Mikhail Svetlov | News Getty Images | Getty Images Russian President Vladimir Putin accused the US on Wednesday of wanting to maintain a “dictatorship” in global affairs at the expense of Europe and the rest of the world. Putin repeatedly criticized the West during a speech to businessmen gathered in Russia’s far east, saying sanctions imposed on Moscow over its invasion of Ukraine posed a “danger” to the entire world and left Europe worse off. “The pandemic has been replaced by new challenges of a global nature, which are a threat to the whole world, I am talking about the sanctions on the West and the blatantly aggressive efforts of the West to impose their modus vivendi on other countries, far from their sovereignty, in order to bend them to their will,” Putin told delegates at Russia’s Eastern Economic Forum in the port of Vladivostok on Russia’s Pacific coast. “The high level of industrial development in Europe, the standard of living, the social and economic stability — all these are thrown into the fire of sanctions,” he added. “They are being wasted on orders from Washington in the name of the so-called Euro-Atlantic unity. Although in reality, they are basically being sacrificed in the name of maintaining the US dictatorship in world affairs,” Putin said. CNBC has reached out to the White House for a response to Putin’s comments and is awaiting a response. Russia is widely believed to have been caught off guard by the West’s forceful and unified response to its unprovoked invasion of Ukraine, which began in February, with an ever-increasing number of sanctions imposed on the Russian economy and Kremlin-linked personnel and businesses. The EU is trying to phase out energy imports, particularly natural gas, from Russia — a move that comes at a difficult time for the bloc as it grapples with runaway inflation and a cost-of-living crisis. Not surprisingly, Moscow has taken a dim view of the sanctions and has tried to sidestep their damaging economic consequences by turning to its allies in Asia to sell its oil. It has now also halted all gas supplies to Europe via the Nord Stream 1 gas pipeline, saying the sanctions are preventing the pipeline from being repaired and functioning properly, a claim denied by Siemens Energy which supplied and maintained equipment for the conduit. Sergey Guriev, an economics professor at Sciences Po and former chief economist at the European Bank for Reconstruction and Development, told CNBC that Russia is promoting a “false narrative” around the sanctions. “The narrative is wrong and Putin’s economy is hurting when you look at the real numbers. In the second quarter of 2022, GDP was 6% below the first quarter, that’s an amazing speed in the decline of GDP. When you look at the decline in turnover of retail trade, the consumption of goods and services by Russian households, that is [seen] down about 10%. When you look at fiscal affairs, July saw about a deficit of 8% of GDP, and that was with an oil price of about $100 [a barrel].” “Putin is not doing very well, but what he is doing with his gas blackmail in July and August is trying to divide Europe… [try to] make sure the Europeans stop pushing for sanctions.”
“war criminal”
Meanwhile, in Ukraine, the war continues to cause untold civilian misery and death and destruction. The United Nations said this week that between February 24, when the invasion began, and September 4, 13,917 civilian casualties were recorded in Ukraine, with 5,718 killed and 8,199 wounded — although the actual number is likely to be much, much higher given the chaotic nature of recording such data in times of war. Millions of Ukrainians have been displaced from the country during the war, with Russia accused of multiple war crimes and repeatedly targeting civilian infrastructure, which it denies despite overwhelming and mounting evidence. US President Joe Biden has called Putin a “war criminal” but on Tuesday refused to designate Russia a state sponsor of terrorism, a label requested by Ukraine. The EU has said Russia is “rigging” energy supplies to blackmail it for sanctions relief. Russia currently holds a swath of territory in eastern and southern Ukraine, but Kiev forces recently launched a counteroffensive to retake the lost land.
The rotation to the east continues
Russia’s president, who has been largely ostracized by developed Western countries after Russia’s unprovoked invasion of Ukraine, said he believes the current situation has been accelerated by the US’s “sliding dominance” in global politics and economics. He said the West was reluctant to recognize “irreversible tectonic shifts” in world politics and international relations, particularly in the east. Describing the Asia-Pacific region as a “magnet” for human resources, capital and productive capacity, Putin said that “nevertheless, Western countries are trying to preserve the old world order that only benefited them.” On Tuesday, Putin announced that China will pay for gas from Russian state gas company Gazprom in both their currencies, the ruble and the Chinese yuan, signaling a further effort by both countries to sideline the dollar. “Western countries have undermined the main pillars of the world economic system built over centuries,” Putin said. “We have seen the loss of confidence in the dollar and the euro and the pound as currencies in which you can transact, hold deposits or assets, and that is why, step by step, we are moving away from the use of these unreliable, compromised currencies,” he said. Russia itself faces a tough winter with the central bank predicting a deeper contraction in the third quarter. Gross domestic product will contract 7 percent in the third quarter after contracting 4.3 percent in the second quarter, Reuters reported last month citing a central bank report. The bank predicted the economy would start to recover in the second half of 2023. Inflation stood at 15.1% in July, above the EU rate of 9.8% in the same month. Speaking to businessmen on Wednesday, Putin said Russia would run a budget surplus this year and that GDP would fall “by about 2 percent or a little more.”
