Considering its lack of credibility, the West needs to step up its sanctions instantly and dramatically to a near Iran level. Presumably, this will not be sufficient to stop a war in Europe, but the West needs to finally get serious.
The good news for the West is that Russia is highly vulnerable. Its GDP is slightly less than 3 percent of global output, or 6 percent of NATO’s output. Its military expenditures are less than one-tenth of NATO’s, and half of Russia’s arms procurement cost is probably lost on kickbacks. Russia is far too weak to be so aggressive, and it has no allies.
Its economic weakness is conspicuous. The market volatility in March, partially caused by the threat of sanctions, has shaved off about 2 percentage points from Russia’s expected GDP this year. Capital outflows amounted to $64 billion in the first quarter, slightly more than 3 percent of GDP, and they are now expected to rise to some $150 billion for the year as a whole. This will hit Russia’s investment, consumption, and growth.
The ruble has fallen, and inflation has risen, forcing the Central Bank of Russia to raise interest rates by 150 basis points. With continued Russian aggression in Ukraine, and stricter Western sanctions, Russia can easily see a fall in its GDP of 2 to 4 percent this year. That will hurt Russia’s standard of living, which has been vital for Putin’s popularity. Perhaps there is a limit to how much economic damage Putin can tolerate. The West needs to test this hypothesis by imposing a truly great cost upon him with a broad array of sanctions. Obviously, the West should also supply arms to Ukraine as fast as possible.
The West has no reason to worry about Putin losing face. He is used to losing face and saving himself through skillful improvisation or manipulation. Rather than apologizing for Russian atrocities in Chechnya, he celebrated them as a victory. He unleashed the shoot-out of hundreds of child hostages in Beslan in September 2005 and used it to reinforce his authoritarian powers. After President Obama snubbed him by refusing to go to Moscow for a bilateral summit in September 2013 and threatened to bomb Syria, Putin came up with the clever idea of eliminating Syria’s chemical weapons. Putin is not interested in any win-win game. On the contrary, to him victory means that his enemy loses.
The West needs to recognize that it cannot afford not to stop Putin. The earlier and more effectively that is accomplished, the lower the cost will be. The obvious parallel is the West’s failure to stop Nazi Germany in time in 1938.
naurally we may thank Putin for doing everything possible to convince us that he is not to be trusted and that he should be stopped to save him and the Russian people of economic disaster .....