Latvian Deputy Prime Minister and Defense Minister Artis Pabriks says maximum sanctions must be imposed on Russia to end its war against Ukraine.
Russia has approved “grey markets” as an additional tool to maintain its recovery momentum, but what are these markets And how have they actually helped Moscow with its sanctions headache?
“Russian markets, their economy as we know it, are very different from what we know in the United States,” Anthony Kim, a fellow in economic freedom at the Heritage Foundation, told FOX Business. “The lack of transparency, accountability… much less efficient and clean.”
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Russian Prime Minister Mikhail Mishustin approved these markets, also known as “parallel imports,” as a way to support small and medium-sized businesses in the country as Moscow continues to combat the effects of harsh Western sanctions over the invasion of Russia. Ukraine.
In this photo provided by the State Duma, the Federal Assembly of the Russian Federation, Russian State Duma Chairman Vyacheslav Volodin, left, and Russian Tax Service Chief Mikhail Mishustin, who was nominated to replace Medvedev, walk in the State Duma, the Lower House. of the Russian Parliament in Moscow, Russia, Thursday, January 16, 2020. Russian President Vladimir Putin has appointed the head of the tax service, Mikhail Mishustin, as Russia’s new prime minister. (The State Duma, The Federal Assembly of the Russian Federation via AP) | AP newsroom
“This approach will ensure delivery of goods to our country…despite hostile actions by foreign politicians,” Mishustin said of the move, adding that the Ministry of Industry and Trade would soon produce a list of accepted parallel imports.
These markets and imports will occur without the need to obtain permission from a trademark owner, a move akin to “legalizing Russia’s smuggling economy,” according to Fortune.
Kim said the United States “cannot apply the same kinds of analytical tools and expectations” to Russia’s markets, and the UK’s Export and International Trade Institute said the markets should “flourish.”
Russia has made great strides to rein in its economy, which has faced a series of shocks and setbacks due to Western sanctions: the initial panic led to Russian citizens trying to get their money out of the bank, forcing banks to take out large loans to the Bank of Russia to meet demand.
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The Wall Street Journal argued that the Russian Central Bank’s strict limits on foreign exchange, withdrawals and currency transfers helped control wild fluctuations that initially spooked officials. closing the trade on the Moscow Stock Exchange for almost a month.
Russia also faced the danger of a sovereign default, but avoided that particular hurdle with a debt payment of roughly $117 million. Moody’s Credit Rating Agency earlier this month put Russia on the second lowest rung of the credit ladder, just above default.
But Kim argued that Russia has not made a “meaningful” recovery.
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“There was an immediate shock or reaction from the Russian market and markets outside of Russia, so we saw this immediate legitimate panic and this legitimate recession,” Kim said. “And where we are now is a different period.”
The BBC reported that annual inflation has continued to rise despite the appearance of recovery, reaching 15.66% this week.
