Russia’s other competition with the West: economic stamina

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Russia’s other competition with the West: economic stamina

As Russia’s invasion of Ukraine escalates, Moscow finds itself embroiled in a parallel conflict: a contest of economic and political endurance against the West.

Russian President Vladimir V. Putin prepared Russia for sanctions imposed after its 2014 annexation of Crimea, such as asking Western countries to cut their citizens from Russian trade and see who blinked first. Is.

But the severity of the Western measures far exceeds expectations, ravaging not only Russia’s economy but also alienating its citizens from travel and even Western brands like Apple and McDonald’s.

Now, both sides face the test of their ability to maintain domestic support for the standoff, the cost of which will be borne by regular citizens. More than a battle of wills, it is a test of two opposing systems.

Mr. Putin’s Russia, which in 2014 was built around nationalist fervor, now relies on propaganda and repression. Western leaders increasingly appeal to international norms and liberal ideals of collective welfare that were in global decline – by now, they hope.

The economic balance is skewed in favor of the West. One study estimated that a full-fledged trade war would cut Western nations’ combined GDP by 0.17 percent, but Russia’s by a disastrous 9.7 percent.

Public opinion could also benefit the West, where polls show widespread support for tough measures against Russia, while Mr Putin dared not acknowledge the extent of the war for fear of triggering more protests.

Still, Western leaders must maintain unity in the more than 20 unstable democracies, convincing citizens from Canada to Bulgaria that rising energy prices – which could be the start of an economic shock – are worth the sacrifice.

Jeremy Shapiro, research director of the European Council on Foreign Relations, said political cracks in the West would inevitably open.

“The elections don’t really tell us anything about how people will actually react to the economic pain and influx of refugees,” Mr Shapiro said. The question is when.

In the meantime, Mr. Putin must keep his grip on Russia’s public and the network of political power brokers who support him. If their tolerance of the rapidly increasing toll of war is reduced before Western resolve, it could jeopardize not only their war, but their hold on power.

The question of who breaks through first could shape Ukraine’s fate as much as an arms transfer or a tank attack. And although the outcome is impossible to predict, a range of economic indicators and political signals provide some clues.

The secret weapon of Western countries, as important as their economic advantage, may be the sudden desire of their citizens for concerted and integrated action.

In elections, Europeans across the continent express a moral imperative to punish Russia’s invasion, as well as recognize that Russia now poses a direct threat to their countries.

In a survey of seven countries conducted just before the invasion, a plurality said they were personally prepared to bear the economic toll of isolating Russia, which provides most of Europe’s energy. Country-specific surveys suggest that the share is likely to increase.

In previous standoffs, European leaders often went against the wishes of their voters to face Moscow, seeing it as a dire need.

Now, leaders such as Germany’s Olaf Scholz and France’s Emmanuel Macron are seeing their approval ratings rise as they rally against Russia. Far from reducing costs for ordinary citizens, some people value it as a point of pride.

The electoral calendar further diminishes political risks: Mr Macron is almost alone among Western leaders facing re-election this year and a strong favorite to win.

Still, President Biden is under pressure from Republicans and voters alike to stand with Russia while keeping gas prices low. If politics around the crisis change, Mr Biden may be forced to adjust, especially as the November midterm election, already expected to be difficult for his party.

And a slowdown in Russian energy exports – already underway as Russian companies hit by the turmoil – is expected to hit Europe hard. Germany imports more than half of its gas from Russia, as does Austria. Some Eastern European countries run on nearly 100 percent Russian gas.

The west of Europe gets most of its gas elsewhere, such as from Norway and Algeria. Still, as Russia is cut off from buyers, fossil fuels will become scarce and therefore costly around the world. Some Germans’ energy bills are already projected to rise by two-thirds this year.

To ease the burden, European governments are offering broad energy subsidies of €15.5 billion, or about $17 billion in France, €5.5 billion in Italy, €2 billion in Poland, €1.7 billion in Austria, and so on. Many target low-income households.

But Westerns may be a timer on resilience. Unless European countries radically re-engineered their infrastructure to import gas or made perhaps the fastest shift to renewable energy in history – both considered technically feasible but costly – they could potentially may run out of fuel next winter.

The economic shocks can go far beyond heating costs. Many European industries are already slowing production due to rising energy prices. Russia also exports most of the world’s copper and other industrial materials.

At the same time, while Europeans express broad support for welcoming Ukrainian refugees, it is unclear whether this will last.

Europe is already expecting a big increase in the arrival of refugees this summer, many of whom are from Afghanistan. Western leaders have proven extremely sensitive to the anti-immigration backlash.

“Significant divisions remain that are buried in the spirit of the moment,” Mr. Shapiro said.

The greatest ally of the West in maintaining unity may be Mr. Putin himself. By gathering forces on NATO’s borders and producing startling images of destruction in Ukraine, they have given Europeans something to rally against, while diverting attention from their dissent.

Unlike in 2014, when many Russians hailed his country’s invasion of Ukraine, Mr. Putin almost immediately turned to repression and censorship, threatening severe prison sentences, to call the invasion a “war”. can be said

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This has intensified a sort of authoritarian feedback loop in Russia, with strong repression of popular dissent, beyond the peak of recent years.

But Mr. Putin belongs to a particular club of authoritarians – personal strongmen rather than military or party dictatorships – for whom popular support is a secondary concern.

Instead, such leaders derive their power from the support of political elites, such as the heads of security agencies or state industries, said Erica Frantz, a Michigan State University authoritarianism scholar.

“This is not to say that ordinary citizens do not matter, but rather that if we are to look at the vulnerabilities of governance at this point in time, the focus should really be on these indicators of elite discontent,” said Dr. Frantz. said.

The authoritarian elite, behind vast personal wealth, could more easily tolerate the economic hardship that would be borne by regular Russians. They give leaders wide latitude in times of war, which is why strongmen rarely lose power due to defeat on the battlefield, research has shown.

Yet, such elites are not fooled by state propaganda. And they are not indifferent to the fate of their country.

Polls of the Russian political elite, conducted in 2020, found that most supported Mr. Putin, who is now in danger: stabilizing the country and winning respect abroad. Many also expressed concern over the handling of the economy – and opposed military adventurism in Ukraine.

“The crisis will be most severe for at least three years. Take the 1998 crisis and multiply it by three,” said Oleg Deripaska, a prominent Russian billionaire, in an unusual break with the Kremlin, referring to Russia’s economically disastrous 1990s.

The sanctions could hurt Mr Putin with the elite by limiting his ability to distribute the loot expected in return for his support. So could popular unrest, if it grows enough to make those elites question whether Mr. Putin is jeopardizing Russia’s stability.

“Russian public opinion is becoming such a problem that Putin is effectively waging two wars: one in Ukraine and one at home,” wrote Sam Greene, a Russian scholar at King’s College London, this week.

The threat is not just anti-war protests, mostly linked to sections of society who already doubt Mr. Putin. Bank runs or other forms of large-scale economic panic, Mr Green argued, could trigger a sense of national distress, even outweighing the blatant lies of the state media.

Mr Putin, by hiding the scale and nature of the invasion, is actually tying his hands, making it impossible for his government to adequately inform citizens about further conflicts. You can’t ask civilians to rally around a war you don’t exist in.

As the toll mounts European discontent is all but inevitable, fears among the Russian elite may be just a matter of time.

Referring to the comments of Mr Deripaska and a few others, Dr Frantz said: “The indicators of elite discontent that we have seen so far are unusual in Putin’s Russia and should therefore be taken seriously.”

Although he insisted that Mr Putin may well exit the self-created crisis, “in the long term, this external pressure – coupled with domestic unrest – could lead to Putin’s downfall.”

#Russias #competition #West #economic #stamina

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