Our Russia strategy has backfired

Russian GDP may be small, but Russia is, together with the United States, one of the only two states in the international system that can survive relatively unscathed in complete autarchy. Indeed, Russia is not dependent on the world for hard-to-replace stuff — the world is dependent on Russia. It supplies a significant fraction of the world’s energy, metals, fertilisers, and food.

The upshot is that the West’s economic war on Russia is generating tremendous blowback in the form of sky-high commodities prices and the mother of all inflationary shocks to the world economy. Just like imposing an economic blockade on Saudi Arabia is a recipe for self-harm, trying to economically strangulate Russia is a fool’s errand. The breakdown of Russo-Western relations has generated a food crisis, an energy crisis, and a broad-based inflationary shock the likes of which we haven’t seen since the oil price shocks of the Seventies. So, the Russo-Western confrontation is extremely costly for the world at large. Meanwhile, Russia’s coffers are overflowing from commodities exports. So much for the economic weapon.

It is not just that imposing costs on Russia is very costly to the West and the rest of the world. With Western opinion leaders fantasising about Russia after Putin, it pays to be clear-eyed about regime stability on both sides. Russia is what Jeffrey Winters calls a “Sultanistic oligarchy” — a political economy characterised, above all, by the need to temper conflict between oligarchs through the concentration of power in the hands of one man. China is also a Sultanistic oligarchy. The difference between Russia and China is that, while Putin faces a small and stable number of oligarchs, China’s oligarchy is constantly growing in size, wealth, and power. The stability of the Russian oligarchy endows the Putin regime with considerable stamina. No serious Russian analyst believes it to be at risk of collapse, no matter what the West dishes out.