Carlo's Think Pieces

Reflections of a Filipino in the Netherlands

Posts Tagged ‘Ukraine’

Looking Forward to 2015

Posted by butalidnl on 6 January 2015

Twice earlier, in 2008 and 2010, I wrote a blog with predictions for the year that had just started. Looking back, I didn’t do too bad. In fact, my only real mistake was predicting that Hillary Clinton would win the presidential elections in 2008.
I want to revive my practice of listing my predictions at the beginning of the year. I’m looking forward to reviewing them a year from now to see how well I did.

Philippines
Both Jejomar Binay’s and Mar Roxas’ stars will fade as presidential candidates. Someone else will take their place and go on to become the leading candidate for president.

The trial of Jinggoy Estrada, Juan Ponce Enrile and Bong Revilla will start, probably in the latter part of the year. Similarly, the long-awaited Ampatuan trial will also start.

In November or December, there will be a supertyphoon that will hit the country. It may be as powerful as Yolanda, but it will have less casualties.

The World
ISIL will no longer be growing. Both the area that it controls and the recruits that it makes will be much less than today. The entire Iraqi Kurd area (and maybe also the Syrian Kurd area) will be safe from ISIL.

Ukraine. Large areas of Donetsk and Luhansk provinces will be recovered from the rebels.

The ruble will drop to 100:$1 or lower. Russia’s GDP will decrease by 15% or more in 2015.

The oil price will hit $40/barrel, but will not remain at that price for long. It will adversely affect the economies of many oil producing countries. Notably, Russia, Venezuela and Nigeria. Even the US economy will be adversely affected.

The Greek Syriza party will not win the elections in February, meaning that Greece will not decide to leave the Eurozone.

Canada and the US will suffer extremely low termperatures for a large part of the winter. US economic growth in the first quarter of 2015 will suffer as a result.

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Russia Sanctions Itself with Food Import Ban

Posted by butalidnl on 21 August 2014

The Russian government’s decision to ban food imports of the EU and US (plus those of Canada, Australia and Norway) is supposed to be a counter-sanction against the West for imposing sanctions on Russia’s weapons, high-tech and banking sectors; but it is really a sanction that Russia has imposed on itself.

Russia’s sanctions are measures that the EU was reluctant to impose, because they would directly hit Russian citizens. But Russia obliged by imposing them itself. The import ban will certainly hurt the Russian consumer, through higher prices and shortages. Higher-end consumer products (e.g. chocolates, French cheese etc) are among the products that are banned; but the big bulk of banned products are cheaper products that ordinary people eat (e.g. milk, fruits, vegetables, chicken, beef).

Food prices are sure to rise. There will be a shortage of products, at least in the short term. Arranging for alternative food sources will take time – it will take at least half a year before beef from Brazil would arrive in Moscow stores. Increasing local production would take years for some products. Fruit and vegetable production require a lot of labor, and there are not enough workers in the Russian countryside; to increase production, workers would need to be enticed to transfer to rural areas. Increasing production of fruits that come from trees e.g. apples, pears, etc will take years. Many Russian businesses will not invest in expanding the production of vegetables and fruits because the ban is formally only valid for one year.
Western products that manage to enter Russia thru Belarus, Turkey or China will cost more because of the longer supply chain.

The shortage of products will cause an increase in prices. In order to stem this rise in prices, the Russian govenment would need to subsidize food production and sales – either by giving direct subsidies to producers, or by buying up the food and selling to the people at a loss. In order to distribute limited stocks properly, the Russian government would need to institute a ration system of some sort.

The food shortages will also be a morale blow on the Russian public. In the beginning, the Russian consumer will accept the explanation that shortages are temporary, and that alternative sources will be found. But in a few months, it will be obvious that certain categories of food will remain in short supply for an extended period. And that price increases, food shortages and rationing will be permanent features of life.
At the same time, the Russians would know that people in other countries can buy these foods at much lower prices. The food ration system will remind them of the bad old days of the Soviet Union.  This will not be good for Putin’s popularity.

An irony of the import ban on Western foods is that Russia may need to increase its food imports from Ukraine. Ukraine was the food basket of the old Soviet Union, and it still supplies large amounts of food to Russia.

While Russia imports some 35% of its food needs, the EU exports only 1% of its total food production to Russia. The effect of the import ban on Russia will be a lot more than the effect on EU farmers. As Russians line up for their food rations,  Western consumers may notice a temporary reduction of the prices of certain food items.

 

 

 

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Let Russia Host FIFA World Cup 2018

Posted by butalidnl on 10 August 2014

FIFA has reiterated its decision to hold the 2018 World Cup in Russia, in the face of mounting calls to transfer it in the wake of Russia’s annexation of Crimea. This issue is complicated – Russia has indeed violated international law; but at the same time, sports events also have a tradition of not being swayed by political events.

The last time an international sports event suffered because of politics was in 1980, when many countries refused to go to Olympics scheduled to be held in Moscow because of the Soviet invasion of Afghanistan. The Soviets responded with a boycott of the 1984 Olympics held in Los Angeles, and held Friendship Games instead.

I believe that the FIFA is right – nations should stop wars for sports, rather than stop sports because of war. But there are also more practical considerations. First, Russia’s conflict in Ukraine (including its occupation of Crimea) may very well be over by 2018. The sanctions by the EU and other countries are bringing Russia into recession; and they will get even tougher if Russia does not change its behaviour. Russia may very well withdraw from occupied Ukraine before 2018.

Second, if Russia still holds Crimea by 2018, its economy would then be in tatters. The billions of dollars needed to build and renovate 12 stadiums and upgrade other supporting infrastructure will be a heavy burden for them to bear. These will have to be built with little foreign financial support. Hosting the World Cup will effectively be a punishment for them.

Hosting a World Cup will open Russia to large numbers of visitors from all over the world. These people will interact with Russians; giving them an insight into the outside world which cannot be controlled by the Russian media and state. Ideas that Russians get from such encounters could be truly subversive to Kremlin control.

The preparations for the World Cup are already quite advanced in Russia, and transferring the games will mean that FIFA will be slapped with a huge liability. But on the other hand, Russia is also committed to the plans for World Cup 2018 – it cannot deviate significantly from the plans. The list of 11 World Cup cities (12 stadiums; Moscow will have two) had been approved back in 2012. Russia has to make sure the stadiums are ready, even if it will have difficulty getting financing for them. It also cannot include other cities e.g. Sebastopol (in Crimea) into the list anymore.

So, let Russia host World Cup 2018. If it insists on remaining in Crimea by then, the World Cup will be a heavy burden amidst an economic crisis. If it withdraws from Crimea, it will get a lot of international support for its preparations, and its economy will boom. It is the choice that Russia needs to make.

 

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