Russia’s New War Strategy: Destroy the Global Economy

A Ukrainian serviceman walks on a burning wheat field near a frontline on a border between Zaporizhzhia and Donetsk regions as Russia’s attack on Ukraine continues, July 17, 2022. (Dmytro Smolienko/Reuters)

The next steps to help Ukraine must counter this new threat.

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The next steps to help Ukraine must counter this new threat.

NRPLUS MEMBER ARTICLE {U} pheaval in Sri Lanka and spiking global energy prices are the result of Russia’s new strategy in Ukraine. By causing international shocks, Russia hopes to overawe the West once again, both presenting it the prospect of a winter energy shortage and stoking crises in the developing world. The West should respond not only by arming Ukraine and toughening sanctions. It must also break the Russian Black Sea blockade.

Russia’s military strategy in Ukraine appeared to fail resoundingly. However, its objective was never to conquer Ukraine conventionally — 200,000 men was grossly insufficient to subjugate the largest country wholly in Europe. Russian intelligence, as has been well documented, badly mistook Ukrainian combat capacity and willpower: The Ukrainian army did not collapse, nor did Zelensky flee.

Yet the purpose of Russia’s offensive was never the conventional conquest of Ukraine. Rather, it was meant to demonstrate Russia’s supposed overwhelming power, shocking the West enough to preclude NATO unity and support. Russia sought to exploit the West’s growing self-doubts as it played on previous biases, particularly the conventional wisdom that Russia’s assault would be sufficiently ferocious to overwhelm Ukraine within hours. The Donbas offensive has the same purpose. The Russian military is demonstrably incompetent and struggles with basic operational skills. Yet it has an overwhelming matériel advantage, a historical penchant for saturation offense, and a callous indifference to civilian lives and the lives of its own soldiers. Hence its grinding offensive in the Donbas creates the impression of an inevitable Russian advance.

In fact, Russia is in a precarious military position. It has gained little in the east despite its major force concentration and heavy losses. This has left the south open to Ukrainian pressure. If Ukraine can generate offensive momentum in Kherson or Zaporizhzhia oblasts, the entire Russian offensive will be jeopardized: Russia will be forced to choose between holding its gains in the east or redeploying south to relieve pressure, a task likely beyond its military capacity.

From this springs Russia’s strategy of global macroeconomic disruption. Russia has three key advantages. First, inflationary pressure was likely independent of the Russian invasion of Ukraine. After two years of intermittent lockdowns in the West and global supply-chain disruptions, Western publics must release pen-tup demand. China’s zero-Covid policy also sharpens supply issues.

Second, Russia is a leading petrochemical producer and, through its diplomatic and military engagement in the Middle East, has some control over additional oil supply. By cutting off European gas exports, Russia can intensify inflationary pressures, even as European and American economies slide into a recession. Combined inflation and unemployment are economically toxic.

Third, Russia and Ukraine combined are crucial to the global food supply. The two combined produce nearly 70 percent of the sunflower oil, 27 percent of the wheat, 25 percent of the barley, and 18 percent of the maize traded globally, and 28 percent of global fertilizer. By cutting its food exports and blockading Ukraine, Russia can slash global food supplies. In the West, this intensifies inflationary pressures. In the Middle East, Africa, and South Asia, it may jeopardize political stability.

Russia’s strategy has already made an impact. Sri Lanka’s president was recently deposed: He faced an economic crisis, and Russian oil and food disruption intensified it enough to trigger blackouts and mass anger, triggering an assault on the presidential compound. Rising fertilizer prices have had effects in Thailand and other agriculture-reliant  states. Signs exist that the fertilizer shortage may be fading, as suppliers redistribute inventories and accelerate production.

Yet global food and fuel shortages will persist. Warming Middle Eastern temperatures and an extant food and energy crisis in Africa will combine with food shortages to create a global macroeconomic storm. The results are unpredictable. But another round of violence in Central or North Africa, for example, prompted by dire economic conditions, could trigger a migrant wave that stresses European political systems, and a series of unforeseen developing-world contingencies that the West cannot ignore.

Russia may not have time to see this strategy through to fruition. The West will feel the energy squeeze only this winter. Even then, a mild winter could blunt the Russian gas weapon. And a successful Ukrainian counteroffensive in the south will threaten to unravel Russia’s entire position, reduce its leverage over Ukraine, and shred its war aims. Moreover, as the Russian central bank has openly admitted, Russia will not feel the full effect of Western sanctions until this fall and winter as its currency reserves are depleted. Once that begins, Russia will be in an increasingly weak position.

Russia’s only leverage may be to disrupt remaining global shipping. Its Black Sea fleet had enough ships in the region to interdict movement from Romanian and Bulgarian ports. Even limited strikes under deniable circumstances will drive the costs of shipping insurance up, intensifying macroeconomic stress. Russia may, in turn, get lucky and fuel a major conflict beyond Europe by November or December of this year.

The U.S. must act to forestall that eventuality. Its most reasonable step would be to remove Russia’s final pressure tool, its maritime control of the Black Sea. Two steps are necessary. First, a reflagging mission that placed Ukrainian grain aboard U.S. or allied flagged ships, and escorted them through the Eastern Mediterranean, would relieve global food pressure. Second, a robust naval deployment to the Black Sea and Levantine Basin would challenge Russia directly, providing the U.S. with the combat power to confront Russia’s Black Sea fleet.

Hobbled on the battlefield, Russia seeks to transform a ground conflict into a commodities contest. The U.S. and a coalition of willing European naval forces can play to our strengths as it exploits Russia’s maritime weakness. As its increasingly effective delivery of superior weapons shows, the Biden administration has shed its initial anxiety over assisting Ukraine. As harvest time begins, the president should summon the same resolve to assure the world’s access to Ukraine’s agricultural products.

Seth Cropsey is the founder and president of Yorktown Institute. He served as a naval officer and as deputy undersecretary of the Navy and is the author of Mayday and Seablindness.
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