(Russia Direct) NATO allies are resorting to stepped-up economic sanctions against Russia. They are doing it because they are convinced that diplomacy has failed to deter Russia from intervening in Ukraine – a move that they see as subverting the post-Cold War order in Europe. One factor complicating a diplomatic resolution instead of sanctions-based approach is that the two sides in the dispute have incompatible views of the situation.
While the U.S. and the EU claim that Moscow provides material support to East Ukrainian rebels and seek to stop any flow of weapons to the rebels, Russia denies any involvement and asserts that there is no reason whatsoever for the sanctions. It is therefore not immediately clear what could become the subject of diplomatic negotiations between Russia and the West with regards to Ukraine at this stage in the crisis.
As of July 30, Moscow is still dismissing the notion that the economic sanctions imposed so far by the U.S. and the EU, can inflict real pain on Russia or compel it to change policy course.
However, the sanctions may already be taking a bite on Russia by restricting the availability of credit and advanced technology to major Russian corporations and undermining overall investor confidence in the future of the Russian economy. Russia's freedom of diplomatic maneuvering on the international stage may also suffer as a consequence of the ongoing crisis in Ukraine.
It is not fair to claim – as many in Russia do – that sanctions have never been successful in history. For example, both Libya ten years ago and Iran over the past year changed their policies in response to multilateral sanctions. Some observers have partly attributed to sanctions the changes currently under way in Myanmar.
Of course, by its sheer size, international clout, and standing within multilateral institutions, Russia cannot be compared to any of these states. When trying to punish Russia, U.S. and European politicians and their advisors acknowledge the lack of historical parallels of sanctioning as big and powerful a state as Russia.
As a large economy and a major international player, Russia may be better able to weather sanctions than any of the smaller countries that managed to get on the sanctions list. However, Russia's more sophisticated economy as well as its citizens' relatively high expectations of rising standards of living may be disrupted by sanctions much more easily than those of Iran. In a way, Russia may turn out to be more sensitive to sanctions than historical precedents suggest.
At the same time, turning up the heat of sanctions against a large and powerful state carries the risk of unpredictable consequences – just as any other process of conflict escalation. The current crisis over Ukraine provides plenty of evidence to prove that point.
As the European Union and Ukraine were speeding towards an association agreement in 2013, they did not foresee the possibility of Russia beginning to play hardball with Ukraine by intervening in Crimea and supporting the cause of East Ukrainian rebels.
Similarly, when demanding an overhaul of the post-Cold War "rules of the game" in Europe and globally, Moscow did not expect these rules to include a strengthened Ukrainian identity, a consolidated NATO presence, and a mounting wave of sanctions against Russia.
To control the risk of further unanticipated dramatic turns, all sides will need the courage to recognize their past miscalculations and reconcile themselves to the imminent costs of a settlement.
See the original post (published July 30) © Russia Direct
