The Western sanctions appear to be having more and more effects on the Russian economy. The value of the rouble reached a low point compared to the dollar on Monday. On Monday, the rouble reached a new low compared to the dollar: 38 to 1, which is 1.3% lower. The Russian government is planning to close more trade deals in roubles, in order to limit dependency on the dollar in global trade. Investors favour more stable currencies.
In addition, Central Asian countries seem to have reacted with a bit too much enthusiasm to the Russian boycott. Many countries announced to significantly increase export, but reality turns out to be more complicated. The countries are unable to increase export on such short notice. Besides, experts warn that the proclaimed boycott will remain in effect for a year; a relatively short period. The question also remains whether these countries are able to increase domestic production on short notice. Also, growing exports also put more pressure on the domestic market, which could cause prices to go up there. Within the Central Asian countries, criticism can also be heard. Expanding the agricultural sector requires time, and there’s doubt whether exporters will give up their relations for a year of export to Russia. And then there’s the low quality of produce, do Russians actually want that? Finally, some of these countries don’t produce enough to meet domestic demand, and are importing from countries like Pakistan and Afghanistan.
Israeli minister Shamir remains optimistic about the chances given to the country by the boycott. According to the minister, the country is able to supply techniques as well as products, to build up domestic cultivation.
Russia is on the lookout for new suppliers of the banned products, and Israel is looking for new markets. That Israel can profit from the boycott has been known for a while, but the statements from Israel minister Yair Shamir in Russian media are interesting. He called the boycott a big opportunity for Israel. The minister also expects trade between the countries to continue after the boycott, “it’s cheaper, more stable and there’s no political price tag attached.” Israel also won’t answer to any European requests to support the sanctions. “Remember that the EU imposed sanctions on us recently. They boycott us, and then want us not to help someone else? They can’t do that.” Israel has more to offer to the Russians than produce alone, by the way. The country is also willing to supply knowledge, and to help the Russians set up production lines in order to become self-sufficient