How to manage geopolitical risk and understand its implications on your portfolio and regional stability: Russia and the Ukrainian Crisis
By Lisa J Walters, on 23 March 2017
By Dr Eugene Nivorozhkin, Senior Lecturer in the Economics of Central – Eastern Europe
Centre for Comparative Studies of Emerging Economies
The economic and political turbulence around Russia in the aftermath of the Crimea annexation in March 2014 is an interesting illustration of how a geopolitical event is itself necessary but not sufficient to cause significant geopolitical risk for investment portfolios.
The Ukrainian crisis prompted a number of countries and international organisations to apply sanctions against individuals, businesses and officials from Russia. In addition to diplomatic actions, the measures included travel bans and freezing assets owned by Russian officials and friends of Putin. A broad set of measures targeted sectoral cooperation with Russia and more general economic matters. In particular, Russian state banks were excluded from raising long-term loans in international financial markets. Bans were implemented on arms deals and exports of dual-use equipment for military use. The EU/US ban included exports of selected oil industry technology and services, to name just a few.