Friday, June 7, 2019

Washington's Duplicitous Approach to Russia and Crimea and It's Unintended Consequences

In a recent interview with RBC, Russia's Foreign Minister Sergey Lavrov, sets the record straight on Crimea and Washington's imposition of sanctions against Russia after the citizens of Crimea voted overwhelmingly to join Russia.

Let's open by looking at what Mr. Lavrov has to say about the current sanctions environment, the impact that it has had and how the problem of U.S.-led sanctions can be negated:

"...…the sanctions, which have become the hallmark of the US administration, a number of EU countries and other Western states – to which we were forced to respond and will continue to do so in such a way as not to do harm to ourselves – are clearly damaging everyone, including the US companies and companies from the European countries whose governments resort to these sanctions. But, despite the difficulties, companies are working and trying to find opportunities that are not blocked by illegal actions of their governments."

Here, he outlines the key part of the problem:

"If we talk about this more comprehensively, it becomes clear that now that the US dollar is used in a vast share of global economic relations and financial settlements, the majority of non-US companies are forced to make compromises. They are not interested in losing a portion of their businesses overnight. The governments of their respective countries are forced to take this into account and try to negotiate with the Americans in order to create a political framework for resolving the current fleeting issues caused by the US economic aggression – let’s call things by their proper names."

...and here, he outlines how the problem of American-imposed sanctions can be defeated:

"In the long run, the thinking process has already started with regard to how to get rid of the US dollar and create a system that will not be dependent on the whims of a particular US administration, or its behaviour in international economic relations, or turn into a tool of domestic political strife in the United States." (my bold)

If Mr. Lavrov is right, thanks to Washington's indiscriminate use of sanctions against Russia, China and other nations could result in the end of the U.S. dollar hegemony.

Now, let's look at the three reasons why Mr. Lavrov believes that Washington imposed sanctions on Russia back in 2014:

"The main reason behind the sanctions is, first, to punish Russia for its independent foreign policy. As President Putin said more than once, the US ruling class now understands that the 1990s were an anomaly, and the traditions of Russian civilisation, history, self-sufficiency, its multi-ethnic and multi-layered structure prevailed. The genetic code of our nation didn’t go anywhere. Certain US politicians, including those who tied President Trump’s hands, not allowing him to deliver on his campaign promises to normalise and improve relations with Russia, are still unable to accept this fact.

The second reason is unfair competition and an attempt to gain competitive advantages by using sanction pressure methods.

The third, more global, reason is the realisation of the irreversible nature of the processes leading to a polycentric world order, where many more than one or two states have strong influence on the global economy and politics. This realisation is not expressed in the desire to establish new forms of functioning of the world order with many, not just two poles or one pole. It manifests itself in an effort to slow down these processes, part of which is the sanction pressure. After all, sanctions are applied to China as well. If we classify increased tariffs as sanctions, I won’t be able to name a single more or less important country on the planet that is not currently hit by the US sanctions." (my bolds)

For some background, let's look back at what happened in 2014.  On March 16, 2014, the legislature of the Autonomous Republic of Crimea and the local government of the city of Sevastopol held a vote on whether the population of Crimea wanted to join Russia and separate from Ukraine in light of the fact that the Supreme Council of Crimea's claim that the new interim government in Ukraine (after the ousting of Viktor Yanukovych) was illegitimate.  Prior to the vote and while it was taking place, Russia soldiers were present on the peninsula.  A total of 83.1 percent of eligible voters voted in the referendum with an overwhelming 96.77 percent of voters voting in favour of secession from Ukraine and integration of the region into the Russian Federation.  The United States (among others) declared the referendum as illegitimate and illegal under international law and, as a result, President Obama declared sanctions against Russia and Crimea starting on March 6, 2014, more than a week before the referendum took place and the results were known by the world as shown here:

These sanctions were expanded the day after the vote as shown here:

At this link, you can find a list of Washington's Executive Orders and legislation related to the Crimea situation.  The Trump Administration has inherited and enhanced the anti-Russia sanctions environment.  On March 4, 2019, anti-Russia sanctions were extended by President Trump who declared a national emergency pursuant to the International Emergency Economic Powers Act as shown here:

Note that the extension was put in place because of the "actions and policies (of Russia)" that "posed an unusual and extraordinary threat to the national security and foreign policy of the United States".

With that background, let's look at Mr. Lavrov's key comments regarding the Crimean referendum:

"There are sanctions that are motivated and explained by Crimea, but they forget the fact that the vote in Crimea was absolutely free. This is no big secret, but in April 2014, former US Secretary of State John Kerry told me: “Everything is clear. Everything happened as the Crimean people wanted. But hold another referendum just for the sake of appearances.” Why would anyone do that? If everything is clear to you, why make people vote again? I hope John won’t mind I told you this. In his memoirs, he talks about some confidential aspects of our conversations."

Please note that John Kerry's solution was that another referendum should be held "for the sake of appearances".

If, indeed, Mr. Lavrov is not prevaricating, it would appear that the Obama Administration very clearly understood that the people of Crimea wanted to separate from Ukraine and join the Russian Federation and that the results of the March 2014 referendum were valid.  If this is the true narrative, the past five years of Russia-bashing by Washington was built on a foundation of lies to the American people and to the world.  Here are, however, serious repercussions that are a result of this lie; according to Mr. Lavrov, the unintended consequence of poorly executed foreign policy could be the potential end of the U.S. dollar as the world's currency of choice in international trade as nations around the world attempt to minimize the impact of Washington's sanctions.

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