Out of the dream that sanctions will not defeat Putin. However, the trade war can lead to a global hunger and financial crisis. The new drones and rocket launchers are designed to bomb Putin to the negotiating table.
About 100 days ago, Russia invaded Ukraine. The West was quick to militarily help Kyiv. With small but smart weapons. Portable anti-tank missiles and shoulder-launched Manpads were designed to stop Putin’s troops. There was agreement in the West on this, but beyond that chaos and loners prevailed. Some countries supplied armored personnel carriers, others insisted that NATO allegedly did not want to send armored personnel carriers. In addition, Kyiv put systems on the wish list that did not exist in the desired number or for which one could hardly get ammunition.
The West is preparing for Kyiv
But for about 14 days things have been happening in rapid succession, with one announcement of the delivery of heavy weapons outstripping the other. And Berlin, hitherto so reserved, has been in the forefront since Chancellor Scholz announced the delivery of a state-of-the-art air defense system and the deployment of Mars launchers. This wave did not come about by accident. There is no question that it was orchestrated by the leading power, the United States. With the Gray Eagle combat drone, the USA is also supplying the decisive individual system with which the long-range rocket launchers are intended to stop Putin’s Donbass offensive.
These weapons would have helped Kyiv before, but Ukraine did not get them. Now where does the change of heart come from? The nasty answer: The West was rudely awakened from its dreams.
The way things are going, Putin wins
The error in thinking arose after Ukraine’s “victories” at Kyiv and Kharkiv. After heavy losses, the Russians withdrew from northern Ukraine. Politically, this was a huge success for Kyiv – but militarily it was only half a victory. Russia called off the operation, withdrew troops, and a few days later Ukrainian forces moved up.
People in the West were content. The wave of Russian attacks was broken, and the usual trench warfare broke out in the Donbass. In the fortified area, the Russians made little progress. Now the counter-strategy should take effect. It looked something like this: The Ukrainian soldiers have to offer sustained resistance and draw Russia into an “eternal” war of attrition. After the experiences of the first weeks of the war, it was assumed that the Russians would continue to suffer heavy losses, while those of the Ukraine would be moderate. The actual decision should not be sought on the battlefield. Unprecedented sanctions were designed to bring Russia to its knees and unhinge public finances and industry.
Too optimistic assessment
Now, in early June, it turns out that both assumptions were wrong. Neither the war of sanctions nor that of the military went as planned.
First the military: Russia could not solve the problems with its army, but contained them enormously. General Alexander Dwornikov showed that he is a commander who “gets defeat under his boots” and who was used to working with troops of dubious quality, as Stern warned at the beginning of April.
Western countries have misjudged the essence of trench warfare in Donbass. It turned out that the Kiev troops were worn out and worn down by the constant attacks and shelling. There is an immediate danger that the Donbass and the troops deployed there will be lost. That means: the chance of militarily fixing Russia in a stalemate is dwindling. This means there is not enough time for the sanctions to take effect.
Putin is swimming in money
That would be bad enough. But in the meantime there are increasing signs that the sanctions and the mutual trade war are not going as well as desired. The sanctions are having an effect. Russia’s economy is expected to contract by more than 8 percent this year. This is a full-fledged recession or economic crisis – especially if this development continues in the next few years.
Unfortunately, however, it is also evident that the “small” economic power of Russia can cause enormous damage to the global economy. And that’s what Putin is doing now. In the trade war, Putin has two starting points. One is Russia’s influence on fossil fuel markets. This option already works. The other lever targets staple food markets. Here, both Russia and Ukraine each have a high share of world trade. In the case of grain and vegetable oil, the first shock waves can be seen in the form of supply bottlenecks and price increases. However, the real effect will unfold in the autumn after the harvest.
Oil price increases and a clever currency policy mean that the ruble is extremely strong despite all sanctions and Russia achieves a very high current surplus. In the first four months of 2022, Putin was able to book 96 billion dollars net, more than triple compared to 2021. None of the EU’s boycott threats can change the fact that Putin is currently making more profits than ever before and even after a boycott – thanks to the high prices.
Money solves many problems
These full coffers will help Moscow survive the sanctions. Russia has time to look for new customers for gas and oil and to open up new transport routes. Energy exports to China have already increased by more than 50 percent. A side effect of the windfall is that Putin can avoid an unpopular mobilization. Instead of drafting cheap conscripts and reservists, tempting wages are paid for fighting. Together with the layoffs due to the economic crisis, it should be possible to find enough “volunteers” for the patriotic mission in comparatively poor Russia. The population in Russia – only informed by the state media – supports the war course. The full coffers can also mean that Russia will be able to at least partially plug the gaps in the supply of components, industrial plants and chips.
After Corona comes the Putin recession
At the same time, the West is stumbling into an economic crisis. Inflation rates are between 8 and 9 percent. Should the harvest from Ukraine be blocked, this value will continue to rise. Economic growth will slow down. That means the EU will need much longer to work its way out of the Corona basement. Putin calculates that the ability of the Russian population to suffer is greater than that of the people in Western Europe, who are now facing a Putin recession after the currency and corona crises.
Hunger and debt – an explosive mixture
The situation in the world’s poor countries is far more explosive. As long as they are not energy exporters, rising energy and food prices will hit them hard. At the same time, the interest rates that these highly indebted countries have to pay are also rising. When people run out of food, the situation becomes uncontrollable. The Arab Spring had many causes, but the immediate spark was rising grain prices. At that time they were triggered by an export ban in Russia, with which Moscow was actually only reacting to a bad harvest.
The impending famine can trigger the next financial crisis. Faced with the choice of paying for food and fuel or paying off their debts, many countries will put debt servicing on the back burner. Sri Lanka has already defaulted and it will not be the last. The whole world is slipping into an economic crisis the likes of which it has never seen before. Not because of the dimensions, but this time there is a player at the table who does not want to defeat or even dampen this crisis, but will fuel it with all means possible. Russia wants to make political capital out of the chaos. By offering generous rebates to states in need, but only to well-meaning states that do not join Western sanctions. That’s already happening, Putin’s friend Assad is said to be getting grain from Ukraine.
The West is running out of time
The “Putin’s Great Depression” scenario doesn’t have to happen, but it is a real possibility. Therefore, military aid to Kyiv is now being massively increased. Ukrainian victories on the battlefield should force Putin to the negotiating table. Will that succeed? The announced weapons are substantial and can turn the tide. Putin cannot hope to fight this steady influx from the Western defense industry alone at the front lines. The Kremlin must therefore come up with something beyond the well-known nuclear rhetoric. The only question is what that will be.