Ukraine, It’s Worth
06/29/14
As I write, Russia is engaging in a military and propaganda campaign to annex parts of Ukraine, and no doubt, the whole of Ukraine if it can possibly get away with it. Not only is Ukraine in jeopardy, but so are many of the old soviet satellites. Russia, of course, thinks it is acting in its best interest by creating buffer zones against the West and reclaiming its former glory and regions of traditional influence. But in so doing, Russia is separating itself from the rest of Europe and even from much of the world. Yet most significantly Russia is alienating itself from the 21st century, where territorial control is far less important than are relationships. In the long term Russia’s prosperity will come from interacting with Europe and the rest of the world as a friend and reliable partner in trade, commerce and culture, and not in claiming dominance over pieces of land and thereby alienating itself from its neighbors. What Russia is doing is reverting to a 20th century policy of land grab and domination by force and intimidation. Such a policy did not work in the 20th century and will certainly not work in the 21st-century. It will only condemn Russia to economic stagnation because it will force it to remain a resource selling economy instead of developing into a diverse trading economy. It’s easy to sell natural resources, but it takes a trading environment and openness to the world to create a an international business economy. Mr Putin may be giving a display of former grandeur to its people for the moment—he runs high in the popularity polls—yet ultimately he is disempowering his citizens.
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Fast forward two months, elections have taken place, a new Ukraine president has been elected, and Ukraine was signed a trade deal with the EU. Russia is still threatening parts of eastern Ukraine by proxy, suppling armaments to Russian sympathizes in Ukraine, but has largely pulled its military back. So the immediate crisis seems to be over for now at least. I would not, however, be surprise see this thing come back with a vengeance.
So was this adventure worth it?
The trade deal which sparked the whole affaire was signed. The public relation coup that Russia gained after the Olympics was squandered, trade sanctions have been imposed on Russia, the Russian economy took a major and long term hit. The ruble lost value. Europe is moving to reduce its dependence on Russian gas. The American gas industry has gained by suppling that need. NATO has breathed new life. Russia’s smaller neighbors are scrambling to sign pacts with NATO and negotiate trade deals with the EU of their own. Russia got itself kicked out of the G8. And oh yeah, Russian now owns the Crimean which it already had use of and could have continued to rent. And Putin is a hero in Russia. Good show. And all this for a group of people simply wanting to sign a trade deal to improve their lot in life? Russia should be doing the same thing!