December 2014 is the month Putin’s Russia was plunged into undeniable crisis. Between the dramatic drop in oil prices and the collapse of the ruble, under Western sanctions pressure, Russians are going into the new year in a dramatically different, and lessened, economic situation than the one they enjoyed at the beginning of the year now ending.
This will bring myriad hardships to Russians, particularly because even Moscow is admitting that low oil prices may be the “new normal” until the 2030’s. Caveats abound here. The vast majority of Russians don’t travel abroad, much less have vacation properties in Europe, nor do they have hard-currency mortgages (the ruble now having returned to its Soviet-era pariah status). Moreover, the average Russian has a physical and mental toughness about getting by in tough times — it is an unmistakable point of national pride — that Westerners cannot really fathom. In no case now does Russia face the sort of complete economic collapse that it endured in the 1990’s, when the Soviet implosion pushed poor Russians to the edge of survival (were not so many Russians but one generation removed from the farm, and therefore had access to their own food supply, famine might well have happened under Yeltsin). Life in Yeltsin’s Russia, particularly beyond the bright lights of Moscow and St. Petersburg, where few Westerners visit, was harsh and frankly dismal.
Nevertheless, the economic undoing of Putinism over the last weeks, brought about by Western sanctions in response to Moscow’s aggression against Ukraine which began in early 2014, heralds major changes for the Kremlin, and not just in its domestic affairs. While Russia has far deeper hard currency reserves than it possessed in 1998, the last time the ruble’s bottom fell out, and it’s clear that Moscow will try to prevent banks from failing, there should be little optimism among Putin’s inner circle. Russia now faces a protracted and serious financial-cum-economic crisis that will get much worse before it gets better. Since much of Putin’s popularity has derived from the impressive economic growth his fifteen years in the Kremlin have brought, a rise in living standards that has benefited average Russians as well as oligarchs, the political implications of this collapse for Russia’s president are grave.
But are they enough to get Putin to cease his aggression and, in the long run, perhaps even leave office? Western politicians, eager to avoid armed confrontation with Russia, have assumed that enough sanctions-related pain will force Putin’s hand and get him to back off in Ukraine and elsewhere. This was always a questionable assumption. In the first place, sanctions tend to work as intended mostly against countries that strongly dislike being a global pariah, like apartheid-era South Africa, whose English-speaking white elites hated how they suddenly were no longer welcome in the posh parts of London. There is no evidence that Putin and most average Russians find being despised by the West particularly objectionable; on the contrary, many seem to revel in it.
Then there is the touchy fact that sanctions sometimes work not at all as intended. Using economic warfare to break a country’s will, which entails real hardship for average citizens, can cause more aggression rather than cease it. The classic example is Imperial Japan, which faced grim economic realities once U.S.-led oil sanctions took effect in retaliation for Tokyo’s aggressive and nasty war in China. Lacking indigenous petroleum, Japan was wholly dependent on imports that Washington, DC, blocked with sanctions. These placed Japan on what strategists would term “death ground,” since without imported oil its economy and its military could not function. Moreover, the sanctions were seen — correctly — by Tokyo as a sign that the United States and its allies did not want Japan to dominate the Western Pacific region, which constituted an intolerable affront to Japanese pride. The closest place to get the oil Japan needed was the Dutch East Indies, today’s Indonesia, and Tokyo resolved to seize the oil there by force. To do that, Japan first had to drive the Royal Navy out of Singapore and the U.S. Navy out of the Philippines, and to enable that they had to disable America’s Pacific Fleet, which was ported in Pearl Harbor…and the rest of the story you know.
Japan in 1941 believed it was already facing defeat through oppressive sanctions, so engaging in actual war seemed like a logical choice. The total defeat of the Japanese Empire in 1945 indicates that Tokyo’s decision to bomb Pearl Harbor was madcap, but had things worked out differently at, say, Midway in June 1942, such choices might look very different to historians today. When sitting on promotion boards for battle-tried colonels hoping for selection to general in his army, something he enjoyed, Napoleon liked to ask of a candidate, pointedly: “Yes, but is he lucky?” Japan was not at all lucky in the war it started in December 1941, but its defeat was hardly preordained, and the salient point is that Tokyo felt that the Americans really started that war with their harsh sanctions.
Might Putin do the same and decide that since Russia is facing defeat at the hands of Western sanctions, which represent a kind of war, why not opt for actual war, in which Moscow at least has a chance of victory? It’s too early to determine that, but 2015 will be the year such grave decisions are made. To date, there are no indications that Putin intends to back down in Ukraine, or anywhere, thanks to Western sanctions. It’s important to note that Putin’s narrative, which he has elaborated on several occasions and is accepted by most Russians, is straightforward: He has done nothing illegal in Crimea and eastern Ukraine, he is only protecting Russia and ethnic Russians, which is a legitimate national interest. Moreover, it is the height of cheek for the Americans, who after all invade countries all over the world in the name of “freedom,” to call Moscow’s legitimate actions on Russia’s borders “aggression.” Russia will defend itself against this rancid hypocrisy and will resist the West’s warlike sanctions, which are intended to punish Russia for defending itself and its rightful interests.
Putin’s public statements this month make clear that backing down now is not in the cards. At a press conference December 18, he pointedly blamed the financial crisis on the West (“The current situation was obviously provoked primarily by external factors.”) while promising the economy will eventually improve. (Close observers will note that Putin cited “The main achievement of the year in the social sphere is of course positive demographics.”) The usual KGB-style tough talk, however, was on display, as a British journalist explained:
He brooked no compromise on the annexation of Crimea, and renewed his lambasting of the West’s policies since the fall of the Berlin Wall, accusing it of putting up new “virtual walls” and wanting to “chain” the Russian bear. He said that even if the bear were to “sit tight… supping berries and honey” and “abandon its hunting instincts”, the West would still “seek to chain us… then rip out our teeth and claws”. The bear, he said, had no intention of being turned into a “soft toy”. It would defend its sovereignty.
On 20 December, a holiday that honors Russia’s “special services” — this was the day in 1917 that the Cheka, the Bolshevik secret police, was founded by “Iron Feliks” Dzierżyński; in a normal country this would be a day of national mourning not celebration — Putin addressed Russia’s security posture, noting this year’s spike in espionage against the country. He proudly asserted that Russian counterintelligence, Putin’s former employers, had uncovered 230 foreign spies operating in the country during 2014. He minced no words about this threat:
Frank statements are being made to the effect that Russia should pay dearly for its independent stance, for its support for its compatriots, for Crimea and Sevastopol – for merely existing, it sometimes seems. Clearly, no one has ever succeeded in scaring, suppressing or isolating Russia and never will. Such attempts have been made regularly, over the centuries, as I have said publicly on numerous occasions, and in the 20th century it happened several times: in the 1920s, the 1940s and later. It did not work then and it will not work now. Meanwhile, we have to be prepared to experience certain difficulties and always rebuff any threats to our sovereignty, stability and the unity of our society.
This is not a man who is about to back down; doubling-down seems decidedly more likely. To be fair to Putin, Russia is a democracy of sorts, and popular opinion matters. He has dangerously stoked nationalist fires throughout the year now ending, regularly citing alleged Ukrainian Nazis eager to commit genocide against innocent Russians, so it’s difficult to see how he can turn those passions off with a switch, not least because beating the nationalist drum, while making the diplomatic equivalent of obscene gestures at the West, is popular with the Russian masses.
Neither does Western behavior always help matters. It seems not to have occurred to many Western politicians that gleeful public statements about how sanctions will cripple Russia might make Russians view these devastating acts as tantamount to war waged against them. President Obama, too, has not always been wise in his comments. In the first place he has not explained why a half-century of sanctions on tiny and impoverished Cuba failed to work — hence his opening to Havana last week — but sanctions on vast and largely self-sufficient Russia should be expected to deliver as advertised. On December 21, Obama’s comments on his adversary in the Kremlin took a strange turn:
There was a spate of stories about how he is the chess master and outmaneuvering the West and outmaneuvering Mr. Obama and this and that and the other. And right now, he’s presiding over the collapse of his currency, a major financial crisis and a huge economic contraction. That doesn’t sound like somebody who has rolled me or the United States of America.
Obama’s offensive defensiveness here speaks volumes — the self-reference in the third person is revealing — and will be read in Moscow as weakness mingled with taunting. If this is what prep school Ivy League lawyers think passes for tough talk in Chicago, the Chekists in the Kremlin, who are actual hard men with much blood on their hands, will be happy to give lessons to faux-macho poseurs in the West Wing, and in 2015 they will.
I don’t know if there will be war — real war — between Russia and the West in the new year. Surely such a possibility cannot be ruled out, not least because NATO has signally failed to implement the modest deterrence posture in Eastern Europe that I recommended six months ago, eschewing actual defense in favor of some showy yet small-scale exercises without strategic impact. It’s not surprising that some NATO frontline states are planning for possible invasion and occupation by Russia, since their faith in the staying power of the Atlantic Alliance, particularly in Obama’s resolve, is increasingly in doubt.
It is unlikely that Putin will soon choose overt aggression against a NATO country with the intent of causing major war, but such a conflict may result anyway in 2015. Rising Kremlin military and espionage operations in Northern Europe are a cause for concern, while Kremlin provocations against Estonia, that tiny country being a particular bugbear for Putin, indicate where the next Russian “microaggression” — here meaning an engineered “misunderstanding” at a border town to test Alliance resolve — may perhaps fall. It’s a tricky game deciding where Obama’s “redlines” are, particularly because the president himself seems not to know in Syria, Ukraine, or anywhere, so it’s dangerously easy to envision a scenario where the angry gamblers in Moscow roll the dice one time too many, forcing NATO’s hand, without realizing it until it’s too late. War can happen by a kind of accident, with a risky Kremlin operational game gone wrong, and since NATO is not seriously prepared to resist Russian aggression on its eastern frontier, in 2015 it just might.
What I am absolutely certain of, however, is that the new year will bring the West more of what I’ve termed Special War emanating from the East. Moscow is far from ready to wage sustained conventional war against NATO, not least because the oil-plus-ruble collapse will delay its long-overdue military modernization program, but it is eminently prepared to engage in the witches’ brew of espionage, subversion, and terrorism that makes up Special War. Here the West must be vigilant, since Kremlin Special War can do real damage, and represents something that NATO is poorly conditioned to recognize, much less defeat and deter.