Russia, in its various political and economical battles around the world, has dropped a figurative, economical bomb. Adding to Western-Russian tensions, Russian officials have officially banned imports of some Western agriculture products, a multibillion dollar blow to Western nations. Willing to risk escalated food prices and barren supermarket shelves, Russia is showing that they will not tolerate nations who are against its support of the pro-Russian insurgency conflicts in Ukraine.
This measure has come in response to sanctions issued over the eastern Ukrainian conflict, where Western nations accused Russia of sending weapons to rebels and organizing invasive troops along the Russia-Ukraine border. In these sanctions, Western nations cut financing for Russia’s banks, restricted technology exports, halted defense purchases, and froze Russian overseas bank accounts. Yet, Prime Minister Dmitry Medvedev hopes to teach the U.S. and the 28 nations of the E.U. a lesson for these sanctions, saying in a statement that they were “dead-end.”
A U.S. official in the Treasury Department, David Cohen asserted in conference calls with various reporters that these agriculture bans are “insignificant as an impact on the U.S. economy.” According to the U.S. Agriculture Department, the U.S. exports of food products to Russia was about $1.3 billion.
Yet is this boycott really a punishment or effective retaliation against Western nations or is this measure really only hurting Russian citizens? The head of the Economic Expert Group told the Washington Post that this ban will likely hurt Russian citizens, as they depended on Western imports for much of their food consumption. He quotes: “It will be quite sensitive. Not only rich people will feel it, but literally every family will be affected. Alternatives to imported foods will be more costly, and anyway, I believe they will be insufficient, and our supplies will diminish. And, hence, prices will go up.”
Russian Agriculture Minister Nikolai Fyodorov, however, said in the Washington Post that food shortages are not expected and there are plans to upgrade Russian agriculture and domestic products, as well as increasing imports of meat goods from Argentina and dairy from Turkey. The banned countries supplied only about 10% of their food.
Not only is Medvedev banning imports of Western food products, but he threatened to further ban U.S. and European airlines from flying over Russia. This measure could result in not only longer flights for passengers en route to Asia, but could spike up prices.
Photo Credit: via flickr/Charles Smith
