Putin’s Perilous Course

by Jeffrey D. Sachs

Jeffrey D. Sachs is Professor of Economics and Director of the Earth Institute at Columbia University. He is also a Special Adviser to United Nations Secretary-General on the Millennium Development Goals.
NEW YORK – The dangers of the crisis in Ukraine cannot be exaggerated. Russian President Vladimir Putin is overtly and covertly inciting separatism in eastern Ukraine, and has declared Russia’s unilateral right to intervene there, in complete contravention of international law. Russia’s provocative policies are putting it on a collision course with the West.

Putin explained his point of view in a recent television appearance: Russia’s current international borders are provisional, determined by accidents of history, such as the transfer of Crimea from Russia to Ukraine in 1954, or the transfer of Russian territories to eastern Ukraine in the 1920’s. Putin claims that it is Russia’s right and duty to defend ethnic Russians in neighboring countries, especially in light of the arbitrariness of the existing borders. 

If ethnic Russians call for a return to Russia, Putin asserts, then Russia must heed their call. Putin pointedly reminded listeners that eastern Ukraine was called “Novorossiya” (New Russia) in Czarist times, clearly implying that it could be Novorossiya again.

Evidently, Putin believes that relentless pressure and claims over neighboring states, designed to undermine their sovereignty and force them to accede to Russian demands, will result in a stronger Russia, better able to confront the West. In the recent past, Russia sharply opposed American and NATO military intervention in Libya, Syria, and Serbia on the grounds that the West was violating those countries’ sovereignty. Now Putin claims the right to ignore neighboring countries’ sovereignty on the pretext that Russia is merely defending the rights of ethnic Russians abroad, up to and including their right to secede and join the Russian homeland.

Putin no doubt hopes to create facts on the ground – as in Crimea – without provoking a severe Western reaction. Even without an invasion, Russia can use threats, displays of military power, secret operations, and heated rhetoric to destabilize its neighbors. That may be enough to achieve Russian foreign-policy aims, including its neighbors’ docility.

But Putin’s adventurism is likely to end very badly for Russia. Though the West is justifiably reticent to be drawn into any military confrontations with Russia beyond NATO’s boundaries, and is even reluctant to apply economic sanctions, Putin’s actions have triggered a strong and growing anti-Russian backlash in the US and Europe. The West’s response will intensify dramatically if Russia deploys forces across its borders, whatever the pretext; should Russia adopt subtler methods of political destabilization, Western pressure will build more gradually, but build it will.

Existing trade, investment, and financial relations between Russia and the West are already becoming severely frayed. New investment projects and joint ventures are being put on hold. Loans from Western investors to Russian entities are being called in. Russian banks and companies will face a growing credit squeeze.

In the short term, Russia has ample foreign-exchange reserves to offset capital outflows; but the reversal of capital flows will begin to bite within a matter of months. Following Russia’s forcible takeover of Crimea, it is almost unimaginable that normal economic relations between Russia and the West could survive Russian intervention, subversion, or annexation elsewhere in Ukraine.

In other words, if Cold War II sets in, as appears increasingly likely, Russia would be the long-term economic loser. The European Union can certainly survive without imports of Russian natural gas, even with a full cutoff. Russia’s gas exports to Europe constitute less than 10% of the EU’s primary energy consumption. Russia, on the other hand, would suffer a major loss of revenues.

Putin seems to believe that Russia can offset any worsening of economic relations with the West by strengthening its economic relations with China. But technologies and business are too globally intertwined to divide the world into economic blocs. China knows that its long-term economic prosperity depends on good economic relations with the US and Europe. Putin seems not to understand this point, or even the fact that the Soviet economy collapsed as a result of its isolation from technologically advanced economies.

Russia’s future economic strength depends on its ability to upgrade technologies in key sectors, including aviation, high-speed rail, automobiles, machinery, and heavy industry. That can be achieved only if Russian companies are more closely integrated into global production networks that knit them together with German, Japanese, American, and Chinese firms that rely on cutting-edge technology and advanced engineering.

Of course, matters could become much worse. A new cold war could all too easily turn hot. Many in the US are already calling for arming Ukraine as a deterrent to Russia. But, while military deterrence sometimes works, the West should emphasize trade and financial retaliation, rather than military responses to Russian provocations. Military responses could provoke disaster, such as turning Ukraine into a Syria-type battlefield, with untold thousands of deaths.

There can be no doubt that NATO will defend its own members if necessary. But Russia’s belligerency and appalling behavior should not permit Western hardliners to gain control of the policy debate. Hardline approaches brought expanded conflicts in Afghanistan, Iraq, Libya, and Syria, leading to plenty of deaths but not to meaningful political or economic solutions in the affected countries. War is not politics by other means. War is mayhem and suffering.

Putin is no doubt acting in Ukraine with domestic politics very much in mind, using his adventurism abroad to shore up his political base at home. The Russian economy is flagging, and the population is weary of repression, not to mention Russia’s pervasive corruption. Russia’s annexation of Crimea and threat to invade eastern Ukraine appear to be hugely popular. It remains a terrifying reality that politicians often perceive war to be an antidote to internal weakness.

Both Russia and the West have played fast and loose with international law in recent years. The West violated national sovereignty in Serbia, Afghanistan, Iraq, Libya, and Syria. Russia is now playing the same card with shocking brazenness in its own neighborhood, often justifying its actions by pointing to Western precedents.

But Russia’s true long-term interests lie in multilateralism, integration into the world economy, and the international rule of law. Putin’s current path is strewn with grave hazards. He is undermining Russia’s economic prospects, while confronting the world with a growing threat of war. Our only hope is that all sides return to the principles of international law, which they have forsaken for too long.



Copyright: Project Syndicate, 2014.
www.project-syndicate.org

 


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