Russia stops gas supplies to ‘unfriendly countries’

MOSCOW: The Kremlin said Wednesday the halt of natural gas supplies to Poland and Bulgaria over the refusal to pay in rubles was a result of unfriendly actions towards Russia. “The need for a new payment method was a result of unprecedented unfriendly steps in the economic sphere and the financial sector, which were taken against us by unfriendly countries,” Kremlin spokesman Dmitry Peskov told reporters.

“This need was dictated by the fact that, as you know, they blocked from us-or, to put it plainly, stole-a fairly significant amount of our reserves,” Peskov said, adding that this led to a “transition to a new payment system”. “So there is no question of blackmail here,” Peskov said in response to comments by European Commission chief Ursula von der Leyen, who said this was “another attempt by Russia to blackmail us with gas”.

Russia’s energy giant Gazprom on Wednesday said it was completely halting gas supplies to Poland and highly dependent Bulgaria “due to their failure to pay in rubles”. President Vladimir Putin last month said Russia will only accept payment for deliveries in its national currency, with buyers required to set up ruble accounts or have their taps turned off. In response to Russia’s military campaign in Ukraine, Moscow was hit with unprecedented economic sanctions, which also froze $300 billion of Russia’s foreign currency reserves held abroad.

The war in Ukraine has “significantly” impacted the Middle East and North Africa, with the crisis dealing a heavy blow to low-income countries while benefiting oilproducing states, the IMF said Wednesday. The International Monetary Fund’s 2022 growth forecast for the region, which includes Arab countries and Iran, was forecast at 5.0 percent, up from the 4.1 percent prediction for this year made in October.

But the predicted growth masks the disparities between the region’s 22 countries, which range from major oil exporters to nations wracked by war and others that depend heavily on wheat imports as well as hydrocarbon imports.

Russia’s invasion of Ukraine and economic sanctions on Moscow have affected the region “through a multitude of direct and indirect channels”, according to the IMF report. “Prior to the war in Ukraine, the economy in the region was showing strong recovery... the only caveat to that is inflation started to increase in 2021 and remained high,” Jihad Azour, IMF director for the Middle East and Central Asia, told AFP.

The report said inflation in MENA surged to 14.8 percent in 2021 and is projected to remain elevated at 13.9 percent this year, largely due to higher food and energy prices. Azour said low-income countries face increased pressure due to lower levels of food security and heavy reliance on imports from Russia and Ukraine, both major wheat producers.

Sudan and war-torn Yemen are among those particularly hard hit. Emerging markets and middle-income countries, including Egypt, Jordan and Morocco, are forecast to register GDP growth of 4.4 percent, on average. The IMF warned that emerging markets and middle-income countries face worsening prospects, given their governments’ limited capacity to cope with inflation as geopolitical uncertainties persist.

However, Azour said that the surge in crude prices has supported economic recovery in oil-exporting countries. “It has compounded the recovery that they have witnessed last year thanks to a high level of vaccination (against COVID-19) and the various measures they took in order to accelerate the recovery,” he told AFP. This is particularly true of Saudi Arabia, the Arab world’s largest economy and a leading oil exporter, whose GDP expected to grow by 7.6 percent in 2022.— AFP