Brussels Former Ukrainian Finance Minister Natalie Jaresko has urged Western companies to stop doing business with Russia. “Companies shouldn’t allow themselves to be drawn into Putin’s bloody business,” Jaresko said in an interview with Handelsblatt.
The West must also stop buying oil and gas from Russia. Its raw materials would bring Russia about $700 million a day. “I would like to thank Germany for providing money and missiles,” said Jaresko. “But at the same time it supports the purchase of the Russian bombs.”
It is also important to close further loopholes in the sanctions. The country’s elite, who are dependent on traveling to the West for their lifestyle, must be hit the hardest. “I hope they can still influence their president,” said the US-Ukrainian politician and former investment banker, who was finance minister in Kyiv from 2014 to 2016. She is currently working on behalf of the US government to deal with the debt crisis in Puerto Rico.
Read the entire interview here:
Ms. Jaresko, many Western companies have already withdrawn from Russia. Is that enough?
Any company doing business in Russia must shut them down. Investments must be deducted. Accepting Russia’s human rights abuses is inconsistent with good corporate governance. Businesses shouldn’t get sucked into Putin’s bloody business.
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How will Western sanctions affect Russia?
The ruble depreciated by 40 percent on the first day. When I was Treasury Secretary, I saw a 40 percent devaluation of our currency. I know the pain this causes. Moscow will not have enough funds to support the ruble. It will now do what we did then, which is limit remittances out of the country. There is a risk of non-payment.
Can China help Russia?
You could buy more gas. But the currency is unlikely to stabilize China. And above all, China cannot offer the political and economic elite what the free world offers them. The oligarchs are looking to Europe, to Miami, to New York and not to Beijing.
What do the sanctions mean for the everyday life of Russians?
The cost of all goods and services in local currency increases enormously. I anticipate a bank run like we’ve seen in Ukraine as people panic. They will convert rubles into hard currencies, further straining the central bank reserve. You will also have a hard time buying ordinary things because the credit cards will no longer work. I would like to emphasize that the purpose of the sanctions is not to harm the average citizen, but to put pressure on the elites and the Russian government to stop killing civilians. Kyiv is being attacked with cluster bombs, which are illegal and aimed at civilians.
Are the sanctions painful enough?
They’re not half as painful as what Ukrainians are experiencing right now. There’s a constant effort to minimize the pain, whether it’s with US corporations or with gas prices. What is the life of a Ukrainian worth? The intent is to isolate President Putin and change his mind. The purpose is not to harm Russia.
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But do you think this will work? Will he change his mind?
If anyone knew what was going on in their head, none of this would have happened. How many world leaders miscalculated when he invaded Georgia in 2008? He invaded Ukraine and annexed Crimea. He poisoned his opponents in London with polonium. In Berlin he had opponents shot in the open street. He interfered in our elections, in Brexit. Every time we thought: He won’t go any further. We misjudged him from day one. We shouldn’t speculate what exactly will change his mind. We should use all the tools we have.
There are still loopholes in the sanctions.
We must sanction all state banks in Belarus and Russia, all state oil and gas companies, the entire political elite.
Why should that make a difference?
The United States, the United Kingdom and the EU together send about $700 million a day to Russia. I thank Germany for providing money and missiles. But at the same time it supports the purchase of Russian bombs.
Do you think Russia will run out of supplies if the West cuts off the cash flow?
I don’t know how much ammunition they have, but I hope and pray that this war will end because its political elite doesn’t want to live in a pariah state. We know how much they like to travel to democratic countries. We know how happy they are to send their children to our educational institutions. Will they really want to live in a new North Korea? I hope they can still influence their President.
“Accepting human rights violations is incompatible with good corporate governance”
What else can help?
We not only need the unity of democratic governments, we need the unity of business. She needs to stop looking at her individual gain and look at the bigger picture: The entire trading system that we have built since WWII is at stake. We have created a rules-based system based on international trade, open markets, diplomacy, international institutions and negotiations. So instead of worrying about pennies at the pump, we need to take care of protecting that system.
Ms. Jaresko, thank you very much for the interview.
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