Global caution, not sanctions, will check Russia and other unilateral actors.
Vladimir Putin is no Joseph Stalin and today’s Russia is not the Soviet Union. No single national leader, however powerful, is in a position to unilaterally alter global power balances. Every unilateral move can be met with a counter move. In the end, it is the word of caution delivered by a large majority of important nations rather than economic sanctions that will temper other major powers. No 20th century analogy, based on a bipolar or a unipolar power system, is relevant to understanding the emerging multipolar balance of the power system of the 21st century.
As I have argued earlier, Putin has been acting for some time now to signal the return of Russia (‘The Return of Russia’, IE, September 26, 2013) to the global high table after the two-decade post-Cold War interregnum. But Russia, like any mature power, ought to know the limits to such unilateral action in today’s world. The same considerations that are holding the United States back in the Middle East and restraining China in the South China Sea would eventually hold Russia back.
Equally, while the US and the European Union may seek to discipline other major powers, like a China or a Russia, when they step out of line, the ability of “the West” to impose its will on “the Rest” is increasingly circumscribed by shifting global power balances and changing alliances.
True, the West has overwhelming military superiority over the Rest. Moreover, if the West constructs new plurilateral trading regimes, like the Trans-Pacific and Trans-Atlantic Trade and Investment Partnerships (TPP and TTIP), it could hurt many of the economies of the Rest. However, in today’s interdependent world, no one country, however big, can hurt another without imposing collateral damage on many others, which may eventually make the unilateral action counter-productive.
Of all the weapons in the West’s armour, the increasingly ineffective one is economic sanctions. Thanks to globalisation, the new interdependencies between the economies of the West and the Rest, and the integration of the “emerging economies” through South-South trade and investment networks, economic sanctions, always a blunt instrument of diplomacy, have become less effective in altering the behaviour of big countries.
The limits to the efficacy of economic sanctions against Russia, imposed in the wake of its “reclaiming” Crimea, were highlighted by a news report in The Guardian (UK) last week, which said that the British government had been cautioned by its own officials against taking measures that would hurt the financial interests of the City of London. If Russian investors lose trust in London as a safe place to invest their funds, they have other places to go to, including Singapore, Hong Kong, Dubai and even Shanghai.
Apart from the City of London’s stake in retaining the trust of global investors, European households have a stake in ensuring access to Russian energy supplies. A third of the EU’s energy needs, and a much higher share in the case of Scandinavian and East European economies, are met by Russia. These interdependencies between Russia and the West would blunt the edge of sanctions.
In any case, the efficacy of economic sanctions as a geopolitical instrument has been long questioned, and by none other than a Washington DC think-tank, the Peterson Institute of International Economics (PIIE), which has researched the subject since the early 1980s. PIIE studies have shown how limited the impact of economic sanctions has been in securing desired political outcomes. One of the recommendations of the PIIE study is that for sanctions to be effective, they should be properly targeted. That is why the US has targeted the Russian private sector, especially entities close to Putin. However, as the worries of the City of London illustrate, it would be difficult hitting Russian business interests without hurting Western, especially European, financial interests.
If economic sanctions are unlikely to rein in a “revanchist Russia”, what will? In the end, be it Iran or Russia, Pakistan or China, what will deter countries from taking internationally unacceptable actions are global cautions and the fear of uniting an assortment of adversaries. While the West has been vocal in its disapproval of Putin’s unilateral actions in Crimea, other powers, including China and India, have also conveyed their own sense of disquiet, not just about Putin’s actions but also about those of Western powers. In fact, it was the suspect actions of Nato powers in Ukraine that queered the pitch for Putin in Crimea.
Some in the media have wrongly interpreted Indian National Security Advisor Shivshankar Menon’s statement on Crimea as a message of support for Russia. Menon did not acknowledge the “legitimacy” of Russian action, as some in the media have made out. In fact, Menon’s exact words were that “there are legitimate Russian and other interests involved” in Crimea. Prime Minister Manmohan Singh’s remarks during his telephonic conversation with Putin further reflect this nuanced and balanced Indian response.
To read China’s and India’s response to Crimea through the lens of their own interests in Tibet and Kashmir is ridiculous. Geopolitical shifts are not determined by precedents but by power. If China, India, Japan, Turkey and other powers take different approaches on such developments, it is because each one of them would want their voice heard and not have their own individual options closed by the actions of others.
In the past, India could withdraw into the comfort of non-alignment and keep its counsel. However, India has an increasing stake in global and regional stability and will have to caution anyone disturbing that stability. That, precisely, has been India’s response to the Crimean crisis, as it was to China’s attempts at destabilising East Asia and US destabilisation of the Middle East and North Africa.
In Ukraine, both the West and Russia have precipitated instability. India, like China, has a stake in restoring stability and not allowing matters to get out of control and tensions to escalate. It would appear that the Indian response has been defined by this concern rather than the urge to confer legitimacy on one or the other protagonist, or stay non-aligned between the two.
The writer is director for geo-economics and strategy, International Institute for Strategic Studies, and honorary senior fellow, Centre for Policy Research. email@example.com
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