Thursday, February 26, 2015

Russia’s Ukrainian Disaster

Nearly everyone believes the best way to solve problems is careful discussion among reasonable, rational people. Unfortunately, political conflicts often produce emotional dimensions that have the ability to sweep away exchanges of this kind, and the long-term crisis in Ukraine is a case in point.
What if reasonable, rational people on each side were able to bypass the politicians and sit down to develop a solution?

For Americans, the opening argument would be simple:  one country is invading another. That’s wrong.
But we would quickly learn that the situation isn’t as simple as we think.
For example, our reasonable and eminently rational Russians counterparts, people that you and I would be comfortable with as colleagues and friends, most likely would deny that Ukraine is a separate country and that Ukrainian is a different language from Russian. It’s just a dialect, they would tell us.
Based on my reading of linguistics and history, I would disagree. But I would have to acknowledge that the views of these Russians aren’t irrational or based on simple jingoistic arrogance.
And I couldn’t dispute that many, and probably a majority, of the people living in the Don river basin consider themselves to be Russians. That’s true even if historians point out that the area was Ukrainian before large numbers of Russians came to work the mines and the mills back in Tsarist times.
Also, there’s no dispute about the ethnicity of the overwhelming majority of Crimea’s residents. They’re Russians.
After making these points, a reasonable Russian would also point out something important—the last President of Ukraine, the one who brought the country closer to Russia, was democratically elected. That’s true—Viktor Yanukovich put together a coalition to oust his unpopular (read:  corrupt) predecessor. It’s also the case that he was forced out by popular unrest, not by losing an election. Russians say he was overthrown by a coup.
Our counter arguments could begin with an important point of our own. That last election was based on domestic issues and many voters, especially in the western regions of the country, were apathetic after years of corruption.
The same election today would be different. It would be a yes/no vote on Europe and the turnout for “yes” in the western part of the country would be huge. No apathy this time.
The eastern areas would still vote “no,” but a substantial proportion of even Russian speakers would vote for Europe. Young people would be key. Given a choice between a future that offers the hope of living in Moscow, compared to one that offered the prospect of London, or Paris, or Rome, we would argue that a lot of those educated younger people who see themselves as mobile would vote for Europe.
Our Russian colleagues would likely concede on these points, probably with considerable discomfort on the issue of the young, and so it would go. I’m not sure what our group’s conclusion would be, but it would be interesting to have this kind of discussion.
One thing I know for sure, our Russian colleagues wouldn’t be gloating over the status quo, over the fact that Russia has digested Crimea and taken possession of a good chunk of the Don basin.
Many Republicans claim that Putin, a strong leader, has triumphed over President Obama, who they like to characterize as weak.
While our rational Russians have a different perspective than ours on the origins of Ukraine and the factors that drive the conflict there, I think vanishingly few would argue that their country is a winner in this conflict—not so far and not likely ever.
Critics of Obama and others forget that the conflict began when Ukraine, all but settled irrevocably in Russia’s orbit, was suddenly yanked back and pulled toward the West. Absorbing Crimea and some scattered lands along the border is small consolation for the loss of a huge country—one that, again, many Russians think of as a part of their own nation.
Sanctions don’t produce “shock and awe” and always take time to have an impact. Even so, the ones imposed on Russia by the EU and the U.S. have quickly had a powerful effect. Russia was already struggling economically and its government is now facing retrenchment across the board.
The crisis in Ukraine is causing pain beyond the sanctions.   
First, Putin has had to bulk up the military to bolster his swagger, and that’s expensive, both in the short and the long term.
Next, to make the acquisition of Crimea and the Don basin look good, both locally and to the world, Putin will have to spend billions to rebuild and strengthen infrastructure. The money for these investments isn’t in the budget, and the consequences for the overall standard of living in Russia will be dire.  
Much has been made of the sanctions’ impact on Russia’s oligarchs, who now can’t travel and spend as freely in the West. But the real danger for the regime will be in the reaction of the young. As the country re-Sovietizes itself, people with talent and ambition will be very unhappy and do their best to leave. When the government moves to prevent that, as it will inevitably be required to do, internal pressure will rise.
Moreover, the challenges for Russia in the aftermath of its actions in Ukraine are just beginning.
The price of oil and gas will eventually go back up at least somewhat, but every dollar lost in the interim is wealth that’s gone for good—roads and bridges not built, technology not acquired, etc.
And the long-term balance of payments scenario is worse. Europe has been working for some time to reduce its dependence on Russia gas. That process has accelerated, both with renewables and with the revived pipeline from Azerbaijan.
Russia has been able to sell some gas to China, but don’t be fooled into thinking they got as good a price as they’re getting from Europe. The Chinese know that Russia has no one else to sell to.
A strong leader brings some benefits in the form of the ability to act fast. Unlike his Western counterparts, Putin didn’t have to get anyone’s agreement to the course he’s pursued with Ukraine. One motivation for his actions was that it’s politically very popular—Russians of all kinds reacted with pride to an assertive policy, one that the see is justified by external attacks.
But strong, uncontested leadership also comes with the potential for significant costs. It will be very difficult for Putin to back down on a strategy that’s been laced with so much nationalist rhetoric. But the West also can’t back down, because to do so would set the precedent of allowing one country to nibble away at another.
Nobody backing down means the sanctions will likely exist for many years.
Over time, the rest of the world will find it increasingly easy to adjust to the non-participation of a country that, despite its size, doesn’t have much to offer the international economy. Russia, on the other hand, is highly dependent, especially for technology and investment capital, and will suffer more and more.
It won’t be long before our reasonable Russians look past their rational nationalist arguments and come to appreciate that they—and their children and grandchildren—would have been a lot better off if Putin had needed to consult with thoughtful people before digging Russia into the hole it’s in now.