BALTIMORE, Maryland April 16, 2014 - Russian Strong Man Vladimir Putin might seem oblivious to sanctions imposed by western nations, including the United States, but the cold hard facts coming out of Moscow show that his efforts to intimidate and control - if not actually overrun - Russia's western neighbor, Ukraine, are having a profoundly negative effect on Russia's economy. Prior to the invasion of Crimea by the Russian Army and Navy in early March of this year, economic forecasters inside and outside of Russia had predicted that the sprawling nation's Gross Domestic Product rate would grow by 2.5%.
But this week, Economy Minister Alexei Ulyukayev told parliament that growth was just 0.8 percent in the first quarter. This is a stunning fall back from economic predictions.
Ulyukayev made absolutely no effort to hide the reasons for the failure. The Economic expert attributed it to "the acute international situation of the past two months" as well as "serious capital flight." The last reference is to the wholesale withdrawl of money in the Russian economy by western investers. The first is a reflection of the pessimism gripping Russian businee because of the Ukrainian invasion. They all are fearful of continued and even harsher economic sanctions and continued capital witndrawl.
Russia's economy was not in the best of shapes to begin with. It has been buoyed by increased exports of energy products such as oil and natural gas. But these exports are directly threatened by Russian military operations in Ukraine, because Ukraine is criss-crossed by pipelines running from Russia to Western Europe.
No comments:
Post a Comment