Putin’s Blame Game from ISIS-K to Ukraine - A Damaging Obsession

President Putin has finally acknowledged the responsibility of ISIS-K for the suburban Moscow concert hall attack, which resulted in the loss of approximately 137 Russian lives and left hundreds injured. Despite this admission, he remains convinced that Ukraine is somehow connected to the attack. Speculation had circulated previously regarding dissent among members of Russian security services, notably the Federal Security Service of the Russian Federation (FSB), who were displeased with Putin’s initial refusal to attribute the attack to ISIS-K. It is possible that pressure from these members prompted Putin’s abrupt change in stance.

Putin’s fixation on Ukraine is proving to be severely detrimental to Russia. Whether one chooses to acknowledge it or not, had Putin not directed all resources and security apparatus towards crushing Ukraine, or had he not dismissed US warnings as “provocative” and instead recognized them as legitimate concerns, the tragic loss of life and injuries in Russia could have been entirely avoided. It is disheartening that in the modern era, dictators like Putin still exist, and are willing to jeopardize the lives of their own citizens to fulfill their audacious ambitions. Yet, just as many believe Russia is confronting reality, the Chief of the Russian FSB is now accusing the US, UK and Ukraine of complicity in the suburban Moscow concert hall attack. Can Russia be earnest for once?

Enough is enough! Putin must wise up and withdraw Russian troops from Ukraine to allow Russians, Ukrainians, and indeed all of humanity to live in peace and prosperity. The Russia-Ukraine conflict has profoundly impacted Russia’s economy. Since Russia’s annexation of Crimea in 2014 and its involvement in the Eastern Ukraine conflict, Western nations, including the United States and the European Union, have imposed economic sanctions on Russia. These sanctions targeted critical sectors such as finance, energy, and defense, hindering Russia’s access to international markets and technologies and impeding its ability to attract foreign investment.

Sectoral sanctions were also imposed on Russia’s financial, energy and defense sectors, limiting access to certain financial markets and technologies. Moreover, the US government restricted exports of specific goods, technologies and services to Russia, particularly in the energy and defense sectors. Also, the US enacted the Countering America’s Adversaries Through Sanctions Act (CAATSA) in 2017, which imposed further sanctions on Russia for its interference in the 2016 US presidential election, its actions in Syria and its aggression in Ukraine.

Furthermore, the European Union implemented various sanctions against Russia, including asset freezes and travel bans on individuals and entities responsible for Crimea’s annexation and Eastern Ukraine’s destabilization. Similar to the United States, the EU imposed sectoral sanctions targeting specific sectors of the Russian economy, such as finance, energy and defense. These measures restricted access to EU capital markets, banned exports of certain technologies, and limited cooperation with Russian entities in these sectors. The EU sanctions were periodically reviewed and renewed, with additional measures added in response to the conflict escalation in Eastern Ukraine and other hostile actions perceived by Russia.

In addition, the conflict disrupted trade relations between Russia and Ukraine, leading to a decline in bilateral trade, particularly Ukrainian exports of agricultural products to Russia. Prior to the conflict, Russia was one of Ukraine's major trading partners for agricultural goods such as grains, sunflower oil, and poultry. However, tensions and subsequent trade restrictions significantly reduced the volume of these exports, impacting Ukraine's agricultural sector and overall economy. This disruption affected various industries, including agriculture and manufacturing, which relied on cross-border trade.

Besides, the Russia-Ukraine conflict has affected the energy sector. Russia is a major natural gas exporter to Europe, and the conflict with Ukraine raised concerns about energy security in the region. Disruptions in gas supplies due to disputes over transit routes through Ukraine impacted both Russia’s revenue from energy exports and Europe’s energy supply. Gas transit disruptions often occurred during times of heightened tension or conflict, such as disputes over gas prices or political disagreements between Russia and Ukraine. These disruptions created uncertainty in European energy markets, leading to price volatility and concerns about energy security.

The conflict also led to the imposition of sanctions by Western countries on Russia, with implications for the energy sector. Sanctions targeting Russia’s energy industry restricted access to Western technology and investment, affecting the development and maintenance of energy infrastructure and exploration of new reserves. On top of that, sanctions limited Russia’s ability to export energy resources, causing disruptions in global energy markets and potentially affecting supply and prices of oil, gas and other commodities.

Likewise, the investment climate was affected by the Russia-Ukraine war. Geopolitical tensions between Russia and Ukraine created uncertainty, impacting investor confidence. Foreign investors may be hesitant to invest in Russia due to concerns about political stability and the risk of further sanctions. Geopolitical uncertainty stemming from the conflict deterred investment in affected regions, leading to a decline in foreign direct investment (FDI) in Ukraine and neighboring countries.

Energy market volatility increased due to concerns about disruptions to energy supplies from Russia to Europe. The conflict raised uncertainty, leading to volatility in global energy markets, affecting investment in energy-related industries and broader markets. The conflict contributed to fluctuations in the Russian ruble exchange rate, impacting inflation, consumer purchasing power, and import costs. The uncertainty surrounding the conflict and imposition of sanctions led to capital flight and a loss of investor confidence, putting pressure on the ruble. Fluctuations in global oil prices, exacerbated by the conflict, further affected the ruble's value, adding to economic challenges faced by Russia.