Since Russia’s invasion of Ukraine, Western countries have pummeled the Russian market and its richest oligarchs with sanctions after sanctions. Despite this, preliminary data from the World Bank shows Russia’s GDP only decreased by 3.5% last year.
Petro Poroshenko, Ukrainian businessman and politician, who served as the fifth president of Ukraine from 2014 to 2019, believes more can be done. Here, he reveals his seven point plan to cripple Putin and the Russian economy:
-OpEd-
KYIV — Ukraine can win a war it did not start and force Russia, the aggressor, to bear international responsibility.
[shortcode-Subscribe-to-Ukraine-daily-box]
This will be our joint victory with all the democratic countries of the world.
Fierce battles continue, like those in Bakhmut, and Ukrainian heroes are dying. Civilians, too, continue to perish – from Bucha in March last year, to Dnipro in January.
Russia has begun a new offensive, preparing to avenge the failures of its military campaign which in just under a year has not achieved any (!) of the goals Russia laid out prior to the invasion.
Late last month, the Russian dictator made a number of statements regarding the Kremlin’s plans.
His speech revealed several key points: the war would be long and exhausting; the human and financial costs were unimportant; the next wave of mobilization would likely take place soon, though it would be done surreptitiously; there was more than enough money for a long war.
Western sanctions on Russia
Russia’s GDP, according to preliminary data from the World Bank, decreased last year by only 3.5%. It is obvious that in the long term, sanctions will have a negative impact on the Russian economy, deprive it of its chances of modernization, and plunge it into a long recession.
Sanctions have planted a ticking time bomb under Russia, gradually turning it into an Orthodox Iran.
But we need a sharp explosive effect, the shock of which, if it doesn’t destroy Putin, will at least deprive him of the resources to wage a long war.
Remember that while the world is waiting for the cumulative effect of their sanctions, the Russian death machine continues its work in Ukraine, destroying Ukrainians.
Sanctions are not a goal, but only a means. The goal is victory in the war and just peace in its place.
The energy question
Russia is hardly mourning the loss of its European gas market – instead it has turned to China to continue earning astronomical sums from its oil and gas exports.
In the first months of the war, oil and gas prices skyrocketed. Moscow earned 0 billion (!!!) in one year. With that size of hoard, Russia can fight for as long as it wants, and not only with Ukraine…
Russian gold is blood gold, Russian diamonds are blood diamonds.
Therefore, the task of the democratic world is to significantly reduce that income this year.
Let’s not forget that it was the drop in oil prices that collapsed the Soviet Union. And before that, it forced Gorbachev to withdraw Soviet troops from Afghanistan.
It was only in December that the most powerful sanctions came into effect: price restrictions on Russian oil and an embargo on its supply by sea.
The anniversary factor
The tenth package of EU sanctions should be ready by the anniversary of the Russian invasion. As announced, it will “mainly focus on closing loopholes, ending sanctions evasion and introducing strong consequences for those who do circumvent European Union sanctions”.
A valid point, but a more ambitious approach is needed.
We insist on more decisive sanctions, which together with an increase in the supply of weapons, will force Putin to peace before the year is out. Here are the seven steps the world must follow.
1. We expect the G7 to lower the price cap for Russian oil by March. Up until now, the cap for Russian oil has been far too high – much more than the standard market price.
2. A ban on trans-shipment of Russian oil or the production of “oil cocktails” [oil blends that started appearing on the market after the war began, since becoming widespread as part of commodity laundering]. This should be combined with a punishment for concealing the oil’s country of origin.
3. Backed by international law, block the entry of Russian sanctioned export goods into the Suez Canal, including energy cargoes that are not covered by insurance companies known for legitimate compliance with the sanctions regime.
Simply do not accept policies from unreliable insurance companies that are under Russian influence or Russian partners that do not comply with the sanctions regime. Violators should be stopped by the naval forces of NATO member countries.
As a result, Russians will be forced to take the far longer route transporting oil to South Asia via Vasco da Gama than directly through Suez.
Russian gas
4. Russian trade in liquefied natural gas should be strictly monitored.
We are grateful that equipment and technology suppliers – France’s Total, Germany’s Linde and Siemens, Japan’s Mitsui – have already ceased cooperation with the Arctic LNG2 project, as well as South Korea’s Daewoo Heavy, which refused a tempting order of 15 ice-class tankers.
Let’s not forget that Russia itself is blackmailing the whole world with nuclear weapons.
5. It is necessary to finally shut down the Russian Druzhba oil refinery, which supplies the one of the world’s longest oil pipelines in the world. We need help to reach an understanding with the Hungarians, Czechs and Slovaks. It is absurd that while the Russians destroy Ukrainian infrastructure, we are obliged to pump some 12 million tons of Russian oil!
By agreement with partners – I have no doubt – Ukraine will stop both “Druzhba” and our part of the gas transportation system (GTS).
The only reason we continue to pump Russian oil and gas is because we take into account the position of our partners who still consume Russian energy.
Nuclear economics
6. Rosatom, the Russian state nuclear power company, as a complicit in the crimes of the Russian military at the Chernobyl and Zaporizhzhia nuclear power plants, deserves the strictest sanctions.
We can deprive Russia of almost billion by stripping it of its uranium enrichment services and its ability to construct more nuclear power plants.
Let’s not forget that Russia itself is blackmailing the whole world with nuclear weapons.
7. Currently, about half of the aggressor’s foreign exchange reserves – more than three hundred billion dollars – have been blocked.
More than 0 billion in gold must be guaranteed illiquid. It is not enough to simply ban the purchase of gold from Russia. Any possibility of using it as collateral or other instruments must be blocked, too.
Russian gold is blood gold, Russian diamonds are blood diamonds, especially if we look at the dirty business of the Wagner Group in African countries.
Energy and military goals are inseparable
According to forecasts, real restrictions in the oil and gas sector, if they become fully operational in 2023, will collapse Russian exports from 530 to 300 billion dollars, and the steps we propose will deprive Russia of another 30 billion dollars of export income.
Another task in the coming months will be to prepare a military offensive sufficient enough to liberate Ukraine from the invaders and discourage them from attacking other countries. It’s not just tanks that are required, but ATACMS missiles, modern F16 fighter jets and Apache attack helicopters.
Sanctions and weapons, weapons and sanctions, are what will protect us all against Russian escalation. These alone will ensure our common victory and that long-awaited peace.
