On the economic war between the G7 and Russia



Russia's financial and commercial rapprochement with Asia tends to increase Russian resistance power

“The history of modern Russia begins in the XNUMXth century, after two centuries of Mongol invasion and domination, and turns into a continuous movement of reconquest and defensive expansion… Since then, the Russian political clock has tuned to Europe and its wars, and its economic development was at the service of a military strategy of defensive expansion of increasingly extensive and vulnerable borders” (José Luía Fiori, History, strategy and development).

In response to Russia's military initiative in Ukraine, which began on February 24, 2022, the G7 countries and their allies in the European Union and Southeast Asia launched an economic war against Russia. The use of “economic sanctions”, especially commercial ones, against “enemy” countries, has been a power resource used since time immemorial, especially in war situations. But an attack of this magnitude had never been witnessed, including sanctions and commercial and financial blockades of all kinds, including the freezing and appropriation of Russian assets and reserves invested in currencies and bonds of the countries that commanded this true “atomic” attack on the Russian economy.

This unprecedented economic attack in the history of relations between capitalist societies and economies had two main objectives: the first was to cause an instantaneous suffocation of the Russian economy that would paralyze its ability to continue financing its war on the territory of Ukraine. It would be an indirect way of entering the war, without having to involve your troops or risk suffering military attacks from Russia; and the second, longer-term objective was to permanently cripple the Russian economy, not only to achieve its effectiveness on the territory of Ukraine and Donbass at this time, but to prevent Russia from repeating any further military initiatives by the coming years or decades.

This economic war launched by the G7 and G10 countries on the Russian economy had two basic areas of attack. One is the financial monetary attack, the main instrument to quickly asphyxiate Russia, excluding it from the international financial monetary system, that is, preventing Russia from making even the slightest transnational transfer in any currency, let alone the dollar. Adding to this measure, Western countries established the classic trade boycott, preventing the purchase of Russian exports of all kinds, including energy goods.

The idea was to promote an exclusion of Russia from the international payments system, initially, through the withdrawal of the country from the system Swift created in the 1970s to carry out cross-border financial transactions worldwide, in any currency. This system, located in Brussels, allows the exchange of millions of messages and the carrying out of daily transactions, involving a huge number of banks, financial institutions from all over the world, whose administration is carried out by the Belgian central bank with the support of ten more banks. centers in European countries and the USA.

In this way, it is possible to say that the economic war was promoted by the countries that make up the council of the Swift, namely: United States, Great Britain, Canada, Germany, France, Italy, Netherlands, Sweden, Switzerland, Japan. That is, the economic war was sponsored by the economic hard core of Western capitalism.

beyond the system Swift, the financial system is anchored in another mechanism called Chips, which makes international dollar payments through 43 financial institutions all headquartered in the United States.

After the start of the war on terrorism at the beginning of this century, there was a kind of integration between the Swift and the Chips, since the United States forced the Swift to open up all information to American institutions, which was previously private. In effect, the United States now has access to any and all financial information about any financial transaction in the world, either through the Swift, either through the Chips, which already belongs to its legal domain by which the 43 institutions that are involved. Any disrespect to sanctions imposed by the United States is also punished by American law. They are institutions that have occupied an absolutely central place in the international economy, particularly in this century, with the beginning of the war on terrorism in the bipolar exercise of American power, after the end of the Cold War.

In this way, the United States took complete control of the information, even of the eventual dollars that can be transferred anywhere in the world. For this reason, US sanctions in the international financial system are capable of reaching all actors that carry out transactions in the global economy.

Indeed, the elimination of a country from this system makes it impossible to carry out financial transactions of any kind, that is, there is a kind of paralysis of its international business. Even if these countries try to evade sanctions, given the depth of Swift and Chips, the US Department of Justice is able to identify these attempts in a short period of time. In other words, the integration of these two systems created an absolutely gigantic machine for monitoring all information in the financial world.

This type of war that blocks a country's action in the international economic field, however, has to be qualified. These western countries have already made this type of exclusion, as a weapon of direct war, against North Korea. But, in the case of the Asian country, it had already “self-excluded” from the financial economic system and, therefore, the measures had little impact. In the case of Iran and Venezuela, these actions had a greater impact and deepened the economic crisis in both countries.

As former American President Woodrow Wilson said, at the end of World War I, economic warfare was the best of them because it liquidated the adversary without explicitly killing anyone. But deaths occurred as a result of starvation and the inability to treat disease. If this was noticed in 1918, imagine in 2018 when Donald Trump applied the last sanctions against Iran, in a situation still extremely complicated by the fact that in 1974 the United States signed an agreement with King Faisal of Saudi Arabia, by which all oil transactions are made in dollars, and even today everyone transacts oil in dollars. Therefore, Iran was completely “crippled” by its exclusion from an entire financial system. They couldn't even hire a ship to transport oil.

In the case of these sanctions against Iran, the Iranian currency devalued four times in six months, GDP fell by 7% in one year, oil production fell by 1 million barrels in one year, Iran's oil exports fell by 2,8, 500 million barrels for XNUMX thousand. Despite these very hard impacts on the Iranian economy, the country resisted through other instruments, as did Venezuela.

There is no doubt that Russia's reaction capacity is infinitely superior to Iran, Venezuela and North Korea. Despite the catastrophic predictions about the Russian economy, the effects have been relatively controlled by Vladimir Putin. Although Russian GDP is forecast to fall, inflation is under control and the ruble has appreciated. In addition, Russian exports have grown, including oil, mainly to Asia.

This does not mean that the sanctions did not affect the Russian economy, but that they did not provide a quick choke that could alter the course of the war. Russia has not changed its position, on the contrary, it has increased its involvement in the war.

Thus, the future perspective is that the devastating effects that occurred in Venezuela and Iran should not be replicated for Russia. In this sense, it is essential to understand that the effectiveness of this type of economic warfare depends on the degree of coordination of the “attackers”, but also on the profile of the country being attacked. In this case, European countries and the United States seem not to have correctly calculated Russia's power of resistance, which is not only an energy power, with high reserves of coal, oil, and natural gas, but also a gigantic military power, with the largest atomic arsenal. of the world. In addition to being a powerhouse in strategic minerals, over the last 15 years Russia has become a grain-producing food powerhouse.

Europeans and Americans did not evaluate Russia's resistance capacity, disregarding both its energy, mineral and military potential, as well as its strong economic ties with Asia, mainly with China. It is not by chance that Russia has strengthened its economic relations with Asia for some years now. The Russians, for example, have already managed to set up their own monetary transfer system in partnership with China and India, allowing them to partially “escape” from the dollar and the euro.

Thus, it is clear that, in addition to its greater capacity for resistance, another future perspective is that of a greater detachment of Russia from the European economy. In this sense, the tendency is for a continuous growth of Russia's economic ties with Asia, that is, the war and the European response created a "definitive impulse" from Russia towards Asia, either because of the fear of the replication of economic wars in Asia, or because of the economic damage that a serious crisis in Russia could cause.

Meanwhile, the European economy tends to suffer from its energy dependency on Russia, which should even affect the solidarity economic project of the European Union that has been suspended for a long time. The energy map of the world has definitely changed, that is, Russian oil and gas are increasingly going towards Asia and other countries instead of Europe.

What is clear, therefore, is that Russia's financial and commercial rapprochement with Asia tends to increase Russian resistance power and, moreover, create difficulties for Europe to meet its energy demand, which is currently very dependent on Russia.

Thus, it is not impossible that this “miscalculation” by the “Western powers” ​​ends up causing much greater long-term damage within the European Union than in Russia itself. Just look at the advance of internal divisions that are fragmenting European partners and playing against each other while the economic crisis and social revolts advance, together with a true typhoon of the ultra-right that could end up burying the last vestiges of the great European utopia of the second half of the XNUMXth century. At the same time that this external offensive puts Russia back in a defensive position, forcing it to resume its old strategy of success over time, as a classic case of “war economy” that has always developed and made its great technological leaps when was threatened by external forces. Only the future, however, will allow us to know what will be the consequences and future results of this European resumption of its endless wars through the centuries.

* Jose Luis Fiori He is Professor Emeritus at UFRJ. Author, among other books, of Global power and the new geopolitics of nations (Boitempo).

The site the earth is round exists thanks to our readers and supporters. Help us keep this idea going.
Click here and find how

See this link for all articles


  • About artificial ignoranceEugenio Bucci 15/06/2024 By EUGÊNIO BUCCI: Today, ignorance is not an uninhabited house, devoid of ideas, but a building full of disjointed nonsense, a goo of heavy density that occupies every space
  • Franz Kafka, libertarian spiritFranz Kafka, libertarian spirit 13/06/2024 By MICHAEL LÖWY: Notes on the occasion of the centenary of the death of the Czech writer
  • The society of dead historyclassroom similar to the one in usp history 16/06/2024 By ANTONIO SIMPLICIO DE ALMEIDA NETO: The subject of history was inserted into a generic area called Applied Human and Social Sciences and, finally, disappeared into the curricular drain
  • Impasses and solutions for the political momentjose dirceu 12/06/2024 By JOSÉ DIRCEU: The development program must be the basis of a political commitment from the democratic front
  • Strengthen PROIFESclassroom 54mf 15/06/2024 By GIL VICENTE REIS DE FIGUEIREDO: The attempt to cancel PROIFES and, at the same time, turn a blind eye to the errors of ANDES management is a disservice to the construction of a new representation scenario
  • Introduction to “Capital” by Karl Marxred triangular culture 02/06/2024 By ELEUTÉRIO FS PRADO: Commentary on the book by Michael Heinrich
  • Hélio Pellegrino, 100 years oldHelio Pellegrino 14/06/2024 By FERNANDA CANAVÊZ & FERNANDA PACHECO-FERREIRA: In the vast elaboration of the psychoanalyst and writer, there is still an aspect little explored: the class struggle in psychoanalysis
  • Volodymyr Zelensky's trapstar wars 15/06/2024 By HUGO DIONÍSIO: Whether Zelensky gets his glass full – the US entry into the war – or his glass half full – Europe’s entry into the war – either solution is devastating for our lives
  • The strike at federal Universities and Institutescorridor glazing 01/06/2024 By ROBERTO LEHER: The government disconnects from its effective social base by removing those who fought against Jair Bolsonaro from the political table
  • PEC-65: independence or patrimonialism in the Central Bank?Campos Neto Trojan Horse 17/06/2024 By PEDRO PAULO ZAHLUTH BASTOS: What Roberto Campos Neto proposes is the constitutional amendment of free lunch for the future elite of the Central Bank