Within days after Russia launched its Feb. 24 “special military operation” in Ukraine, the West unleashed what it called “unprecedented sanctions against Russia,” “the largest in history,” including in early March, banning 7 Russian banks from the SWIFT financial messaging system, the “nuclear financial option.” On April 25, U.S. Secretary of State Antony Blinken after arriving in Kyiv and meeting Ukrainian President Volodymyr Zelenskyy, announced that the Russian “economy … as a result of sanctions … is in shambles.” British Foreign Secretary Liz Truss, who comports herself as (and seems to emulate) the madwoman Lady Macbeth, stated April 6, during her trip to Warsaw, that “coordinated sanctions … were having a crippling impact,” on Russia, “pushing the Russian economy back into the Soviet era.” She later called for “crushing Russia.”
The intent is evil and dangerous and could lead the world to a nuclear war. But, thus far, as an EIR preliminary survey will show, Russia has beaten back some serious features of the assault, but still has problems to solve.
Russia’s adoption of rigorous capital and exchange controls; direction of some state-directed credit to internal agriculture and industry to offset imported goods that are blocked by sanctions; and above all, collaboration with China, and to some extent India and other nations, to begin laying the rudiments of a world credit and production system for development, as opposed to today’s world looting system, has something to do with the preliminary outcome.
Consider Russia’s trade balance and current account. The current account is a broader measure that measures a nation’s trade balance on exports and imports, which comprises 85 to 90% of the current account, and then smaller items such as a nation’s payments made to foreign investors, foreign aid paid to other nations, etc. But it is overwhelmingly trade. Based on its large trade surplus, Russia’s current account surplus for the first three months of 2022 soared to a record $58.2 billion, from $22.5 billion during the first quarter of last year, according to figures published April 11 by the Bank of Russia central bank.
But there is a problem inherent here. During the first quarter of 2022, relative to first quarter of 2022, Russia’s exports rose approximately 5%, largely through the fact that the price of oil and natural gas, a prime Russian export item, rose sharply. Moreover, on the import side, there is a challenge: Russia’s import of goods fell, because several European nations and Japan cut off shipments of goods to Russia due to sanctions. The effect of increasing exports and falling imports caused Russia’s trade surplus to grow, but many of the goods Russia was cut off from are capital goods, machine tools, electronics, which are essential to the Russian economy. That is a challenge, though it can be a spur (see accompanying slug).
