EDITORIAL - The Ukraine crisis and Jamaica's interest
In a perverse sort of way, the deepening rift between Russia and the West, marked most recently by Moscow's retaliatory ban on food imports from Europe, the United States and their allies, may not be bad for countries like Jamaica, especially if we have the will to pursue our self-interest.
The first point to note is that today's tensions over events in Ukraine are an unlikely precursor to an old-style Cold War, with its mutual-terror face-off by sharply defined hostile camps. The world is too inexorably changed for that and no one wants to go back there.
In any event, practical realities make the geopolitical isolation of Russia, hoped by US President Barack Obama and European allies, improbable. The more likely scenario is for the current crisis in Ukraine to accelerate the expansion of economic cooperation between the major emerging economies and further fuel their demand for a greater say in the management of world affairs.
The basis of the crisis is Russia's annexation of the Crimea earlier this year and the continued rebellion by pro-Russian separatists in eastern Ukraine who, the West says, are actively supported by Moscow, for which America and Europe imposed hurtful sanctions on Russia. Last week, the Russians hit back, announcing a one-year restriction of agricultural imports from the sanctioning countries.
Russia imports around US$43 billion a year in food, of which the products now banned account for around a fifth of that bill. Russian consumers will feel the pinch, most likely in inflation and, especially for the rich or the middle class, the absence of some of the foods to which they have grown accustomed.
EU EXPORTS TO RUSSIA
But so, too, will be exporters, especially those in the European Union, whose food out-take to Russia last year was nearly US$16 billion, approximately 44 per cent of which were the kinds of products now restricted. The loss of this market, allied with the broader effect of the tensions, could, as the European Central Bank conceded, retard recovery in the Eurozone.
But it could be good news for Latin American countries, such as Brazil, Argentina, Chile, China and others, which would expect to increase their farm exports to Russia. In a way, it is a convergence of politics and economics. Indeed, last month when President Vladimir Putin made a swing through the region on his way to a summit of the BRICS (Brazil, Russia, India, China, South Africa) in Fortaleza, Brazil, no one was particularly concerned about the Ukraine crisis. They wanted to cut deals. At that summit, the BRICS formalised an agreement for the establishment of a development bank for emerging economies, as well as a US$100-billion stabilisation fund. This, in time, could rival the World Bank and the International Monetary Fund, in which emerging economies have little power.
The upshot, in the circumstances, would be to give emerging economies greater leverage in world economic affairs, while increasing the availability of capital flows to the South and the capacity for increased trade and other forms of economic cooperation between developing countries. Even those countries whose internal situations might make them uneasy with separatism in the Ukraine are likely to balance such concerns against the breaking of unipolar hegemony.
Such developments, as our relationship with China demonstrates, have mostly upsides for Jamaica, including seeking to deepen relations with Russia and other partners. It requires, however, unabashed but skilful pursuit of Jamaica's interest.
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