REBOUNDS OF RESTRICTIONS ON RUSSIA

 

Russia began a military invasion of Crimea, Ukraine on February 20th, 2014, which advanced in a week lapse. Russian military forces went through Novorossiysk. Eventually, the parliament of this city was captured, and a Russian flag was raised. After approaching the border in the first days of August 2014, Russia initiated a conventional invasion on the 25th of the same month. In the transverse, the North Atlantic Treaty Organization (NATO) took part and at the beginning of November 2014, an agreement for a ceasefire was reached. Seven years later, the conflict rose once more and gave place to the war beginning on Feb 22nd, 2022 Measures to restrain Russia were applied, however, they are proving not to be as effective as expected... The conflict between Ukraine and Russia has resulted in the inflation of first-necessity product prices in countries like the Dominican Republic.

To begin with, restrictive measures against Russia have carried negative consequences for the rest of the world. One of these, the prohibition of transactions of Russia Central Bank, stole liquidity to banks that held funds in it, such as The Federal Reserve, in the United States of America; Bank of England, in Britain; and, The Central Bank of Canada, in Canada. The Prohibition of import from Russian raw materials, another restriction with great impact, gave place to a rise in prices of products like Coal, Gold, Steel, and others. In addition, the Closure of the European Union ports to Russian vessels created scarcity in some countries of Europe that had to find alternate suppliers. Cases of these are Italy, Germany, and the Netherlands.

Moreover, Oil inflation increased the cost of first-necessity products for countries that imported them. Being oil a first necessity product, one of the cities that suffer the consequences due to a noticeable scarcity was the United States of America, which rose its price as a result. Another impact in prices was seen in countries that did not have any internal production of oil. For instance, some cases of this are, Dominican Republic, Peru, Chile, Haiti, and others. Another reason is that, as oil is needed to carry goods, given that it is the main source of energy for those purposes, products depending on transportation to reach retailers increased in prices. For instance, clothing, food, and electronic devices went up roughly 3% in the first four months of the year 2022. In the same order, Countries that did not have a reserve of oil were hit by the fluctuation of oil market cost. Examples of this are, Lebanon, with 61-41% of the population reporting difficulties to access basic necessity products; Kenya, with a 7.1% inflation rate; and, Luxemburg, although less affected, with an augmentation of 0.2% in market expense. They were, in spite of possessing a different position in the scale of financial power, forced to make adjustments in their prices.

In addition, when cities depend on external supply to keep their economy afloat the risk of jeopardizing the stability of their market valuation is high. Countries that import most of their first necessity goods, as is the case of the Dominican Republic and others, are hit with sharp rate variations in the exchange. This is resulting from the acceptance of the fare they are offered. This is caused by self-insufficient, and the urge to avoid deficit; moreover, there is a higher exposition to foreign phenomena that risks stability. Instances like wars, accidents, and weather effects. Besides, Nonsufficient countries are at the expense of their commercial partners; hence, delays, transportation costs, and price whims are only some of the negative causes of a fee alteration.

In conclusion, restrictions on Russia have backfired on the rest of the world. Cities and countries that are non-self-sufficient were stricken by the variations in oil market prices; In the same order, the stability of prices in countries that imported most of their goods was risked, which exposed the local markets to price fluctuations.           

Kimeily De la Cruz Lagares