The sudden financial crisis in Russia is providing a “teachable moment,” as our Democratic friends like to say. In this case, it should be a master class in strategic thinking. Before we get too confident in our assumption that Vladimir Putin has fatally overreached, or too self-congratulatory that Western sanctions have crippled the Russian economy, a bit of caution is warranted. We must not be so sure that we have reached a new equilibrium, that this is the new normal, or that there is only one trend line that will determine Putin’s future. It is a time for more, not less, careful analysis and strategic planning.
Those in the Obama administration cheering economic sanctions, which have been in place for months, cannot be unaware that Putin’s current crisis comes solely from the collapse of the price of oil. Without the petrodollar props’ being knocked out from under him, it is likely that Putin would have been largely unaffected, thumbing his nose at Western efforts to cause enough pain to his regime to bring him to the negotiating table in a bid to end his Ukrainian intervention. The sanctions are not suddenly taking effect; they’re now effective because of exogenous shocks.
That, of course, means that the situation could just as suddenly reverse. Yes, it is unlikely that the price of oil will jump back to levels as high as those in June of this year, when it was close to $115 per barrel, but it is foolhardy to assume that it will stay at the current level of about $60 forever. Policymakers who base their plans on a presumption of stability will once again be caught flatfooted if the trend reverses. A sudden spike in oil prices would end Russia’s currency crisis, return wealth and strength to the regime, and embolden Putin. It is just as prudent to prepare for that possibility as it is to think about what may happen if the ruble completely collapses.
Say, however, that the crisis intensifies. A still deeper level of analysis will then be required, asking harder questions: What will Putin do in the case of a full-blown economic meltdown in Russia? Will he be more malleable or more intransigent? Will he be more likely to pursue a cooperative path or will he be more dangerous? Prudent strategic thinking requires the flexibility and imagination to incorporate counterintuitive views.
Those who assume that Putin will be on the ropes in the case of a shattered economy should remember that this is a man who has consistently acted aggressively in his own interests, refusing to be bound by the logic that many in the West assumed would restrain him. Moreover, Western policymakers have been consistently wrong in their assessments of his actions, from the annexation of Crimea to the invasion of eastern Ukraine. There should be some strong Red Team analysis going on, and, so far, it appears that only General Philip Breedlove, the military head of NATO, has been challenging the official wisdom.
Conservative thinking, therefore, would at least entertain the notion of caution in the coming days. Reports that the interest-rate spike announced last week by the Russian state bank will cripple individual and small-business lending in the coming year means that 2015 may well be a year of living dangerously for Putin and his regime. There could be unrest directed against lower-level officials, and Putin may crack down, to prevent any perception that the regime is vulnerable. Certainly, he will try to shift blame onto the West and whip up anti-Western feeling. Perhaps he will channel internal frustration into further external adventurism, a tactic familiar to history.
Caution therefore may mean not pressing ahead with proposed new sanctions against Russia’s defense, energy, and banking sectors — and, indeed, President Obama has recently indicated that he will hold off on imposing the new sanctions. No one wants to give Putin any unnecessary breathing space, nor defuse the crisis over Ukraine by accepting the status quo, but pouring oil on the blaze ravaging Russia’s economy could backfire, given Putin’s unpredictability. Of course, every despot wants to be overestimated by his adversaries, and the West might be playing right into Putin’s hands if it hesitates to squeeze him further out of fear of his response; that may well be the sole reason he saw fit to remind the world that Russia was a nuclear power and threatened to put tactical nuclear weapons in Crimea.
Yet, we do have Putin’s track record to take into consideration, and there is at a minimum the requirement that our policymakers soberly calculate the potential costs of backing him into a corner from which he may see no way out but to fight more ferociously. Given their failure to anticipate his moves so far, there is at least reason to doubt that President Obama and his advisers have done their due diligence on what response a new round of sanctions might evoke in the current atmosphere of crisis in Moscow. Yet they must also guard against slipping into a de facto recognition of his claims and prepare instead for a protracted resistance.
A final caution against premature celebration that Putin has finally been neutered: He has been in power for 15 years now, and become the strongest Russian leader at least since Leonid Brezhnev, and probably since Josef Stalin. He will not face a Nicolae Ceausescu–like end or a Ferdinand Marcos–style exile. There is every reason to expect he will be in power a decade hence. The West cannot forget that it is playing a long game with Russia, as it is with China and Iran, the other two major revisionist powers in the world today. We may well be on the right path to containing revisionists like Putin, but we shouldn’t celebrate dumb luck, like a collapse in oil prices. How seriously we analyze our strategic challenges, how realistically we assess seemingly decisive events, and how sensitive we are to the implications of our policy choices have an importance that go beyond tomorrow’s headlines, and beyond Russia’s borders, as well.
— Michael Auslin is a frequent contributor to National Review Online.