In March 2014, after Russia annexed Crimea, US President Barack Obama famously said: "Russia is a regional power that threatens some of its immediate neighbors not because of its strength but because of its weakness."
At the time, Obama's words were seen as arrogant and thought to underestimate Russia's military strength. Today we have another perspective on the military power of that country.
Russia has deployed 85% of its military power in Ukraine since February, but it has only managed to seize an additional 11% of that country's territory and, despite the enormous cost suffered in human and material losses, most of it is only cereal fields. Suddenly, Obama's assessment of Russia as a regional power seems overly generous, even though arrogance is never good in diplomacy.
Regardless of how Putin's war of aggression against Ukraine ends, it is a disaster he is unlikely to survive. The best thing for everyone would be for him to be overthrown, commit suicide like Hitler or end up shot like Mussolini as soon as possible. Now, we are not only facing a personal drama. Putin has degraded, discredited and isolated Russia. The biggest mistake the outside world could make today would be to expect Russia to return to the status quo ante. In its recent history, Russia has been through great upheavals, and we need to brainstorm what can happen to a country that has been so poorly governed.
It is difficult to fathom the magnitude of the disaster that Putin has brought to Russia and the world. He has time and again unleashed unjustified wars, especially in Georgia and the Ukraine; he has destroyed the Russian army; it has ended the freedom brought about under Gorbachev and Yeltsin; it has isolated Russia from the rest of the civilized and developed countries; it has denigrated its economy; and has paralyzed the modernization of the country. In future centuries, Putin will be seen as a rival to Caligula and Mobutu in cruelty and damage.
For Russians who dream of imperial greatness for their country, it is most devastating that Putin has lost his war in Ukraine. Throughout history, Russia has often been defeated. In the last two centuries, four defeats stand out: the Crimean War of 1853-1856, the Russo-Japanese War of 1904-1905, the First World War of 1914-1917, and the Afghanistan War of 1979-1988.
Every time a terrible dictator has ruled Russia, pessimistic voices have claimed that someone worse could happen to him after his demise and have warned the outside world to be careful about destabilizing the country. Those pessimistic voices were always wrong. All previous Russian military defeats led to major liberalizations. Tsar Alexander II took over from Tsar Nicholas I in 1855, after the senseless Crimean War. Alexander II was the most reformist czar and was praised by Lincoln because he abolished serfdom. There has been no better time than the 1860s for US-Russia relations.
The dim-witted Czar Nicholas II was weakened by the Russo-Japanese War, which led to the creation of the Duma and legal reform. He was overthrown after the Russian withdrawal from the Great War which marked the prelude to the first reasonably democratic elections in the country. After the failed war in Afghanistan, the USSR collapsed, and the feared nuclear weapons played no role. We should not fear Russian destabilization, but welcome it.
Increasingly, Putin's war in Ukraine looks as disastrous for the Kremlin as the Russo-Japanese war. Like the hapless Nicholas II, Putin has unjustifiably destroyed most of the Russian army, and he will hardly be able to survive such a disaster. Nor should we fear that someone even worse will come to power, because Putin is the worst possible option. He has degraded himself to the level of Hitlerian and Stalinist genocidal policies. It is true that defenders of genocide and nuclear attacks that are even worse appear on official television, but the truth is that they appear only because Putin wants to show that there are people worse than him. According to the excellent investigative journalists Andrei Soldátov and Irina Borogán, Putin has not only elevated the FSB repression to the level of the KGB but to that of the NKVD.
Putin is a disaster for Russia's foreign policy. Since he lies all the time, no conversation with him can be relevant. In addition, he violates all the agreements that he has concluded and also those that he has inherited. The benevolent Western rulers of France and Germany have claimed to have passed on useful warnings in talks with Putin, but we see no evidence of the effect of such warnings. On the contrary, it seems that Putin grows up in any meeting with foreign leaders because they are a sign of a vestige of respectability. With his war against Ukraine in 2014, Putin cut Russia off from the US, Europe and most of the former Soviet republics.
He stuck with the third world by his side and promoted the BRICS (Brazil, Russia, India, China and South Africa). Brazil and South Africa have lost much of their appeal due to economic stagnation caused by the end of the commodity boom in 2014. India and China have not condemned Russia's war in Ukraine, but neither have they supported it.
Russia has repeatedly requested arms deliveries to China, but according to the US government it has received nothing. In the mid-1990s, a former Russian deputy foreign minister told me that Russia had refused to become a junior partner of the US. Instead, it had become a junior partner of China. Putin and Xi Jinping seem to get along very well, but their subordinates have great trouble cooperating, and Chinese authorities and private companies fear secondary US sanctions if they cooperate with Russian entities. As a result, Chinese state banks are refusing to lend to Russia, and even Huawei says it has suspended deliveries of mobile phones to Russia. The supply of arms to Russia would far exceed what China considers affordable. Instead, both China and India are delighted to buy oil from Russia because they get it at deep discounts of $25-35 per barrel.
A few years ago, China overtook Russia in GDP per capita in current US dollars, which means that its total GDP is ten times larger, since the Chinese population is ten times larger than Russia's. In practice, China only buys raw materials and weapons from Russia; and now, given the ineffectiveness and outdatedness that Russian weapons have shown in the war in Ukraine, it will be forced to stop buying weapons. And then the Russo-Chinese trade will look purely colonial. China had sold Russia electronic components and other sophisticated manufactures. However, since the start of the war, both Chinese and Indian exports have halved as companies fear violating Western sanctions and thus being subject to secondary sanctions.
At present, the only country whose delivery of weapons to Russia has been proven is Iran, which has supplied numerous drones; their quality seems to be poor anyway, as Ukraine has shot down many of them. The US has claimed that North Korea was going to supply heavy artillery ammunition, but Pyongyang has denied this, and so far no North Korean ammunition has been detected in Ukraine.
In the old days before the war, Putin had kept German Chancellor Angela Merkel and US President Barack Obama waiting. Some Western leaders even waited for hours; however, now it is the presidents of Kyrgyzstan and Azerbaijan, aware of these diplomatic intricacies, who have just publicly jilted Putin. It also doesn't help that Putin likes to murder people both at home and abroad. Today, few want to talk to him and those who do are neither decent nor impressive. Putin has achieved that Russia is totally isolated and sanctioned by the whole of the Western world, almost like Iran and North Korea.
Putin has been a catastrophe for the Russian economy. He inherited a reformed economy in 2000 and then enjoyed a decade of commodity boom, but the Russian economy has stalled since 2014 and is now sinking. The optimistic official forecast is for a decline of only 6% in 2022, without any recovery for a decade. Even in official terms, Russia's real disposable income fell by 10% in 2014-2020. Instead of opening up Russia to trade and entrepreneurship, Putin is closing down his country in every perceivable way.
The only aspect of the economy that Putin cares about is what he and his cronies can seize. The official total of net capital outflows from Russia over the last three decades amounts to more than a trillion dollars. By my calculations, he and his closest cronies own about a quarter of that, or $250 billion. This is why Putin has made no attempt to stop the massive outflow of capital. His cronies have bought palaces in nice places all over the world and have acquired some two hundred superyachts. The US has identified five superyachts "associated" with Putin, according to the official term for the properties. As the late Boris Nemtsov said long ago, Putin is almost the world's greatest hedonist (along with Saudi Arabia's Mohamed bin Salman).
Putin has expelled the best citizens of the country: officially 419,000 in the first half of 2022. The sensible, the most educated and the entrepreneurs flee to more hospitable lands. Putin's announcement of mobilization at the end of September quickly escalated the situation. Hundreds of thousands of young Russians fled Russia to avoid conscription. Putin has turned the country into a prison. He has blocked all forms of modernization in Russia and degraded it to the level of a 19th century resource economy with the failed and retrograde Tsar Nicholas I as its ostensible ideal.
Following Russia's first attack on Ukraine in 2014, the West introduced major sanctions. In March-April 2014, the US and the European Union imposed personal and trade sanctions on Crimea, which have kept it isolated and stagnant. When Russia moved heavy troops into eastern Ukraine in July 2014, the West added far more severe sectoral sanctions on finance, oil technology and defense technology.
The effectiveness of these sanctions has been questioned by Russian leadership and also by Western leaders (who called for tougher sanctions), but the punishment has had significant effects. After his imposition, the Russian troops stopped the offensive in the Ukraine; and the Russian economy has not grown since they were introduced in 2014. Although the European Union sanctions were intended to be valid for six months, they have not ceased to be renewed. The best proof of their impact could be that, as much as they despised them, the Russian leaders did not stop calling for their suspension. The sanctions were maintained, although not significantly tightened, despite the fact that Russia did not withdraw from those territories. In retrospect, the best strategy would have been to systematically intensify sanctions, but the European Union in particular opposed that policy.
After February 24, 2022, the sanctions have become much tougher and are close to the severity of those decreed by the West against Iran. Three types of sanctions stand out: financial, export control and personal. This time, the financial sanctions have been much more severe than in 2014. Many of the largest Russian banks have been sanctioned and also banned from SWIFT, the international payments messaging system. The biggest blow has been the freezing of more than 300,000 million dollars in foreign exchange reserves of the Central Bank of Russia that were in seven Western countries. The logical thing is that those funds are confiscated and used as war reparations for the destruction of Russia in the Ukraine. However, the financial sanctions have had less of an effect than most initially expected. The Central Bank responded by raising interest rates and imposing strict currency regulations, and Russia has benefited from sky-high prices for energy exports.
By contrast, the new, strict export controls appear to have been much more effective. Russia's exports have increased, but its imports have halved because the West has banned the export to Russia of all kinds of electronics and dual-tech products. More than a thousand large multinational companies have stopped doing business in Russia, because it costs them more in damaged reputation than in commercial benefit. Surprisingly, also countries that remain friendly to Russia, such as China and India, have reduced their exports to that country for fear of secondary sanctions from the West. Despite everything, the Russian government claims that its GDP will only decline by 6% this year.
Personal sanctions have affected thousands of Russian officials and businessmen. All parliamentarians have been sanctioned. The number of families of civil servants who are subject to sanctions is increasing more and more. Currently, 70% of Russian exports are oil and natural gas. Western countries have long debated how to penalize these export earnings, though so far without much success. The US has defended a cap on the price of oil. The European Union has decided to drastically reduce its gas imports, and it is not easy to reorient them.
At the moment, controls on the export of electronic products appear to be the most powerful sanctions, and are likely to cause the economy to fall further and further behind, as did the Soviet one.
Russia is a personal dictatorship with a minimal number of institutions. Such a system usually collapses with the death of the tyrant. The usual three factors in an early slump are defeat in a foreign war (which seems likely in Ukraine), social unrest (which has yet to emerge), or divisions among security forces (not apparent).
The fundamental question is why a corrupt character who does not care about his people or his country, but only about his personal power and wealth, remains president of Russia. Russia's liberal opposition often counters that Putin has developed an extraordinary presidential guard, the Federal Protection Service (FSO), which could number some 50,000 well-paid agents completely loyal to him.
However, in the end it is not likely that this will save his wretched government that has caused so much damage to the country. The Russians accepted Putin's war against Ukraine with limited popular protest; however, they have now reacted with a massive emigration to the “partial” mobilization order of September 21. Whatever the course of events, it is hard to imagine that Putin will survive a defeat in the Ukraine.
Anders Aslund es autor de ‘Russia’s crony capitalism: The path from market economy to kleptocracy’ (2019).
