Sex and Sex and Sex and Sex Some More
Dirty little secrets about sanctions revealed!
Today’s headline is my shot at getting the overlord’s algorithms for search engines to pay attention to a post about economics. There are no naked pictures or lurid descriptions of sex acts, just some analysis to inform reader perspectives.
Maybe I’ll get banned from Twitter for inappropriate content. In any case, I’m sorry [not sorry] to have disappointed you if that’s why you’re visiting.
To make matters worse, there's a smattering of good news, which somebody says everybody knows nobody wants to read. Stick around, you might learn something new.
There are two types of sanctions: goal-oriented and moral. While their impacts may overlap, those aiming at state power are more effective.
Goal-oriented sanctions seek to maximize shock to supply chains, particularly those related to the technologies needed to wage war. Russian manufacturing uses western industrial machines technologies, and information technology products.
Moral sanctions are about generalized economic damage, in the hope that the populace will revolt and overthrow their leaders. While moral sanctions may bolster the political prospects of the nation initiating them via a feel good effect, the reality is they are historically ineffective at toppling regimes.
As major brand name retailers are pulling back, their visual marketing i.e., billboards, ads, and signage are being replaced with patriotic propaganda, which often means posters of papa Putin praising the homeland.
Threats of nationalization may temporarily save a few jobs, but history shows Russian consumers aren’t thrilled with placebos. Putin power pants won’t be replacing Levi-brand jeans any time soon.
Microchips, as we’ve learned from our own supply chain issues, are a critical part of just about every mode of transportation and communication these days. Maintaining the systems used to enable those facets of the economy/military has also been largely contracted out to Western firms. Cisco systems shutting down operations is a major blow.
Sanctions have already triggered a brain drain. Flights to Georgia (the path of least resistance) are sold out. The not-particularly tourist-friendly Central Asia republics like Uzbekistan. Fergana, Tashkent, are suddenly popular.
Border guards are now asking about employment and educational backgrounds. Humanities degreed people are allowed to travel outside the country, IT specialists, not so much.
Putin has already thrown a carrot to IT specialists and other experts by exempting them from the draft. Currently the stick part of this equation is being wielded by employers, like the state owned Roskosmos aerospace company, which ahs posted memos forbidding employees from traveling abroad.
The obvious way for the Russian to dull the impact of sanctions involves turning to China. Unfortunately, redirecting trade and technological dependence isn’t something that can happen overnight. Russia’s turn toward the west over the past forty years was in part driven by concern over the more powerful Chinese military.
Even though the Chinese are not self-reliant on items Russia might need (microchips, for example), they’ll welcome the trade with open arms. It would be a mistake to think there’s any altruism involved. China’s much larger economy means they’ll use their leverage to the fullest extent.
Likely export supply routes for Russian goods involve using the Transsiberian railway… which goes through… China.
Buckle up, Putin. The logistics of trade are about to get more expensive.
Losing a war that a country's leadership sold as a sure thing, on the other hand, has a record (particularly in Russia) of sparking regime change. Getting whooped by Japan –which was considered an inferior country– in 1905 and 1991 to a bunch of ragtag Afghanis, have both been pivotal events in Russian history
Another miscalculation by the Kremlin leadership –in addition to the readiness of the military– was the secrecy surrounding planning for the invasion. They were divided over relations with China, with the Security Council promoting economic cooperation for geopolitical reasons and the Federal Security Service viewing it as a security risk
Large parts of the Russian government, including the Federal Security Service, were outside the loop when it came to advance notice of Putin's decision to launch a big military strike. Some accounts I’ve read say even parts of the military chain of command were caught off-guard. Although it’s been generally understood that conflict with the West was inevitable, internal economic policies were designed on the assumption it would be gradual.
Now, boom! There’s a new iron curtain growing across the West, and the same officials who were snidely sabotaging Chinese overtures are charged with getting something in place pronto.
The New York Times analysis of sanctions looks at them through the rose-colored glasses of democracy, with the thinking being that the Russian public’s suffering will lead to an overthrow of the Putin regime.
But because Ukraine’s allies seem unwilling to send troops, sanctions seem their best hope for confronting Putin. And the sanctions do seem to be having some effect already. Oleg Deripaska, a prominent billionaire (and among those whom Britain sanctioned yesterday), recently said that he expected the country to experience an economic crisis lasting at least three years. Already, there are signs that the turmoil may be aggravating Russian public discontent that already existed about the war.
“Russian public opinion is becoming such a problem that Putin is effectively fighting two wars: one in Ukraine, and one at home,” Sam Greene, a Russia scholar at King’s College London, wrote this week. Erica Frantz, an expert on dictators at Michigan State University, told our colleague Max Fisher, “The indicators of elite discontent that we have seen thus far are unusual in Putin’s Russia and should therefore be taken seriously.”
Papa Joe Stalin would argue otherwise. He survived famines in the Soviet Union just fine.
His paranoia, something that Vladimir Putin seems to have adopted lately via extraordinary social distancing at events, was focused on the dangers presented by those closer to him in the pyramid of power.
Thanks to Kamil Galeey, historian and Galina Starovoitova Fellow at TheWilsonCenter, whose thinking informed this post.
Email me at WritetoDougPorter@Gmail.com