Feeling the strain: sanctions and the Russian character

An anniversary of some controversy will come around on February 27th: two years since soldiers backed by Russia seized the parliament building in Simferopol, Crimea. President Putin announced the annexation of the territory a mere 19 days later.

It is beyond reasonable doubt that this move was aggressive, nationalistic and highly illegal. The Economist newspaper at the time called Mr Putin ‘a force for instability and strife’. The response from the United States and Europe was a relatively severe string of economic sanctions.

Perhaps hawkish pundits (myself included) honestly expected a victory for hard diplomacy and international law. It is modish among international theorists nowadays to proclaim states’ increased ‘sensitivity’ due to our interconnected world. Globalised finance, trade and information add a host of ‘vulnerabilities’ to that most timeless of strategies: military threat. Put plainly, there are more ways for governments to hurt each other. Throwing Russia in the dock for however long it takes for Mr Putin to repent is a wonderful thought. But is it sheer optimism?

The blunt tool of economic aggression is somewhat older than the Obama and Putin regimes, even than the modern state system. Thucydides wrote on the Athenian economic exclusion of fellow city-state Megara. Sanctions are the modern equivalent of starving a stubborn foe out from behind equally stubborn fortifications. Inflict the gravest attack short of lethal force: impoverishment. More recently, we find the idea has developed a nuance: sanctions are now ‘smart’, in that key figures close to the offending regime have their assets frozen and face travel bans.

Two years on from Crimea, the Russian rouble has depreciated by over 100% against the US dollar, as if determined to outstrip the plummeting oil prices – now hovering just above $30 a barrel – it is so dependent on. The effects of this decline can of course be felt in Russia itself. State banks and corporations face the possibility of a rapid-fire sale of their assets to private buyers (although one Russian banker told me sarcastically that “there won’t be any investors” thanks to the rouble’s terrible performance).

The streets of Moscow, energetic capital city that it is, no longer stock European imports like dairy produce (in actual fact a counter-measure imposed by the Kremlin) and have seen prices climb rapidly, even for lower-quality goods. “The main thing is that prices for all products are several times higher now,” complained Lena, proprietor of a small independent café and restaurant. “There have been changes to business, life, everything – we have an economic crisis. Everything is affected.”

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High rises, not-so-high spirits. Photo/jaime.silva

But behind the pessimism, Lena managed also to represent a streak of Russian conviction, of belief in itself as a uniquely fated country. “Russia is a special kind of nation. It’s impossible to compare us with other countries – we’re half in Europe and half in Asia.” This schizophrenia in the Russian psyche has long dogged its political behaviour.

Geoffrey Hosking, a leading scholar on the country, writes in his history Russia and the Russians that “the polarity between East and West has afflicted Russia’s political and cultural life at least since the sixteenth century.” Dragged towards Europe by modernising Tsars like Peter the Great, but bound to the Asian continent, traditions and cultures, Russia finds itself reacting and responding to contrasting influences. Diplomacy practised on the steppe went awry in Europe, provoked the Crimean War and resulted in humiliating concessions for Russia. Only then was the necessity of emancipating the serfs truly understood. And this followed the drawn-out decline that began well before Pyotr Chaadev’s flowing diatribe of 1831, published five years later:

“It is one of the most deplorable things of our strange civilisation that we have to discover truths which are the most trivial elsewhere…. We are neither of the West nor the East. As if we were situated outside time, the universal education of the human race has not reached us yet.”

The Putin regime, too, is reactionary – it embraced the West in the early 2000’s, but has since grown dismayed at EU and NATO enlargement right up to its doorstep. And Mr Putin enjoys enormous personal ratings among Russians. In October last year, the state media claimed a positive score of 90%; more recently, the Russian Public Opinion Research Centre (VCIOM) has reported scores of around 60%. This is even more pronounced in rural areas than in the buzzing metropolitan centres of Moscow and St Petersburg.

In this light, we see that sanctions have an untoward effect. With a crisis ostensibly – even if not wholly – caused by foreign powers, a narrative becomes available. The Kremlin points to Western interference, in so doing fanning the patriotic resentment it relies on for its support. Again, Mr Hosking reminds us of “stark oppositions of truth and un-truth and ‘us and them’.” Mr Putin thrives on rancour and fluid truths. He has built and profited from an image as a ‘strong’ leader, ensuring Russia’s place as a force on the world stage.

We should look to former sanction victim, Iran, for comparison. The Islamic Republic suffered total investment and trading bans to both its energy and banking sectors. Companies at all implicated were shut out from dollar markets. But as last year’s nuclear deal is implemented, the ultra-conservative theocrats who make up the supreme power in the country push back in predictable fashion. Moderate candidates for imminent elections on February 26th have been disqualified by the autocratic Guardian Council. Ayatollah Khameini delivered a grating rebuttal in January to the triumphalist mood following the deal, claiming the need to “guard against deceit and violations of arrogant states, particularly the United States.”

It is far from certain that Iranian policy will continue to mellow with time. If it does, it must come from gradual regime change – moderates like Rouhani must repeatedly capture the state through elections. And this, in turn, requires that Iranian people place more blame on their own former, more conservative governments than on the West. Otherwise, they’ll hand the reins back to the hardliners.

And there’s the rub: without regime change, why should Russia change its policy? Smart sanctions earned their moniker because they ought to work around this quandary, convincing a band of oligarchs to perform a volte-face on policy even without the threat of being punted out of office. This looks more and more like a chimera. Mr Putin’s support leeches off a crisis when it should diminish. One gets the feeling that sanctions were built with the wrong target in mind, able only to cripple a perfectly accountable democracy with voters ready to rescind culpable policies.

But failure to castigate such actions as the destabilisation of Ukraine feels almost equally unfulfilling. Encouraging civil society – the same that Mr Putin has spent years choking the life out of – and a thriving democratic opposition seems the best bet to produce change. But miserably, this too is frequently labelled as ‘meddling’. In a Soviet throwback, NGOs have been legally obliged since 2012 to declare themselves as ‘foreign agents’ if they receive funding or support from abroad.

It’s not obvious that the West should let the Kremlin off the hook any time soon: analyst Alexei Chesnakov told The Moscow Times that implementation of the Minsk agreement in Ukraine is currently “complete fantasy.”

But Western powers also cannot conquer Russian patriotism. So as sanctions enter their third year, it might just recall and try to minimise sentiment which, as put by Tolstoy, “produces that Governmental organization under which power may fall, and does fall, into the hands of the worst men.”

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