Effects of sanctions imposed by Western countries on Russia
Due to the recent Russia-Ukraine crisis, many western countries including USA, European Union, United Kingdom have imposed a lot of sanctions on Russia.
Effects of these sanctions:
- Impact on Russia: This has led to a situation of a bank run. Russian citizens queue up at banks to withdraw their deposits in the form of ruble and convert it into a safe currency (like the US dollar).
- Impact on India: India is neither a member of NATO nor of the European Union. The sanctions imposed, therefore, are not binding on India. However, India’s potash fertilizer requirement is entirely dependent on imports from Belarus and Russia. Supply chain disruptions may disrupt the availability of potash.
- Impact on the World: About 90% of the global supply of neon used in chip lithography comes from Russia and Ukraine. Russia and Ukraine account for 30% of the global supply of titanium used in the aerospace and armament industries.
Potential Geopolitical Impact of Recent Events:
- Western countries will unite and the North Atlantic Treaty Organization (NATO) will be reactivated.
- The Cold War-like situation of the 1950s could re-emerge. It will consist of the Eastern Bloc led by Russia on one side, and the Western countries and their allies on the other.
Bank run: This situation arises when a large number of depositors start withdrawing their money from banks simultaneously in the apprehension of bankruptcy of the financial institution.
Source – The Hindu
