Photo Credit: European Union
In 2014 the Russian economy came to a grinding halt. The ruble’s value was slashed nearly in half, the price of oil dropped dramatically, and the country’s GDP contracted sharply. It was easy for U.S. and European politicians and media outlets to claim sanctions had their desired effect (i.e Russia’s economy is down, so we win). This perception wholly misses the point.
The intent of economic sanctions was to create lasting peace in Ukraine. While there has been a relative lull in fighting compared to months prior, it is naïve to think that Russian President Vladimir Putin has given up his desire to assert influence in the separatist regions. In fact, an adviser to the Latvian President recently claimed that, “The relations with Russia are complex but no one has ever thought it possible to make Russia change its policy with sanctions. This has never been and will never be. So, difficult negotiations with Russia lie ahead.” To think that a man like Putin would capitulate to Western sanctions is a gross underestimation of his resiliency.
One might expect the Russian people to rise up against their government and demand Putin to step down or to change his policy. But that is not happening. Rather, support for Putin is still overwhelming and the Russian people are blaming the United States for their economic woes. Anti-Americanism is reaching heights not seen since the Cold War.
The Russian populace is currently rife with nationalist fervor. There have been calls from the most respected members of the country’s elite for ordinary Russians to do their part in nourishing the Russian economy. Perhaps the best example of this is the move to replace McDonalds with a Russian fast food chain. (What better target of American corporatism is there then McDonalds?) Although it will likely be difficult to topple the ubiquitous ‘Golden Arches’, it is conceivable, given that the Russian government offered a billion rubles in financial backing and the move is backed by two Oscar-winning Russian directors.
The name for this restaurant: “Let’s Eat At Home.”
This call for domestic growth goes beyond fast food. Putin has advised Russian businesses to focus on growth before sanctions are lifted so that they will be competitive against western businesses, saying that, “The change in the Ruble’s exchange rate improves the cost competitiveness of Russian products and opens the door to possibilities of taking control of new niches in both national and international markets. But we should keep in mind, this is time limited. That’s why we must take advantage as soon as possible to increase non-energy exports and to develop our own market.”
It should also be noted that sanctions have had negative implications outside of Russia. Although Americans won’t feel a pinch from sanctions, as trade with Russia is only a small fraction of overall US trade, Russia’s major trading partners in the region have taken a sizeable hit. Reinhard Meyer, a finance minister in northern Germany where exports to Russia have dropped 31 percent, stated his frustration with sanctions specifying, “… the car industry has been hit, but also the machinery and food sectors have been seriously affected.”
And the reverberations go beyond the economy. Several weeks ago Putin signed into law a measure that would allow the government to shut down foreign and international organizations operating in the country by declaring them “undesirable,” if they are determined to threaten constitutional order, defense, security, or public health. There was always the potential to change Russia from “within”, by means of foreign NGOs and other international organizations, but the Russian government is now taking advantage of the sanctions and using them to eliminate any potential threats to their power.
Because Russia has been shunned by the United States and much of the Western world, it has been forced to turn elsewhere for support. Russia is strengthening relations with longtime ally Iran. In mid-April Russia lifted the ban on shipping the S-300 anti-aircraft missile system, defying the demands of the international community in the wake of nuclear negotiations.
Another alliance that Russia is seeking to cultivate is with Greece, which is turning out to be a thorn in the side of the European Union. Moscow is heavily courting Greek Prime Minister Alexis Tsipras through several channel’s, including Moscow’s invitation for Athens to join the BRICS development bank, as well as participation in the Turkish Stream gas pipeline project that will deliver Russian gas to Europe via Greece.
American leaders will continue to point to statistics showing that the Russian economy has been crippled by sanctions. But what good does this do if Russian troops mass on the Ukrainian border for an imminent invasion?
The Obama administration has embraced sanctions as an effective middle ground, whereas one extreme is all out war and the other is to stay out of it altogether. Politicians in Washington have vocalized both sides of the equation, though it seems the contingency seeking to arm Ukraine is gaining more ground in Congress.
Yet, if we look at how sanctions have given the Russian government an opportunity to stoke the flames of nationalism, as well as removing “undesirable” foreign organizations, then what repercussions will arming Ukrainian President Petro Poroshenko and the Ukrainian army have?
The solution to this conflict will not be easy, and to use the earlier quote from the adviser to the Latvian President, surely “Difficult negotiations lie ahead.”
Bryan Rosenthal is a graduate of The Ohio State University with dual degrees in Russian and History and will continue his studies with the pursuit of an M.A. in European and Eurasian Affairs at George Washington University. He recently interned with the Department of State at the U.S. Embassy in Tashkent, Uzbekistan giving him firsthand experience with U.S. foreign policy in Central Asia.