There's little doubt that the global business community gobbled up most of the half-hour speech Vladimir Putin made last week. For months front-liners, banks, financial institutions and stock-markets have been preparing for the eventuality Mr. Putin's swift actions following on from the speech. The script was prepared, choreographed and teasingly tested. Big business had by design or choice scrambled to disentangle global integration so as to accommodate the impact and repercussions of the list of sanctions outlined to be imposed for Russian adventurism.
That sanctions squeeze but don't cause to bleed has been well-documented. More so when these are not globally coordinated. Bits and bobs don't work. The ability for demand and supply theories- in this case willingness of all to accept clampdowns has never happened as is so obviously demonstrated by the abilities of Iran and North Korea to function and emerge stronger. Sanctions that will cut deep won't be forthcoming till matters further escalate. That trump card continues to be held my Mr. Putin. No one has second guessed him yet for all the flaunted spy agencies the world over. In the midst of what may be a mayhem, he continues to leave everyone guessing. Strategically, he has Europe and the United States (US) in 'response' mode.
With the fifth largest reserve of US dollars, carefully built-up rainy day funds and other economic flow tricks up his sleeve, Vladimir Putin has used his substantial experience both intelligence and political to make his moves decisively. That he doesn't need to make too many public statements or explain himself has worked to his benefit. Having watched with probable amusement the trade-tiff between the US and China, he played a master-stroke in being the only leader of note to travel to China symbolically supporting the Winter Olympics. In return he has achieved the country's non-committal support. Russia's economic wheels won't stop; it will at best divert and evolve. That was evident from her long-time ally India and China voicing for 'restraint' rather than 'condemnation'. Mr. Putin probably had been assured as much by Narendra Modi in his last meeting. Businesses don't run on emotion. Theirs' is to serve shareholders and ostensibly the consumer. The bets are hedging as to where Europe will find, beyond the summer, supplies of its energy requirements. With Qatar having plainly said they can't supplement additional demands, it will be Asia that must fill the gap.
Countries such as Bangladesh contracted with the middle-east producers face a double whammy-of prices, sourcing and significantly payback to Russia for its economic and infrastructure development assistance. The requirement of further support from the richer nations was met with at best, lukewarm silence at the recent Munich Security summit. No less than India's Foreign Minister Jayshankar gave out a lecture on the insensibility of spend on mega-projects that he termed as 'unnecessary'. Global battles take few prisoners from friend and foe alike. Fragility of economies over dependent on single source export revenues can no longer be hidden. The combination of rising prices, the spin-off impact and dwindling value earnings suddenly, become very worrying. Sheikh Hasina's recent statement is suggestive of phasing out subsidies on energy is a signal that should reverberate worries across the board.
The new order provoked by Russia before others do, is beginning to expose its fangless. The consumption friendly west including Europe and the US have frame issues to confront. Having exceeded their own designed debt-ceilings means to impose sanctions brings its own pains. The US's strategy of dipping into its reserves of shale oil was always contentious. In these days of heavy debt, giving up more of those reserves will be a heavy weight to bear. The days of self-reliant economies and territorial sovereignty had been on the decline for quite some time. Israel can't survive unless propped up by the US, North Korea can't exist without China and Russia backing it up. How far can the United Kingdom (UK) go by sanctioning the oligarchs that merrily launder their money through it is a test for the stiff British upper-lip. How long Germany can stomach its investment in Nordic Stream 2 is another ingredient into the melting point of questions. One man has the answers. He will tell us on his time, on his terms.
