Risks to Russia of alienating the West over Ukraine

Obama & Putin

WASHINGTON, April 17, 2014 – The dangerous situation in Ukraine poses challenges and dangers to the West, and the United States and EU have been hard pressed to find a serious and credible response. Russian President Vladimir Putin has seemed to a number of western observers to be in commanding control of the situation, with President Obama, EU leaders, and American Secretary of State John Kerry looking dangerously weak.

Putin’s control of the situation is not as absolute as many people assume, and in some ways the Russian position is much weaker in the long run. That fact is underlined by today’s announcement of an agreement to defuse tensions. Putin had earlier expressed hope that he would not have to exercise his “right” to send troops into Ukraine. Russian Foreign Minister Sergei Lavrov said today that Russia has “no desire” to send in troops, an apparent attempt to take the edge off of Putin’s remarks.

CDN editor Lisa Ruth discussed five risks yesterday to the West of taking harsh actions against Russia. Here are three risks to Russia of raising tensions in Ukraine.

READ Lisa Ruth: Five risks for the West in alienating Russia over Ukraine

1. Oil and gas: Ruth observes that Europe is highly dependent on Russian oil and Gas. Germany receives 38 percent of its natural gas imports from Russia, and 35 percent of its oil imports. Russian natural gas exports account for about 30 to 35 percent of total West European consumption.

But at the same time, Russia depends on Western Europe to buy that gas and oil. Europe buys almost 80 percent of Russian crude oil exports, and 76 percent of its natural gas exports. About half of the Russian government’s revenues come from energy exports.

If Russia uses the energy weapon against Europe, it will be a heavy blow to the European and world economy, but that blow will hit Russia as well. It will also force Europe to develop new energy supplies, and in a few years Russia could be left with a greatly reduced European energy market. It might sell that production to China, but first it will have to build almost 1,500 miles of pipeline to connect the western Transneft and Gazprom distribution networks with the eastern network that sends oil and gas to Asia.

Doubts about Russian reliability could begin to bite this year, as Europe considers the dangers of signing long-term contracts with Russian energy suppliers. The European pipeline system must be re-engineered to allow gas to flow from West to East, not just East to West. There is talk of bringing gas in from Africa, and of building liquid natural gas (LNG) terminals on the coast. Coal can be used as a substitute for natural gas.

The energy weapon comes close to being Russia’s “nuclear option,” and like the real nuclear option, it might result in mutual destruction. It’s a weapon that Putin will try very hard not to use.

2. International cooperation: As Ruth points out, Russia is an integral and important player in international organizations. It has a large, perhaps crucial role to play in combatting terrorism and international money laundering.

Russia has grown increasingly reliant on international organizations as well. Access to international finance was not much of an issue for the Soviet Union, but it matters hugely to Russia’s wealthiest families and its businesses. Its role in international organizations is a matter of national prestige, giving Russians the sense of international legitimacy and respect that they have always craved.

The importance to Russians of international respect and legitimacy should not be underestimated. Putin will not sacrifice it just for Donetsk.

3. Military power and weapons inspections: Russia could withdraw from inspections required under strategic arms treaties. It has larger stockpiles of nuclear weapons than the U.S. does, and it has several new ICBMs in the works, including a replacement for the SS-18 due to enter service in 2018. If Russia withdraws from START, it could quickly gain a large numerical advantage over the U.S. in strategic nuclear weapons.

This military machine is expensive, however. The Russian government expects to spend over $700 billion by 2020 to upgrade its defense forces, but – perhaps due to its activities in Ukraine – its economy has stalled. The Gaidar Institute predicted very sluggish growth over the next four years, and those projections came before the situation in Ukraine became and issue.

The Russian window of opportunity to pursue expanded military power is relatively short. If Ukraine results in a disruption of energy sales to Europe, the Russian economy will be devastated as badly as Europe’s, and military expansion will be unaffordable. Its development of another strategic missile has been slowed by test failures, and its fifth generation fighter jets, while including many interesting design features, reportedly have very disappointing avionics packages.

While America has been retrenching and curtailing military programs, the recent launch of the USS Zumwalt demonstrates a continuing capacity to build cutting-edge weapons systems, pushing the military technology envelope in ways that Russia simply can’t afford to.

There is undoubtedly already a recalibration going on in NATO headquarters in response to Russia’s activities in Ukraine. Russia is already doing all that it can to build its military. If it scares the West enough, it will find that the West can do a great deal more.

Russia is posing a huge challenge to American and European political and military leadership and planning. At the moment, Russia appears to have the advantage, but if Putin pushes that advantage, he will find that it can’t hold for long; in the long run, his advantages work against him.

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