Imposition Of Economic Sanctions Research Articles

The Impact of the Russia-Ukraine War and Its Implications for Indonesia's Economic Resilience Strategy

The world economy will feel the impact of rising commodity prices due to the crises in Ukraine and Russia. In addition, inflation around the world will increase due to rising food and energy prices. In addition, the imposition of economic sanctions on Russia by the United States and its allies has further exacerbated not only the armed conflict but also the world economic recovery. This qualitative research approach was implemented through literature reviews and field studies. The global economy, including Indonesia, will be greatly affected by the diplomacy carried out by the Indonesian government in response to Russia's military action against Ukraine. Worldwide disruption of food and energy supplies will occur as a result of this conflict. In the midst of increasing prices of various commodities and crude oil on the international market, the Indonesian government is expected to implement proactive steps to manage inflation.

Geopolitical Turmoil and G7 Renewable Electricity Production: Impacts of the Russian-Ukrainian Conflict

This paper scrutinizes the transformation in the electricity production structures of G7 nations in the wake of the Russian invasion of Ukraine. The inquiry centers on discerning shifts in the trajectory of energy production, particularly toward more sustainable and secure sources. With the imposition of economic sanctions against the Russian economy, an anticipatory transition from combustible fuels to renewable energy sources within G7 countries is envisaged. An empirical investigation is conducted utilizing panel data analysis of energy data across the G7. First and second-generation unit root tests have been used. Cointegration tests and the Vector Error Correction Model have been applied to see short-term and long-term relationships between renewable energy-sourced electricity production and combustible energy-sourced electricity production. Additionally, predictive modeling, employing SARIMA and Machine Learning model (Prophet) with Python, is employed to forecast future trends in energy production. This comprehensive analysis sheds light on the profound impact of geopolitical events on the energy landscape of influential global economies. The results of the econometrics and predictive models show that there is a significant effect of Russia-Ukrainian conflicts on electricity production in favor of more secure and clean energy. This trend change in renewable energy-sourced electricity production should fortify more regulatory aspects.

The effect of economic coercion on companies’ foreign direct investment decisions: Evidence from sanctions against Russia

Existing research on the relationship between economic coercion and foreign direct investment suggests that sanctions have no effect on investments in targeted countries or may even encourage investment inflows. A key limitation of this research, however, is its aggregate country-level focus, which fails to capture company-level decision-making processes and factors shaping them. In contrast, this paper evaluates multinational companies’ investment plans as reflected in new investment announcements and shows that sanctions in fact lead to significant adjustments in multinational companies’ plans to invest in a targeted country. Our company-level analyses of new investment projects in Russia show that companies are less likely to announce new investments after the imposition of economic sanctions against the country.

EU SANCTIONS IN THE AVIATION AND SPACE SECTORS ADOPTED FOLLOWING RUSSIA’S AGGRESSION AGAINST UKRAINE

Russia’s aggression against Ukraine stopped many joint scientific space exploration missions and launches of commercial satellites, and resulted in the imposition of economic sanctions that inevitably restrict a number of projects in space. Sanctions have been used by the UN from the 1960s and have grown to be an instrument applied by the international community and individual states to bring about a change in a state’s or individual’s actions and to stop breaches of international law. In the EU, the Treaties also allow imposition of sanctions. The EU sanctions affecting the aviation and space sectors correspond to the EU general legal framework of sanctions, including lists of restricted goods, technologies and services. The nature of cooperation among States in space justifies possible derogations from the restrictive measures and explains why competent authorities may, in strictly defined circumstances, authorize certain transactions. Still, it seems that the lessons learnt from the present situation will accelerate efforts to ensure that the EU is less depended on third states in space projects. The EU’s autonomy in space has now emerged as a strategic objective.

Economic Sanctions and the Escalation of Terrorism

Abstract A common belief is that sanctions will deprive targets of the resources they need to engage in offensive behaviors. This suggests that sanctions on active and passive supporters of terrorism should reduce violence. This study examines the argument that sanctions can weaken state support for terrorism and reduce terrorist violence. We argue that while sanctions may deprive active or passive supporters of resources, these market imperfections may create commitment problems by weakening these states’ ability to maintain the balance of power with their rivals. As a result, state supporters and their terrorists may escalate violence to solidify gains against their rivals. We test this hypothesis quantitatively using the Threat and Imposition of Economic Sanctions and the Global Terrorism datasets, and qualitatively using an examination of Pakistani support for the Haqqani Network.

Формы взаимодействия участников в цепях поставок: полная интеграция против автономного функционирования

The restoration of the production and economic potential of Russian enterprises in the conditions of an economic war necessitates the search for the most effective forms of organizing the activities of firms in supply chains, which make it possible to increase their degree of competitiveness in the markets. The urgency of this task has increased in the context of diplomatic isolation and the imposition of economic sanctions that have affected the collapse of the main technological and logistics chains. In these circumstances, the need to understand which industry structure will give the largest increment in production volumes and the lowest prices while maintaining the stability of supply chains is of particular importance. The purpose of the study is to determine the principles and optimal forms of organizing the activities of firms in supply chains from the standpoint of market efficiency and profitability of the participants themselves. The set goal predetermined the solution of the following tasks: a comparative analysis of two options for the interaction of chain participants was carried out – autonomous functioning and full vertical integration; the model of contractual relations of firms is identified, which allows them to receive maximum profit; the most attractive variant of the chain organization from the position of the consumer (output volumes and prices) was determined; an economic-mathematical model has been developed for calculating the optimal parameters of activity in the supply chain of an industrial enterprise for two opposite models of firms’ behavior. The methodological basis of the study is a synthesis of theoretical, methodological and applied research of foreign and domestic specialists in the field of supply chain management theory, as well as the theory of industry markets. The scientific novelty of the study is a methodical approach to considering the supply chain as a system oriented to the market function of demand, i.e. the activities of all participants in the chain are set up to produce and sell such a volume of goods for which demand is presented. The article proposes a formal model that allows one to analyze the incentives for vertical integration and evaluate the results of alternative strategies for the behavior of firms in the supply chain.

To the question of the concept of reforming the budget legislation

The changes caused by the imposition of economic sanctions by unfriendly states predetermine the need to improve budget legislation. The formation of budgetary resources, their distribution among the links of the budgetary system, and the financing of state measures should be coordinated with national projects, which are now being formed separately from budget planning. The article touches upon possible measures to reform the budget legislation, as well as ways to increase the efficiency of revenue sources for financing national projects. Important is the creation of a special legal regime for mobilizing funds to the budgets and making expenditures provided for the implementation of national programs and for other purposes; it was proposed to allocate these monetary resources to the category of “budgetary ruble”.

Impact of Domestic Terrorism on Economy: A Literature Review

Terrorism has had a substantial economic effect all over the world. Statistical analysis from the literature review demonstrates the costs of the global economy at approximately 33 billion dollars in 2018 and 855 billion dollars since 2000 (Iqbal et al., 2019). After the domestic terror attacks on 11 September 2001, terrorism increased dramatically, with the sharpest upsurge between 2011 and 2014 following the post-Arab uprising violence in Syria, Libya, Yemen, and Egypt. With the rise of the Islamic State terrorist group in the Middle East, conflicts in Iraq, Afghanistan, and Pakistan became more intense. The imposition of economic sanctions has been related to an increase in domestic terrorism, postulating that when sanctions impair the financial functioning of the target country, feelings of bitterness and despair are intensified among the poor, who may lash out by turning to domestic terrorism. Terror events would appear more likely where states fail to provide, or reduce, an economic safety net to mitigate the transformative effects of economic development. Financial performance generally leads to terrorist violence. Economic sanctions lead to a rise in the rate of domestic terrorism. Terrorism is rarely found to influence growth in bivariate and trivariate specifications causally. Countries featuring minority groups’ economic discrimination are significantly more likely to experience domestic terrorist attacks. In contrast, countries lacking minority groups or whose minorities do not face discrimination are considerably less likely to experience terrorism. Highly democratic and long-enduring states are less prone to domestic terrorism than less democratic states.

The Impact of Economic Sanctions on Oil Industry: A Case Study of Libya Using the Synthetic Control Method

This study assesses the impact of economic sanctions on oil exports and economic growth through case studies of Libya. By setting up a synthetic group method that reproduces the oil exports and economic growth of the case study before the imposition of economic sanctions, we compare the oil exports and the economic growth of the Synthetic and the actual for each period. We address a crucial gap in the literature of sanction in a petrostate case study using the synthetic control approach. Our analysis found that both petroleum exports and economic growth were lower with economic sanctions. This research is integrated into the comparative and international landscape of international influence relations with the domestic economy. Economic sanctions, the results show, are the key driver in fluctuations in oil exports and economic growth that might be represented in the oil curse. We believe that our empirical research can contribute to domestic and international policy formation by sanctioned countries. Overall, the findings confirm that sanctions may be imposed on Libya as another channel of the resource curse from the global and foreign policy perspectives.

The impact of the Russia-Ukrainian war on green energy financing in Europe

The energy crisis started because of the war between Russia and Ukraine and European countries’ imposition of economic sanctions. Russia supplies 40% of gas and 25% of crude oil to most European countries. In retaliation for the sanctions, Russia required the purchase of its gas and oil in its ruble. However, this policy was rejected by European countries, resulting in reduced energy supply as the price of gas and oil rose. European countries are trying to reduce Russia’s energy dependence by looking for environmentally friendly energy alternatives. As the first step, European countries increase the budget for developing environmentally friendly energy. This paper use data from the European Commission (EC), Eurostat, Greenmatch, and the World Bank. The author finds that European countries have increased the budget for developing and using environmentally friendly energy to remove the dependence on gas and oil energy from Russia. European countries believe that environmentally friendly energy can become the primary energy resource in the future.

Economic sanction and global sourcing complexity: A cross‐country analysis

The supply chain disruption drives the firms to source the same inputs from multiple suppliers in low-cost countries. However, the imposition of economic sanctions may prevent firms from enjoying diversification benefits of global sourcing complexity. Using data for more than 127 countries from 1997 to 2014, we uncover the effects of economic sanctions on the global sourcing complexity. After extensive robustness checks, our main findings reveal that economic sanction hampers global sourcing complexity. These effects are conditional on the level of economic development and the occurrence of financial crises in a particular country. Our results are robust for various forms of economic sanction, alternative estimators, and when controlling endogeneity problems. Our findings suggest important foreign policy and managerial implications for the countries and firms in response to economic sanctions.

The Russian Federation subjects budgets as a financial basis for their economic security

Ensuring the stability of economic security is impossible without a sustainable budget and tax system. In this regard, the tax system, being at the same time a factor of financial security, must contribute to ensuring such economic development that creates the necessary financial resources for socio-economic development of each region, the conditions for successful counteraction to internal and external threats. The relevance and importance of regional and national economic security has increased recently due to the unfavourable political and economic environment: the imposition of economic sanctions on Russia by the West due to the events in Ukraine. This leads to a decline in production, a decrease in budget revenues. The announced embargo on oil and gas imports from Russia will directly affect the economy of export-oriented regions engaged in oil and gas production, and indirectly on the budgets of other regions due to the reduction of interbudgetary transfers from the federal budget due to the reduction in oil and gas revenues in the federal budget. Under these conditions, the issue of increasing budget revenues through changes in the tax and budget mechanism is of paramount importance.

The effect of an embargo, sanctions and culture on safety climate: A qualitative view from aviation maintenance in the MENA region

Introduction: Safety climate assessment is a key measure of organizational safety. A strong safety climate is integral to the high safety performance in aviation. Most survey instruments that purport to measure safety climate are derived from evidence obtained in developed countries in the west. It is rare for these studies to examine the influence of macro-environmental factors on safety climate, and rarer still in countries found in the Middle East and North Africa (MENA) region. Method: The researchers conducted 28 semi-structured interviews with experienced aviation maintenance engineers from a national carrier in the region. The interview questions were derived from an extensive review of existing studies of safety climate. Data from interview transcripts were coded, creating a data structure using participant quotes for 1st order codes and arriving at three aggregate dimensions: organizational commitment to safety, organizational safety practices and social relationships and their consequences. Results: Commercial considerations influenced negatively organizational commitment to safety. Organizational safety practices were weak. There was a lack of safety training, a lack of resources to support safe working, poor safety communication, and a failure to report safety issues. Strong friendships were developed through working together in teams. This adversely influenced the reporting of errors and the punishment of violations. Discussion and conclusion: The apparently weak organizational safety climate reported here was attributed to financial constraints following the imposition of economic sanctions and embargos, and to the influence of Arabic cultural values that privilege family connections and the importance of maintaining harmony in social relationships that precludes punishment. Practical application: Financial constraints inevitably limit resources for safety and encourage prioritization of production. Arabic cultural values inhibit the development of a ‘just’ culture and a ‘reporting’ culture and challenge the universal adoption of approaches for promoting organizational safety developed in the West.

Kebijakan Rusia untuk Bertahan Menghadapi Sanksi Ekonomi Uni-Eropa di Tahun 2016-2020 Melalui Strategi Import Substitution

In the dynamics of Russia's relations with the European Union, at the beginning of the administration of President Vladimir Putin, Russia tried to approach the European Union as a trading partner. However, after Russia's intervention in Ukraine and the annexation of Crimea and the imposition of economic sanctions by the European Union on Russia in 2014, relations between the two entities became strained. Both parties impose sanctions on each other. Russia and the EU are two entities that have not much different influence and power. Therefore, this theme is important as an analysis of Russia's defense stance against the European Union Economic sanctions in 2016-2020 through the Import Substitution strategy. The author uses a national interest approach to analyze this problem. In this paper the author argues that the Import Substitution strategy is a form of policy to survive the economic sanctions of the European Union and as Russia's national interest over economic sovereignty.

Coercive Diplomacy and Economic Sanctions Reciprocity: Explaining Targets’ Counter-Sanctions

ABSTRACT Though reciprocity is an important aspect of coercive diplomacy, little is known about whether and when sanctioned countries (i.e., targets) respond to foreign pressure with their own counter-sanctions. The purpose of this article is to offer a comprehensive analysis of the conditions under which targets are more likely to employ economic counter-measures against their senders. Analyzing data for sanctions reciprocity episodes in the Threats and Imposition of Economic Sanctions (TIES) dataset, we find that targets with wealthier economies, less democratic regimes, or higher trade dependence on their senders are more likely to initiate reciprocal sanctions. Our findings also denote that sanctions reciprocity is more likely when targets are subject to sanctions by senders with poor economies or when the issue that instigates the initial sanctions is less salient. As the first cross-national, quantitative analysis of sanctions reciprocity, our analysis provides a more complete picture of how strategic ties between senders and targets unfold, and why some sanctions are more likely to fail or result in stalemate due to counter-sanctions employed by targets.

The Economic Sanctions and the Iranian Exchange Rate Crisis of September–December 2012

:The signing of the “Iran Threat Reduction and Syria Human Rights Act of 2012” by President Barak Obama on August 17, 2012 resulted in a massive depreciation of the Iranian currency, the rial, by December 2012. The news of new sanctions on the petroleum and financial sectors of the Iranian economy was taken as a “Sudden Stop” in capital inflow into the country and was a “displacement,” which led to the currency crisis.In this article #within the framework of the Minsky's theory of financial fragility of the market economies #we discuss the details of the currency crisis after the imposition of economic sanctions against Iranian petroleum and banking sectors #and the Iranian government's anti-speculative and stabilization policies. The article adds to our stock of knowledge of the occurrence currency crisis despite substantial foreign reserves holding of the Iranian banking system.

LEGAL REGULATION OF DIGITAL ECONOMY IN RUSSIA IN LIGHT OF FOREIGN ECONOMIC SANCTIONS AND RESTRICTIVE MEUSURES

In this article, the author presents a study of the changes in legal regulation of the digital economy caused by the imposition of economic sanctions by the foreign states as well as the Russian Federation. The paper analyzes the restrictive measures imposed in the USA against Russian persons in the field of digital technology. The author concludes that the economic sanctions of foreign countries limit the ability to conduct foreign economic operations in the digital sphere both by Russian persons to foreign persons and vise versa. An analysis of the Russian legal framework for the imposition of restrictive measures and the latest legislative amendments, in particular with regards to the preinstallation requirement of the Russian software, showed that currently the measures introduced in Russia are aimed not at reducing the effect of foreign sanctions, but at developing a national market of digital technologies and decreasing the dependability level ofthe Russian economy on exported technologies in general. The author also highlights that it is necessary to assess the consequences of imposing prohibitions in the field of digital technologies and to consider introduction of more flexible measures of legal regulation upon the results of such assessment.

Peculiarities of Applying Investment Tax Deductions

The imposition of economic sanctions on the Russian Federation by the countries of Europe and the United States, the introduction of import substitution required the modernization of production, the development of new technologies and the growth of labor productivity. To achieve these goals, significant investments are required in the economy, in particular, attracting investments from individuals and legal entities. The paper describes tax aspects of investing. The methodological basis of the study is tax legislation and local legislative acts of the regions. The analysis of investment activity of individuals shows the state of fixed assets of companies and the dynamics of investment activity for some types of economic activity in conformity with the current state policy to restore fixed capital. The author revealed that the number of individual investors and the amount of investment deductions received by them have increased more than twice, but the investments volume in the segment of large and medium-sized businesses continued to decrease. There was tension in the formation of regional budgets. To intensify the investment activity of companies, the author recommends to extend the application of the investment tax deduction to lowincome companies and reformat regional budgets for the least loss of funds when they are temporary diverted. The study may be of interest to state and regional authorities when developing indicators for the application of investment tax deductions.

Islamic Finance in Russia: Between Past and Future

Russia interested in alternative partnership finances as early as the 90s of the XX century. The first attempts to apply the principles of Islamic finance were made by individual banks. The second wave of initiatives began after the global financial crisis of 2008–2009, with increasing interest in 2014 in the face of a complicating foreign policy situation and the imposition of economic sanctions. In such conditions, it became necessary to search for alternative sources of attracting investment, which, inter alia, became Islamic finance. From 1992 to the present, Russia has gained some experience in Islamic finance. This article provides a comprehensive review of the more than 25-year history of the development of the Islamic financial market in Russia in the context of the analysis of its problems and prospects. After introducing the main definitions, concepts, features and principles of Islamic finance, as well as citing numerical and geographical data on the industry, the author describes all the initiatives for the development of Islamic finance in Russia, divided into 4 levels: international, federal, regional and individual. The history of the development of the Islamic financial market in Russia is presented in chronological order with a division into industry components and Russia’s experience in developing each of them — Islamic banking, Islamic insurance and the Islamic capital market. At the end, a brief analysis of the current state of the Russian Islamic financial micro-market is made and the main opportunities that Islamic finance can give Russia are also indicated.

Влияние премии за риск на российские макроэкономические показатели

In this study, we estimate the contribution of the risk premium shock to the dynamics of the main macroeconomic variables along with other shocks that are crucial for the Russian economy. The relevance of the discussion on risk premium is caused by the crisis of institutions in Russia and the introduction of economic sanctions. The low quality of institutions, in particular the protection of property rights and the judicial system, increases the risk premium and undermines investors’ interest in the Russian economy. The imposition of economic sanctions, especially against specific companies, also leads to some restrictions on operations and increases the risk premium. All this may result in losses in real macroeconomic indicators such as output and investment.The main tool used in this work is a structural vector autoregression model with an exo­genous variable. Using short-term restrictions, we identify 3 types of shocks: output shocks, investment shocks and risk premium shocks. To take into account terms of trade shocks, which play a key role for the Russian economy, we use the price of oil as an exogenous variable, as it is the main driving force for the terms of trade. In this case, the shocks of the risk premium, conditionally on other factors, characterise the institutional and political component. As an alternative exogenous variable, we use the index of global real economic activity, which is a proxy for the dynamics of world demand.As a result, it was discovered that the risk premium shocks had a significant positive effect on output and investment. The negative impact of these shocks in the dynamics of real variables was noticeable in crisis periods, including the period of economic sanctions. Howe­ver, the overall contribution was moderate. The main driving force behind the dynamics real variables were the terms of trade and output shocks. Also, in 2015, negative investment shocks played an important role.