INDIA NEWS
Mar 16-31, 2022 - Vol 2, Issue 17
WORLD THIS WEEK
WORLD THIS WEEK A publication of the National Institute for Advanced Studies, Bengaluru
Compiled by D Suba Chandran, Ashwin Immanuel Dhanabalan, Padmashree Anandhan, Angkuran Dey and Meghna Manoj
Sanctions against Russia: Effects and Divides
What happened? On 26 February, the European Commission released a joint statement with France, Germany, Italy, the United Kingdom, Canada, and the United States rebuking the Russian invasion of Ukraine. Out of the four commitments, one focussed on following up with the sanctions: “we commit to launching this coming week a transatlantic task force that will ensure the effective implementation of our financial sanctions by identifying and freezing the assets of sanctioned individuals and companies that exist within our jurisdictions.” On 28 February, the UK, the US, and the EU announced sanctions on Russia’s top financial institutions. It barred business entities in the UK from transacting with Russia’s central bank, Finance Ministry, and wealth fund. With this, the Russian entities will no longer transfer security or financial instruments into the UK. On the same day, the US sanctioned the central bank of Russia in the US, thereby denying them access to billion-dollar assets held by Russia. Along with this, the US Treasury Department provided a license allowing “energyrelated transactions.” Likewise, the EU banned Russian banks from SWIFT and excluded energy payments. It comes due to a few from the Eurozone urging the region’s dependency on Russian energy. What does this mean? First, rush amongst the West to impose sanctions. With new escalations and development every day, there is a rush in imposing sanctions, without consideration of the sanctions’ retrospective effects on Europe and the rest of the world. Second, a defensive Russia. When it comes to handling the sanctions, Russia has not been reactive but is taking the hits with a good defence. Till now, Russia has only condemned the West and has not responded with countersanctions. This means it has strategized well, taking lessons from conflict in Crimea. Third, a divided EU. Due to economic dependency and historical links, some EU countries seem to have a different position against Russia. While some have gone pro-US in imposing sanctions, others have restrained. It is the game of power for the US, but for Europe, the sanction can cost its economy.
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Biden’s State of the Union Address: Focus on building back better
What happened? On 1 March 2022, President Biden delivered his first “State of the Union” (SOTU) address to the US Congress. The SOTU address of the American Presidents focuses on the domestic and external priorities for the US and outlines a strategy to deal with them. Biden’s address started with the war in Ukraine, President Putin’s aggression, sanctions against Russia, and domestic challenges, including inflation. Biden’s address started with Putin’s Ukraine aggression. He said: “Russia’s Vladimir Putin sought to shake the very foundations of the free world, thinking he could make it bend to his menacing ways. But he badly miscalculated. Putin’s latest attack on Ukraine was premeditated and totally unprovoked. He rejected repeated efforts at diplomacy. He thought the West and NATO wouldn’t respond. He thought he could divide us at home, in this chamber, in this nation. He thought he could divide us in Europe as well. But Putin was wrong. We are ready. We are united. And that’s what we did: We stayed united.” Biden’s address also looked into measures the US has taken. He said: “Together, along with our Allies, we are right now enforcing powerful economic sanctions. We’re cutting off Russia’s largest banks from the international financial system; preventing Russia’s Central Bank from defending the Russian ruble, making Putin’s $630 billion war fund worthless. We’re choking Russia’s access to technology that will sap its economic strength and weaken its military for years to come. Tonight, I say to the Russian oligarchs and the corrupt leaders who’ve bilked billions of dollars off this violent regime: No more.” Third, Biden’s address also underlined, whether the US would get into a war directly with Russia over Ukraine. He said: “But let me be clear: Our forces are not engaged and will not engage in the conflict with Russian forces in Ukraine. Our forces are not going to Europe to fight [in] Ukraine but to defend our NATO Allies in the event that Putin decides to keep moving west. For that purpose, we have mobilized American ground forces, air squadrons, and ship deployments to protect NATO countries, including Poland, Romania, Latvia, Lithuania, and Estonia. And as I’ve made crystal clear, the United States
and our Allies will defend every inch of territory that is NATO territory with the full force of our collective power — every single inch.” Besides Ukraine and Russia, the rest of Biden’s address looked at internal challenges facing the US. He looked at the state of affairs and nailed the problem when he said: “We meet tonight in an America that has lived through two of the hardest years this nation has ever faced. The pandemic has been punishing. And so many families are living paycheck to paycheck, struggling to keep up with the rising cost of food, gas, housing, and so much more.” In response to the above problem within, Biden self-congratulated his “Rescue Plan” helping the working people and leaving no one behind. He said: “It worked and created jobs — lots of jobs. In fact, our economy created over 6.5 million new jobs just last year, more jobs in one year than ever before in the history of the United States of America.” His address also focussed on the other major American challenge – the infrastructure. He said: “America used to have the best roads, bridges, and airports on Earth. And now our infrastructure is ranked 13th in the world. We won’t be able to compete for the jobs of the 21st century if we don’t fix it. That’s why it was so important to pass the Bipartisan Infrastructure Law. And I thank my Republican friends who joined to invest and rebuild America — the single biggest investment in history.” His address also focussed on the need to focus on innovation, and provide a level playing field vis-àvis China. He said: “…to compete for the jobs of the future, we also need to level the playing field with China and other competitors. That’s why it’s so important to pass the bipartisan Innovation Act sitting in Congress that will make record investments in emerging technologies and American manufacturing. We used to invest almost 2 percent of our GDP in research and development.” What does it mean? The primary challenge for the Biden administration is domestic – addressing inflation, reducing the costs without reducing the wages, rebuilding infrastructure, and building back better. The second challenge for Biden is to get bipartisan support to address the first; unfortunately, he does not have much support even within his party. The third challenge for Biden is China, and a more significant challenge in this context is how to avoid other challenges that would pull his attention away. With Putin’s aggression, he would have to face China and a resurgent Russia.
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ALSO IN NEWS
Indonesia: India requests an increase in palm oil supply On 2 March, the Indian government asked Indonesia to increase its palm oil supply to compensate for the loss of sunflower oil supplies from the Black Sea region due to the Ukraine crisis. The halt in supply of sunflower oil from the Black Sea region has resulted in global record high prices of vegetable oils. Ukrainian and Russian exporters of edible oil to India accounted for 1.6 million tonnes. India has also requested Indonesia to lower its biodiesel bending rules as Jakarta had reserved 30 percent of its palm oil for biodiesel. India: New Delhi abstains from the UNHRC vote On 4 March, India refrained from voting in the UN Human Rights Council to establish a commission of inquiry to look into Russia’s aggression in Ukraine. The 47 member council had voted on a draft resolution that would look at the human rights situation in Ukraine. Apart from India, 13 other countries, including China, Pakistan, Sudan, and Venezuela, abstained from voting, while 32 votes favoured the resolution and two against it. Pakistan: Islamabad continues to be on the grey list of FATF On 5 March, the Financial Action Task Force mentioned Pakistan would continue to remain on the grey list. However, the watchdog noted that Pakistan had progressed in its commitments to fight against financial crimes and had implemented 26 of 27 action items from its 2018 plan. The FATF cited: “Pakistan should continue to work to address the one remaining item in its 2021 action plan by demonstrating a positive and sustained trend of pursuing complex [money laundering] investigations and prosecutions.” Pakistan has assured that it will comply with the 2021 action plan by the end of January 2023. Ukraine: Zelenskyy upset over NATO’s rejection of no-fly zone On 05 March, Ukrainian President Volodymyr Zelensky slammed NATO and the West for not
implementing a no-fly zone over Ukraine. NATO’s Secretary-General, Jens Stoltenberg, argued that this would result in a confrontation with Russian forces and lead to a full-fledged war. Russian President Vladimir Putin said that implementing such a decree would be seen “as participation in an armed conflict by that country.” Zelenskyy refuted NATO’s claims and said: “All the people who will die starting from this day will also die because of you. Because of your weakness, because of your disunity.” Ukraine: Protests in Kherson against Russia’s invasion On 05 March, protests broke out in the recently occupied region of Kherson by Russian forces. About 2,000 demonstrators marched through the city, waving the Ukrainian flag and singing the national anthem. Kherson is a crucial port on the Black Sea and is strategically located near the Dnieper River. Russian troops fired in the air to disperse the protestors in response to the protests. However, Russian President Putin mentioned that he would not impose martial law. Ukraine: BBC suspends its work in Russia On 05 March, BBC said it would suspend its journalists’ work in Russia as a response to the implementation of the law on fake news. However, the BBC would continue producing news on Russia from outside the country. Similarly, Zara, Paypal, and Samsung announced to suspend their businesses and trade in Russia in response to Russia invading Ukraine. The businesses cited violent military aggression and geopolitical developments to shut down their services in Russia. About the authors D Suba Chandran is a Professor and Dean at the School of Conflict and Security Studies at the National Institute of Advanced Studies. Ashwin Immanuel Dhanabalan and Padmashree Anandhan are Research Assistants at the National Institute of Advanced Studies. Angkuran Dey and Meghna Manoj are Postgraduate scholars at the Center for South Asian Studies at Pondicherry University.
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