The Pandemic Depression
The Global Economy Will Never Be the Same
Russian President Vladimir Putin is not as strong as he might seem, or, more important, as he might hope. Although Russia supports fighters in Ukraine, invaded Georgia in 2008, sold missile systems to Iran, and recently threatened Denmark and Lithuania with nuclear war, it is, in reality, a muted and restrained power operating in a system that no longer supports grand-scale intervention. If anything, Russia’s recent military and diplomatic adventures have revealed its desperate weakness. Meanwhile, its shift toward a self-defeating utilization of new forms of power (covert warfare, cyber conflict, and coercive energy policy) demonstrates the limitations it faces in coercing its neighbors.
Russia’s involvement in the Ukraine conflict has not gone the way Putin intended. Betting that the West would decline to help new Ukrainian President Petro Poroshenko, Moscow attempted to strangle Ukraine’s economy, nullifying the bailout package and the gas deal that the two countries signed under former Ukrainian President Viktor Yanukovych’s rule in 2014. But Putin’s calculation proved incorrect; the West did offer financial support and training forces, granting Ukraine $17.5 billion in economic packages and loans to keep its economy afloat. Meanwhile, as the West was coming to Kiev’s aid, the price of oil collapsed, leaving Russia with barely enough funds to even contemplate purchasing a quarter of the new T-50 stealth jets it had planned on acquiring. That, combined with Russian soldiers and mercenaries’ limited success in Ukraine so far, and the fact that the government had to move troops in from Siberia and force conscripts to sign up for the long term just to get enough boots on the ground at the border, a full-scale invasion of Ukraine seems unlikely, even as the ruble recovers.
For Russia, the story in Ukraine gets even worse. Russia’s involvement in Ukraine has roots in the nation’s role as a Soviet-era energy pipeline for natural gas sales from Russia to Western Europe. Until 2014, when civil strife began, 80 percent of Russian natural gas headed for Europe traversed through Ukrainian territory. To this day, gas supplies have been used as a political tool by Russia to keep Ukraine aligned with Moscow. But now, Russian pipelines in Ukraine operate at about half capacity, owing in part to Western sanctions, the effects of war, and a network of new pipelines that circumvent Ukraine. Thirty percent of all natural gas imported to the EU comes from Russia, where state-owned Gazprom has been charging countries different prices according to the their political stance. Bulgaria, the Czech Republic, and are being charged well above the EU average price, due in part to their supplying gas back into Ukraine after the Russian shutoff. On the other hand, Hungary and Slovakia are paying well below the average EU price, as these governments have shown more support for Putin. Now the EU is accusing the company of anticompetitive practices and formally bringing it up on legal charges. This could spell disaster for Gazprom’s revenues and further damage the energy export-driven Russian economy.
Things aren’t going much better for Russia in other parts of its foreign policy. In the wake of the impending Iranian nuclear deal, Russia resumed its S-300 surface-to-air missile sales to Tehran, a deal that was nixed in 2010 as sanctions on Iran mounted. Moscow officials declare that the sales abide by the framework of the tentative agreement between world powers and Iran. The United States has criticized the move as jeopardizing the final deal in June. The U.S.-Russian rivalry has continued even with the Soviet collapse, and this recent move by Russia can be seen in that context. Discord between the United States and Russia has moved from a geopolitical ideological rivalry to a regionally based, issue-centered rivalry. The fates of democracy, human rights, and economic independence within of post-Soviet states have been at the center of this animosity. Arms sales to U.S. adversaries by Russia and missile defense placements by the U.S. in Europe have also deepened the post–Cold War rivalry. The resumed sales demonstrate Russia’s desire to provoke the United States, even if the missiles themselves are unlikely to be a major factor in U.S. foreign policy considerations. These missile sales are an empty gesture, as the West is now very unlikely to attack Iran given that a nuclear deal seems imminent.
Russia is attempting to counter the EU’s growing economic might by creating its own economic free trade zone, the Eurasian Union. As of now, the Eurasian Union only has four members: Russia, Armenia, Belarus, and Kazakhstan, and is a customs union that allows for the free movement of goods, services, and persons across borders. Other Eurasian countries, however, are looking westward, signing bilateral deals via the EU’s neighborhood policies.
Another source of Russian antagonism against the United States comes from the nation’s growing cyberpower status. Now considered the second strongest cyberpower after the United States, Russia has the capability to compromise government networks and e-mail accounts. Moscow’s capabilities, however, have created few real accomplishments. Attacks on the White House, the State Department, and the Defense Department achieved nothing of strategic value. Moscow’s attack against Estonian servers in 2007 only brought Tallinn closer to its NATO allies, aligning the nation within the Cooperative Cyber Defence Centre of Excellence. Cyber disruption launched before the conflict in Georgia in 2008, which included denial of service attacks of Georgian government networks and telecommunications companies, did not do any damage nor help Russia achieve any strategic objectives. These cyber campaigns caused confusion and left some parts of the country in the dark, but it was conventional military attacks that secured the separatist territories of South Ossetia and Abkhazia for Russia.
Given that, as far as we know, Russia has not even tried cyber measures against Ukraine, one wonders what these methods really achieve for it. The recent attacks on the United States Department of State, Department of Defense, and White House, which involved a security breach on Obama’s non-classified computer network that could have revealed sensitive—but not classified—documents and messages, are troubling and notable, but they still do not constitute a successful operation. Penetrating the White House’s systems might seem scary, but if no classified information is compromised, little is accomplished. If anything, it is more of a wakeup call for the U.S. government to shore up the backdoors throughout its own systems. The United States is vulnerable, but it is not clear that Russia is able or even willing to exploit these weaknesses in a significant way.
Given that Russia’s bark is worse than its bite, there are several options for responding. John Mearsheimer advocates buffer-state status for Ukraine, a seemingly interesting proposition that avoids a full-scale war in the region. Yet given the troubled history of warfare and occupation within buffer states such as Afghanistan and Poland, this idea becomes a nonstarter. Furthermore, buffer-state status can lead to continuous territorial disputes. Leaving Ukraine in limbo between the West and Russia is not a solution that is fair to Ukraine or to any other interested party.
Letting Russia assert its regional interests has resulted in outcomes that counter its own goals. And that is why rushing to deal with a perceived Russian threat would be folly. Continued support for Western allies and investment in alternative energy sources and cyberdefenses as (opposed to cyberoffensive capabilities) would lead to continued stability in the international system despite Russia’s use of force. Pushing a confrontation between the West and Russia will only lead to a demonstration of the West’s own weaknesses; strategically incompatible goals, limited weapons supplies (excluding the United States), and the West’s own vulnerability when it comes to cybersecurity would lead the West to appear weak just as it attempts to look strong.