Russia’s imperialism vs globalization

By John Lloyd
March 21, 2014

In the sanctions against Russia announced this week by the U.S. and the European Union we begin to see the outline of a titanic struggle. It is one between imperialism and globalization. The Western states have been reminded that imperialism is alive and well, even rampant, and threatens the vision for a more global world economy.

“Russia can be an empire with Ukraine,” said a senior Russian banker earlier this month in an off-the-record briefing. “Without it, it cannot. Simple.” Having Ukraine does not mean possessing it. It is enough for Ukraine to be closely linked to Russia, run by leaders who understand and acquiesce in that necessity. The large failure underlying Russia President Vladimir Putin’s great success in seizing Crimea is that he has propelled much of the rest of Ukraine away from Russia and guaranteed instability; or worse.

The targeting through sanctions of the Russian political and financial elite, including their favored bank, Bank Rossiya, described by a Russian fund manager as “a pocket bank and special purpose vehicle” for the Kremlin elite, has one goal in mind. That is, to drive a wedge between Putin’s imperial strategy and the Russian political and financial aristocracy who have homes in France, yachts moored off Tuscany, children in British private schools and businesses that depend on global markets.

A talk on Wednesday with Sergei Guriev, Russia’s leading free market economist, revealed both Russia’s vulnerability and the huge dangers that Putin brings upon himself, his country and the world. Guriev left Moscow and his post as rector of the New Economic School last year, fearful that his support for the anti-Kremlin campaigner Alexei Navalny would lead to his imprisonment. He now lives and teaches in Paris.

Guriev does not see Putin as a monster. In Putin’s early years he instituted reforms that benefited the economy, repaid the large foreign debt and built up a large reserve fund. He also had good luck. He came to presidential office in 2000 as oil prices were going up and as high unemployment and low output had produced many workers willing to work for low wages. The reconstruction of companies that had been privatized during the 1990s produced more efficient working practices.

But by 2012, the growth rate of 7 percent or more a year was rapidly slowing. In 2013, it reached an anemic 1.3 percent. Social tensions and divisions among the powerful could no longer be bought off. Consumption growth, booming since 2000, could no longer be sustained. A new ideology was needed to unite the country, and that has turned out to be an aggressive nationalism and a stress on recreating the Soviet empire in a new form. Putin needed “a small victorious war,” said Guriev.

When the EU offered Ukraine an association agreement that would have given the former Soviet state trade and investment advantages in return for reforms in the economy and in politics, this ran directly counter to the new spirit of the Russian leadership. For Putin, the risk was to “lose” Ukraine. The Kremlin mindset is zero-sum. You are with us, or with them; to be with the West is thus to be against us.

President Putin is presently riding high in popular support. His approval rating is near 72 percent. President Barack Obama, to say nothing of President Francois Hollande of France, would kill for such ratings. Russians, barraged by TV-borne propaganda celebrating the taking of Crimea, are prepared to indulge in some leader-worship.

Guriev thinks the enthusiasm will be short-lived. The new elite, including those closest to the president and the big oligarchs, are increasingly tied into the rules and customs that go with globalization. They have reasons to be grateful to Putin. But gratitude is short-lived when wealth and influence begin to suffer.

Russia is rich in energy. Part of the hesitation that was evident on Thursday when the EU leaders debated sanctions was because European states — Germany above all — rely on its oil and gas supplies. London feeds richly on its financial transfers. But the longer-term threat to Russia’s well-being will be the consequences of its present behavior and its tendency to use gas supplies as a cudgel against those it wishes to whip into line.

Europe has long worried about its dependence on such a capricious neighbor. Increasingly they are making plans to diminish it. Crimea, as James Surowiecki writes, “Will give more impetus to these efforts.” It will take at least two years for a real shift in the supply networks, but when it comes, it will blow a large hole in Russian export earnings.

The EU is not a fighting organization. Some of its leaders desperately hope that a red line can be drawn after Crimea and that, bit by bit, trade and business can continue as before. They are encouraged that Putin on Friday drew back from imposing sanctions in response to those announced by the EU.

But no red line can be drawn. Ukraine has a government that is dependent on the West, especially the EU, for financial and political support. Its leaders now look at those fortunate ex-Soviet states — the three little Baltic countries of Estonia, Latvia and Lithuania that are secure in the EU and in NATO — and can only envy them.

Putin did not take Crimea to “lose” the other 95 percent of Ukraine. He must find a friendly, or at least not hostile, government in Kiev after the election in May. He must destabilize it and frighten or bribe a future administration back on to his side. The tragedy for him, temporarily hidden by his small victory, is that such an outcome is likely to be impossible.

PHOTO: An armed man, believed to be a Russian serviceman, stands guard near a military base in Perevalnoye, near the Crimean city of Simferopol, March 20, 2014. REUTERS/Baz Ratner

25 comments

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So it’s imperialism if Russia does it but not if we do it. Is that the ticket? There is more at stake here than just for Russia. Yes, Russia has been using it’s oil and gas as a cudgel but the US/EU has been wielding its stranglehold on world financing in exactly the same way. Both are vulnerable.

Posted by majkmushrm | Report as abusive

I’m curious about the retort of American Imperialism: WTF are you talking about? Is the UN an imperialist tool? Seems to me America took action with UN consent and urging for the last 25 years. Since the wash-out of the USSR, western ‘imperialism’ is as dead as Caesar. China and Russia, on the other hand, have both seized foreign territory and claim it as their own. What territory has ANY western power seized since the end of the cold war? Iraq asked America to leave and they left; Afghanistan is about to ask America to leave and they will leave. Ukraine is asking Russia to leave… Even Pakistan asked America to stop bombing Taleban positions and targets and the Americans cut back drone strikes 90% and now only act with approval of the Paki parliament. If you want to call that brutal imperialism and compare it to Putin’s moves, you might as well say creationism is as valid as evolution while you’re at it…

Posted by CDN_Rebel | Report as abusive

The political and chattering classes, left and controlled right, have closed ranks in support of the New Cold War.

Be afraid, be very afraid, Westerners. You have an adversary worthy of you, and then some.

Posted by f00 | Report as abusive

I don’t agree that Russia and China have show themselves to be Imperialistic. Just because Russia took back the Crimea and played policeman in Georgia does not mean that they intend on continuing to expand as an empire. Nor has China showed it either. Yep, they’ve had Tibet since 1950, but have not taken any other countries since and show no desire to do so.
Also, both are significant players in the global economy. China will soon be the number 1 economy.
In fact I can’t see where the author even made comparisons or arguments about globalization. Seems more like a discussion of Russian politics.

Posted by tmc | Report as abusive

“For 25 years we were told how good was West, how just and fair it was and that we must follow West’s example.
For the long time we were in doubt.
But they still continued to persuade us.
We watched how West acted – and processed that.
And then we remembered that we have our own zone of interests, our own principles and our own people divided.
Now i don’t understand why West is so dissatisfied”
(C)Sergey Lukyanenko, unaunthorized translation

Posted by chyron | Report as abusive

I suspect, in the context of the second paragraph, that “guaranteeing instability” in Ukraine will be seen by Mr Putin as a success and not as a failure. The failure, if it is one, is that he now has two million fewer pro-Russian votes with which to ensure it going forward.

His gamble, one suspects, is that the EU, at some point, will tire of trying to stamp out corruption that has become as deeply ingrained in a country as it has in Ukraine. It’s notable that in the past week, Voice of Russia Russian-language broadcast propaganda about Bandera (spelling?) has moved from how many Russians he killed to how many Poles he killed. Clumsy as ever, but it sounds like an attempt to drive a wedge between Ukraine and its new friends even before the friendship has started.

It seems essential, therefore, that the EU does not flag in helping Ukraine to reform and grow. Let’s hope that all the premiers and foreign ministers involved also appreciate this.

As for empire building, this surely feeds directly into Mr Putin’s belief in the notion that the world is divided into “sovereign states” and “subject states” about which there was a lot of discussion when he first came to power? In this sense, the current situation is nothing new: to him, Ukraine is and always has been a “subject state”.

Posted by Ian_Kemmish | Report as abusive

Crimea is hardly worth another global fiscal rout – time EU/USA grew up

Posted by jackdanielsesq | Report as abusive

Not so “titanic” a struggle. Russia is the smallest economy among the four BRIC developing nations, smaller indeed than Italy. Titanic are only Putin’s mouth and his propaganda machine.

Posted by pbgd | Report as abusive

@pbgd
Tout est à moi, car je l’achète
Et je paye en deniers comptans,
Disait l’or en levant la tête.
— Tout beau, — dit le fer, je t’arrête;
Tout est à moi, car je le prends.

Posted by chyron | Report as abusive

Europe has long worried about its dependence on such a capricious neighbor. Increasingly they are making plans to diminish it. Crimea, as James Surowiecki writes, “Will give more impetus to these efforts.” It will take at least two years for a real shift in the supply networks, but when it comes, it will blow a large hole in Russian export earnings……….

Bollocks. Russia is as we speak readying a nat gas deal with China, and one that will likely skirt the dollar.

Posted by Loucleve | Report as abusive

“The reconstruction of companies that had been privatized during the 1990s produced more efficient working practices.” Now if America can catch on and reverse the damage done via privatization, we will be getting somewhere. L.

Posted by 2Borknot2B | Report as abusive

Time to pull Radio Free Europe out of mothballs.

Posted by borisjimbo | Report as abusive

“Russia can be an empire with Ukraine,” said a senior Russian banker earlier this month in an off-the-record briefing. “Without it, it cannot. Simple.”

Actually this is a paraphrase of what professor Zbigniew Brzezinski, who used to hold a position of National Security Adviser at administration of President Carter, wrote in his book “The Grand Chessboard: American Primacy And Its Geostrategic Imperatives” published as long ago as in 1997.

“Ukraine, a new and important space on the Eurasian chessboard, is a geopolitical pivot because its very existence as an independent country helps to transform Russia. Without Ukraine, Russia ceases to be a Eurasian empire.”

I am far from suggesting that you attributes the words of an once prominent American politician and professor to an unnamed Russian banker, but it is very likely that the banker tried to tell how he understands the US politics concerning Ukraine after reading the book.

If you want to buy the book, I would suggest a cheap paperback edition. Or you can just check the quote (page 46) and the context online on Amazon. Actually, the context worth the time spent.

I read that prof. Brzezinski and/or his former students influence foreign policy of the current administration.

Having Ukraine does not mean possessing it. It is enough for Ukraine to be closely linked to Russia, run by leaders who understand and acquiesce in that necessity.

As Canada and Mexico (the latter with a lesser enthusiasm)?

Posted by yurakm | Report as abusive

@ Ian_Kemmish

“It’s notable that in the past week, Voice of Russia Russian-language broadcast propaganda about Bandera (spelling?) has moved from how many Russians he killed to how many Poles he killed. Clumsy as ever, but it sounds like an attempt to drive a wedge between Ukraine and its new friends even before the friendship has started.”

It would be very clumsy indeed to assume that Poles listen to “Russian-language broadcast propaganda” …

However, just a few seconds ago, when I typed “Volyn” in Google search, the very top context that it suggested was “Volyn massacre”. The top lines are:

“Massacres of Poles in Volhynia and Eastern Galicia – Wikipedia”

“Historiography of the Volyn tragedy – Wikipedia, the free encyclopedia”

“The tragic massacre in Volyn remembered – The Economist”

“Volhynia Massacre | Home”

“BBC News – Poland unveils Volyn WWII massacre memorial”

“Ukrainian racism, massacre of the Poles – YouTube”

and then it goes, pages after pages.

This is in US English-language Google interface, not Polish, Ukrainian, or Russian: I am a US citizen, live in Connecticut. It is not hard to imagine what Google shows via Polish language interface.

So, I would think that Poles already knew about their “new friends” without the aid of “Russian-language broadcast propaganda”.

Still, I will ask about it the next time when I will talk with my close Polish relatives who live in the old country.

Posted by yurakm | Report as abusive

Until the EU can mobilize for a large war. Everyone in it should say nice things about Putin. Russia can mobilize and has large conscript army. The Eu has no central army and free trade between states and limits debt of states means individual states cannot spend much on an Army or they hit debt rules or their taxes drive firms and people away.

The EU may have 500 million people and the biggest GDP in world to 146 million of Russia, but is not organized for group efforts. Russia can change oil customers and some may even mix the Russian oil with their own and resell to the EU.

Posted by SamuelReich | Report as abusive

This article is off-base on several fronts…misses key geopolitical issues, etc… Russia has always pursued buffers to keep the West off its border, and needs Ukraine as a pro-Russian buffer zone. If Russia took all of Ukraine, the West would be on its border. It doesn’t want all of Ukraine. This US-led, botched coup created several unintended geopolitical problems for the West and Russia. 1. Pro-Russia Eastern Ukraine is being forced into Russia’s hands…Russia would prefer to have them within Ukraine, influencing / balancing politics in an important buffer zone. You don’t need to own the real estate, just control it. This defines modern American hegemonistic “imperialism”, and what much of the world is fighting against…including our “allies”. 2. Follow the money: The EU gets the rump end, poverty stricken part of Ukraine as a permanent dependency state…which Germany will have to foot the bill for…hence Germany’s unexpectedly aggressive rhetoric against Putin. 3. Pours gasoline on highly destabilizing copycat self-determination referenda globally…we’ve already seen several in the past few weeks…this puts the West in the awkward situation of aggressively going against one of the bedrock planks of the UN…self-determination freedom for all (only when it doesn’t impinge on the economics of the West is seems). These self-determination referenda…especially in Catalan, Eastern Ukraine, et al, where the wealthy/productive side wants to split from the poor / debt-ridden side that’s been taxing them unfairly. Get ready for more of these to come…including the US??? Perhaps this is why the West is so aggressive at the moment…not really angry at Putin, but worried about the destabilizing precedent??? Hypocritical to say the least.

Posted by sarkozyrocks | Report as abusive

Unfortunately Eastern Ukraine is the poor/debt ridden rust belt part and that is why it’s gangster politicians were so keen to control the capital Kyiv as that is where the money is being made now. Russia may be eager to subsidize the resorts/naval bases of the newly seized Crimea but tapped out coal mines and aging industrial infrastructure is another matter…

Posted by bluepanther | Report as abusive

Russia is a third world economy run as a banana dictatorship featuring dolts who threaten the U.S. with nuclear destruction. I’m so scared.

Posted by keebo | Report as abusive

@ bluepanther

Quote: “Eastern Ukraine is the poor/debt ridden rust belt part and that is why it’s gangster politicians were so keen to control the capital Kyiv as that is where the money is being made”

Eastern Ukraine, particularly Donbass, definitely is a rust belt. Unfortunately, other parts of Ukraine generally are even poorer; they have almost peasant farmer economies.

Kyiv, well … Though Kyev has a sophisticated population, Kyiv is not a Silicon Valley, not a Hollywood, and even not a Wall Street. Money are made in the city mostly for the same reason why Washington, DC area became the most affluent region of the US during the Great Recession: when you collect and redistribute taxes, a sizable part of them is stick with the redistributors.

Posted by yurakm | Report as abusive

@chyron
Sergey Lukyanenko is a wonderful sci-fi writer. I enjoyed reading many of his novels. But Moscow and Russia in general from Night or Day Watch, Spectrum or Labirynth of Reflections is VERY SIMILAR to that depicted by Michaił Bulgakov in Master and Margarita about 60 years earlier.
Homo sovieticus made gradually by totalitarian Tzar monarchy and refined by 80 years of communism/autocratic regimes is immortal.
It is a pity you are not capable to understand the qualities of democracy and rule of law.
Of course EU/West countries are the most predator capitalists, but you are also given civil liberties in the package. It sweetens the deal.

Posted by Wantunbiasednew | Report as abusive

What Mr. Lloyd and other Western elitist writers fail to mention (intentionally) was that we and the EU where plotting the overthrow of the previous government in Kiev to be replaced by a more pro-Western government. It was only a day after the Ukranian President agreed to early elections that he was suddenly overthrown. That could not have happened unless the US and EU gave the green light to the opposition.
(Leaked cables and conversations of US diplomats confirm all of this, this is no conspiracy)

So honestly the West deserved what it got.

To Russia, enjoy!!!!!

Posted by KyleDexter | Report as abusive

@ KyleDexter

I have read the news and listened to the infamous Nuland conversation on YouTube and there was no US/EU plot to overthrow the “previous government in Kiev”. President Yevtushenko had removed large amounts of Ukrainian wealth to the west and changed the constitution to increase the power of his office,including making it impossible to get rid of him by legal means. So the Ukrainian people took to the streets and got rid of him.
The West supported the Ukrainian people. There was no US/EU plot to overthrow Yevtushenko. The difference is not subtle and not difficult to understand.

Posted by Oma | Report as abusive

An eye-opening article on what appears to be what’s really going on behind the scenes with this Ukraine crisis: “Texas, Crimea, Catalan, and What’s Really Driving the New “Cold War” With Russia” http://jackworthington.wordpress.com/201 4/03/25/texas-crimea-catalan-and-whats-r eally-driving-the-new-cold-war-with-russ ia/

Posted by sarkozyrocks | Report as abusive

@OMA,

And what are you basing this on?? The leaked conversations are all out there for everyone to hear. Granted that it was probably Russia that leaked the conversations, that does not change the fact that they did happen. The US and EU threw there weight behind the new government as soon as they overthrew Yanukovych, which was only a day or two after he agreed to early elections. If you listen to the conversations our diplomats were having, they were preparing for a pro-western government to take over. And how convenient that one did, just a day after the previous government agreed to the oppositions demands. It was ALL ORCHISTRATED BY THE US GOVERNMENT!

If nobody believes me, just listen to the conversations, it will all be clear to you.

Posted by KyleDexter | Report as abusive

So let me get this straight.

The people of Crimea voted to separate from the Ukraine and to join Russia. This is called “Russia’s imperialism”.

Israel unilaterally and illegally annexes land beyond it’s 1967 boundaries. There was no vote by the local residents. Never did I hear about “Israel’s imperialism”.

It seems there is nothing in the Bible about Russian rights to the ancient lands of Crimea.

Posted by rgbviews | Report as abusive