Russia is working to cut Western influence out of its economy

Facing harsh economic measures imposed by Washington and its allies in Europe, Russia is working to cut Western influence out of its economy, Foreign Ministry spokeswoman Maria Zakharova said in an exclusive interview with RT.

In April, US President Joe Biden unveiled a new package of sanctions against Russian businesses and officials, while, at the same time, effectively banning American financial institutions from buying shares in Russian sovereign debt. Officials in Washington described the restrictions as a "proportional" response to alleged meddling by Moscow in the 2020 US presidential election, and assertions Russia was behind the colossal SolarWinds cyber-espionage breach detected last year. The Kremlin has strongly denied both sets of claims.

The UK and the EU have both since rolled out their own sanctions, and there is talk in European capitals of more measures to come. Few moves have been as extreme, though, as the decision to target national debt bonds, which the White House says was designed to hit the country's economy while minimizing the impact on world markets. However, some economists claimed the package of measures was mostly "symbolic," and the new rules could simply be "circumvented" if buyers still wanted to pick up shares in Russian debt.

'A gesture of desperation'

The characteristically blunt Zakharova told RT over the weekend that new economic barriers were "having a complex negative impact on both Russian and Western economies." According to her, the price of playing out hostilities through the financial markets is high, and "estimates of the damage vary, but are well within the hundreds of billions of dollars."

"Unfortunately," the diplomatic spokeswoman said, "the reality of our time has been the increased use of politically motivated unilateral measures by some Western states, mainly the US. We see the sanctions against Russia more and more as a 'gesture of desperation' due to the inability of elites to accept the new realities, abandon their collective groupthink, and recognize Russia's right to determine its own development path and build relations with its partners."

One reason behind this, she claimed, is that Washington and its allies "seem to find it difficult to accept the obvious successes of the Russian economy, the increase in its international competitiveness and the expansion of the presence of quality Russian goods and services on world markets."

While the ruble has been hit hard by falling oil prices, geopolitical uncertainty, and the global recession that has accompanied the Covid-19 pandemic, the country appears more resilient than most of its contemporaries. While a number of other European nations are still languishing in lockdowns, most Russian businesses have been trading consistently with few restrictions since an initial strict quarantine period in the first half of last year.

The governor of Russia's Central Bank, Elvira Nabiullina, has previously said that "the economy is bouncing back rather steadily" and, "given the current positive trends," its analysts have maintained their outlook on GDP growth for 2021 at 3 to 4%. Her bullishness comes at a time when the path back to growth appears uncertain for many countries.

The US insists its approach is simply to send a message that it will not tolerate what it deems as aggressive and malign influence on the part of Moscow. "I was clear with President Putin that we could have gone further, but I chose not to do so," Biden told journalists at the time. "The United States is not looking to kick off a cycle of escalation and conflict with Russia." However, since then, relations have gone from bad to worse, accompanied by diplomatic expulsions and increasingly combative rhetoric coming from both sides.

A SWIFT response

At the end of April, the EU Parliament passed a non-binding resolution in which representatives called for the harshest possible steps to be taken against Russia in the event of an all-out conflict with neighboring Ukraine. Tensions have risen rapidly in recent weeks over fierce fighting in the Donbass between Kiev's forces and those loyal to two self-declared breakaway republics, which have sought support from Moscow.

In such a scenario, the Members of the European Parliament (MEPs) behind the motion said, "Imports of oil and gas from Russia to the EU [should] be immediately stopped." At the same time, the country "should be excluded from the SWIFT payment system, and all assets in the EU of oligarchs [sic] close to the Russian authorities and their families in the EU need to be frozen and their visas cancelled."

SWIFT, a Belgium-based international transaction mechanism, is the cornerstone underpinning the vast majority of cross-border transactions, with more than 30 million financial messages moving through its network each day.

Ukraine has previously issued a request for Moscow to lose the right to make use of the service, even without the kind of conflict described by the MEPs. But Russia has warned that, if implemented, disconnecting its businesses from SWIFT would be seen as an "act of war," and it has expanded domestic alternatives to reduce its vulnerability to Western sanctions.

Speaking at a meeting with his Chinese counterpart last month, Foreign Minister Sergey Lavrov said, "The United States has declared its mission is to limit the technological development opportunities of both the Russian Federation and the People's Republic of China." He added that the dollar should be de-prioritized as the default currency of international markets, and the two nations should move away from the use of "Western-controlled international payment systems."

By Gabriel Gavin, in Moscow

https://www.rt.com/russia/522685-vicious-sanctions-dollar-dependency/