Economic sanctions are hurting Russia, but these measures haven’t been effective in deterring Putin. Sanctions programs do, however, seem limited to the amount of economic pain Western countries are willing to endure. What should the U.S. and Europe do when the target government doesn’t flinch at the economic pain inflicted by our primary policy?
Albert Einstein reputedly defined insanity as doing the same thing over and over again and expecting a different result. Such has been the case with Western economic sanctions against Russia. We can debate how much harm the sanctions have done to Russia already, and how much more they might do in the long run, but the key point is that Russia believes it has a vital national interest in preventing Europe and the United States from drawing Ukraine away from Russia into a Western orbit. In Russia, as elsewhere, economic concerns as a rule take a back seat to vital national security matters. So Russia is prepared to absorb a great deal of economic pain to defend its interests in Ukraine.
That Europe and the United States do not have the same level of interest in Ukraine is evident from the nature of the sanctions they have levied so far, designed to cause as little economic pain to the West as possible. If the West is not willing to bear much pain, if it is not prepared to run any serious risks for the sake of Ukraine, then it should find ways to meet Russian concerns so as to stop the violence and prevent further damage to Ukraine and the West's credibility. That will require conceding Russia some influence in Eastern Ukraine and agreeing that Ukraine will not be accepted in NATO.
In your recent article in The National Interest America Needs a Real Russia Policy, you mention that we need to think about the long-term consequences of sanctions on the broader global system. How does the sanctions policy affect the global balance and other economies?
In recent years, the United States has increasingly turned to sanctions to pressure what it sees as hostile regimes to change their behavior. The most prominent example is Iran, and now we see sanctions as the weapon of choice in dealing with Russia over Ukraine. To the extent sanctions work, it is a consequence of the central role the United States plays in the global economy, especially in the financial system.
It is only natural that countries concerned that they will become the target of American sanctions will begin to develop ways ways to thwart them, in part by building alternatives to the global economic institutions the United States and other Western countries dominate. The effort of the BRICS, five large emerging economies, to build alternatives to the World Bank and the IMF and their decision to increase the amount of bilateral trade they clear in their own currencies, bypassing the US dollar as a medium of exchange, are harbingers of a larger effort to erode America's central role in the global economy and the effectiveness of its sanctions.
While the East and West are at odds over Ukraine, Putin has moved quickly to enhance ties with China, which has been able to stand apart from this conflict and gain advantages. How does this impact the U.S- China relationship?
Recent American policy has pushed Russia toward China - something highlighted by the $400-billion gas deal Russia and China signed earlier this year. But American policy has also weakened Russia in its negotiations with China - Russian reportedly absorbed a significant cut in price to conclude the gas deal. The net result of American policy is to ease the access of China, which does pose a strategic challenge, to the vast resources of Russia, which does not, to fuel its economic growth, whereas from a strategic standpoint we should be trying to work with Russia as a hedge against China's rise.
Is NATO’s recently announced rapid response military unit too little too late? What is the reality of NATO using Article 5 to fight fire with fire?
The Very High Readiness Joint Task Force is not intended to deter Russia in Ukraine. Rather, its goal is to reassure Allies that feel vulnerable, particularly the Baltic states, that NATO has in place the capabilities to make good on its Article 5 guarantees of collective defense. For the same reason NATO allies at the Wales summit also committed to a "continuous air, land, and maritime presence and meaningful military activity in the eastern part of the Alliance." Those were appropriate steps, given recent Russian actions. But they also demonstrate, as did other declarations at the Wales summit, that even if the Ukraine crisis is resolved the effort to build a NATO-Russia partnership belongs to the past. NATO has now decided to treat Russia as an adversary -as Russia has treated NATO for some time already.
Thomas Graham is managing director of Kissinger Associates, Inc.