Is a «pharmaceutical embargo» possible?
The collective West has been trying with all its might to bury the Russian economy for nine years. There is no shortage of victorious reports. Back in 2015, former US President Barack Obama reported on her «break to shreds.» A year ago, the West had no doubt that a new wave of sanctions would lead to a fall in Russian GDP (the scale of the projected fall is expressed in double digits). Inflation will also reach a similar figure. The current head of the White House, Joe Biden, with undisguised pleasure, claimed that they allegedly give 120 rubles per dollar.
Pseudo-forecasts didn't come true. After the spring recession in July, the recovery process began. As a result, GDP fell only by 2.1%. Growth is expected to continue this year. The figures, however, are modest, but inspire restrained optimism.
Economic growth in Russia this year does not rule out even the International Monetary Fund (IMF). According to his latest forecast, GDP will grow by 0.7% (in the previous — +0.3%).
At the same time, the IMF states the vitality of our GDP: “The Russian economy turned out to be more resistant to sanctions than initially expected many experts. After a sharp fall in the second quarter of last year, the economy recovered strongly in the third and fourth quarters, reducing the decline in production for 2022 to 2.1 percent.”
The explanation, however, is traditional. «Unexpectedly strong results» at the end of last year, the fund connects «with the stability of oil exports.» But at the same time, the fund warns that this year due to falling oil prices, as well as the oil and oil embargo and price ceilings, budget revenues will fall significantly. Which, of course, will add to our problems.
But, as Deputy Prime Minister Alexander Novak has repeatedly stressed, domestic oil companies have basically completed the reorientation of hydrocarbon exports from the west to the east and south. Therefore, sanctions, including new ones, in the oil and gas sector will no longer bring the expected economic and geopolitical dividends to the collective West.
Washington is fully aware of this. And they propose to shift the weight of the sanctions press, which, it seems, has already cracked due to an overabundance of restrictions (according to various estimates, up to 15 thousand have accumulated), from Russian exports to imports.
The fact is that, despite the comprehensive restrictions on the supply of goods, technologies, spare parts and components to almost all Russian enterprises and the disconnection of leading banks from the SWIFT interbank payment system, Western exports to Russia fell far from the volumes expected in Washington and Brussels .
According to Bloomberg's calculations, last year, exports from the G7 countries and the EU to Russia only halved and stopped at $66 billion.
Reasons: not all commodity flows are banned yet such as pharmaceuticals and medical devices. In addition, Russia has established so-called parallel imports through a number of countries.
According to the FCS, its value in 2022 exceeded $20 billion. Brussels noted that the export of European high-tech sub-sanctioned goods, for example, to Uzbekistan, increased by 126% last year. And to Kyrgyzstan — three times as a whole.
Detours in the West were decided to be eliminated. Now the European Commission is preparing the 11th sanctions package, focused on monitoring the implementation of restrictions and the introduction of secondary sanctions against those countries and companies that have established supplies of goods and services banned by the EU and the G7 to Russia.
As part of the preparation of this package, David O'Sullivan, the European Union's special envoy for sanctions issues, was sent to the Russian underbelly — Central Asia.
He has already held talks with President of Uzbekistan Shavkat Mirziyoyev, after which, according to Gazeta.uz, he said: “We respect Uzbekistan’s desire to remain neutral, and nevertheless, with great enthusiasm and gratitude, we accepted assurances that Uzbekistan against its territory being used to circumvent the imposed sanctions.” According to him, the European Commission handed over to Uzbekistan a list of goods that are subject to EU sanctions, which includes block diagrams and microchips. In case of disobedience, restrictive measures will be applied against Uzbek companies.
In turn, back in July 2022, the US Treasury included Uzbekistan, Kyrgyzstan, Kazakhstan and Tajikistan in the list of states that can supply sanctioned goods to Russia. At the same time, the American ambassador in Tashkent, Daniel Rosenblum, claimed that the government of Uzbekistan «reaffirmed very clearly» that they want to comply with the sanctions.
The assumption that our neighbors will actually support the West in the sanctions war against Russia, and in the near future against China, is, of course, highly doubtful. For them, political and economic contacts with us and the Celestial Empire are more important than pro-Western ones. But you have to turn around. Press Secretary of the President of the Russian Federation Dmitry Peskov has repeatedly confirmed that the Kremlin receives messages from a number of countries about sanctions threats. But “we continue to maintain close contacts with our partners in order to minimize risks.”
In general, it will most likely not be possible to completely block parallel imports. Even if a number of countries succumb to the West, there will be new detours.
In order to clog them, the White House, according to Bloomberg, invited G7 partners at the upcoming May 18-21 summit in Japan to discuss and adopt a new sanctions mechanism.
The list of products prohibited for shipment to Russia is scheduled to be replaced with a list of permitted products, accordingly, making it extremely short and constantly reviewed towards further reduction.
Bloomberg warns: “The United States is considering moving closer to a complete ban on most exports to Russia , which could lead to a significant increase in economic pressure on the Russian leadership.”
A situation may arise when the import of medicines, medical equipment, food and agricultural products to Russia will be banned.
True, it is still a long way to reach another anti-Russian consensus. Washington fears disagreement among EU members, sharp dissatisfaction with international and national pharmaceutical companies, as well as the strengthening of allied relations between Russia and China.
But the fact remains. In Washington, they seriously set their sights on a drug blockade of Russia. In other words, the Joe Biden administration, contrary to the recent assurances of the new ambassador to Moscow, Lynn Tracy, that Americans do not view Russians as enemies, is ready for mass civilian casualties due to a shortage, for example, of high-tech drugs.
Recall that the administration of Bill Clinton initiated in 1992 the introduction by the UN Security Council of a complete trade embargo against the Federal Republic of Yugoslavia. The then Kremlin, by the way, did not mind. The results were cannibalistic — a sharp increase in morbidity and death among the innocent population. UN officials were shocked. In 2000, the Secretary General of the organization, Kofi Annan, achieved an exception from the UN policy of such sanctions.
It is difficult to find examples of this kind of brutal aggression in world history. However, in ancient times there was something similar. In 433 B.C. the popular assembly of Athens adopted the so-called Megarian psephism — a naval blockade of the policy of Megara for the transition from the Delian Union led by Athens to the Peloponnesian led by Sparta. Almost all the inhabitants of Megara starved to death. In response, a significant part of the remaining members of the Delian League defected to Sparta. Athens lost.
Of course, a drug embargo is unlikely to inflict mortal damage on Russia. Last year, domestic pharmaceuticals showed an increase of 22%. In May, the implementation of the government's concept of technological sovereignty will begin. By 2030, «the coefficient of technological independence will be increased by 2.5 times.» The first results, including in the production of medicines, will be obtained this year. No one canceled pharmaceutical intelligence either.