Sanctions against Russia unlikely to affect SA

Any European Union (EU) and US sanctions against Russia are unlikely to have any sort of direct impact on SA-Russia trade, according to trade analyst Duncan Bonnett of Liz Whitehouse & Associates. “Anyway, our trade with Russia is pretty small,” he said. Indeed, the department of trade and industry (dti) statistics revealed that in 2013 SA exported just under R3.9 billion of goods and services to Russia, the bulk of which were oil products, chemical products, transport equipment, machinery, food and agricultural products, and wood. And SA imported a margin over R3.6bn – mostly metals (aluminium being a prime one), wood, fertilisers, foods (in the form of fruits and vegetables), raw materials, and alcoholic and non-alcoholic beverages. Also, Bonnett told FTW, the proposed sanctions are only asset freezes and travel bans aimed at individuals in President Vladimir Putin’s inner circle – and, in the US case, at companies linked to these individuals. However, US politicians are currently debating a new round of even tighter sanctions In the EU, members of European parliament (MEPs) have also called for heightened sanctions, and the bloc’s foreign ministers for measures that could hit “access to capital markets, defence, dual-use goods, and sensitive technologies, including in the energy sector”. But up to now, the EU has tended to shy away from extending sanctions to include major Russian companies. The reason, according to much of the European media, is a worry that Russian President Vladimir Putin could respond with economic penalties of his own. It is felt that this would be a problem for European industry in several countries if Russia were to retaliate with energy sanctions – like cutting off vital gas supplies. “If the sanctions were applicable to EU and US companies operating in this country – mostly in the automotive and energy sectors – it might have an effect on these companies,” said Bonnett. “But I can’t think they’d be doing their Russian business from here.” He also rejected the likelihood of sanctions affecting SA mining companies which are developing projects in Russia, or the limited financial services involvement with Russia in this country. “I don’t think we’ve got a dog in that fight,” Bonnett quipped. A policy briefing called “Russia–SA Relations” – presented to the SA Institute of International Affairs (SAIIA) last year – reveals in some detail the involvement between the two states. The development of mineral resources – particularly diamonds, gold, manganese, platinum group metals, and rare earth elements, it said, is one of the most promising areas of bilateral co-operation. INSERT & CAPTION The proposed sanctions are only asset freezes and travel bans aimed at individuals in President Vladimir Putin’s inner circle. – Duncan Bonnett