Washington: Hard hit by sanctions since the Feb. 24 invasion of Ukraine, Russia’s economy will shrink by 15% this year and another 3% in 2023, wiping out 15 years of economic gains, according to the Institute of International Finance, a global banking trade group.
The resilience of the ruble — Russia’s currency — has partially shielded its economy from the full impact of sanctions. Propping up the ruble are strong oil and natural gas sales and the Russian central bank, which has raised interest rates and imposed capital controls to keep money from fleeing the country.
President Vladimir Putin said this week that unemployment and inflation are decreasing, backing up his frequent claims that Russia is succeeding despite Western sanctions.
Still, the finance institute argued that the sanctions, partly by encouraging foreign companies to abandon Russia, “are unraveling its economy, wiping out more than a decade of economic growth, and some of the most meaningful consequences have yet to be felt.”
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KEY DEVELOPMENTS IN THE RUSSIA-UKRAINE WAR:
— AP Exclusive: Ukraine recovers bodies from steel-plant siege
— Ukraine’s leader says Russia is trying to capture a key southeastern city
— US general says US, allies will keep sending significant’ aid to Ukraine
— UN: Climate shocks and Ukraine war fuel multiple global food crises
OTHER DEVELOPMENTS:
KYIV, Ukraine — The head of the Ukrainian grain traders group has dismissed Turkey’s effort to negotiate a deal with Russia to allow Ukrainian grain exports to resume, saying Ankara lacks the power to act as a guarantor.
Ukrainian Grain Union head Serhiy Ivashchenko said Wednesday that “Turkey doesn’t have enough power in the Black Sea to guarantee security of cargo and Ukrainian ports.”
The blunt comment followed talks between Turkey and Russia at which they discussed creating a safe maritime corridor in the Black Sea for Ukraine to export grain amid an escalating world food crisis. Russia says the Ukrainian ports must be demined to allow safe shipping and insists on its right to check incoming ships to make sure they don’t bring weapons into Ukraine.
Ivashchenko said Ukraine would prefer if NATO ships entered the Black Sea and served as guarantors. He also said it was the Russians who have planted sea mines in the area, and it would take three to four months to remove them.
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BRATISLAVA, Slovakia — Slovakia’s government has approved a long-term Defense Ministry plan to modernize and significantly increase the number of troops in its armed forces following Russia’s invasion of neighboring Ukraine.
According to the plan announced Wednesday, the NATO member with a population of 5.5 million people should have 22,000 service members by 2035, up from 14,100 this year.
Slovakia also plans to acquire 228 various armed vehicles and will modernize its air force bases to be ready for the U.S. F-16 fighter jets whose delivery should start in 2024, with other deals to purchase new arms to follow.
The government has also confirmed Slovakia’s commitment to spend 2% of its gross domestic product on the military by 2024.
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ISTANBUL – Turkish Foreign Minister Mevlut Cavusoglu says a plan by the United Nations for a grain corridor to carry Ukrainian agricultural products was “feasible.”
Speaking alongside Russian Foreign Minister Sergey Lavrov at a news conference Wednesday in Ankara following talks, Cavusoglu said the plan required negotiation between Moscow and Kyiv.
There was no Ukrainian representative at the Ankara meeting. But Kyiv has expressed concerns that if it removes mines from its Black Sea ports, Russia would be more able to attack its southern coast.
Cavusoglu also said Moscow’s request that its involvement in implementing the U.N. Plan result in the easing of international sanctions against it was “quite legitimate.”
“If the whole world is in need of the products to be exported by Ukraine and the Russian Federation, then a method needs to be established,” he said, adding that he hoped “technical preparations” could be made “as soon as possible.”
Ukraine is one of the world’s largest exporters of wheat, corn and sunflower oil, but the war and a Russian blockade of its ports have halted much of that flow, endangering global food supplies.
An estimated 22 million tons of grains are sitting in silos in Ukraine. Russia is also a major exporter of food and fertilizer.
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ROME — Italy is demanding that Russia release grain from Ukrainian silos to ease the global food crisis, saying the continued blockade of Ukraine’s ports “is sentencing to death millions of children, women and men, far from the battleground.”
Speaking at a conference in Rome on Wednesday, Foreign Minister Luigi Di Maio also warned that increased food insecurity in the developing world will trigger political instability and migratory flows.
Many countries in Africa and the Middle East, including Somalia, Tunisia, Libya and Egypt, import much of their grain from Ukraine. Drought and high fuel prices even before the war in Ukraine already had threatened food availability for many developing countries.
Di Maio described the following weeks as crucial. “I want to say clearly that we expect a sign from Russia because blocking exports of wheat means holding hostage and sentencing to death millions of children, women and men far from the battleground.”
Ukraine is one of the world’s largest exporters of wheat, corn and sunflower oil, but the war and a Russian blockade of its ports have halted most of that flow. Complicating export is the heavy mining of Ukrainian ports.
An estimated 22 million tons of grains are sitting in silos in Ukraine.
Di Maio was hosting a conference of Mediterranean governments and international organizations on the world food crisis. He spoke alongside the head of the Rome-based U.N. Food and Agriculture Organization, Qu Dongyu.
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BRUSSELS — Irish Prime Minister Micheal Martin is backing Ukraine’s efforts to join the European Union, despite concerns about allowing the war-torn country into the bloc any time soon.
“I strongly support Ukraine’s application for membership,” Martin told EU lawmakers in Strasbourg, France on Wednesday. He says he hopes EU leaders can “send the people of Ukraine a clear and positive message” at their June 23-24 summit.
The EU’s executive branch, the European Commission, is drafting an opinion on Ukraine’s request to join. In recent years, the commission has repeatedly expressed concern about corruption in Ukraine and the need for deep political and economic reforms.
Several EU leaders are wary of opening the door to Ukraine.
But Martin says the EU “should support those looking to join in undertaking the reforms and preparations necessary.” He says Ireland’s experience is that EU “membership is transformative.”
Italian Premier Mario Draghi has also been a proponent of Ukraine’s ambitions to join the bloc. But other European leaders, among them French President Emmanuel Macron opposes fast-track membership for Ukraine, saying it would lead to lowering standards and be unfair to other previous applicants.
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COPENHAGEN, Denmark — Norway said Wednesday it has donated heavy artillery with equipment, spare parts and munition to Ukraine, enabling the country to “withstand the Russian attacks,” said Norwegian Defense Minister Bjørn Arild Gram, who called that “a substantial contribution.”
The Scandinavian country’s Armed Forces recently has replaced M109 artillery guns with new artillery from South Korea, the defense ministry said, and 22 of them had been sent to Ukraine. Norway added that it trained Ukrainian forces to operate the guns in Germany.
The situation in Ukraine means “that it is now necessary to donate heavier materiel and weapons systems as well,” Arild Gram said in a statement.
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BRUSSELS — The European Union’s top two officials on Wednesday stepped up warnings about global food shortages as a result of Russia’s war against Ukraine. The war has left Ukraine unable to export millions of tons of grain via the Black Sea to destinations such as Africa.
European Commission chief Ursula von der Leyen and Charles Michel, who chairs EU summits, accused Russian President Vladimir Putin of preventing Ukraine from fulfilling its traditional role as a major supplier of agricultural commodities, including wheat, to world markets.
“This is a cold, callous and calculated siege by Putin on some of the most vulnerable countries and people in the world,” von der Leyen told the European Parliament in Strasbourg, France. “Food has become now part of the Kremlin’s arsenal of terror and we cannot tolerate this.
Said Michel to the 27-nation EU assembly: “Russia is using food as a weapon of war, stealing grain, blockading ports and turning farmlands into battlefields.”
Von der Leyen said that the EU must work to persuade trading partners to keep their markets open, offer aid to countries at risk and support an expansion of food production in Africa. “The Russian invasion of Ukraine reverberates around the world,” she said. “It is about the lives and livelihoods of millions of people.”
AP
