Feb 5th 2015

Mr. Putin Will Not Change Course in Ukraine or Syria

by Daniel Wagner

Daniel Wagner is CEO of Country Risk Solutions, a Connecticut-based cross-border risk advisory firm and author of the book Managing Country Risk. CRS provides a range of services related to the management of cross-border risk. He is also Senior Advisor with Gnarus Advisors.

When Russia first expropriated Crimea last year, I wrote that neither the EU nor the U.S. were likely to take military action to reverse the tide, and that in the end, Russia didn't care much about whether it is a member of the G8 or not. Some economic sanctions would ensue, I predicted, but to Mr. Putin and many Russians, righting an historical wrong was far more important than what may come as a result. They also knew that Europe and the U.S. need Russia every bit as much as Russia needs them -- perhaps more so considering Europe's dependency on Russia for natural gas, and the desire for much needed collaboration between the U.S. and Russia on Iran and Syria.

At issue then, as now, was the perceived legitimacy (on the part of Russia) of the government in Kiev, ethnicity in Ukraine, Russian history, Russian pride, and Russia's ability and willingness to project its power. Depending on one's frame of reference, Russia's actions have either evoked outrage or relief, as Ukraine has become the epicenter of the battle between pro and anti-European and Russian influence in the region. In the absence of any meaningful military response by either Europe or the United States -- which remains to be seen, but, a year after the fact, is more likely be more oriented toward preventing any further expansion of Russian-backed military forces, rather than an effort to repel them altogether -- Mr. Putin has achieved what many Russians have sought since jurisdiction over Crimea was transferred from Russia to Ukraine in 1954.

In spite of all the economic pain Russia (and Russians) have thus far endured as a result of sanctions, and the plummeting price of oil, support for Mr. Putin remains at more than 70 percent, according to a January poll taken by the Public Opinion Foundation. That is astounding, and should give Western policy makers some guidance as to what to expect from him going forward: in short (as if there were any doubt), more of the same. Indeed -- what else do they need to know? As long as he has the support of the Russian people, he will continue on the course he has set. Apparently, the average Russian would rather eat rubber than give in on Crimea and Ukraine.

Similarly, in spite of the tremendous economic and political pressure that is being applied to Mr. Putin as a result of the plunge in oil price to modify his position on support for Bashar Al-Assad in Syria, he is unlikely to do so. While many around the world may chide him for his overt display of testosterone, having done so resonates with people who identify with his unabashed bravado, and Russia's willingness to challenge the status quo. In the body of global public opinion, Mr. Putin has plenty of admirers, which gives Russia an added incentive to continue thumbing its nose at the West.

In the eyes of many, the choice in Ukraine and Syria appears to be between a) Russia as a former global power, ruled by a strong man (wearing a cape of 'democracy'), which seeks to restore part of its former glory by resurrecting old alliances, flexing its muscles, rejecting the existing world order, and challenging 'the way things are' on a broad scale, and b) the U.S. as a fading superpower (with China nipping at its heels), trying to 'do the right thing' in the world (but really just looking after itself and its interests, like any other country), paralyzed by its own hubris and political infighting, and having difficulty getting much of anything done -- domestically or internationally.

There is plenty to like and dislike about both options. But, given the fractured and evolving global political landscape, both sides, and neither side, will achieve all of its objectives. Swimming against the tide has its own appeal at a time when virtually everything about the world order seems to be up for grabs. By the same token, trying to maintain stability has obvious appeal. The battle lines are clearly drawn, and the stakes are high, which is yet another reason neither side has much interest in backing down.

More to the point, having such battle lines drawn seems to suit the powers that be - on both sides of the divide -- rather well, as a convenient rallying point for nationalists to wave the flag, for extremists to promote their causes, and for the people who hold the levers of power to maintain their hold. Russia is a well-ingrained enemy of the U.S., and vice versa. For that reason, not too much effort is required to dust off and re-oil the propaganda machines on both sides of the Atlantic. Both sides appear to have an interest in prolonging the status quo between them for the foreseeable future.

As for Mr. Putin, there would appear to be little incentive to change course -- in Russia, Ukraine, Syria, or anywhere else where Russia is in the process of flexing its muscles. Ukraine demonstrates very well that while NATO is unified as a political force, it is anything but as a military force, and Europe is as disjointed in terms of international policy making as it has ever been. Any future military response to Russia in Ukraine will undoubtedly prove to be -- and be seen as - too little and too late. Mr. Putin knows this as well as anyone.



Daniel Wagner is CEO of Country Risk Solutions and author of "Managing Country Risk". For Country Risk Solutions, please click here.

You can follow Daniel Wagner on Twitter: www.twitter.com/countryriskmgmt


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