when the Crimea crisis broke out, Russia also went closer to China. Russia was also facing sanctions from all over the world at that time, even at that time China had given it economic and diplomatic help.
On the other hand countries like Hungary, Italy and Austria have close relations with Russia. It is believed that even if Russia attacks Ukraine, they will not want to impose sanctions on Russia. This can make it difficult for Western countries to isolate Russia.
Expansion
Many countries, including the US, Britain, Australia and Germany, have imposed tough sanctions on Russia amid fears of an attack on Ukraine. By declaring Ukraine’s two provinces of Luhansk-Donetsk as independent countries, Russia has forced Western countries to do the same.
US President Joe Biden has issued an order banning all new investment, trade and funding of the American people in Donetsk and Luhansk. The 27 countries in the European Union spoke of sanctions against Russian politicians and industrialists. Britain has banned five Russian banks and three billionaires. Their assets are also being frozen. Australian Prime Minister Scott Morrison has also announced many sanctions against Russia.
At the same time, Japan has also come with the Western countries on this issue. Germany, on the other hand, has decided to close the Nord Stream-2 gas pipeline project coming from Russia. The sanctions have rattled Russia and warned that the sanctions would hurt global financial and energy markets. Russia has said that Americans will fully feel the consequences.
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