The commercial parts of Russia’s state will do very well with plenty of customers remaining for its oil and gas. It’s $3-$4 a litre 91 everyone. Everything else in Russia is ruined.
We are seeing, slowly but perfectly surely, the United States and the European Union get closer and closer to a full military confrontation with Russia.
There’s no winners but there is a likelihood that one side will be defeated more than the other. We don’t have to look back to the ‘nation building’ failures of Iraq or Afghanistan too far back.
Russia will continue to bomb Ukrainian Donbass cities and towns into concrete dust, just like Aleppo. Everyone should take a moment to admire the heroics of the Ukrainian military and their determination and skill, but they will be ground down no matter what military weapons are supplied to them. “They made a desert”, said the Roman historian Tacitus, “and called it peace”. Putin already has control of the coal, iron ore and steel factories and he will bank it. Putin now controls what he sought, even if he needs his military to defend it for many years. Ukraine will keep the far less productive remainder and that will be that. A Russified eastern Ukraine is all that is needed to achieve sufficient victory.
But this is a perverse win for the Ukrainian leadership as well as to NATO. A Russian occupation of Donbass would be incalculably expensive, because the Ukrainians are clear they will always and forever attack to get it back now. There is never going to be peace for Ukraine while Russia occupies any part of its former boundary. Perhaps Putin had in mind the Warsaw Pact in which the Soviet Union ruled over many European nation-states. Now that was expensive, but it was nothing like a zone under perpetual internal rebellion and armed to the teeth by NATO and other partners on the lookout for any gathering of generals or wayward Russian naval ship. Ukraine may become the large version of Mariupol: used to drain Russia dry.
A natural expansion of the conflict is for the EU’s trade benefits to expand to include the United States and Canada; the elision of a defence pact into a common trade arrangement. Even the Republicans would see that coming.
To humiliate and bring Russia low is the apparent strategy of Europe and the United States. Remove foreign investment and the key investors that would have developed more oil and gas fields. Make capital very very hard to acquire. Stunt their modernisation even as the war deepens global scarcity. Bring to nothing all further tech transfers. Kill their markets even where possible oil and gas. Open the doors to all their top talent and their young sportspeople. Let the occupying force burn itself to ash. Let it take Donbass and at the same time consign itself to the third world for any future markets. Let Russia be made low. It’s very 1920.
It will take years, but Russia’s internal repression will fold into collapse: just ask the Soviets.
Once a territory + compensation deal is reached as it will do, the world is left with a rebuild plan on a scale of Germany after WW2. But there is not yet any sign that “nationbuilding” is in the offer from the United States or anyone else. The great majority of remaining Ukraine orbits tighter around Europe and the resource-rich remainder snugs into Russia. What’s fairly likely is now that the Ukrainians will not let up as they never have since 2014, and any Russian governance claims to Donbass statehood will be weak and militarily contested as far as the eye can see. Dark. Humanitarian crisis far larger than that from Syria, but by tens of millions into Europe.
China at 4-5% GDP growth will figure that it needs the capital and customers of the United States and Europe more than it needs the coal and gas of Russia. China will I’m pretty confident figure a different path to India, and follow the money of those who can buy its Gucci handbags, Tesla cars and Apple phones. In a decade perhaps a sufficiently weakened and poor Russia splits apart that that west of the Urals orientates to the European Union.
A smaller, weaker, more resentful and bitter Russia emerges no matter who leads it. Russia’s core markets become Africa and India: poor people buying bulk energy commodities.
NATO will emerge stronger and Russia weaker, by the end of this year. China isn’t going to get much out of it other than more influence over the remainder of a truly broken Russia. China will not sustain the ambitions of its middle class trying to find customers in Russia, but they will find them in Europe, the United States, Australia, Japan, Korea, and South East Asia. Russia is going to feel the hurt faster than US hegemony declines.
We will all cry out as our mortgage rates hit 5% and petrol hits $3 and our grocery bill hits $200 a week – many governments will fall on it including our own.
Russia’s war has weakened us all.
But the richest countries overall will get richer and the poorer ones will get a whole bunch poorer. While we stick close to Australia, United States, Japan and China as our core trading partners we are on balance going to do fine out of the Russian invasion.
Russia: not so much.