With a number of volatile trends in multiple conflict theaters and geopolitical hot spots now coming to a head this week (Ukraine-Russia, China-US, Iran-US, Turkey-Syria-Russia, Saudi Arabia-Europe), and with Presidents Putin and Trump set to meet at the G20 summit in Argentina in just days, Putin has again signaled Russia will move away from the U.S. dollar.
Speaking before the VTB Capital forum in Moscow on Wednesday, Putin wryly explained that by implementing sanctions on Russia and other countries Washington is effectively “shooting itself not in the foot but a bit higher”.
He said, according to Bloomberg, “We aren’t aiming to ditch the dollar. The dollar is ditching us.” Making the case that aggressive US punitive measures against its rivals is undermining confidence in the dollar, Putin explained:
We are not setting the target of moving away from the dollar – the dollar is moving away from us, and those who take respective [sanctions] decisions are shooting themselves not just in the foot, but slightly higher, as such instability in calculations in dollars creates a desire of many global economies to find alternative reserve currencies and create settlement systems independent of the dollar.
To underscore that Russia is not alone in moving toward de-dollarization, Putin added, “We’re not the only ones doing it, believe me.”
Despite recent dire reports on a downward spiraling Russian economy embattled by US sanctions — with one Bloomberg Economics study for example claiming the sanctions have knocked as much as 6% off Russia’s economy over the past four years — Putin attempted to instill a feeling of confidence amid current difficulties.
He said: “I think, there is an understanding that despite any crises and even artificially-created difficulties, the Russian economy is adapting to these difficulties, feeling confident, creating conditions for its own internal development,” according to a translation by RT.
Putin took note of lagging growth and called for confidence in Moscow’s economic countermeasures, increasingly taking the country toward pursuing alternate trade relationships, such as growing ties with China, Saudi Arabia and Turkey:
Our GDP growth is 1.5 percent, which does not seem like a lot, but investments in the fixed capital are higher than the GDP growth at 4.1 percent. This means that investors are certain about the future, they understand the policies implemented by the financial authorities in Russia, that it is stable, reliable and predictable.
Explaining that Washington sanctions will only result in blowblack, citing “400,000 lost jobs” in Europe, Putin said “key trade partners” were helping Russia on setting up alternate payment systems which would circumvent the SWIFT network.
— Ruptly (@Ruptly) November 28, 2018
As one major example of “alternative” opportunities, he noted that Turkey recently paid in rubles – not dollars – for Russian S-400 air defense systems — a controversial and hugely important deal which had the side effect of disrupting American F-35 fighter jet sales to Ankara.
And touting that Russia will supply soybeans to China instead of America, Putin continued:
According to WTO estimates, the mutual restrictions recently imposed by G20 countries reduced global trade by almost $500 billion. Is anyone interested in this, including such a large economy as the US? For us, this creates certain opportunities.
Those “certain opportunities” were listed in part with the following words of the Russian president:
The United States supplied in huge quantities, now we will deliver. We agreed with our Chinese friends that we’ll supply poultry meat and some other additional goods. But in fact the Americans themselves voluntarily abandoned this market, a very huge one…
Meanwhile, despite President Trump saying in an interview with The Washington Post on Tuesday that he’s considering canceling the planned sit-down with Putin in Argentina over Sunday’s Kerch Strait incident, the Kremlin issued a statement Wednesday saying it considers that the meeting is on track and has received no notice of changes.
Kremlin spokesman Dmitry Peskov told reporters that Russia had not received “any other information from our U.S. counterparts.”
And not entirely unrelated, the White House further indicated on Tuesday that Trump would not meet in a formal capacity with Saudi Crown Prince Mohammed bin Salman at the G20 summit, as MbS continues to face immense scrutiny and pressure over the murder of journalist Jamal Khashoggi.
Trump won’t meet with MbS, but guess who might?…