Putin's Desire for New Power Status

Stephen M. Ackerman
Long before Russia started pressuring the Ukraine last year, President Vladimir Putin’s motive was clear: Counter Europe and NATO by securing the “near abroad” countries of Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, and Ukraine into a Eurasian Customs Union.  Putin worried that these countries would tie themselves to Europe’s economies and would join NATO.

In 2008-9, Russia used the conflict between Georgia and the regions of Abkhazia and South Ossetia to neutralize Georgia.  Georgia sought to expand economic relations with the European Union and with NATO.  Since then, Putin has been consolidating these “near abroad” nations by manipulating the price of natural gas they get from Russia to keep their economies (and governments) in line.  He’s also made Europe impotent by keeping it reliant on Russia for natural gas.  Europe gets 33% of its natural gas from Russia.  Even former Soviet states like the Baltic States remain heavily dependent on Russia for their natural gas, despite being in NATO.  In Central Asia, as well as Armenia and Azerbaijan, Russia remains the dominant trading partner.

Despite all this, the U.S. has been a “silent partner.”  The Obama Administration said both sides were to blame for the problems in Georgia, and then it did nothing.  It cancelled the ballistic missile defense systems it was to place in the new NATO members Poland and the Czech Republic.  The “reset” of relations with Russia brought the U.S. nothing because the U.S. didn’t require Russia to guarantee the independence or borders of countries in its region.  Russia retained, as it used in Crimea and threatened against others, the ability to enter their territory to “protect” ethnic Russians.  And the U.S. has done little to support Europe’s need to diversify its energy sources beyond Russia.  This last failure is the worst because several natural gas pipelines run through Ukraine.  Not only is the Ukraine the most economically powerful of all of Russia’s neighbors, but it is especially vulnerable to Russian action.

When combined with Obama’s empty rhetoric over “red lines” in Syria, dithering over troop levels and future objectives in Afghanistan and Iraq, and a failed and scandalous episode in Libya, Putin was assured the Obama administration would take no action should Russia move against Ukraine.

Why does this matter?  Roughly 45% of the world’s GDP comes out of Europe and the U.S. -- $32 Trillion.  These two regions account for 40% of global trade.  A slowdown in Europe will hurt recovery in the U.S.  What is anemic growth now in America will become comatose if Europe’s energy supply is cut.  That will mean higher prices, fewer investments, and less job creation at home.

Putin’s strategic objective is for Russia to be a medium-level economic power.  A Eurasian Customs Union touts a respectable $3 Trillion GDP against countries like China at $7.2 Trillion, Japan at $5.8 Trillion, and India at $1.9 Trillion.  More importantly, Putin attains this status by dominating his neighbors and standing up to both the European Union and the U.S.-led NATO military alliance.  What Putin cannot get militarily, he will obtain through energy extortion and control over trade and investment.  The countries of the near abroad will subjugate themselves to Russia for they have no serious support in the U.S. and Europe remains dependent on Russia for energy.

Thus, Putin will push hard against Moldova, while continuing to do so against Ukraine.  He will also threaten the Baltic States.  They have sizable Russian populations, and are members of both the European Union and NATO.  He will leave the Eastern Europeans alone, due to his respect for German Chancellor Angela Merkel, though they are nervous.

U.S. options are limited because it is showing up late in the game.  Nevertheless, here are a few recommendations: NATO military exercises (in the Baltic and Black Seas, and in Eastern Europe); continued energy assistance to Ukraine, Moldova, and Baltic States; diplomatic outreach to the countries of Central Asia and Armenia and Azerbaijan; and help on the upcoming Ukrainian elections in May.  In the long term, the Obama administration should reverse itself and go forward with implementing the ballistic missile defense systems in Poland and the Czech Republic.  This will show the U.S. is committed to NATO and to the region down the road. 

Stephen M. Ackerman teaches Economics and Political Science at the College of Idaho and at Westwood College Online.

Long before Russia started pressuring the Ukraine last year, President Vladimir Putin’s motive was clear: Counter Europe and NATO by securing the “near abroad” countries of Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, and Ukraine into a Eurasian Customs Union.  Putin worried that these countries would tie themselves to Europe’s economies and would join NATO.

In 2008-9, Russia used the conflict between Georgia and the regions of Abkhazia and South Ossetia to neutralize Georgia.  Georgia sought to expand economic relations with the European Union and with NATO.  Since then, Putin has been consolidating these “near abroad” nations by manipulating the price of natural gas they get from Russia to keep their economies (and governments) in line.  He’s also made Europe impotent by keeping it reliant on Russia for natural gas.  Europe gets 33% of its natural gas from Russia.  Even former Soviet states like the Baltic States remain heavily dependent on Russia for their natural gas, despite being in NATO.  In Central Asia, as well as Armenia and Azerbaijan, Russia remains the dominant trading partner.

Despite all this, the U.S. has been a “silent partner.”  The Obama Administration said both sides were to blame for the problems in Georgia, and then it did nothing.  It cancelled the ballistic missile defense systems it was to place in the new NATO members Poland and the Czech Republic.  The “reset” of relations with Russia brought the U.S. nothing because the U.S. didn’t require Russia to guarantee the independence or borders of countries in its region.  Russia retained, as it used in Crimea and threatened against others, the ability to enter their territory to “protect” ethnic Russians.  And the U.S. has done little to support Europe’s need to diversify its energy sources beyond Russia.  This last failure is the worst because several natural gas pipelines run through Ukraine.  Not only is the Ukraine the most economically powerful of all of Russia’s neighbors, but it is especially vulnerable to Russian action.

When combined with Obama’s empty rhetoric over “red lines” in Syria, dithering over troop levels and future objectives in Afghanistan and Iraq, and a failed and scandalous episode in Libya, Putin was assured the Obama administration would take no action should Russia move against Ukraine.

Why does this matter?  Roughly 45% of the world’s GDP comes out of Europe and the U.S. -- $32 Trillion.  These two regions account for 40% of global trade.  A slowdown in Europe will hurt recovery in the U.S.  What is anemic growth now in America will become comatose if Europe’s energy supply is cut.  That will mean higher prices, fewer investments, and less job creation at home.

Putin’s strategic objective is for Russia to be a medium-level economic power.  A Eurasian Customs Union touts a respectable $3 Trillion GDP against countries like China at $7.2 Trillion, Japan at $5.8 Trillion, and India at $1.9 Trillion.  More importantly, Putin attains this status by dominating his neighbors and standing up to both the European Union and the U.S.-led NATO military alliance.  What Putin cannot get militarily, he will obtain through energy extortion and control over trade and investment.  The countries of the near abroad will subjugate themselves to Russia for they have no serious support in the U.S. and Europe remains dependent on Russia for energy.

Thus, Putin will push hard against Moldova, while continuing to do so against Ukraine.  He will also threaten the Baltic States.  They have sizable Russian populations, and are members of both the European Union and NATO.  He will leave the Eastern Europeans alone, due to his respect for German Chancellor Angela Merkel, though they are nervous.

U.S. options are limited because it is showing up late in the game.  Nevertheless, here are a few recommendations: NATO military exercises (in the Baltic and Black Seas, and in Eastern Europe); continued energy assistance to Ukraine, Moldova, and Baltic States; diplomatic outreach to the countries of Central Asia and Armenia and Azerbaijan; and help on the upcoming Ukrainian elections in May.  In the long term, the Obama administration should reverse itself and go forward with implementing the ballistic missile defense systems in Poland and the Czech Republic.  This will show the U.S. is committed to NATO and to the region down the road. 

Stephen M. Ackerman teaches Economics and Political Science at the College of Idaho and at Westwood College Online.