At the end of year 2021, the Gross Domestic Product (GDP) of the USA was valued at USD 23 trillion while that of China and the EU equalled each other at USD 17.5 trillion. That of the Russian Federation was considered by western economists as being only on par with Spain and their governments were convinced that the conflict in Spain could be swiftly brought to an end by imposing financial sanctions and trade embargos.
But these calculations ignored (1) the adjustment which must be made to GDP for the parity of purchasing power in domestic economies and (2) the advances made in recent years by Russia with its diplomatic and geopolitical influence in the eastern hemisphere. These factors have added resilience so that the Russian economy is now on par with that of Germany at around $ 5 trillion and shares a potential for growth based on the production of essential goods rather than services in fields such as finance, electronics, fashion and entertainment. In global terms Russia exports nearly 20% of foodstuffs ; metals such as nickel, platinum and iron ; phosphates and fertilisers ; oil and gas. It has porous frontiers though which its exports can continue to reach its many trading customers and agents of the East.
As to payment, U.S. regulators and their Senate Banking Committee have recently held several emergency meetings to devise methods for limiting the use of crypto currencies to circumvent sanctions but without making any significant progress. The unique features of blockchain secrecy which have been such a boon to oligarchs, kleptocrats and criminals worldwide are ideal for making clandestine exports !
Indeed, it would seem that the USA and EU may well add to their woes and fears of inflation and recession by the backfiring of their intended punitive measures and the consequent weakening of their NATO enforcers.
The Sanctions against Russia and their Avoidance
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