THE WAR GAMES

Economist Raghuram Rajan has recently said that sanctions are also weapons of mass destruction. An analysis of how these impositions can create long-term havoc and imperil commercial, fiscal and industrial activity across the globe. Also, a look into the actual beneficiaries of this war

- Sujit Bhar

AS this article is being written, over a month has passed since Russia invaded Ukraine, talks have started in Istanbul between Russian and Ukrainian representatives, Russia has said it wants to scale down offensives, insisting that its Phase I action is over, thousands have died, nearly 4 million have been displaced and sanctions have jackhammered the Russian economy into putty.

That, however, is just news. When you look behind the wings of this theatre of the absurd, you realise that this entire situation could see the evolution of a whole new paradigm in war and post-war economics. There are two related aspects to consider. One is the sheer economic impact, and the second is the industrial takeaway from the war-related expenditure of nations.

The possible economic shift was pointed out in a recent interview by Raghuram Rajan, the former governor of the Reserve Bank of India and a noted a economist. He said that economic sanctions announced by the US and other European nations on Russia, are another Weapon of Mass Destruction (WMD). It has the potential to inflict as much destruction of lives and property as conventional WMDs. The effects of this. slow-poisoning will not be evident immediately, but will cause widespread destruction of a nation's economy. That cannot bring peace.

The industrial shift, on the other hand, will be mostly visible in the United States. There is the well-established case of the US weapons manufacturing industry representing possibly the strongest lobby in US Congress-pushing a weak President Joe Biden to do its bidding for them and issuing re-weaponisation orders that will only benefit the defence industry at the cost of the American taxpayer.

This, when seen in the backdrop of the cessation of action in Afghanistan and with no other emerging conflict hotspots in sight, makes business sense.