It’s now around day forty-nine of Russia’s invasion of Ukraine, and it’s carrying on as Putin insists that they will continue until they meet their goals. This as there are unconfirmed reports that chemical weapons were used in an attack in Mariupol, while Russian spokespeople from Donbas were discussing the possibility. That could lead to another escalation in sanctions, and talk of “red lines,” though that didn’t seem to do much good when it happened in Syria. The mayor of Mariupol says that more than 10,000 civilians have been killed as the strategic port city continues being flattened by Russian forces. Ukrainian government officials also say that they have thwarted an attempt by Russian hackers to knock out power to parts of the country, and it’s worth noting that Canada has been providing cyber-security assistance to Ukraine.
Ukrainian President Volodymyr Zelenskiy said that Russia could resort to chemical weapons as it amassed troops in the eastern Donbas region for a new assault on Mariupol https://t.co/bPnheaZQRE pic.twitter.com/TSOCGzhZrb
— Reuters (@Reuters) April 12, 2022
What's so interesting about Zelensky is that his appeals to the West have been incredibly effective — but so has his ability to name and shame countries that want to appear more committed and invested than they are. https://t.co/EGuS4pw5re
— Justin Ling (Has Left) (@Justin_Ling) April 12, 2022
On the subject of sanctions, there are lots of questions circulating about how effective they really are if the invasion continues, and it’s one of those things for which it’s not an easy answer. Yes, they’re hurting Russia, but Putin and his inner circle seem fairly insulated from some of the worst of it, in part because they managed to stop the ruble from collapsing entirely. That makes it even more imperative to provide military support to Ukraine so that they can defeat Russia on the battlefield, which will hurt Putin more. This doesn’t mean that we shouldn’t carry on with sanctions, because we should, but they’re at the point where they are hurting us as well, and we had Conservatives demanding exemptions for farmers last week who bought fertilizer from Russia before the conflict began and now don’t want to pay the tariffs associated. But for sanctions to be effective, they will hurt us as well, and people seem to forget that.
As well, this conflict is now going to have an effect on inflation globally, because of the effect of diverting from Russian oil and gas, and from the effect this war has on Ukraine’s ability to produce and export food, as the breadbasket of Europe. Of course, it’s going to continue to be blamed on government spending (never mind that it actually isn’t, and this is a global problem), and the Bank of Canada is going to hike rates this week if only because they need to be seen to be doing something about the problem even if it won’t actually address the root causes of these price increases. Things are messy, and it’s going to take time for everything to work itself out, but what will really help is for Russia to get out of Ukraine.
I'll keep saying it: we are moving from COVID inflation to CONFLICT inflation. Conflict inflation is going to be lower in headline going forward, but more painful for growth. You could sub out of used cars, home renos, fitness equipment. You can't sub out of food and energy.
— Frances Donald (@francesdonald) April 12, 2022