A look back at the repercussions of the Russian invasion of Ukraine, which marked the world in 2022.
Russia’s invasion of Ukraine has caused developed countries to declare an extreme form of economic warfare against it. Their attempt to isolate the Russian economy is a spectacular example of a movement to de-globalize and refocus trade between friendly countries that some are calling for.
Russian aggression against its Ukrainian neighbor has sown consternation in the Western camp, especially in Europe. We were, of course, shocked by this unprovoked attack on a sovereign country. But we also realized with horror the extent of the energetic dependence of several of them with regard to the aggressor.
Failing to send troops directly on the ground, the West has deployed a set of sanctions of a scale and variety unprecedented since the 1940s aimed at strangling Russia economically.
The most spectacular, but also the least effective, targeted some 1,500 leaders and wealthy friends of Vladimir Putin’s regime by freezing their assets or banning them from staying abroad, summarized The Economist at the end of the summer. There have also been attempts to dry up Russia’s coffers by blocking its financial reserves abroad and denying it access to the main interbank payment platform (SWIFT). There has also been an attempt to isolate the country commercially, by reducing, as much as possible, its oil and gas exports, and by preventing it from buying all sorts of goods and services, especially in high-tech sectors.
As the war in Ukraine continues and Russia’s economy could, according to the IMF, contract by “only” 3.4% this year and 2.3% next year – rather than plummeting by 33% as some predicted it at the start of the crisis — one would think that all these sanctions have failed. But we would be wrong, believes more than one expert.
What is not seen, they say, is the damage to medium- and long-term economic growth potential that comes with the departure of some 1,200 foreign companies, the disruption of supply chains in the technology sectors, information technology, pharmaceuticals, chemicals or mining, and the exodus of half a million of the country’s best minds.
This episode comes at a time when geopolitical tensions between the West and China are growing and when there is also more and more talk of a “decoupling” between their economies, particularly in the technological sectors. More generally, governments and experts question the benefits of a certain economic globalization. They speak of the repatriation (or relocation) of production capacities (reshoring in English), the geographical rapprochement of value chains (nearshoring) or searching for suppliers in friendly countries (friendshoring).
For the moment, we do not yet find “generalized change” behind the few “anecdotes” sometimes cited, reported in The duty in September the Federal Department for International Trade. Sarah Guillou, from the French Observatory of Economic Conditions at Sciences Po Paris, was not kind to these elected officials who ignore economic reality and call for de-globalization. “Autonomy of production, as claimed by certain governments to flatter public opinion in the name of economic sovereignty, is a political hoax. »