The Credit Strategist - February 13, 2022
The key to playing chicken is convincing the other guy you are not going to blink. That is why Vladimir Putin is making it seem as though Russia is prepared to invade Ukraine at any moment. He requires a credible threat to stop NATO expansion into Ukraine and other Eastern European border states. If his threat is seen as empty, it will be ignored. A similar strategic calculus applies to Ukraine, Europe and America as they seek to stop Mr. Putin. The West can leave no doubt in Mr. Putin’s mind that an invasion will result in crippling economic, diplomatic and geopolitical costs for Russia.
The situation in the region is complex. I claim no special expertise on this subject, but it appears that Russia is trying to conceal its motives (limiting NATO expansion) by claiming that the West is encouraging Ukraine to invade its Donbass region rather than negotiate to absorb it peacefully pursuant to the 2015 Minsk II Accord. Ukraine’s President Zelensky knows that an invasion of Donbass would repulse the European Union and NATO and has given no indication he plans to pursue one. Without the provocation of such an invasion, Russia is going to have a difficult time justifying any type of military incursion into Ukraine. Stories are circulating regarding the possibility that either Russia or Ukraine is planning a ‘false-flag’ event to coopt the other into initiating militarily action, but it’s hard to determine whether these stories are credible or not. With the region crowded with military forces, however, the chances of an accident are rising uncomfortably.
Russia stands to lose far more than it gains if it invades. The Russian people have little desire to spill blood and treasure waging war against Ukrainians, so claims that an invasion would bolster Mr. Putin’s domestic political standing are implausible. A war would be enormously expensive and burden Russia with huge ongoing costs, isolate Russia diplomatically and economically by triggering crippling economic and trade sanctions, and severely damage relations with the West. China may support such a destructive move, but with friends like China eventually Russia will pine for its enemies. Russia is currently benefitting from high oil prices but is otherwise a weak economy punching high above its weight because of its nuclear arsenal and Mr. Putin’s testosterone-fueled Machiavellianism. Oil can be purchased elsewhere, however, and the price Russia would pay to indulge Mr. Putin’s grievances over the fall of the Russian empire are much higher than anything it could possibly gain through an invasion.
Russia can mount this type of threat partly because Mr. Putin perceives that the West is morally, politically and economically weak. We see similar behavior by Chinese leader Xi Jinping in Asia. Observing 9-11, the Great Financial Crisis of 2008/9, the Iraq and Afghanistan wars, the West’s pandemic response, former President Trump’s attack on America’s constitutional system, the incessant daily vomitorium of Western social media, the corruption of Western mainstream media, and the deterioration of Western political discourse, men like Putin and Xi smell blood in the water. Since the turn of the century, the West has suffered one disaster after another, most self-inflicted. Signs of Western political, economic and moral decay are palpable. Russia and China sense weakness and will press their advantage (real or perceived) on the geopolitical chess board until they are countered with strength. More likely than not, however, they will overplay their advantage. The West is still robust and resilient. A Russian invasion of Ukraine might even be the event that shakes it out of its present slump.
While the situation at the Russia/Ukraine border is extremely volatile, I suspect war is less likely (and less imminent) than the U.S. government is suggesting in its increasingly alarming public statements. These statements are most likely a necessary part of the diplomatic and geopolitical dance required to achieve a non-military solution to a complex but solvable problem. While invading Ukraine would be a blunder of historic proportions, that doesn’t mean Mr. Putin won’t commit such an error if he can’t find a face-saving way out of the corner into which he painted himself. He has done this before in Crimea and Georgia and by all accounts remains troubled to the point of obsession by the fall of the Russian empire. For the moment, Mr. Putin is probably prepared to sit and wait for the West to give him what he wants because he views the West as weak and desperate to avoid war (as it should be but with some limitations). If anybody is going to pull the trigger first, it will be Russia.
The problem with playing chicken, however, is that eventually somebody has to blink. Let’s hope Chicken Kiev doesn’t end up a dish best served cold.
Michael E. Lewitt