Local and regional leaders have been discouraged from imposing “useless” sanctions on Russia over its invasion of Ukraine.
In fact, international relations lecturers Dr Kristina Hinds and Dr George Brathwaite fear that sanctions imposed on the Vladimir Putin regime by world powers will also have negative consequences on the region.
Western leaders have so far frozen the assets of Russia’s Central Bank and the United States, European Union and United Kingdom have banned citizens and businesses from doing business with the financial institution.
Russian banks have been removed from the Swift messaging system, delaying international payments to the Eastern European country, including those intended for oil and gas.
Sanctions have also been imposed on Putin, his foreign minister Sergei Lavrov and a “hit list” of powerful, wealthy Russian businessmen and women.
Already, sanctions are having a ripple effect on Cuba’s tourism industry as scores of Russians – who make up the island’s largest number of annual visitors, flee the country since the EU closed its airspace to Russian aircraft.
In an interview on Monday, Dr Brathwaite revealed that other CARICOM countries including Barbados may not escape the fallout.
“The problem with the use of trade sanctions is that the innocent gets hurt,” said Brathwaite citing Caribbean affairs expert David Jessop. “This is particularly so when one economically powerful nation acts against another and regulations are written in such a way that they have an extraterritorial effect on third nations and their citizens.”
Brathwaite noted that the sanctions against Russian companies and oligarchs could have a potentially “crippling” impact on small states particularly because they extend to companies which “knowingly facilitate significant transactions for, or on behalf of,” the sanctioned entities.
“Furthermore, whether it is increased volatility of prices in travel and tourism, oil and grain, because of the growing instability and uncertainty in global markets, there will be the potential for collateral economic damage to the Caribbean at a time when the mantra ‘friends of all, satellite of none’ ought to be beneficial in helping us as a region to recover from the severe dislocations caused by the COVID-19 pandemic,” said Brathwaite, who has lectured in political economy at the University of the West Indies.
“Indirectly, the sanctions in addition to Putin’s responses to Europe given their need but vulnerable positions regarding oil and natural gas, would further impede the rebound of international travel thereby throwing another wrench in the travel and tourism industry across the Caribbean,” the academic added.
Executive Director of the Barbados International Business Association (BIBA) Carmel Haynes said she was unaware of any substantial business domiciled here that is Russian-owned.
But she added that stakeholders, particularly in the insurance sector are bracing for an impact of the sanctions on global insurance rates.
“Of course we do have quite a big international insurance sector. So I believe that they would be taking stock of what’s going on and obviously you are seeing substantial damage and losses, so like with any disaster that impacts property, you do see that having an impact on insurance rates and premiums etcetera,” said Haynes.
“So it is obviously going to be a consideration when renewals come into play, but that is not going to be a direct impact right now.”
On the other hand, Dr Hinds, head of the Department of Government, Sociology, Social Work and Psychology, believes the level of exposure to Russian money throughout the region, even if unknown to the average citizen, could make the sanctions against Russia even more cumbersome.
“The emphasis right now needs to be on the immediate conflict and some of the more immediate potential repercussions that we can face across the region and I don’t mean just CARICOM, but the wider Latin America and the Caribbean region because this is an interconnected world,” Dr Hinds told Barbados TODAY.
“There is Russian money across this region, just as there is in the United Kingdom as we see with Chelsea Football Club and all kinds of Russians in the United Kingdom that are facing some difficulties because of this.”
She added that many of the citizenship by investment programmes in the region have provided citizenship for wealthy Russians.
“I don’t know if they may want to use such things as their dual citizenship as shields from these sanctions and I don’t know the extent to which some of our banking systems and investments may be exposed to these sanctions. That is where I think we are most likely to get pulled into this in terms of feeling the consequences,” Hinds added.
After hours of deliberation at the 33rd CARICOM Intersessional Meeting of Heads of Government in Belize last week, member states determined that decisions about imposing sanctions on Russia would be left to individual states.
The 13-member group had previously released a statement condemning the Russian invasion and calling on Russia to respect the territorial sovereignty of Ukraine.
Since then Antigua and Barbuda has imposed economic sanctions against Russian people and companies singled out by the Biden administration.
Dominica on Monday suspended applications from nationals of Russia and Belarus seeking citizenship under the Citizenship by Investment programme.
Dr Hinds, however, warned that CARICOM states which impose sanctions on Russia may be “shooting themselves in the foot”.
“It can send a message but it is not effective,” said Dr Hinds
“You would want your sanctions to be targeted. Targeted sanctions mean that they will deliver the intended outcome. So the sanctions in this case are supposed to make it extremely difficult for Russia to continue with this war by financially crippling the country, crippling those significant wealth owners both living outside of Russia and in Russia, who might have connections to leadership, also making it difficult for the population so that the people in the country are against this war and can place pressure on Russia.
“There is nothing that we can do in this region that will function as a targeted sanction. So if it is just a symbolic sanction then you can do it, but you can also not do it and continue doing what we have been doing, which is standing up and saying ‘we are against this war’ – making that very clear in places like the United Nations, CARICOM and whenever there is an OAS meeting. But the effect of sanctions from the 15 members of CARICOM will be nothing on Russia,” she added.
Dr Brathwaite agreed, calling instead for CARICOM countries to continue lobbying for an end to Russian hostilities toward Ukraine. kareemsmith@barbadostoday.bb
