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What role will sanctions by Canada, the United States, and the European Union play in the development of the political crisis in Ukraine?
Today's sanctions by the West are likely not aimed, as much of the media commentary suggests, at reversing Russian actions in Crimea; that's unlikely to succeed short of a devastating blow to the Russian economy, and even then such a blow would just as likely encourage nationalism and spartanism rather than restraint. Rather, this is a signal that far more serious sanctions would come if Russia escalated into Eastern Ukraine. The longer term question is whether the West deepens the effort to weaken the Russian economy over the long term. Modest sanctions will nevertheless place a chill on investment in the Russian market. A shift in U.S. energy sales to Europe would also have a substantial impact. But none of the current policies are going to reverse Russia's actions in the Crimea in the short term.
The sanctions imposed by Western countries will send an important message to Vladimir Putin and his inner circle that “business as usual” will not continue. Russia’s military interference in Ukraine and the subsequent staging of an “independence referendum” that will see Crimea join the Russian Federation is a dangerous precedent that has put all of eastern Europe on edge and fearful of a military conflict. Strong economic sanctions that target individuals will hopefully prevent Moscow from invading other parts of Ukraine.
It depends on what the sanctions are intended to accomplish, and what sanctions are applied. Sanctions are effective at communicating to your own citizens the seriousness of your resolve, but they are not likely to be effective in compelling an opponent country, especially a large, powerful, and self-sufficient one, to relinquish something that matters much more to it than your sanctions.
The Ukraine protests were not primarily about geopolitics, the EU vs Russia, or the ethnic divide, which apart from in Crimea is overstated. They have been about Ukrainian self-governance, cronyism, and corruption.
Putin is the last person to understand the point of it all. He sees hostility everywhere. The alleged threat from "the West" was negligible. The real threat to him is contagion to already restive Russians in the big cities exhibiting popular disgust with shoddy governance structures. In spite of his intervention, it's coming back again soon to a neighbourhood near him.
True, the snapshot today shows Putin riding a wave of popular Russian approval for inflicting a unilateral correction to an awkward loose end of the USSR's mostly peaceful break-up--the loss of emphatically Russian Crimea.
But sanctions will bite the already wobbly Russian economy, the oligarchs, and all those who benefit from Russia's now-threatened integration into the global economy. Putin says sanctions will hurt the EU more than Russia. But activity with Russia accounts for only 1 percent of the EU's GDP. Activity with the EU accounts for 15 percent of Russia's GDP. Putin will ring all the patriotic and anti-American bells to try to obscure these basic facts but new Russians don't want to live in a rogue and isolated state where economic opportunity has been degraded.
It's a pity that President Obama's sincere re-set with Russia has been trashed by a paranoid demagogue. Someone else will have to do a re-set again with a more democratic Russia in several years' time. In the meantime, it's up to Ukraine to at last get its own act (without Crimea) together.