Sanctions. We are told that the US and Europe have imposed the toughest sanctions to date on Russia and individual oligarchs. Maybe, but that might be hyperbole at best. There is this idea that with tough enough sanctions on individuals, those oligarchs may overthrow Putin or at a minimum dissuade people from going into the service of a state that, through sanctions, will limit their futures. This, of course, is rubbish and wishful thinking on the part of pundits. Indeed, overthrowing the state or leadership is not the purpose of sanctions.
Yes, the oligarchs will lose some of their wealth and will have difficulty travelling to their mega-yachts, but that is all. Most of them are smart enough to have engaged expensive and cunning firms whose speciality is hiding the money. “Where’s the money, Lebowski?” Well, the Dude has no idea where the money is, and neither do most governments. Certainly, there will be a few high profile examples of frozen assets and seized mega-yachts. Meanwhile, the vast majority of their assets will remain safe, protected by offshore companies with convoluted and obscured ownership structures, holding assets in trust for other obscure companies in different jurisdictions, with paper trails so complex they make the Camino de Santiago de Compostela look like an afternoon hike.
No, these people are not going to overthrow Putin, and most of them will not even get near enough to tell Putin what he needs to hear, because they certainly are not going to bite the hand that feeds them. If they do get close enough to actually talk to the great man himself, they will provide supportive comments and agree with his assessment of progress in Ukraine. When they are asked (if they are) about any impact of sanctions on them, their answers will be “nothing we cannot handle, for the greater good of Mother Russia (and the great leader, of course)”.
And if they do get near Putin, it will be because he has asked them to come to him, with the double objective of gauging their loyalty and promising them loot from Ukraine to replace any losses they have suffered from the sanctions. So sanctions on oligarchs will not push them to foment revolution or call for his ouster.
The purpose of sanctions is to undermine an adversary's long-term productive capacity and reduce their capacity to engage in, or prevail in, a long term struggle. The American North triumphed over the South not because they had “God on their side”, everyone has God on their side, but because they could, and did, outproduce the South for years on end. Blockades reduced export revenues from cotton, thus reducing the amounts available to purchase the arms and ammunition that they could not produce. The blockades then also reduced the ability of the purchased arms and ammunition to reach the Southern shores and, therefore, the Southern armies.
The First World War (The “War to End All Wars”) eventually was won by the Allied Powers through a blockade and the eventual starvation of Germany (and the other Central Powers). The Second World War carried on the tradition of out-producing to victory. Effectively, the Allies played for time until the US officially entered the war. At that point, the result became inevitable.
Saddam Hussain was not toppled by sanctions, though the people of Iraq suffered horribly. Sanctions arrested and degraded his productive capacity to rebuild his armies after the Gulf War, and kept him and Iraq in a state of ongoing capacity degradation. The invasion of 2003 was, while a major war, a forgone conclusion. Iraq simply did not have, after many years of sanctions, the productive capacity to maintain its existing military, let alone modernise or expand its capabilities.
Today we see much the same dynamic as in the early stages of WWII, with the US providing arms and supplies while officially not being actively involved in the hostilities. There was little probability that the UK and even the USSR could have staved off a German victory without American factories and farms.
The US (and NATO allies) are not (yet) officially fighting in this war. But they are supplying arms and at least as important, detailed Intel, to Ukraine, enough it seems so far to keep them from capitulating. The US is considering the first “lend-lease” agreement since WWII, when American factories kept the UK and the Soviet Union in the war against Nazi Germany. It is difficult not to consider the irony of a new lend-lease programme specifically aimed at supporting a former Soviet Union country against another former Soviet Union country, and supporting a country accused of being “Nazi” against a country that is claiming to fight to “De-Nazify” the target of its aggression.
Sanctions are a long-term tool designed to undermine the productive capacity of Russia over a multi-year period. Eventually, Russia will be “starved” to the negotiating table. If Russia can be fought to a standstill on the battlefield, still a very dubious proposition, then we will see the Iraq-ification of Russia, with a weakened military and a dramatically reduced capacity to maintain, let alone build new capability. Already, before the war, production of the T-14 Armata, Russia’s latest design and modernisation of the Main Battle Tank (MBT) concept, was delayed, in no small part due to the cost per unit. Post-Ukraine, Moscow is going to find it even more difficult to find the money to build sufficient T-14s to make a meaningful difference on the future battlefield.
In the case of Iraq, sanctions carve-outs were provided for humanitarian products such as medical supplies and food. Even then, the supplies were limited, and hundreds of thousands of Iraqis died due to the sanctions. But in terms of curtailing Hussain’s ability to rearm and build a larger military that could threaten his neighbours (again), the sanctions were effective. Where there had been a nuclear programme, there no longer was such a programme. The funding did not exist, and the inspections regime ensured that it would not be possible to restart such a programme.
In Russia’s case, the sanctions will only be effective if enough of the international community participates, or if the US still has the economic and political leverage to enforce a sanctions regime. While both are debatable, the sanctions-busting nations will, other than China, probably be on the fringe of the international economic system. The threat of losing China's support may be one of the few remaining checks on Putin. He can probably get away with the small-scale use of chemical weapons. Battlefield nuclear weapons will be a bridge too far, and could end up with too much pressure being put on China by the rest of the international community.
And that represents the core difference between Iraq, Germany and the American South; Russia is a major nuclear power. There will be no UN Inspections teams roaming around Russia any time in the near, or even moderate, future. Likewise, there will (I hope) be no use of the Russian nuclear arsenal against Ukraine or any other country. The use of tactical nuclear weapons to clear Ukrainian forces will create the conditions for a true blockade of Russia, and not the faux-blockade of sanctions.
And as long as Putin does not use nuclear weapons on the battlefield (or beyond), then as the military and political leader, he will not be overthrown. And his KGB roots ensure that he is well-versed in using a security apparatus to identify and quell dissent. Oligarchs will be promised a share of the loot from Ukraine, and that, coupled with their well-honed skills of keeping on the right side of Putin (they have seen what happens when their peers have crossed Putin) will ensure that he is safe from any oligarch revolution.
So the sanctions are part of a long game, and while targeted at individuals as well as Russia collectively, no one should expect Putin to be overthrown, and no one should expect oligarchs to have difficulty enjoying a good meal in the restaurant of their choice (in sanction busting countries, of course).
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