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    2014: Back to the Iron Curtain?

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    Western Sanctions Against Russia (737)
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    The 2014 would go into history as critical test for the post-communist world with Russia and the West locking horns over the crisis in Ukraine and waging the war of sanctions no one could have imagined a year ago.

    The 2014 will leave its mark in history as critical test for the post-communist world with Russia and the West locking horns over the crisis in Ukraine and waging the war of sanctions no one could have imagined a year ago. While US and EU leaders show no signs of lifting sanctions, the policy of isolating Russia is getting growingly unpopular in the West denounced by prominent political and public figures and representatives of business elite.

    Studio guest Alexander Domrin, Professor at the High School of Economics, Pekka Vilyakainen, Finnish businessman, adviser to President of Skolkovo Foundation in Russia, Roslyn Fuller, Research Associate at the INSYTE Group in Dublin, Ireland, and Sergei Utkin, Head of Department of Strategic Assessment at the Center for Situation Analysis, Russian Academy of Sciences, shared their opinions with Radio Sputnik.

    How do you describe the relations between Russia and the West now? Are they as bad?

    Alexander Domrin: I'm 52 and in my lifetime I've never seen the worse time than now in our relations with the West in general, and with America first of all. I absolutely agree with what Putin said and I absolutely agree with his metaphor. And by the way, this is also a very important thing that Putin again and again reminds us and not only us, but he also reminds his Western counterparts of such a thing as sovereignty. On the other hand, I remember the previous Ambassador of the US to Russia, Mr. McFaul, who used to say that sovereignty is the concept of the 19th century.
    This is not the concept of the 19th century, this is one of the backbones of the international law. Once you start undermining our sovereignty, we will defend it. And that is exactly what Putin was talking about.

    Where would you put Moscow’s strategy with the West now? And how do you see that developing from now?

    Sergei Utkin: In these recent days or, probably, a week there was some softening of the tone. And you could also hear it in the speech of the President. When he was speaking to the journalists, he tried to avoid the most harsh formulations that were previously used. And even the window of opportunity in the cooperation on antiterrorism and the rest of the security issues, which are important for both Russia and the West, this is not just a byproduct of what is happening. This is really important.

    Do you think our relations have crossed the point of no return?

    Sergei Utkin: It is already too late to get to the status quo, but we can look for other opportunities to improve the relations, to get out of the deep trouble we are all in. It is possible to move ahead in the negotiations on Ukraine and Putin paid quite some attention to the possible ways out. It is all about negotiating at the round table, it is about a political solution, instead of the military one. Up to this moment quite a lot of negotiations were used to simply spend the time and to prolong the status quo, as we have it today. And now we cannot tolerate this status quo anymore.

    What is the Western strategy when it comes to viewing the relations with Russia?

    Roslyn Fuller: As we know the US at the moment is working on passing a new sanctions bill that will actually increase the level of sanctions on Russia, particularly the gas industry, perhaps, the armaments industry. And that it is also going to be proving about $350 million of military aid to the current Ukrainian Government. So, their position at the moment is, I think, going to push to push, to see if they can put more pressure on Russia and also to try to basically win the Ukrainian conflict for themselves, if you will.

    So, I think they are going to try and keep pushing that way, because for the people running the Western countries this is a very important battle in a way, because I think that if Russia were to pull through on its current foreign policy (and Putin did say yesterday that that is their intention), we will probably look back on 2014 and say that this is the beginning of a shift away from a unipolar world in which the Western powers have had the bulk of military might in the world.

    We are struggling to understand whether we have reached the point of no return or we can still get back to normal in our relations?

    Roslyn Fuller: You can always get back to normal. And indeed, that is really the point of international laws – to try to get back to normal, to try and have stabilization, to try to work together globally in a way that is beneficial to most people. But we have seen, unfortunately, that these tensions have been mounting for a really long time. And we’ve seen that a lot of our major institutions, like the WTO, like the IMF or like the UN have really failed in completing their tasks and failed to build a consensus with the countries around the world. And I think that is really what is coming home to roost you.

    So, I think until those fundamental  issues are resolved, I think until we have an institutional framework that allows for global cooperation and has mechanisms for deciding thing on a basis of mutual respect, I don’t see how that is possible. I think it is a point we should be working towards, but I don’t know if it possible and I don’t think it is something that one side themselves can make happen. Both sides have to be willing to engage in that dialog.

    What effect the sanctions between Russia and the EU will have on each other? And with the latest situation with the Russian Ruble, what effect has that had?

    Pekka Vilyakainen: I think that the answer is definitely two-folded. I'm coming from a big business, a big enterprise and investment world. And there the difference is being compared to the startups and entrepreneurship, what we are doing in Russia.

    From the positive side, I think that the direct impact for the startup community, for the Skolkovo project, for entrepreneurship in Russia is not so severe, because the young entrepreneurs don’t think so much about these kinds of things and they are not under the sanctions in any way. We can see it in a very concrete manner that, for example, the Russians are very active in their startup events all over the world, foreign investors and foreign communities are active in Russia and there is no impact.

    However, of course, when you talk about the big businesses – premises, construction – for any big business there the cost of financing is the biggest problem, especially now, after the Russian Ruble’s exchange rate issue. That of course is a severe problem for those who has the income in rubles and, for example, the debt in the US dollars or euros. I would say that for my personal life the impact has been relatively small so far.

    What is the mood of the business elite in Europe and the West?

    Pekka Vilyakainen: First of all, to be very honest, this is my personal view, it is not my official view. This isolation – I haven’t seen that so much. Of course, there is a lot of talk and so forth. And I know that in certain sectors there is a massive problem of having certain technical equipment and that kind of limitations. But, like I said, in high-tech, in software, in IT where I'm extremely active, so far, the impact has been quite small. I think that the isolation as such, at least today, it is mainly in the people’s heads.

    But I hope you will agree that the sanctions are counterproductive for any business?

    Pekka Vilyakainen: I'm not so naïve, so absolutely. The life would be much-much easier without the sanctions, that’s for sure.  My point was more like to say that the impact in the businesses where I'm involved has so far been relatively limited, and mainly due to the fact that I'm not in the capital intensive business. The capital is in the heads of the people, so to say.

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