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Order from Chaos

We may live in different worlds, but sanctions on Russia still make sense

My colleague, Clifford Gaddy, wrote about sanctions on Russia on this blog on March 9. He notes that the West, on the one hand, and President Vladimir Putin and Russia, on the other, hold fundamentally different views of global and national security, and argues that U.S. and European Union sanctions on Russia are bound to fail. I hesitate to challenge Cliff—his knowledge of Russia and Russians is immense—but, as a supporter of sanctions, I will push back on four points.

First, it is too early to tell whether sanctions will fail in their goal, which is, as Cliff noted, “to change Putin’s calculus.” There is no doubt that sanctions have contributed, along with the fall in the price of oil and Moscow’s own failure to make needed structural reforms, to a Russian economy that is very troubled.

The Ministry of Economy in Moscow forecasts a three percent contraction in the Russian economy in 2015. Capital outflow from Russia in 2014 amounted to $150 billion. And Russia’s international reserves fell from $510 billion in January 2014 to $360 billion this February.

True, the sanctions have not yet achieved their political objective of effecting a genuine shift in Russian policy toward Ukraine. Moscow still seeks destabilization of the government in Kyiv, in order to make it more difficult for that government to address its pressing economic reform agenda and draw closer to the European Union.

But the Russian president can hardly be indifferent to his falling international reserves or to the decline in the average Russian’s purchasing power. Those trends will deepen over the course of the year if Russian troops remain in eastern Ukraine and the West maintains its sanctions.

For more than a decade, Russian economists have spoken of Putin’s implicit social compact with the Russian people: they will get little political say but in return will enjoy economic security and rising living standards. If he cannot undo the sanctions and oil prices stay low, Putin may begin to get nervous that he is not holding up his side of the bargain. He might then look for a way out.

Second, Cliff argues that Putin and the Russians will not give in to sanctions because they see themselves as defending against an existential threat in Ukraine—that Russians are being asked to “accept a political and military situation that will threaten the survival of their nation” in order to end the sanctions. But is that really the choice that Russians face?

Russians might regard a Ukraine that is a member of NATO and the European Union as an existential threat. That, however, is not on offer. There is no interest within NATO in putting Ukraine on a membership track. The Obama administration has expressed no support for that, and key Alliance members such as Germany and France have made clear their opposition to Ukraine joining NATO. For its part, the European Union has resolutely resisted even offering Kyiv a prospect of membership.

Putin may worry that if—and this is a big if—Ukraine builds a modern, democratic, market economy outside of NATO and the European Union, the Russian people might see Maidan-like demonstrations as a vehicle for venting their discontent. If they did, that would result from Russia’s internal disfunctionality. So Putin might see that kind of Ukraine as an existential threat to his hold on power, but would the Russian people regard it as a danger?

Third, Cliff argues that, for the West, “winning” in the current stand-off with Moscow could mean that Russia must collapse. No Western leader seeks that. A Russian collapse—which Putin’s policies may make more likely—would pose a series of nightmares for the United States and Europe: a complex set of division issues that would invariably impact Western interests, a huge power vacuum in Eurasia, and who wants to deal with a nuclear-armed Saratov or Irkutsk?

The goal behind Western sanctions is far more modest: persuading the Kremlin that it should not use military force to seize territory or to undermine a neighboring state for its domestic policy choices. This gets back to the West’s view of a rules-based security order in Europe, the most fundamental rule of which is that states should not use force to change borders. That, by the way, was enshrined in the 1975 Helsinki Final Act at the insistence of the Soviet Union.

Fourth, Cliff argues that differences between the West and Russia can only be resolved by negotiation. If the West casts aside sanctions, what tools in their place would encourage the Russian leader to abandon his current course of dismembering Ukraine in favor of a genuine negotiation?

If the West’s sanctions were truly aimed at securing NATO missile bases in Ukraine or the collapse of Russia, it would be understandable that Russians would regard those demands as unacceptable, and Western sanctions policy would fail. The West’s objective, however, is to get Russia to stop using force against Ukraine, to engage in a real negotiation, and to then implement the agreements reached.

Assuming that Putin has not fallen completely under the spell of the propaganda that his government spews out, there should be an acceptable middle ground. Sanctions can play a role in steering the Kremlin toward that. And even if in the end they do not, sanctions nevertheless will make clear to Moscow that egregious misbehavior has costs.

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