August 7, 2014 by AK
In December 2012, the Russian parliament reacted to the US Magnitsky bill by outlawing the adoption of Russian orphans by Americans. Let the disabled kids pay, said the Russian MPs and voted for “Herod’s law“. As some Russians joked bitterly then, if NATO were to hit Syria, Putin would bomb Voronezh in response.
This time, Moscow’s response to US and EU sanctions is less cannibalistic but the Kremlin has once again applied its general principle of making Russians pay for the regime’s adventures. This time it’s a blanket ban on imports of meat and dairy products, fruit and vegetables from the US, EU, Norway, Canada and Australia. Mercifully, baby food is exempted.
This measure is going to fuel inflation more than Putin’s pet economists would have us believe. My feeling is by early 2015, year-on-year inflation is going to break into the double digits from 7-8% now, with the Central Bank targeting 6.5% for 2014. If the government merely hints at introducing price ceilings, expect food shortages and enormous, 1991-length lines.
I suspect that the cabinet may loosen some of the restrictions when Russian kids across the income spectrum get unhappy about missing German-made Kinder chocolate – but Polish and Lithuanian food is unlikely to get any breaks. I wouldn’t be surprised if the Kremlin’s primary target are those two countries with their firm pro-Ukrainian stance, since they critically depend on Russia for their agricultural exports.
A tricky question for the Kremlin must be how to deal with Belarus and Kazakhstan, members of the same customs union as Russia. It’s naive to expect its dictators, Lukashenko and Nazarbaev, to ban EU or US imports on Russia’s whim. These countries could only attempt, on Putin’s request, to stop imported goods from being re-exported to Russia, but that would mean continued customs controls within the union and would undermine its purpose. And why waste an excellent opportunity? Russian consumers would be thankful for Belarusian olives and Kazakh salmon. In practical terms, Belarus and Kazakhstan would have to be handsomely rewarded for any cooperation in enforcing the imports ban.