November 11, 2014

How the War Against Ukraine will Affect the Country's Future

After visiting revolutionary Russia in the middle of the civil war and meeting Vladimir Lenin at the Kremlin, H.G. Wells, the famous British writer, named his book about the Bolshevik coup and the future of the giant country Russia in the Shadows. Nearly a hundred years after that trip, modern day researchers could also use the same title: Russia’s future is still obscure and nobody can predict what will become of it in the years to come.

Russian tank in Ukraine

In 1920, as Wells was being introduced to the Soviet leader, Lenin was still head of the government in the Soviet Russia. Future republics of the Soviet Union – including Ukraine – still existed as independent states with the Red Army controlling military and economic unions there following occupation. (It’s a well known fact that a similar plan also existed for Poland but had failed due to the defeat of the Red Army, led by Mikhail Tukhachevsky). The Soviet Union was still two years away from coming into being, but hardly anybody doubted that the Bolsheviks had set a course for restoration of their former empire by using armed forces.

Something of the kind is happening today.

There is no Soviet Union yet, but Vladimir Putin – now only president of the Russian Federation – imposes economic and military unions upon neighboring states and prepares for their absorption.

The Eurasian Economic Union is meant to become the first step on the way to reconstructing the former empire and it is quite clear that Putin would like to see not only Belarus, Kazakhstan, Armenia and possibly Kyrgyzstan in such a union, but also Ukraine. I dare say, Ukraine may be the most important piece of this puzzle.

Moscow – as well as the vast majority of Russian society – regards the time between 1991 and 2013 as a temporary retreat of the empire, which has finally regained enough strength to start the process of taking back its “ancestral” lands, from Lviv to Ashgabat. This is exactly how Bolsheviks viewed the time between 1917 and 1922.

Convinced that the EU-Ukraine Association Agreement would prevent Russia from absorbing the neighboring country, Putin started an open war against Ukraine.

Europe saw it as the best model of cooperation with the former Soviet republics and hoped that the Association would enable them to create effective economic ties with the EU while maintaining their traditional ties with Russia. Moscow perceived that as an assault on its “natural” interests and even on the territory of Russia. That’s exactly why Putin put fierce pressure on Serge Sargsian and Viktor Yanukovych, the presidents of Armenia and Ukraine respectively, forcing them not to sign the documents last year.

After the Maidan Movement in Ukraine, Putin started the war. The Maidan made the Russian President march out earlier than he’d planned – and much too fiercely to argue for the painless absorption of a neighboring country.

When the Bolsheviks carried out their occupation of the first Ukrainian independent republic in 1918-1920, nobody could resist them. Europe was dysfunctional and burnt out by World War I and the United States had no substantial interests on the continent. Russia itself – after its economy collapsed following years of war and the Bolshevik revolution – was in fact torn away from the developed, western world and did not fear its pressure.

Today the situation is totally different. Putin has created an economic model that would have horrified Lenin. Putin’s Russia produces virtually nothing – buying everything in exchange for energy resources. This was the very topic of the speech given by German Gref, head of Russian Sberbank at the forum “Russia Calling!”.

Centralized economy is another important part of that model, inherited by Putin from Boris Yeltsin (who himself inherited it from the Soviet times). The center redistributes the funds received from so-called donor regions (today Russia has only ten of those) to its other seventy two dependent regions, as well as to the now occupied or controlled Crimea, Transdniestria, Abkhazia, and South Ossetia. Such redistribution is the nature of Russian statehood.

The nature of the Russian economy lies in selling petroleum (with only half of the donor regions engaged in petroleum production, and with the rest of them mostly serving as centers of corruption). The state will collapse if the balance is disturbed.

Now we’ve come to the crossroads. The civilized world has the option of stopping Russia on the Ukrainian borders with the help of economic sanctions on top of sinking oil prices. That would reduce the earning potential of Russia’s donor regions, depriving the center of money and making it unnecessary.

Otherwise, Russia could gather its remaining strength for a military thrust, occupy and destroy Ukraine and Kazakhstan, annex Belarus, and the EU will have a new Soviet Union emerging on its borders – impoverished, embittered, burdened with its internal problems, but ready for new wars for “ancestral territory” and “traditional spheres of influence”.

The fact that Russia is integrated in the world economy makes the first scenario more realistic. But we should be keenly aware of one thing: there will be no return to the “status quo” that used to exist before the occupation of the Crimea.

Vitaly Portnikov, "Forbes"