Russia's choice to destroy contraband food items has been met with widespread outcry both at home and abroad. What was the logic behind this move? What larger strategic purpose does it serve?
Economic sanctions against Western foods in Russia saw the destruction of massive quantities of goods couple with a stern refusal to direct those resources towards humanist aims. A portion of the Russian population, whose standard of living plummeted because of the sanctions, is actively protesting these measures, though economic relief is not likely to arrive soon. Putin's popularity is currently sufficient to retain the peoples' loyalty, however the potential for a black swan event to quickly change things is rising.
On 7 August Russian President Vladimir Putin initiated strict enforcement of Kremlin food sanctions. Moscow has since been cracking down on all illegally imported goods, chiefly those coming from the United States and European Union countries. Public reaction to this has been relatively negative, with many criticizing the Kremlin. Food imports to Russia sharply decreased afterward, falling by over fifty percent within one day of Putin’s executive order.
Protests could escalate if such actions continue. Given the already fragile economic environment and discontent over Russia’s Syria policy, harsh crackdowns would likely only hurt Putin’s public approval ratings. It is likely therefore that the Kremlin will opt for more intermittent, rather than consistent, crackdowns to avoid a large public uproar should such protests continue. Though Putin has not taken this approach with protests in the past, Russia has a tumultuous history when it comes to social problems relating to hunger. Food shortages and famine have taken large tolls on the Russian people in the past, so it is likely that citizens today will continue to remain sensitive to the issue, especially in the face of consistent crackdowns on illegal imports. Intermittently stemming the breaches of the sanctions is likely the only way the Russian government will be able to simultaneously accomplish its objective and keep the Russian people at bay.
The Kremlin first put sanctions on a variety of Western goods on 5 August 2014. These were a calculated response to Western sanctions following Russia’s military intervention in Ukraine. Coupled with fluctuating inflation rates, key interest rate cuts, and falling oil prices, the Western sanctions were a main contributor to a statewide rise in food prices. In late 2014, the costs of some staple goods rose as much as 60%.
At first, the Russian government vowed to stem these rising food prices by increasing domestic production and finding new import sources. However, Russia’s black market softened the sanctions’ impact by bypassing the bans altogether. Western states started shipping their imports through various countries in the Eurasian Economic Union (EEU), such as Kazakhstan and Belarus, from which they could illegally access the Russian market. According to a report released by the European Fresh Produce Association, exports rose from the European Union to Kazakhstan by 108% and to Belarus by 141% within the initial six months of Western sanctions.
The Kremlin promptly revised their sanctions and closed all means of evasion in early 2015. However, exporters then began misreporting source countries on all of their shipments to Russia. Moscow’s import and export surveillance agency, Rosselkhoznador, recently impounded a large shipment of fruit that came from the EU with forged certificates from Turkey. On 6 August, the group also destroyed a shipment of cheese from Germany that had been wrongfully categorized as a product from Russia. According to the head of the agency, Sergei Dankvert, Rosselkhoznador has only successfully confiscated approximately 10% of all illegally imported goods over the past year.
The crackdown on illegal imports has catalyzed a widespread negative response among the Russian people. Approximately 280,000 Russian citizens banded together online and formulated a petition begging government officials to give the goods to those in poverty instead of destroying them. Additionally, Russian MP from the center-left Fair Russia party, Andrei Krutov, suggested that Russia send all of the goods to the regions of Ukraine ravaged by separatist fighting. Another Russian opposition leader, Mikhail Kasyanov, spoke out against the Kremlin’s new policy, sardonically calling it “some real triumph of humanism.” He was also quick to point out that approximately 20 million Russian citizens live below the poverty line.
Even stalwart advocates of the Kremlin’s strategies are against the crackdowns. Russian television anchor Vladimir Solovyov, a longtime supporter of the Russian government, criticized the policy on the air, saying “I don’t understand how food can be destroyed in a country that lived through the horrible hunger during the war and tough years that followed.”
Up until this point, the Russian government has received little to no negative backlash regarding countersanctions. When the Kremlin first enacted the ban against Western goods, some Russian citizens took it upon themselves to assist the government in its efforts to destroy illicit imports. However, the economy was much stronger during that time.
Current Economic Conditions
Despite Putin’s assurances that the worst is over for the Russian economy, conditions have continued to worsen over this last quarter. A decrease in oil prices is responsible for approximately 45% of Russia’s economic problems, according to the former first deputy chairman of Russia’s Central Bank, Sergey Alekashenko.
The ruble hit a historic low toward the end of August this year, following a year of intense fluctuation. The currency’s value first began to sink in the early 2014 after beginning its free fall in December following the sudden collapse of oil prices. The economy managed to stabilize in the beginning of 2015, but another sudden decrease in oil prices, coupled with public uneasiness surrounding the potential global effects of China’s recent stock-market crash, caused it to falter once more.
The currency’s renewed volatility has placed severe pressure on Russia’s Central Bank causing it to hike inflation. Additionally, the bank has postponed interest rate cuts and opted to take a more passive approach to stabilization. Consumer prices in Russia rose about 0.4% over the past month, bringing the inflation rate to nearly 16%.
Industrial output in Russia also took a hit. The manufacturing and services sectors suffered most from the sharp drop in the ruble’s value, and the prospects for both of these sectors remain unstable. The annual average growth in industrial output declined from -0.5% in June to -1.0% in July – the largest contraction since April 2010. Additionally, Russian consumer confidence, a number that has not been positive since 2012, remains a historic low of -23.
All of these factors contributed to a statewide struggle for income and economic survival. They also certainly contributed to the backlash that the Kremlin received over the past two months for their crackdowns on Western imports.
The Russian standard of living suffered following the Kremlin’s crackdown on illegal imports. In an overstated show of strength demonstrated by the destruction of the illegal imports, the Kremlin remains unyielding in its policy. Vladimir Putin’s official spokesman, Dmitry Peskov, said, although the food destruction “visually, perhaps, is not very pleasant,” the media should not “exaggerate the problem.” Peskov called the food “pure contraband.”
The Russian president’s popularity ratings remain at historically high levels. However, when Putin first took power he earned the trust of the Russian people by ensuring that the state’s economy would consistently improve. Now, the Kremlin is putting these promises at risk because of recent policy decisions. How this will play out is uncertain, but it is likely that Putin’s approval rating will take a hit. Though Putin’s popularity ratings have remained high during times of public disapproval and economic hardship in the past, Russia’s history of famine and food shortages could potentially trigger a reaction among the Russian people that is more disadvantageous to Putin’s standing.