I read “American Prometheus”, by Kai Bird and Martin J. Sherwin, which is a biography of Robert Oppenheimer, the father of the atomic bomb.
This exceptionally written book provides insight into Oppenheimer’s life and the background to the conception, design and testing of the bomb in the desert southeast of Socorro. While this is very interesting, I find the post-war period even more fascinating where Oppenheimer tries to put the genie back in the bottle by pressuring the United States to engage the Soviet Union in discussions aimed at limiting the production of nuclear weapons, a stance that ultimately led to the cancellation of his high-level security clearance.
Oppenheimer fully realized that the escalation in the production of weapons of mass destruction was a threat not only to the United States, but to humanity itself worldwide. The real possibility of a madman or a rogue country using them to wage war could destroy the world. Here we are, 70 years later, and we see that Oppenheimer was a sage. Russia invaded Ukraine and put its nuclear weapons program on high alert, threatening the world not to interfere with its aggression. Thank goodness no nuclear bombs were used in this war, but Russia finds that it is waging a war on two fronts – an economic and public relations war waged by most of the world against it.
Russian assets have been frozen by countries around the world. Russian oligarchs, many of whom have made their fortunes clandestinely, are waking up to find their luxury apartments in Miami and their yachts in France seized as sanctions for Russia’s attack on Ukraine. The participation of Russian athletes and teams in sporting events has been banned, and international and other sporting events in Russia have been moved or canceled. President Biden has banned imports of Russian oil into the United States. Even cats of the Russian breed have been banned from competition outside of Russia.
The United States trades very little with Russia, having exported $6.38 billion to that country and imported $29.69 billion in 2021. The most popular goods the United States exports to Russia are aircraft , machinery, automobiles and medical products. Major US imports from Russia include fuels, precious metals, rare minerals, fertilizers and chemicals. Total trade with Russia is miniscule, considering that in 2021, total global imports from the United States were $1.8 trillion and exports $1.1 trillion.
The stakes are higher for the European Union, which exported €89 billion (4.1% of total exports) to Russia and imported €158 billion (7.5% of total imports) in 2021. About 62% of EU imports from Russia were in the energy sector, mainly oil. Russia is basically one big gas station. It doesn’t make a lot of products that the world wants to buy.
Restricting trade will harm the Russian economy in the future. However, restricting the ability of the Russian government, banks, businesses and citizens to access foreign bank account assets will be even more painful. The ruble collapsed during the implementation of international sanctions against Russia. Its economy, which was anemic before the invasion, will suffer even more suffering, especially in the long term. It is essential to restrict the economic options available to Russia. The sanctions imposed on Russia are the most ever imposed on a country after the Second World War. This speaks to near-universal horror at Russia’s behavior.
It is doubtful that Russian President Vladimir Putin had any idea of the financial harm that would befall his country after invading Ukraine. He probably thought he would get a little slap on the wrist, like he did when he invaded and annexed the Ukrainian region of Crimea in 2014. However, this time the Ukrainian situation is different. Unlike the invasion of Crimea, this time the Russian people will suffer. The bank rush is already underway as people line up to withdraw cash and spend it before it loses even more value or becomes inaccessible. Russia’s industrial base will experience delays and closures as the United States, Japan and other high-tech producers restrict the sale of semiconductors and other high-tech equipment to Russian companies.
Because of his miscalculation of the world’s support for Ukraine, Putin now finds himself between a rock and a hard place. He can’t easily pull himself out of Ukraine with his tail between his legs. This humiliation could most likely lead to his deposition and a different direction in terms of Russian leadership. However, with the strict sanctions gradually tightening around his neck, how long will Russian citizens endure the position he has placed them in?
Experts say Russia’s invasion of Ukraine represents a new direction in the world, and possibly a new world order, that reestablishes a new Cold War in which Russia exercises absolute control over its neighbors. Regardless of the end of the war that Russia has started, I believe that a new world order has been established, in which Russia is firmly established as an outcast, with whom only a certain number of countries will trade and do business. business in the future.
Jerry Pacheco is the executive director of the International Business Accelerator, a nonprofit business counseling program of the New Mexico Small Business Development Centers Network. He can be reached at 575-589-2200 or [email protected]