Russian ambassador: Don’t blame us for food, fuel price crisis
Mbongeni Mguni | Monday July 18, 2022 17:09
Mmegi: Has Russia had any engagement with the Government of Botswana since the operation in Ukraine began, and what has been the response of Government?
Kemarskiy: Russia has enjoyed excellent relations with Botswana since the establishment of diplomatic relations in 1970. Like most countries in the world, Botswana does not support illegal sanctions imposed by the United States and its satellites against Russia. Those who have felt the effects of Western colonialism and racism, Botswana including, have not joined anti-Russia restrictions.
Therefore, nothing prevents our countries from developing mutually beneficial equal relations.
Proximity of our positions on the international arena was forged during the process of the anti-colonial struggle. And that fact contributed to a stable political dialogue and interaction of our countries in the UN and its institutions. In particular, Russia and Botswana hold the same positions on combating the glorification of Nazism and neo-Nazism, on preventing an arms race in space, the use of information technologies in criminal purposes, etc.
The legal framework of our bilateral relations comprises 11 joint intergovernmental and ministerial documents, including agreements, conventions and memorandums on cooperation in the fields of trade, economics, culture, science and education, defence and military-technical cooperation. Together with Botswana partners, we are working on several new MOUs and Agreements.
I would like to highlight the collaboration between our countries in the education sphere. The signing of the Agreement on the Exemption of the Visa Requirements in June 2019 created necessary conditions for businessmen, politicians, public figures and personalities of science and culture to interact.
The leading positions of our countries in diamond mining create conditions not only for cooperation in the multilateral framework of Kimberley Process, where Russia and Botswana are working closely, but also for further promising development of bilateral ties in the diamond industry.
Railway transport, energy projects, agriculture, IT security could be also identified as promising areas.
Based on the aforementioned, I can conclude that engagements with the Botswana side remained unchanged.
Mmegi: What is the level of direct trade between Botswana and Russia and will this be affected should Botswana vote against Russia at any international meetings?
Kemarskiy: Trade turnover between Russia and Botswana in 2021 amounted to $64.5 million. This is more than double the increase compared to 2020. I don’t have more up-to-date statistics.
As for the second part of your question, I see no reason to discuss it, since it is not the Russian tradition to be arrogant or disrespectful of the positions or opinions of sovereign states. Of course, we are not talking about openly hostile positions or actions that pose a real threat to our country.
Russia prefers to explain its approaches, convince our friends and partners, and seek mutually acceptable solutions. Moreover, we do not link political issues with prospects for trade and economic cooperation.
As for Botswana, as I have already said, our positions are quite close, and regarding initiatives of our opponents at international meetings, Botswana, as a rule, takes a neutral position.
Mmegi: What is your general comment on the criticism that Russia has engaged in an unfair invasion of Ukraine and that this is pushing the world towards an economic recession?
Kemarskiy: After the dissolution of the USSR Russia recognized new independent states, including Ukraine, helped ex-soviet republics, even though it faced a very difficult situation itself.
But Ukrainian authorities always preferred dealing with Russia in a way that ensured that they enjoy all the rights and privileges while remaining free from any obligations.
Ukrainian authorities began building their statehood on the denial of everything that united us. Ukrainian society was faced with the rise of far-right nationalism, which rapidly developed into aggressive Russophobia and neo-Nazism.
Radicals found it easy to force their will on the weak authorities, which were infected with the virus of nationalism and corruption. Nationalists have unleashed a real terror campaign against those who opposed their anti-constitutional actions.
In 2014 the people of the East of Ukraine did not agree with the West-supported coup in Ukraine and started fighting for their basic rights - to live on their land, speak their own language, preserve their culture, religion and traditions.
In March 2021, a new military strategy was adopted in Ukraine. This document is almost entirely dedicated to confrontation with Russia and sets the goal of involving foreign states in a conflict with our country. In fact, this is nothing but preparation for hostilities against our country. At the same time Kiev has long proclaimed a strategic course on joining NATO.
After five waves of NATO’s eastward expansion, its military infrastructure has reached Russia’s borders. This is the key cause of the European security crisis which had the most negative impact on the entire system of international relations.
We tried hard to convince West not to do this. We showed where and why our red lines are drawn. We were flexible, ready to make concessions and look for compromises. All efforts were useless.
When our proposals for an equal dialogue on fundamental issues have remained unanswered by the US and NATO, when the level of threats to our country has increased significantly, Russia had every right to respond in order to ensure its security.
Factors that affect the global economy nowadays are the consequences of the 2008-2009 crisis. Much earlier than the start of Russia's special operation in Ukraine, economists warned about factors that could lead to an international recession.
The COVID-19 pandemic resulted in the severe disruption of global supply, production and logistics chains. A surge of financial injections into the EU, US and Japanese economy to boost post-pandemic recovery caused a significant increase in demand and, consequently, high inflation. The EU’s ill-advised “green energy” transition led to record energy prices. Renewable energy potential proved to be exaggerated because unfavourable weather conditions meant that wind turbines produced only half the intended energy. The prioritising of climate agenda have resulted in the oil and gas sector significantly underfunded.
As a result, fuel and electricity prices rose substantially. Oil prices rose by more than 22% in 2020-2022, while the price of electricity in some European countries reached its historic highs in March 2022 – by 350-530 % compared to the same period in 2021.
Because of a cold winter in 2020-2021, European Underground Gas Storage (UGS) facilities were empty by spring of 2021. For a long time the EU was delaying decisions to fill its UGSs, waiting for prices to drop. However, there was no seasonal drop in gas prices due to economic and technological difficulties of US Liquefied Natural Gas (LNG) producers and the increased demand for LNG in Asia, where additional supplies were diverted. By mid-2021, Europe was short of gas. At the end of 2021 UGS sites were filled at minimum level with about 50.44% in Austria, 54.43% in the Netherlands, 64.57% in Germany. The “Nord Stream 2” pipeline could have smoothed tension in the EU gas market, but due to pressure from the US it never became operational.
The spike in gas prices was also driven by the systemic strategic mistakes of the European Commission, which has followed the irrational policy of abandoning long-term gas contracts in favour of spot contracts. In September 2021 the price per 1,000 cubic meter exceeded $1,000 and reached the record high of $3,600 in March. Meanwhile, according to experts, Russian pipeline gas in Q1 2022 would have been 40% cheaper for Europeans than spot prices.
Another key factor of high energy prices is the tide of anti-Russia Western sanctions. Expectations by some EU countries that LNG would quickly substitute Russian pipeline gas are self-deceptive. Global LNG demand will exceed supply in 2022 and new projects will not become operational until 2024.
Mmegi: What is your comment on the impact that this conflict is having on African countries such as Botswana, which are suffering high food and fuel prices?
Kemarskiy: The UN warned about a risk of a global food crisis two years ago. The growth of agri-food prices over the recent years is being driven not only by the unfavourable weather conditions and consequences of the COVID-19 pandemic, but also by the short-sighted economic and energy policies by major Western economies, the underfunding of the agricultural sector, trade wars, logistics disruptions and freight volume decline. Freight rates almost doubled.
Nevertheless, according to UNCTAD data, there is no global physical shortage of food. According to the FAO summary of grain production data for the 2021/22 season, the volume of grain stocks in the world market has increased significantly compared to the level of last year and will amount to a record 850 million tons. The issue is in its distribution structure. The price factor also plays a role.
The spike in agri-food prices was recorded already in 2020 and was not a consequence of the Special Military Operation. The FAO Food Price Index rose by 50% between 2019 and 2022. According to stock exchange data, wheat prices rose by 25% in 2021. By February 2022 they were already 31-62% higher than the average for the previous five years. Maize prices have risen by 162% over the past two years.
Rising gas prices are reflected in fertiliser prices which have skyrocketed by two and a half to four times and cereal production.
The devastating effect on the global economy was compounded by the unilateral and illegitimate Western restrictive measures against Russia, including obstacles on delivery of goods, payment difficulties, transaction bans, and customs problems, which have become an additional risk factor for global food security.
The EU openly declared an all-out economic and trade war against our country – in full oblivion to Russia’s standing as a key global supplier of basic agricultural products such as wheat, barley, sunflowers, mineral fertilisers and fodder crops, including to low-income countries, that are subject to risks of food shortages. The US and EU are also attempting to constrain Russia’s abilities to access new markets, thus creating risks of an artificial food and energy shortage and uncertainty in global markets, mostly for African countries.
Instead of making groundless allegations Western leaders should rather turn their attention to redressing the systemic miscalculations in their own macroeconomic, monetary, trade, energy and agro-industrial policies. They should stop attracting commodity flows at the expense of developing countries and abandon the perverse practice of imposing unilateral restrictive measures against international law.
Wanting to rebuild the world system of economic relations 'for themselves', to impose their own 'rules of the game', Western countries fell into the trap of their own ambitions, because they are also devastated by higher prices. Under these conditions, the Russian special military operation in Ukraine has become a pretext for the West to hide its mistakes from the world community and its own citizens.
Mmegi: Is there any measure that Russia is taking to ensure that its trade routes with Africa remain open for products that have not been sanctioned by the West?
Kemarskiy: As our Foreign Minister Sergei Lavrov said at a reception for the African diplomatic corps in Moscow this year on the occasion of Africa Day: “Russia is fulfilling and will continue to honestly fulfill its obligations under international contracts in terms of export supplies of food, fertilizers, energy and other commodities that Africa needs”.
“We call on our friends, the African Union, to strongly demand that the West lift illegal unilateral sanctions that undermine the transport and supply infrastructure that international trade depend on, which creates risks for vulnerable groups of the population. Africa’s voice must be heard”.
We are deeply concerned about a possible food crisis and are well aware of the importance of supplies of food, to the socio-economic development of countries in Asia, Africa, Latin America and the Middle East.
Since February Russia has provided humanitarian assistance to countries in need through bilateral and multilateral channels. Via the World Food Programme Russian food aid was delivered to Lebanon, Tajikistan, Kyrgyzstan, Cuba, Yemen and Sudan. On a bilateral basis assistance was provided to Sudan and Cuba.
Russia expects to have a good wheat harvest this year, which will allow to offer 25 million tonnes of grain for export from 1 August 2022. Together with exports of the last year, our supplies will amount to 37 million tons, and for 2022-2023, we will raise exports to 50 million tons.
Our capacity for exporting fertilizers from June to December 2022 will amount to at least 22 million tonnes which is about 20% of global consumption over this period.
Meanwhile, illegitimate unilateral restrictions imposed by the EU and the US remain the main obstacle to normal export relations
Mmegi: At the Kimberly Process intercessional in Kasane, we are informed that several countries tried to have Russia put on the agenda as discussion item. What was your response in Kasane and what is your position in terms of attempts to sanction Russian diamonds by some KP members?
Kemarskiy: There is no ground to question the compliance of Russian diamonds with the requirements of the KP Certification Scheme. It’s also groundless questioning Russia’s status as a full-fledged member of the KP, as a chair of relevant working groups, or otherwise limiting our participation in the Process work.
Such attacks are speculative and based on an artificial substitution of concepts or their deliberate distortion. Statements about alleged UN sanctions against the Russian Federation are absolutely unjustified. Under article 41 of the UN Charter, solely the UN Security Council is authorized to impose sanctions. UN GA resolution ES-11/1 dated 2 March 2022 does not, and may not, contain any sanctions against Russia.
Empty rhetoric regarding the need to examine irrelevant topics within the KP and appeals for a 'frank dialogue' on issues falsely introduced to the KP indicate nothing but an attempt to use the Process for disseminating anti-Russian propaganda.
The situation in Ukraine is beyond the competence of the Kimberley Process. Attempts to introduce it along with politicized propagandistic messages threaten the current KP work. It’s fraught with significant destabilization of the world diamond industry. It can most negatively affect the socio-economic development of a whole number of the KP participants, and implementation of important international initiatives, including the Sustainable Development Goals.
Moreover, there are attempts to impose on the KP participants the consideration of the issue of the need to change the basics of the Process functioning or to revise the definition of 'conflict' diamonds to serve politicized interests of certain countries. We believe that the issue of possible revision of the definition of 'conflict' diamonds is possible exclusively on a de-politicized basis in full compliance with the KP rules.
Russia, for its part, intends to fully execute its responsibilities within the KP, including as chair of specialized committees. We call on all the Process participants to continue constructive cooperation in addressing the KP tasks.