Sapa and the Global Economy

Sapa and the World's Economy

Sapa and the Global Economy. By Solomon Oluwaseun Olukoya

While sapa is having a nice time with the global economy, Russia’s economy is feeding fat and healthy. Nigeria’s economy would have been dining at the same table just as Russia. The probe becomes; what is Russia doing right?

Russia’s Ruble is the only currency in the world that has gained more value despite the war threats and even amidst the myriad of sanctions from the EU 🇪🇺 and “World’s Police” – US Government 🇺🇸

Energy has become more expensive globally, and its effect on the global economy and the financial state of things cannot be overemphasized.

Before the invasion, Russia’s currency was at 81 Rubles per $1. But today, $1 equals 61 Rubles. The sanctions were supposed to render Russia’s currency useless. But the reverse is the case.

We’ll probably be having a different conversation if the President of Russia, or the Govenor of the Central of Russian Federation was either Shadrach, Meshach, or Abednego. But none of them answers any of the aforementioned for a name.

Is Russia the cause of the financial crisis in the world today? 

The answer is a “no” – a very fat “no”, even though Russia has the world’s largest natural gas reserve. But the world will need to make Russia 🇷🇺 happy, for ease to beam its bright teeth at the global economy.

Just recently, Russia cut its supply of natural gas to Europe by a whopping 88%. Even Europe’s economic heavyweight (Germany 🇩🇪) is at the mercy of Russia, probably because the whole of Europe 🇪🇺 depends on Russia 🇷🇺 for natural gas. Russia 🇷🇺 supplies over 40% of the natural gas in Europe.

Germany 🇩🇪 being the largest importer last year is suffering from an acute shortage of energy at the moment.

Well, the billion-dollar question becomes, what is Russia doing right?

Monetary Policy: Russia’s central bank enforced a policy to control measures that increased demands for Rubles. The policy is that 80% of business capital remains in Russia’s ruble instead of the US dollar or euro.

They ensure that gas payments are in Rubles. Before the invasion, Russia accepted euros as a means of payment for the gas they supplied. But it changed after they were bashed with several sanctions following the invasion in Ukraine.

Revolutionised import controls. By default, if you import more, you need the US dollar. This means you need US dollars to buy from the international market. But Russia turned this around. They cut down on imports just like South Korea did in the 1950s which birthed the new South Korea 🇰🇷.

Despite the US threat of sanctioning any country that ignores the price cap, it also looks like Russia will also ignore the second order effect of the global price cap, because Russia has also said it will not export to countries that comply with the price cap.

Just a couple of days ago, Japan 🇯🇵 was forced to sell off some US dollars from its reserve for the Japanese yen to gain a little value, as it was becoming helplessly valueless against the USD.

Conclusively, while the global economy is in a mess partly due to the monetary policies of central banks across the world and due to the shortage of energy, the US dollar can no longer sustain the world’s economy just as it used to. The earlier we accept the need for a new global reserve currency, the better for us.

 

Author: Solomon Oluwaseun Olukoya

Contact: olukoyasolomon64@gmail.com; +2347030313860

Feel free to reach the author, ask questions or make inquiries on this topic or any other legal issues via onyekachi.umah@gmail.com or +2348037665878.

****************************************************************************************

This work is published under the free legal awareness project of Sabi Law Foundation (www.SabiLaw.org) funded by the law firm of Bezaleel Chambers International (www.BezaleelChambers.com). The writer was not paid or charged any publishing fee. You too can support the legal awareness projects and programs of Sabi Law Foundation by donating to us. Donate here and get our unique appreciation certificate or memento.

DISCLAIMER:

This publication is not a piece of legal advice. The opinion expressed in this publication is that of the author(s) and not necessarily the opinion of our organisation, staff and partners.

PROJECTS: 

🛒 Take short courses, get samples/precedents and learn your rights at www.SabiLaw.org

🎯 Publish your legal articles for FREE by sending to: eve@sabilaw.org

🎁 Receive our free Daily Law Tips & other publications via our website and social media accounts or join our free whatsapp group: Daily Law Tips Group 6

KEEP IN TOUCH:

Get updates on all the free legal awareness projects of Sabi Law (#SabiLaw) and its partners, via:

YouTube: SabiLaw

Twitter: @Sabi_Law

Facebook page: SabiLaw

Instagram: @SabiLaw.org_

WhatsApp Group: Free Daily Law Tips Group 6

Telegram Group: Free Daily Law Tips Group

Facebook group: SabiLaw

Email: lisa@sabilaw.org

Website: www.SabiLaw.org

ABOUT US & OUR PARTNERS:

This publication is the initiative of the Sabi Law Foundation (www.SabiLaw.org) funded by the law firm of Bezaleel Chambers International (www.BezaleelChambers.com). Sabi Law Foundation is a Not-For-Profit and Non-Governmental Legal Awareness Organization based in Nigeria. It is the first of its kind and has been promoting free legal awareness since 2010.

DONATION & SPONSORSHIP:

As a registered not-for-profit and non-governmental organisation, Sabi Law Foundation relies on donations and sponsorships to promote free legal awareness across Nigeria and the world. With a vast followership across the globe, your donations will assist us to increase legal awareness, improve access to justice, reduce common legal disputes and crimes in Nigeria. Make your donations to us here  or contact us for sponsorship and partnership, via: lisa@SabiLaw.org or +234 903 913 1200.

**********************************************************************************

Leave a Reply

Your email address will not be published.

Related Posts