Webinar named “Sanctions and Anti-sanctions: The
Russian Case” was organized by One Belt One Road Research Institute (OBORRI),
Chu Hai College of Higher Education on 18th Jun 2022. In the
beginning, Prof. Oleksandr Rogach (Professor, One Belt One Road Research
Institute, Chu Hai College & Taras Shevchenko National University of Kyiv,
Ukraine) gave an opening speech and he introduce the topics’ background and
guest speakers.
The first speaker was Mr Ryan Chan Ming Tai (Deputy
Director General, Silk Road Economic Development Research Center) and his topic
entitled “General background of the sanctions imposed on Russia”. Firstly, Mr. Chan stated the background such
as the Office of Foreign Assets Control (OFAC) of the US Department of the
Treasury which enforces economic and trade sanctions.
Then Mr. Chan briefed the scope of sanctions on
Russia and history of USA’s sanctions since 2014 including energy sector,
financial sector, military goods, mercenaries and transportation.
And then he mentioned the impacts on aviation
industry and international companies (e.g. McDonald’s, Coca-Cola and Starbucks).
Then he introduced Russia’s defense against global sanctions.
After that the Russia’s key role in energy
exports, global supply chain and global food crisis were discussed.
Since Russia is lacking high-tech products
domestically, Mr. Chan showed the diagram of high-tech goods in 2019 and found
that Europe is dominated. However, China involvement is expected to increase.
Finally, Mr. Ryan Chan using global value chain
to explain Russia’s involvement in the global economy. Europe and Central Asian
countries are most dependent on Russia’s large exported metal products that not
only oil and gas.
Lastly, the role of Russia in the global supply
chain was explained and Russia would gradually shift its focus to Asia. He concluded the short-terms impacts
including hyperinflation on energy and food, as well as, lower economy growth
in the Euro zone. The long-terms impacts were dramatic reorganization of the
global economy; localization, regionalization and politicization of production
chain and supply chain by higher geopolitical risk and a fragmentation of the
trade system.
The second speaker was Prof. Oleksandr Pidchosa
(Associate Professor, One Belt One Road Research Institute, Chu Hai College &
Taras Shevchenko National University of Kyiv, Ukraine) and his topic named “Russian
Economy Under Sanctions: Implications for the Financial Sector”. Firstly, he showed western expected results
in the beginning of the sanctions but it didn’t happen.
Then Prof. Pidchosa briefed some background of
Russia historical experience and competence in circumventing sanctions and could
trace back to USSR in 1918. Then he
introduced the structure of Russia’s GDP in 2021.
And then he stated the current condition of Russia’s
Economy that the macroeconomic stability of the country was not significantly
affected, as well as, low unemployment rate (4%). As a result of Western
actions, confidence was broken in the Jamaica monetary system, the US dollar,
the Euro and Western financial institutions.
After that Russia solved the cross-border
payments using SFPS (System for Transfer of Financial Messages) and the Chinese
CIPS (Cross-Border Interbank Payment System) since 2017. Russia and Iran, India & other counties
had agreed to use national currencies.
Blockchain technology would be employed to replace SWIFT and planned to
use the digital ruble in 2023.
Those cryptocurrencies (along with physical
gold) were considered as one of the options for conducting financial
transactions. Moreover, a mechanism for
circumventing “Gold sanctions” was also mentioned because of sanctions on LME
in London, COMEX in New York and Switzerland.
The diagram showed the comparison on the effect
of sanctions through Russia’s unfriendly countries and friendly countries.
Finally, he mentioned about Hong Kong situation
on Russia trading cases. Lastly, Prof. Pidchosa concluded that “In general, the
question is not about sanctions and counter-sanction in long-term perspective,
but about those tectonic shifts and processes launched in the global economy.”
