Guy's, I get all the Russian love: They seem cool and badass, but realistically, they're basically ruined.
Hell, the sanctions the EU put on the Russians alone has almost destroyed the credibility of the Ruble. They're economically trashed. Putin is whack if he thinks he can remake the Soviet Union.
Russia is in even worse shape than Britain was in 1992. With a clapped-out manufacturing sector, it is too dependent on its massive stocks of oil and gas at a time when the price of oil is falling through the floor.
A barrel of Brent crude oil was trading at below $60 a barrel at one point in December, compared with a recent peak of $115 in the summer of 2014.
The west knows all about the vulnerability of Russia’s economy, its creaking factories and its over-reliance on the energy sector. When the introduction of sanctions from the EU over Russia’s support for the separatists in Ukraine failed to bring Vladimir Put to heel, the US and Saudi Arabia decided to hurt Russia by driving down oil prices. Both countries will face some collateral damage as a result – and this could be considerable in the case of the US shale sector – but both were prepared to take the risk on the grounds that Russia would suffer much more pain. This has proved to be true.
Now for the good (or perhaps less bad) news. Eventually, lower oil prices mean stronger global growth, because consumers will have more money to spend and businesses will have more spare cash to invest. At that point, the price of oil will rise and the ruble with it.
Even so, Russia looks vulnerable. It has reached the end of the road with interest rate increases and has only two options: to allow the ruble to find its own level, in the hope that declining oil prices will prove temporary or to introduce capital controls. These are seen very much as a last resort by Moscow, but may prove necessary if the ruble rout continues.
The phrase “perfect storm” is over-used, but the combination of a collapsing currency, a collapsing economy and punitive interest rates make it apposite. The question now is how Putin responds. If he softens his line over Ukraine, the west’s gamble will have paid off and it will be mission accomplished. But there are hardliners in Moscow who will argue that the response to the crisis should be a siege economy and the ratcheting up of military pressure on Ukraine. If economic agony makes a wounded Russian bear more belligerent, it will prove a hollow victory.
Over the past few months critics have warned that Russian President Vladimir Putin is a cunning strategist and the mastermind of a dangerous new foreign policy. He is playing the long game, they say, making moves in Crimea and Eastern Ukraine as part of a program to undermine the post-Cold War order while western leaders scramble without purpose. These fears are unwarranted. Putin may be a ruthless commander, but he is a second-rate strategist.
Russia has become more enthusiastic about using proxy fighters, voicing rhetorical support for their politics while disclaiming responsibility for their actions. Russian leaders may believe that this allows them to destabilize unfriendly governments while maintaining enough plausible deniability to avoid the consequences. Some analysts believe this is part of a broader shift toward “non-linear war,” which involves indirect methods of expanding Russian influence. They worry this is a ruthless but effective way for Russia to paper over its conventional military weakness, especially since the United States appears to be unwilling to respond in kind. Putin is a former KGB officer, after all. President Obama is a former law professor.
In fact, non-linear war is not a brilliant reconceptualization of strategy. It’s an old-fashioned trick: the use of armed groups to stir unrest in neighboring countries as a way of gaining strategic depth.
The undisputed champion of this approach is Pakistan, which has used militants for most of its history. Pakistan has cultivated groups in India, Kashmir and Afghanistan in large part to overcome its military weaknesses. Supporting proxies might have seemed like a good idea, given Pakistan’s security problems, but the results have been disastrous. The belief that armed groups could solve its security problem may have encouraged military leaders to indulge in corruption rather than building a more professional force. The decision to nurture groups that engage in terrorism has led to international scorn and opprobrium. Worst of all, some of the same groups that Pakistan helped create are now waging an insurgency against it.
As I said, Russia is also suffering for its intervention-by-proxy in Ukraine. Its economy has been in deep distress since the annexation of Crimea this spring, with tens of billions of dollars exiting the country during a stock market and currency crisis. U.S.-led sanctions have worsened Russia’s economic outlook, as investors fear returning to a country that increasingly looks like an international pariah. Washington announced tougher sanctions the day before the MH17 flight went down, and it is now likely that these will remain in place indefinitely. The Obama administration may go further still by enacting industry-wide sanctions, a serious escalation that it has so far avoided.
Nonetheless, policy analysts still worry that Putin is eroding the post-Cold War order, and military analysts still warn that the west is unprepared for Russia’s new way of war. Both concerns are mistaken. Putin’s grand strategy is proving to be a dismal failure, and his high-risk strategy in Ukraine is only making things worse.
And militarily? Are you serious? There's no one on this Earth that can stand up to the United States military. Period.
Up to, and including the rest of the world.
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