Spoiler: The export sanctions are working even though the Kremlin says the opposite. The fact that increasing oil prices have increased russia’s current account is not a sign of success. russia’s imports have decreased drastically due to export sanctions on products that russia needs to kill civilian Ukrainians. The plunging imports are also due to non-sanctioning countries’ hesitation to export to russia because of fear of being on the wrong side of history.
But more export sanctions are necessary. Most export sanctions refer to high-technology products that can be used to kill Ukrainians. That is not enough. Not only chips and electronic components are used in the weapons and weapons systems that putin uses to kill Ukrainians. Also plastics, rubber, metals, textiles and other types of materials are needed.
Including also such products in the export sanctions will make it even more difficult for putin to fight his genocidal war. And secondary sanctions should be imposed to prevent other countries to use sanctioned countries’ products in exports
Imposing secondary sanctions are important because weapons are made by different industries located all over the world. The production in global value chains makes putin’s industries more sensitive for sanctions. By excluding products from global value chains reaching russia, russian industries’ abilities to produce more weapons will be severely limited.
Spoiler: Swedish industries recovered from the Corona crisis. In December 2022, two thirds of the industries had higher levels of production than 12 months earlier. At this point in time, the increase in energy prices had lasted for a few months. The impact on firms and industries varies depending on energy intensity and duration of contracts between firms and their energy suppliers.
The Diffusion Index contains data for all industries until December 2021. There is data for thirty-four industries until February 2022. The developments of those industries suggest that the Index continues to grow until February.
The psychopath in Kremlin’s war against Ukraine is not yet visible in the data. How this will affect Swedish industries remain to be seen. It has resulted in disrupted supply chains, and higher energy costs increasing the prices of other inputs and the general inflation rate. Whether this supply chock will translate into a recession remains to be seen.
Spoiler: Today, 3rd of May, is World Press Freedom Day 2022. Press freedom is under duress in many countries and journalists are being harassed, jailed and killed by authoritarian regimes.It’s not getting better. It’s getting worse.
And Russia is among the worst places to be a journalist. From the web site of Reporters Without Borders:
“The situation is classified as “very bad” in a record number of 28 countries in this year’s Index, while 12 countries, including Belarus (153rd) and Russia (155th), are on the Index’s red list (indicating “very bad” press freedom situations) on the map. The world’s 10 worst countries for press freedom include Myanmar (176th), where the February 2021 coup d’état set press freedom back by 10 years, as well as China, Turkmenistan (177th), Iran (178th), Eritrea (179th) and North Korea (180th).”
Following Putin’s war against Ukraine, he also extends his war against the free press in Ukraine. His orcs are abducting, arresting, murdering and torturing journalists inside Ukraine. The situation for the media in Russia is approaching the situation in North Korea.
Spoiler: More and more countries sanction exports to Russia which creates problems for the Russian military industry complex. Russia must therefore to a higher extent than before rely on countries that is not on the Kremlin’s list of “unfriendly countries”. China is not on that list. Putin wants to replace imports from sanctioning countries by imports from China.
However, parts of the Chinese value-added shares of Russian final demand for Computers & Electronics and Machinery origin in countries that sanction Russia. Imposing secondary sanctions that prevent China from using parts and components from sanctioning countries will make it more difficult for Putin to feed his death machine.
This will not put a halt to Chinese exports to Russia. China can keep exporting products without any parts and components from sanctioning countries or produce them themselves. However, that is not easy for China in the short run. Chinese exports without parts and components from sanctioning countries appear to be less advanced and poor substitutes for the products from sanctioning countries.