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22 July 2021, 17:43

Ambitions of global players behind sanctions against Belarus

Vasily Gursky. An archive photo
Vasily Gursky. An archive photo

Recently, the collective West has taken almost any step by Belarus as a reason to impose another round of sanctions. Such restrictions have become almost commonplace in relations of Western countries with those who do not fit into their model of world order (Belarus, China, Russia and others). Literally in one day, using far-fetched pretexts (plane landing, protection of human rights), they have destroyed mutually beneficial international economic ties cultivated for decades. This phenomenon is becoming systemic, which attests to a major crisis of international relations. BelTA has asked Director of the Institute of Economics of the National Academy of Sciences of Belarus, Doctor of Economics Vasily Gursky to comment on the situation.

It is obvious that “lightweight events” cannot serve as a real reason for undermining trade and economic relations between countries. Dramatic changes in the global economy which manifest in significant shifts in the balance of power, spheres of influence, channels of commodity movement, high volatility of commodity and stock markets should be commensurate with the reasons, which, in turn, arise on the back of historical prerequisites and technological progress.

It is also clear that using sanctions as method of exerting influence by some countries on others has a negative impact on international economic relations in general and all parties in particular. Therefore, the question arises as to why countries and corporations are willing to abandon the well-established and profitable channels of commodity distribution, why they are willing to incur increased costs? The seemingly irrational international policy of the global players must have some explanation.

You can give up on profits only for the sake of superprofits

I believe there are two main reasons behind the global crisis in economic relations today. The first one is increased competition between global players (USA, China, Russia, EU) for technological dominance as the world is switching to a new technological paradigm based on digital technologies. The second one is increased competition between transnational corporations (TNCs) and governments for a more favorable economic environment. This competition has been prompted by the growing power of TNCs and their desire to get rid of control of the state as a socially oriented institution.

As is known, the larger the volume of production is, the cheaper the end product is. With the current level of technology and investment opportunities, the volume of production for TNCs is limited only by the volume of demand. Upon gaining control even over half of the market, a corporation receives long-term competitive advantages that other market players cannot beat given the current level of technological progress.

The desire to dominate the markets and dictate terms is becoming the main driving factor for both corporations and states. This is not new, but this round of escalation can be attributed, on the one hand, to the rapid depletion of resources (especially rare and strategically important ones). On the other hand, there emerge new opportunities to obtain unlimited competitive advantages thanks to economies of scale.

In the past no company was technologically capable of monopolizing the global market. Today it is possible. A corporation or a state that gains a technological edge and the ability to scale up its digital platform onto a large part of the world will have total control of not only economic affairs but also over social ones on a global scale.

Stakes are high. The winner might take it all

This idea lies at the core of the modern global economic crisis that manifests itself in increased competition for global leadership between states, between corporations, and between states and corporations. The current stage is complicated because all these processes are happening at the same time and are overlapping, which results in a transformation and intertwinement of interests. In international markets interests of large countries and transnational corporations to overtake competitors align and countries use protectionism and sanctions to assist corporations while using their potential for economic expansion.

Their arsenal is huge – from trivial corruption to color revolutions. Anything goes in the war for world domination. However, in the domestic market interests of corporations often clash with interests of the state (taxes, social guarantees, environmental requirements), which leads to their confrontation resulting in undermining the government's authority, fueling social tensions in the country, causing migrant crises, and so on. Let us remember, for example, when Donald Trump was banned from social networks during the latest presidential election in the United States.

Thus, the ongoing aggravation of antagonism across the world stems from dramatic changes in the structure of interests and priorities of participants of international economic relations. Those who sincerely believe that sanctions are imposed in response to an emergency landing of an aircraft or following an overseas trip of some private individual without an official status cannot grasp the scale of the processes that are underway in the world.

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