Commentary on Political Economy

Friday 23 February 2024

 Make or Break

Ukraine faces a bleak future unless it receives more weapons immediately. The West must respond and also seize Russian state assets to rebuild that shattered country
Two years ago some 190,000 Russian troops invaded Ukraine, launching the biggest, bloodiest war in Europe since 1945 — one that has cost at least $350 billion, caused untold destruction and killed or injured about 315,000 Russian soldiers with vast losses also of Ukrainian troops and civilians.

President Putin’s assumption that Kyiv would swiftly surrender was proved humiliatingly wrong: within weeks the Russians were turned back from Kyiv, leaving behind hundreds of dead, Nato was galvanised into action and Ukraine hit back hard. A year ago, after a string of victories, Ukraine had recaptured much occupied territory, exposed Russian military incompetence and won promises of western tanks, missiles and aircraft.

It is a far bleaker picture today. Desperately short of artillery shells and still awaiting western fighter jets, Ukraine has been forced to retreat from Avdiivka, the second recent battlefield loss, after Bakhmut, of key strategic towns on the eastern front. The war has settled into a bloody stalemate, with Russia steadily building up its forces behind a well-defended front line. The failure of Ukraine’s counteroffensive last year, coupled with the holding up of $60 billion in US aid and growing weariness of western opinion, has led to demoralisation, disagreements within the Ukrainian lead- ership and defeatist forecasts of enforced negotiations.

That would lead to the consolidation of Russia’s gains, buying Mr Putin time to exploit western weakness and US electoral uncertainty, while regrouping for future aggression.

The Kremlin’s triumphalism has also led to a brutal and comprehensive clampdown on all forms of dissent within Russia, culminating in the cynical murder of Alexei Navalny, the sole remaining outspoken opponent of the Putin dictatorship.

That even such gestures as laying flowers at memorial sites for Navalny should lead to arrests and harassment by security thugs underlines not only the paranoia of the 71-year-old Russian leader but the threat that this return to Stalinism poses for all Russia’s neighbours.

Western leaders have announced new sanctions on Russia in a gesture of disgust over Navalny’s murder, targeting especially those connected with his killing and Russia’s security services.

These are, indeed, sadly no more than gestures, dismissed with contempt by the Kremlin. It has announced retaliatory and meaningless bans on European Union officials — as if any of them had any intention of visiting Russia at present. But while the White House is now promising further measures, Washington and its allies have still not committed themselves to a measure that would indeed hurt: the seizure of all Russia’s sovereign assets and their transfer to Ukraine.

Various reasons have been advanced for this unnecessary caution: immediate Russian seizure of western assets; the example it would set to other authoritarian regimes, encouraging them to do the same in any future dispute; the danger that the measures might also hurt innocent or exiled Russians; and concern over violating international law, especially the concept of “sovereign immunity”.

Few objections stand up. Western businesses have largely written off their holdings in Russia; Moscow has itself broken all legal norms with its aggression; and in any case such a measure was used before in confiscating Iraqi assets during the first Gulf war and using them to rebuild Kuwait.

The rebuilding of Ukraine will cost a fortune, but the $300 billion of Russian reserves would certainly help. Nevertheless, sanctions alone will barely dent Russia’s war economy, as the head of Ukraine’s national security council bitterly told The Times. He said Ukraine now needed three thing: weapons, weapons and weapons. It is a message the West must heed immediately. Otherwise the third year of war could see a dangerous and humiliating defeat for Ukraine — and the West.

No comments:

Post a Comment