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Putin Thumbs His Nose at West's Sanctions
by John M. Curtis
(310) 204-8700
Copyright
October 2, 2014
All Rights Reserved.
Brushing
off the West’s economic sanctions for seizing Crimea and threatening
Southeastern Ukraine, 61-year-old Russian President Vladimir Putin continues to
dig in his heals. Looking to China
and India to peddle Russian natural gas and petroleum, Putin hopes to stem the
economic damage from U.S. and European Union sanctions that have tanked the
Russian stock market and dropped the ruble by 30% since seizing Crimea March 1. Nearly $60 billion in foreign
capital has left Russia, fearing Putin no longer plays by international rules. Calling Western sanctions “utter
silliness,” Putin shows the kind of arrogance that only comes from isolation,
pretending his geopolitical moves in Crimea and Southeastern Ukraine have no
consequences. Former Soviet
satellites, especially the proudly independent Baltic States of Lithuania,
Estonia and Latvia, expressed concern about Putin’s aggression.
Putin stubbornly insists that Ukraine is not free to affiliate with the
European Union, blaming the U.S. and EU for sponsoring the Feb. 22 coup in Kiev
that toppled the Russian-backed government of ousted Ukrainian President Viktor
Yanukovich. Because Putin had an
ally in Kiev, he felt entitled to have the same now. Ukraine’s billionaire President Petro Poroshenko has no intent of moving Ukraine back
into the Russian orbit. Putin’s
refusal to comply with United Nations’ norms suggests that he has no intent of
partnering with the international community.
Reliable clients of Russia’s energy sector, like German Chancellor Angela
Merkel, have questioned whether they can continue business as usual with the
Kremlin. Swearing off Russian
energy won’t be easy for Germany and other EU members, who’ve grown accustomed
to Russia’s affordable natural gas and petroleum.
Signing a Caspian Summit cooperation agreement Sept. 29 with leaders of
Kazakhstan, Azerbaijan and Turkmenistan, Putin shifted to the Asian subcontinent
to form what amounts to minor league economic ties. Shifting away from the U.S. and EU,
Putin hopes offset the capital losses from alienating the world’s most powerful
economies. When he was evicted from
the G8 March 25, now the G7, the West took a stand on Putin’s outlaw behavior. When he annexed Crime March 1, Putin
decided that the strategic Black Sean peninsula was more important than Russia’s
ties to the West. While discounting
the effect of U.S. and EU economic and travel sanctions, the Russian ruble
continues to slide together with the stock market. Putin’s foreign minister Sergei Lavrov talks about a “reset-two” with the U.S but has
shown little interest in resolving issues with Ukraine.
Putin has no answer for how to stop the hemorrhage to Russia’s currency
and the stock market. Cash outflows
could exceed $100 billion by year’s end without some central bank intervention. Putin’s recent ban on U.S. and EU
food imports has put inflationary pressure on Russian food products. Calling the U.S. and EU
“foolishness” doesn’t change the fact that foreign investors have become gun-shy
in Russian markets. Without the
energy sector, Russian would be running the same kind of deficits that watched
the old Soviet Union collapse in 1991.
Confiscating more private property from Russia’s oligarchs won’t
compensate for unfavorable economic conditions.
Going after oligarch Vladimir Yevfushenkov’s Bashneft oil company raises
more fears in Russia’s private sector.
When the economy gets tough, Putin looks to loot the piggy bank of
Russia’s private industry.
Pretending that U.S. and EU economic sanctions have no effect, Putin
shows his go-it-alone Stalinist side, where he ignores global investors. Looking to China or the Indian subcontinent to compensate for losses of U.S. and EU
investment shows Putin’s stubbornness.
If he pushes the EU any further, Russia could loose its lucrative natural
gas and petroleum contracts. Putin
continues to flex his military muscle threatening former Soviet satellites. While denying direct Russian
military involvement in Southeastern Ukraine, U.S. and EU officials have the
satellite imagery to prove otherwise.
Learning well from his days as a KGB colonel, Putin controls Russian
media, presenting Russia as the victim of Western aggression. Whipping up Russian nationalism,
rank-and-file Russians have no clue about how Putin’s aggression has cost the
Russian economy.
Playing victim to the Russian people, Putin and his Foreign Minister
Sergei Lavrov have whipped up the Russian public to believe they’re under attack
from the U.S. and EU. Putin’s
public remarks display he’s either clinically paranoid or continues to push
pernicious propaganda on the Russian people.
Few in Russia get the real picture of Putin aggression seizing Crimea
March 1. Meddling in Southeastern
Ukriane, Putin has Russian speakers in a frenzy about how Kiev’s pro-Western
government will destroy their lives.
Painting himself as a white knight, Putin’s unlawful actions in Ukraine
make perfect sense to the Russian people.
Battling the West continues the same Cold War propaganda that had
Russians compliant and obedient to the Kremlin’s failings. With Putin at the helm, Russia has
become the same old armed fortress, keeping the Russian people in the dark.
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