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Russia has already won the sanctions war

Taking its cue from the shock and awe strategy of the Gulf War in Iraq, the United States and its western allies introduced "shock and awe" sanctions on Russia within days of the Special Military Operation in February 2022.

Shock and awe, technically known as rapid dominance, is a military strategy based on the use of overwhelming power and spectacular displays of force to paralyse the enemy's perception of the battlefield and destroy their will to fight.

In the case of the Gulf War, the curtain raiser for this war was the relentless shock and awe blitzkrieg bombing campaign of the US and its allies on Baghdad, launching approximately 1,700 air sorties (504 using cruise missiles).

If you had been a resident of Baghdad at that time, imagine the deep fear and trauma you would experience under this constant and relentless barrage of bombardment for days.

In the same manner in March 2022, Russia was subject to a blitzkrieg of more than 5,000 different targeted sanctions, more than Iran, Venezuela, Myanmar and Cuba combined, making it the world's most sanctioned country. At that time, with 1,194 sanctions against Moscow, the US was the leading sanctioning country, followed by Canada (908) and Switzerland (824).

This is unprecedented. The main aim of these sanctions is to ensure the speedy collapse of the Russian economy so that it could no longer support the special military operation.

The US and its allies were also hoping that with the collapse of Russia's economy, there would be mayhem and chaos leading to regime change where Russian President Vladimir Putin would be overthrown, resulting in an end to the war followed by the dismemberment of Russia by the collective west.

And, because Russia is a country rich in commodities and natural resources, this huge wealth would then be redistributed among the collective west as spoils of war accompanying a regime change.

So "Project Ukraine" in essence is an investment scheme of the US and the collective west to seek the strategic defeat of Russia and enrich the leaders of the west and their military-industrial complex so that the US remains the only hegemon in a unipolar world.

It was during this early period of the Ukraine war that the sanctions caused the rouble to nosedive, leading to president Joe Biden gleefully coining the expression "the rouble will be reduced to a rubble", and the president of the European Commission, Ursula von der Leyen, to describe the scenario as "Russian industry and economy in tatters".

But, under the leadership of Putin and his economic team especially its Central Bank Governor, Elvira Nabiullina, the Russian economy and industries, particularly its military-industrial complex, remain unscathed from the intense sanctions war.

In fact, based on the latest World Economic outlook, it was revealed that Russia went on to be among the world's five largest economies and the largest in Europe, replacing Germany in terms of purchasing power parity as of the end of 2022. This was despite Western sanctions and amid the proxy and hybrid war it is facing.

So, what was the secret recipe for Russia's ability to withstand the shock and awe sanctions and win the sanctions war?

Cool-headed leadership. You don't find Putin panicking or snapping at the US or the west. In contrast, there are many occasions where Biden had snapped at Chinese president Xi Jinping in the most outrageous and undignified manner such as at his State of the Union address.

Remember the famous remark Biden uttered off-script during his State of the Union address: "Name me a world leader who'd change places with Xi Jinping. Name me one!".

This will only cement the close relations further between China and Russia, and it is this relationship that has also helped Russia to weather the sanctions war.

Cooler head on the part of Putin has allowed Russia to come out with some brilliant moves to counter the sanctions. These include making it a condition for European Union countries which wanted Russian gas at the start of the war to pay for their purchases in roubles rather than in dollars, where failure to do so would result in their gas supply pipelines being shut.

And, offering oil at huge discounts to Asian and African countries where it was snapped up in huge quantities by India and China, thus more than making up the loss in revenue from zero exports to EU-sanctioning countries.

Russia also began to focus more on alternative trading routes to make up for its loss of the European hinterland by reviving the idea of an International North South Transport Corridor (INSTC), touted as an alternative to the Suez Canal. The INSTC is a planned 7,200km multi-mode transit system that will connect ship, rail, and road routes for moving cargo between Russia, Iran, Azerbaijan, India and Central Asia.

Construction on the project began in the early 2000s, but efforts to develop it have intensified after Western sanctions forced Moscow to shift its trade flows from Europe to Asia, Africa and the Middle East.

The total cargo flow along the INSTC was 14.5 million tonnes in 2022, and the projection for this year is 17.6 million tonnes. By 2030, the volume is expected to reach 41 million tonnes.

Currently, only some sections of the route are operational, with Russia and Iran agreeing in May to build a railway line to incorporate it. Moscow plans to invest more than US$3 billion in the expansion of the project by 2030.

Russia has repeatedly said that the route could become a substitute for the Suez Canal, the 193km sea-level waterway in Egypt that connects the Mediterranean Sea to the Red Sea. The popular route between Europe and Asia sees about 12 per cent of global trade pass through it each day.

In March 2021, the Suez Canal was blocked for six days by a container ship that ran aground. This obstruction cost global trade an estimated US$9 billion a day in losses.

Trade via the INSTC is expected to allow companies to cut shipping costs by about 50 per cent and save up to 20 days of travel time compared with the Suez Canal route.

Finally, what happens to the shock and awe sanctioning countries? The sanctions only boomeranged on them. All of them are experiencing high inflation rates including double digit food inflation and are on the verge of a recession.


* The writer is the Editor of Let's Talk!, an e-newsletter on current affairs

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