Suchergebnisse

On September 26-27 the Fletcher School at Tufts University hosted a workshop on "Global repercussions of Russia-West economic warfare." It brought together two dozen experts, both academics and practitioners, to discuss the impact of the sweeping sanctions imposed on Russia by some 50 countries in the wake of the full-scale invasion of Ukraine. The meeting, organized by Tufts professors Christopher Miller and Daniel Drezner, did not come up with a decisive answer to the key question: are the sanctions working — and the related question, should they be wound up, continued, or intensified?In part, this is because Western leaders have been vague when it comes to defining the goals of the sanctions, which have shifted over time. Initially, the goal was to deter Russia from launching the invasion. That did not work. So then the goal was to crash the Russian economy, force a bank run and collapse of the ruble, which would hopefully cause Russian elites, and/or the Russian people, to rise up against Putin and force him to abandon the war. For a week or two, that seemed to be working. But the Russian Central Bank imposed strict controls to stop the outflow of capital and ended the convertibility of the ruble. The Russian economy did not collapse.After that, the goal shifted to one of attrition, increasing the cost to Putin in the hope that it will make him more willing to come to the negotiating table and end the war. By ratcheting down the declared goals, leaders can keep insisting that the sanctions are working. Edward Fishman, a former U.S. Treasury official, said the "Goal was to shock the system, create chaos, and force Russian policy makers to redirect attention to developments inside Russia." But we underestimated the skill of Russian financial managers and the extent to which they had been preparing for sanctions in the wake of the annexation of Crimea in 2014. Maximilian Hess, author of the new book, "Economic War: Ukraine and the Global Conflict Between Russia and the West," argued that Putin has been preparing Russia for economic war with the West since the passage of the Magnitsky Act in 2012, which sanctioned individuals involved in the death of Russian banker Sergei Magnitsky.Historically, sanctions have only worked in about one third of the cases. Success only comes if they are multilateral, involving a majority of key economic players. In the case of Russia, there was unexpected solidarity amongst the Europeans and between the Europeans and the U.S., which hit Russia hard given its dependence on oil and gas exports to Europe. However, only a few nations outside the West joined the sanctions (Japan, South Korea, Singapore, Australia). China, India, Turkey and others increased their trade with Russia, buying the oil which was no longer flowing to Europe.Despite the relative lack of success, sanctions are a popular tool, in large part because they are better than the alternatives — doing nothing, or going to war. They may be more important as a way of signaling political commitment amongst allies, rather than for their economic impact. Peter Harrell, a former National Security Council official, noted that "sanctions have been a growth industry over the past 20 years," starting with Bill Clinton's use of sanctions to target drug cartels and expanding as part of the post-9/11 War on Terror. The U.S. was later encouraged by the success of the sanctions on Iran, which forced it to negotiate the Joint Comprehensive Plan of Action (JCPOA) in 2015 limiting its nuclear program. However, the Russian economy is much larger, more diverse, and globally integrated than that of Iran, so the impact of the sanctions has been more modest. Harrell concluded that we "need to be realistic about what sanctions can achieve, and not expect that they are a magic bullet."While the sanctions were extensive, they mainly focused on the financial sector — cutting Russia out of the SWIFT financial transaction network, barring transactions with most Russian banks. Interestingly, Fishman revealed that the decision to freeze the Central Bank's assets was only taken after the full-scale invasion. However, the West feared that an abrupt interruption of Russian energy exports would cause inflation to spike, so oil and gas continued to flow into Europe through 2022. And the banks handling payments for oil and gas exports were exempt from the sanctions. The U.S. controls critical nodes in the finance sector, and the dollar remains the main currency for international trade and investment. But Elina Rybakova of the Peterson Institute pointed out that Washington has no such critical leverage over energy markets, and is still struggling to come up with ways to monitor and regulate the export of critical dual-use technologies.Meanwhile, Harvard's Craig Kennedy alluded to the fact that sanctions can be a negative-sum game, harming the country that is imposing them just as much as the target. This has certainly been true for Germany, hit by a 400% rise in the price of natural gas in 2022. Organizer Daniel Drezner pointed out there has been a number of unintended consequences for which ramifications have yet to be unpacked. They include the rise of a "shadow fleet" of uninsured tankers shipping Russian oil to India and China, and the expansion of a shadow network of financial transactions facilitating Russia's evasion of the sanctions. By making it harder for Russians to export capital, the sanctions have boosted investment in the Russian economy, and has tied the business elite — the main advocates of Westernization — even more closely to the Kremlin. The war has further institutionalized the militarization of Russian economy, polity and society and it might be very hard to get the country off that path in a post-Putin future. Finally, Drezner noted one important unintended consequence for Russia — that the war united the West, led Sweden and Finland to join NATO, and Germany to rearm. This nullifies a decades-long strategic goal of Russia to separate Europe and the U.S.Analysts agreed to the assertions that the sanctions, for all their limitations, are squeezing the Russian economy's prospects for long-term economic growth, particularly with regard to access to the investment and technology to develop new oil fields. Sergei Vakulenko, a fellow at Carnegie's Russia Eurasia Center, argued that Russia is "facing graceful decline [in oil output] but not a sudden drop." That seems to be a price Putin is willing to pay to continue his war in Ukraine.It is hard to say how (and when) this conflict will end or what the end state will be. Will a future Russia rejoin the West at some point? Or is Russia destined to become a resource base for China and other nations now unaligned with the West or willing to "multi-vector" on the geopolitical landscape?

The Carnegie Center's Maksim Samorukov recently published an article in Foreign Affairs entitled "Putin's brittle regime. Like the Soviet one that preceded it, his system is always on the brink of collapse." The argument is driven by a straightforward historical analogy. The Soviet system appeared strong and immutable, and virtually no one predicted its collapse. But collapse it did. Likewise, the Putin system appears strong and resilient, and few people can imagine its collapse. But collapse it will.One can understand why this argument would be attractive to Foreign Affairs. Wishful thinking always gets an audience: people like to be told what they want to hear. Absent any prospects of a successful counter-offensive in Ukraine, the most likely scenario for Ukrainian victory is regime collapse in Russia.Historical analogies can be attractive but misleading in that they may focus our attention on superficial similarities, while ignoring structural differences. And there are several important respects in which Putin's regime is in a very different place from the Soviet Union of the perestroika era.First, Mikhail Gorbachev was only in power for six years and he was never able to establish effective control over the inner circle of Soviet leaders, nor the bureaucracy at large. As a result, his policy initiatives were blocked from effective implementation, forcing him to adopt more radical measures which destabilized the entire system.In contrast, Putin very quickly established strong control over rival elites after he came to power in 2000, restoring the "power vertical." He has been in charge for 24 years, and most analysts agree that the institutional foundations of the Putin regime are robust and it will likely survive the death of its founder.Second, a critical factor in the unraveling of the USSR was the fact that it was fighting an unwinnable war in Afghanistan, which forced it to enter negotiations with the West. Russia is fighting a war in Ukraine which it is still confident it can win.Third, the Soviet Union was bankrupt, running trade deficits and borrowing money abroad. In contrast, despite the pressure of Western sanctions, Russia ran a $50 billion trade surplus last year. The Soviet planned economy was rigid and value-destroying, a sinkhole of state subsidies. Unlike the Soviet Union, Russia has a dynamic capitalist economy, well integrated into the global economy, and one whose entrepreneurs have been adept at evading Western sanctions.Fourth, the USSR was a federation where ethnic Russians made up 52% of the population. Putin's Russia is a more centralized state where Russians are 82% of the population.Admittedly, the possibility of an Islamist insurrection in the North Caucasus is a potential security challenge. But the logic that turned Chechen leader Ramzan Kadyrov into a loyal vassal of Moscow would apply to any successor. It is better to enjoy a flow of subsidies from Moscow and buy Lamborghinis, than to have Grozny turned back into a sea of rubble. The Chechens have learned their lesson from the first and second wars: that pursuit of independence is not worth the effort. None of the other ethnic republics in the Russian Federation are remotely interested in starting a war with Moscow.The Crocus City Hall attack of April 22 was not only a reminder that Islamist terrorism remains a security threat for Russia, but it represented a massive intelligence failure by the Russian security services. They were warned in advance by the U.S. that such an attack was coming: they should have placed armed guards at all concert halls in Moscow. However, attacks like Crocus are not going to cause regime change in Russia.The terrorists did not come from North Caucasus, but from Tajikistan. That indicates that the 8 million migrant workers from Central Asia are a potential security risk. But their value in Russia's labor-short economy still outweighs the security challenge, at least for now.The Wagner insurrection in June 2023 was an extraordinary development, the most serious threat to the stability of the Putin regime since its foundation in 2000. We'll never know what would have happened if the dog had caught up with the car: if Yevgeny Prigozhin had not turned back, but had ordered his troops to advance into Moscow. What we do know is that the insurrection failed. Prigozhin is dead and buried, and regime stability was quickly restored.Allowing the Wagner group to develop to a point where it could launch that mutiny was a serious error by Putin — second only to his decision to launch the full-scale invasion of Ukraine. But it remains an outlier, and cannot serve as a foundation for U.S.policy.To prevail in diplomacy and war one needs a realistic assessment of the adversary's strengths and weaknesses. The abrupt collapse of the Soviet Union reminds us to expect the unexpected. But Putin (and China's President Xi Jinping) have learned from Gorbachev's mistakes. Washington should not build its Russia policy on the assumption that lightning will strike twice in the same place.

Cover -- Half Title -- Title -- Copyright -- Contents -- List of Illustrations -- List of Acronyms -- Preface -- Introduction: Business and the State in Russia -- 1 How Russia Is Ruled -- 2 The Distorted Russian Media Market -- 3 Moscow City Management: A New Form of Russian Capitalism? -- 4 The Political Economy of Russian Oil -- 5 Between a Rock and a Hard Place: Russia's Troubled Coal Industry -- 6 Trade Unions, Management, and the State in Contemporary Russia -- 7 The August 1998 Crash: Causes and Consequences -- Index -- About the Contributors

AbstractThis introduction to the special issue looks back at 30 years of nation-building in the post-Soviet states. Initial hopes that national self-determination would reinforce democratization proved misplaced. While that synergy worked well in the Baltic states, elsewhere authoritarian leaders embraced nationalism, while democracies like Georgia, Moldova, and Ukraine lost control of parts of their territory to secessionist movements backed by Russia. Each of the post-Soviet states promoted a national language (except for Belarus) and forged a new historical narrative for their "imagined community," but in most cases they remained multi-ethnic and multi-lingual communities. In recognition of this persisting ethnic diversity, nation-building was accompanied by policies of ethnicity management. The international economic environment was rapidly changing due to globalization, posing new challenges for nation-builders. The gender dimension is important to the new national identities being forged in the post-Soviet space: the categories of race and class, less so. The article concludes with a review of the salient features of each of the newly-independent states.