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WHEN the international community punished South Africa in the 1980s because of apartheid, it did so with relatively heavy economic sanctions.
Sanctions are again the weapon of choice to punish Russia because of the illegal occupation and annexation of the Crimea. But beyond the word, the present sanctions have very little in common with those of 30 years ago.
This week, the USA ordered steps against 11 Russians and Ukrainians – politicians and officials – who are deemed guilty of the violence in Ukraine and the annexation of the Crimea. Henceforth, they may not travel to the US, while their assets are frozen.
The European Union (EU) took similar steps against 21 such people. It is likely that more individuals, rich Russian businessmen, will also be targeted.
But there is no talk of investment or trade bans, no banning of capital transfers or any such thing.
There are, of course, huge differences between the situation South Africa found itself in and Russia's present position.
Firstly, taking into account other sanctions imposed during the past decade or so – on Zimbabwe, Iran, Syria, et cetera – it seems as if the world has realised that heavy sanctions such as those against South Africa do not advance the cause they are supposed to.
They hit primarily innocent people, those they are designed to help. And so “smart” sanctions, directed surgically against the guilty decision makers, are the new weapon.
But there is another, perhaps even more important, difference. Russia is much more important to the world economy than South Africa ever was, and much more capable of hitting back. Heavy sanctions are likely to hit the sanctioneer as hard, if not harder, as the sanctioned.
Granted, America’s economic ties to Russia are not all that strong. But Europe is another matter.
The EU imports about a third of its natural gas from Russia. For Germany, the leading European economy, it is 35%, while 36% of its oil comes from Russia. The total worth in 2013, according to the German news magazine Der Spiegel, was more than €40.4bn.
At the same time, Germany exported huge amounts of machinery, motor cars, chemical products and clothes to Russia to the tune of €36.1bn. In addition, about 6 000 German companies have investments, big and small, in Russia.
In total, about 300 000 jobs are dependent on Germany’s economic ties with Russia.
Of course, this is a two-edged sword. Heavy sanctions could cripple both economies. President Vladimir Putin’s new-found popularity in Russia could evaporate quickly, but it could also put a big dent in German Chancellor Angela Merkel’s prestige in Germany and Europe.
Russia and the West may be likened to two fighting stags with their antlers locked into each other’s, unable to either continue fighting or stop the battle.
Also, given the severe pruning of the West’s military expenditure during the past six years because of the economic crisis, Nato is simply not able to intervene militarily.
What to do?
My feeling is that the West – the EU and Nato – will soon start two steps, perhaps with little fanfare.
The first is to disentangle the stag antlers by slowly diminishing the economic ties. This will be a slow and difficult process, but in the long run it will give the West more room for manoeuvre.
For instance, one already hears noises in Europe about cutting natural gas imports from Russia and replacing them with American and local gas, mined through fracking.
This is, also in Europe, a controversial issue, but in the light of the Crimean crisis the objections may well weigh less than strategic interests.
The second is that the West may bite the bullet and start to re-arm. This will also be a contentious and difficult matter, as the extra money for military purposes means that funds will have to be siphoned off others, probably social expenditure – and that is sure to make the decision makers very unpopular.
There are few European politicians with enough gravitas to take on such a difficult task. The possible exception is Merkel, at present the uncrowned empress of Europe.
Be that as it may, there seems to be little possibility that the Crimean crisis will be resolved speedily, especially if Putin decides to slice off the eastern part of Ukraine, where a large Russian-speaking population lives.
Putin is an ice-cold chess player who is driven by his ambition to make Russia a great power once again.
Economically, his country’s feet are a mixture of steel and clay. The Russian economy is a lot less efficient than that of the USA and northwest Europe, and the ever-pervasive corruption is sapping the country's energy and life-blood.
In the short term, this does not matter much. By showing strength, Putin has become the idol of the Russians, who feel deeply humiliated by the shameful demise of the Soviet Union.
In the long term, it may be another question. Putin has not only alienated the West, but also the “near abroad” – the very countries who used to be part of the Soviet Union and who he wants to pull back into the Russian sphere of influence.
He may have bitten off more than he can chew. Time will tell.
- Fin24
* Leopold Scholtz is an independent political analyst who lives in Europe. Views expressed are his own.
Sanctions are again the weapon of choice to punish Russia because of the illegal occupation and annexation of the Crimea. But beyond the word, the present sanctions have very little in common with those of 30 years ago.
This week, the USA ordered steps against 11 Russians and Ukrainians – politicians and officials – who are deemed guilty of the violence in Ukraine and the annexation of the Crimea. Henceforth, they may not travel to the US, while their assets are frozen.
The European Union (EU) took similar steps against 21 such people. It is likely that more individuals, rich Russian businessmen, will also be targeted.
But there is no talk of investment or trade bans, no banning of capital transfers or any such thing.
There are, of course, huge differences between the situation South Africa found itself in and Russia's present position.
Firstly, taking into account other sanctions imposed during the past decade or so – on Zimbabwe, Iran, Syria, et cetera – it seems as if the world has realised that heavy sanctions such as those against South Africa do not advance the cause they are supposed to.
They hit primarily innocent people, those they are designed to help. And so “smart” sanctions, directed surgically against the guilty decision makers, are the new weapon.
But there is another, perhaps even more important, difference. Russia is much more important to the world economy than South Africa ever was, and much more capable of hitting back. Heavy sanctions are likely to hit the sanctioneer as hard, if not harder, as the sanctioned.
Granted, America’s economic ties to Russia are not all that strong. But Europe is another matter.
The EU imports about a third of its natural gas from Russia. For Germany, the leading European economy, it is 35%, while 36% of its oil comes from Russia. The total worth in 2013, according to the German news magazine Der Spiegel, was more than €40.4bn.
At the same time, Germany exported huge amounts of machinery, motor cars, chemical products and clothes to Russia to the tune of €36.1bn. In addition, about 6 000 German companies have investments, big and small, in Russia.
In total, about 300 000 jobs are dependent on Germany’s economic ties with Russia.
Of course, this is a two-edged sword. Heavy sanctions could cripple both economies. President Vladimir Putin’s new-found popularity in Russia could evaporate quickly, but it could also put a big dent in German Chancellor Angela Merkel’s prestige in Germany and Europe.
Russia and the West may be likened to two fighting stags with their antlers locked into each other’s, unable to either continue fighting or stop the battle.
Also, given the severe pruning of the West’s military expenditure during the past six years because of the economic crisis, Nato is simply not able to intervene militarily.
What to do?
My feeling is that the West – the EU and Nato – will soon start two steps, perhaps with little fanfare.
The first is to disentangle the stag antlers by slowly diminishing the economic ties. This will be a slow and difficult process, but in the long run it will give the West more room for manoeuvre.
For instance, one already hears noises in Europe about cutting natural gas imports from Russia and replacing them with American and local gas, mined through fracking.
This is, also in Europe, a controversial issue, but in the light of the Crimean crisis the objections may well weigh less than strategic interests.
The second is that the West may bite the bullet and start to re-arm. This will also be a contentious and difficult matter, as the extra money for military purposes means that funds will have to be siphoned off others, probably social expenditure – and that is sure to make the decision makers very unpopular.
There are few European politicians with enough gravitas to take on such a difficult task. The possible exception is Merkel, at present the uncrowned empress of Europe.
Be that as it may, there seems to be little possibility that the Crimean crisis will be resolved speedily, especially if Putin decides to slice off the eastern part of Ukraine, where a large Russian-speaking population lives.
Putin is an ice-cold chess player who is driven by his ambition to make Russia a great power once again.
Economically, his country’s feet are a mixture of steel and clay. The Russian economy is a lot less efficient than that of the USA and northwest Europe, and the ever-pervasive corruption is sapping the country's energy and life-blood.
In the short term, this does not matter much. By showing strength, Putin has become the idol of the Russians, who feel deeply humiliated by the shameful demise of the Soviet Union.
In the long term, it may be another question. Putin has not only alienated the West, but also the “near abroad” – the very countries who used to be part of the Soviet Union and who he wants to pull back into the Russian sphere of influence.
He may have bitten off more than he can chew. Time will tell.
- Fin24
* Leopold Scholtz is an independent political analyst who lives in Europe. Views expressed are his own.
