UPD: The livestream is over. The video of the discussion is available via the same link. Stay tuned!

🎥 LIVE: at 11:00 Moscow Time (GMT+3), we are starting a discussion dedicated to the fate of the property of Russians abroad, titled “Confiscation of Russian Assets: Limits of Aggravation.”

https://vk.com/video-214192832_456239120

#EconomicStatecraft #sanctions

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⛔️ Confiscation of Russian Assets: Politics vs. Law

On September 14, the Valdai Club hosted an expert discussion, titled “Confiscation of Russian Assets: Limits of Aggravation”, dedicated to the fate of the property of Russians abroad. 

💬 Discussion moderator Ivan Timofeev noted that the confiscation of frozen Russian assets is now being actively discussed in the West. There is no mass practice of this kind yet, but appropriate legal mechanisms are gradually being created and these trends are also noticeable at the political level.

💬 Dmitry Timofeev, Director of the Department for Control of External Restrictions of the Ministry of Finance of the Russian Federation, noted that the West did not dare to attempt to sharply isolate Russia, as had been expected after the start of the special military operation. Russia is too important for the world markets. A scenario where Russia would gradually be isolated is also unlikely: the problem of negative effects on the Western countries’ own economies remains and cannot be overcome by any political statements.

💬 Anastasia Likhacheva, Dean of the Faculty of World Economy and International Politics at the National Research University Higher School of Economics, emphasised that there are still few real cases of confiscation and they are de facto marginal. “Apparently, a solution how to confiscate without breaking the entire structure of private property as an institution has not been found,” she said. In her opinion, the system will most likely continue to operate in the same spirit, mainly focusing on physical rather than financial assets. She emphasised that it is not only about institutions and the importance of Russia, but also about the fact that it is obvious to everyone: if confiscations affect Russia, China will be next. And in China’s case the scale of investment is much larger, and the retaliatory actions would be much more difficult to calculate.

💬 “Russia’s role in the global energy sector is too significant to throw it away with sanctions regimes and confiscations,” said Konstantin Simonov, Director General of the National Energy Security Fund, professor at the Financial University under the Government of the Russian Federation. He noted that sanctions undermine the institution of private property and, accordingly, trust of the Global South in Western institutions and rules. Business, especially businesses with long investment cycles, cannot work like that, so it is probably waiting until they “start to push off from the bottom,” but politicians force them to “punch through the bottom” every time, the analyst admitted, noting that the “creativity” of regulators is likely to grow.

💬 Sergey Glandin, lawyer, partner of BGP Litigation commented on the situation around the European Commission’s clarifications regarding the import of personal belongings and vehicles into the EU by Russian citizens. According to him, what is happening shows the level of incompetence among EU authorities, who are entangled in their own anti-Russian policies and rhetoric. EU sanctions legislation (especially the eighth package of sanctions) is aimed at income from business activities, and attempts to apply it to confiscate property of individuals not intended for sale clearly contradict its spirit.

https://valdaiclub.com/events/posts/articles/confiscation-of-russian-assets-politics-vs-law/

#EconomicStatecraft #sanctions

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🇧🇷🇷🇺🇮🇳🇨🇳🇿🇦 The XV BRICS Summit in Johannesburg held in August of this year sparked a wide range of expectations regarding its growing weight in the international system.

The Summit’s agenda foresaw two prominent issues to address.

🔹 On one hand, particularly due to movements in favour of using national currencies in trade and financial exchanges among group members and other nations of the Global South, the creation of a common currency to replace the U. S. dollar as the dominant currency appeared as key issues to be addressed.

🔹 On the other hand, the expansion of the bloc to a broader platform, taking into account the numerous requests for entry from countries in the Global South.

The geographical balance of the new additions to BRICS clearly illustrates this intention. However, just like the original group and the currently expanded BRICS+, they present heterogeneities and asymmetries that will likely pose challenges in the future for consensus-building, Andrés Serbin writes.

https://valdaiclub.com/a/highlights/brics-political-and-geopolitical-challenges-a-view/

#EconomicStatecraft #BRICS #BRICS2023 #GlobalSouth #LatinAmerica #Argentina

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🗺️ BRICS no longer exists: the time of BRICS+ has come.

From 2024 onwards, BRICS+ will account for 44.4% of the world population and for 37.3% of the world’s GDP, with its overall natural endowment capable of leading, as anticipated, to a world-challenging super-OPEC:

📍Home to 79% of the world’s aluminium output
📍77% of palladium production
📍75% of the world’s manganese
📍50% of its graphite
📍Approximately 50% of the world’s gas reserves
📍44.3% of the world’s oil reserves and 41% of oil production
📍More than 50% of global food production
📍38.8% of total global industrial production
📍Over 30% of the world’s nickel reserves
📍Four-fifths of all rare earth reserves
📍One-fifth of global lithium production
📍One-tenth of the world’s copper

Common energy considerations and long-term geo-economic goals (de-dollarisation) are the main driving reasons for the BRICS’ existence and its first enlargement, but (much) more is needed if the aspiring G7 rival hopes to win the battle for the de-Westernisation of the world.

To make this informal forum into a structured reality, one capable of withstanding bumps and games, a radical rethinking of its purposes and its current skeleton is needed, writes Emanuel Pietrobon.

https://valdaiclub.com/a/highlights/the-case-for-a-brics-academy/

#EconomicStatecraft #BRICS #BRICS2023

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🗽⛔️ The US Treasury has introduced another series of financial blocking sanctions against Russian citizens and legal entities.

The purpose of such sanctions is to isolate the Russian economy from American-centric global finance, to block the possibility of normal foreign economic activity, inflict maximum damage, and force it to make political concessions on the Ukrainian issue and other security issues.

As part of a new round of US sanctions, more than a hundred Russian companies have been blocked. Their distribution by sector indicates a continued focus on defence industry enterprises and the electronics industry.

The introduction of a large new package of restrictions can hardly be called a new phenomenon. Over the past year and a half, they have become routine. However, the latest wave of sanctions is notable for its emphasis on certain sectors of the Russian economy, as well as the practice of applying secondary sanctions against companies in third countries involved in circumventing American restrictions.

Sanctions have caused damage and continue to distort normal market relations, writes Valdai Club Programme Director Ivan Timofeev. But business continues to find alternative ways. The regime of Western sanctions against Russia is likely to continue for decades. Therefore, investing in diversification is in many ways a non-alternative strategy.

https://valdaiclub.com/a/highlights/already-routine-new-us-sanctions-against-russia/

#EconomicStatecraft #sanctions

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🇺🇸🇨🇳 The deterioration of US-China relations has long been a generally recognised trend. The high-tech sector has become a key front for containing China. 

The general line of Washington is to limit the access of Chinese companies to the technologies of the United States and its allies. Such technologies can solve dual-use problems and lead to the subsequent modernisation of the PRC in both the military and civilian sectors.

Another indicator of China’s containment in the field of high technologies is President Biden’s new Executive Order “On Addressing United States Investments in Certain National Security Technologies and Products in Countries of Concern.” The new Executive Order introduces a National Emergency due to the fact that individual countries use access to US civilian technology to develop their military-industrial complex. In the annex to the Order, China is named as such a country, as well as the special administrative regions of Hong Kong and Macau. 

The new legal mechanism gives the Administration wide room to limit Chinese companies’ access to US high-tech firms. The flexibility of the mechanism will be determined by the ability to revise the categories of transactions, technologies and foreign entities that are subject to restrictions. At the same time, the mechanism is likely to provide more opportunities, in comparison with the norms that already exist.

The intensity of US sanctions against China is incomparable to the volume of US restrictions on Russia. This does not mean that sooner or later there will not be a landslide fall in relations. The creeping nature of the escalation gives Beijing time to prepare for the worst-case scenario, writes Valdai Club Programme Director Ivan Timofeev.

https://valdaiclub.com/a/highlights/us-china-creeping-escalation/

#EconomicStatecraft #sanctions #China #UnitedStates

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⚔️ The widespread use of hybrid war tools in modern international relations brings us back to the classic maxim of Thomas Hobbes that relations between states are doomed to anarchy.

The state of peace is temporary, and at any moment can turn into a state of war.

Modern realities suggest that the absence of armed struggle can be combined with a permanent hybrid confrontation.

That is, anarchy goes much further and deeper than the classical political theorists observed. 

The key practical problem of hybrid warfare is that it is extremely difficult to control via conventional diplomatic means. You can stop the armed struggle by concluding a truce or a peace agreement. But how can two belligerent parties agree on the end of a hybrid war? 

Hybrid warfare is easy to start and even easier to accelerate its momentum. Stopping it is extremely difficult, if not impossible. Moreover, a smouldering and self-sustaining hybrid war may well devalue political agreements and diplomatic efforts.

The termination of hybrid wars and their transformation into a hybrid peace is the fundamental problem of modern diplomacy, writes Valdai Club Programme Director Ivan Timofeev.

https://valdaiclub.com/a/highlights/hybrid-war-and-hybrid-peace/

#EconomicStatecraft #HybridWar

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🇪🇺 The economic consequences of sanctions for Europe are already far-reaching.

🔹 EU countries are not able to compensate for the economic losses caused by sanctions against the Russian Federation.

🔹 First of all, this concerns the energy and raw materials sectors. The huge increase in prices for these resources is causing serious damage to the industry. European industry is increasingly falling behind global competition.

🔹 With the introduction of sanctions against Russia, the process of deindustrialisation of Europe is accelerating.

🔹 This combination of inflation and recession is leading to an economic crisis in Europe that will continue for many years.

This will result in a permanent loss of wealth for Western societies, writes Ulrike Reisner, freelance political analyst, lecturer & journalist, based in Vienna, Austria, PICREADI expert.

https://valdaiclub.com/a/highlights/losses-due-to-sanctions-grow-in-the-west/

#EconomicStatecraft #EU #sanctions

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🇮🇱 It can be expected that the Israeli economy, in the event of a protracted confrontation with Hamas, will face difficulties that were generally characteristic earlier, during the period of the Al-Aqsa intifada.

By the end of the second quarter of 2023, protest activity and the delayed consequences of the pandemic had revealed a number of problems that could be layered on top of the typical difficulties for the Israeli economy during the escalation periods in the Middle East conflict.

However, there are also what could be called “anchors of stability”, that enable the state to cope with current challenges, albeit not without losses, writes Elizaveta Yakimova.

https://valdaiclub.com/a/highlights/the-economics-of-conflict-the-impact-of-the-war/

#EconomicStatecraft #Israel #economy

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🌏🌎 Events in the Middle East have pushed the fighting in Ukraine to the background of the media agenda.

Meanwhile, the development of the situation there hardly speaks in favour of the strength of the post-bipolar status quo. A sign of such strength could be Russia's return to the status of a defeated power and the final consolidation of the results of the collapse of the Soviet Union. However, the facts tell a different story.

The widely advertised and expensively purchased offensive of the Ukrainian army has not met its objectives. The Russian army is slowly but inevitably increasing pressure at the front. Economic sanctions did not lead to the collapse of the Russian economy. Despite extensive damage, it quickly adapts to new conditions. The West also failed to isolate Russia politically.

For the Western partners of the Ukrainian authorities, the conflict is becoming more and more expensive. Its price may increase in the future, taking into account the knocking out of Soviet-made equipment from the armed forces of Ukraine and the growing need for new supplies. Ukraine's economy also requires external injections amid military losses, demographic failure and persistent governance problems, including corruption.

If the Ukrainian conflict was the only problem for the United States in controlling the post-bipolar order, then there might be fewer risks for it.

The bottom line is that the tactical gains from the conflict in Ukraine turn into a major diplomatic defeat for Washington in the form of an increase in the number of influential opponents where there were all the conditions to avoid this. For the EU, the strategic costs of the conflict, despite its tactical advantages, have turned out to be even greater.

It cannot be ruled out that in such conditions the United States and its allies will reconsider their ideas about defeating Russia in the Ukrainian conflict at any cost. The big question is how Moscow will reconsider its approache, writes Ivan Timofeev, Programme Director of the Valdai Discussion Club.

https://valdaiclub.com/a/highlights/from-the-middle-east-to-ukraine-a-milestone/

#EconomicStatecraft #conflicts #WorldOrder

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