For now, Ukrainians are watching the unravelling Russia’s
oil-funded economic prosperity with an undisguised – and understandable – glee.
Even those of them who never before took an interest in economics, currency
exchange rates or financial markets have been mesmerized over the past two
years by sliding oil prices and a shrinking Russian ruble, cheering at every
sign of Russia’s progressive impoverishment: the loss of its markets for oil
and gas, the dwindling of its hard-currency reserves, the weakening of its real
estate markets, the rise of the default rate on consumer loans and the
across-the-boards crumbing of everyone’s living standards.
No one can reproach Ukrainians for their Schadenfreude. It is, actually, more like a relief in the face of a
miraculously avoided mortal danger. Had a barrel of oil still fetched $100
instead of around $30 as it does now, and oil consuming nations had been
worried about possible oil shortages, Russia might have been emboldened to use
its full military might to invade and dismember their country. It won’t
diminish the heroism and self-sacrifice of Ukrainian soldiers and volunteers to
say that falling oil prices played a major role in curbing Russia’s military
adventures in Eastern Ukraine.
Lower international oil prices and Western sanctions imposed on
Russia after it annexed Crimea weakened the Russian economy, but the government
in the Kremlin also seems determined to hasten the country economic collapse.
Not only has it now become entangled in a foolish misadventure in Syria, but
along the way it has started to pick up quarrels with regional powers. It has
already lost one trading partner, Turkey, and antagonized Saudi Arabia and its
allies in the Persian Gulf; it may soon enter into an open confrontation with
Israel, as well.
There is a whiff of endgame about the whole thing. Russia is
becoming increasingly isolated and, more to the point, the international
community is starting to move against Vladimir Putin personally. There are
almost daily revelations about his involvement in large-scale corruption and
his ultimate responsibility for various crimes committed not only on Russian
soil but in Western countries, as well, notably in the UK. Bringing up Putin’s
name in association with criminal cases is a qualitatively new development which
must certainly have an ominous ring for Russia’s rulers.
As the Russian people grow even poorer and economic, social and
political structures within Russia start to collapse, the government may find
itself in danger. True, Russian society has not been known for its ability or
desire to protest against its own government, and, absent active opposition,
Putin doesn’t give a damn about economic hardships suffered by ordinary folks.
But if Western sanctions start turning against Putin himself and affect his
assets held in the West, it is another matter completely. It could induce him
not only to abandon Donbas but to start looking for a way to withdraw from
Crimea without looking too much as a loser.
Nice though such a prospect may seem it may not be so good for
Ukraine. While it remains the victim of Putin’s aggression – and a bulwark
against Russia’s expansion into other parts of its former empire – Ukraine gets
the sympathy of Western governments and economic assistance. It will be a
different ballgame if Putin backs away.
Ukrainians may complain about the niggardliness of foreign
governments and intransigence of multilateral lenders, but there can be no
question that Ukraine has been treated much more leniently than other
impoverished countries that are unable to meet their financial obligations.
Ukraine has got loans and military assistance. Its leaders have enjoyed
preferential access to Western leaders, allowing them to build personal ties.
Even though military assistance has been insufficient to equip the Ukrainian
military to withstand a full-scale Russian assault, there have been training
missions and joint exercises which have laid the groundwork for a possible
future military alliance.
But once Russian aggression ends, Kyiv will be left to fend for
itself. If it had not instituted meaningful reforms, reduced corruption and
curbed the political power of its oligarchs – in short, hadn’t created a viable
market economy – it may find itself in considerable difficulties.
In a way, it would be worse if international sympathy for
Ukraine, which is still growing as Ukraine stands up to Russia and as
revelations about Putin’s corruption, ties to criminal networks and personal
depravity keep piling up, start to turn to disappointment. Goodwill has a nasty
habit of turning to irritation – and Ukraine may find it hard to avoid severe
economic hardship if it is treated like Greece or Azerbaijan.
There is a moral aspect to this, as well. Take former Russian
oligarch and political prisoner Mikhail Khodorkovsky. While he was jailed, many
Russians supported him and admired his courage and dignity. Since he was
released and allowed to leave Russia, things has been very different. Some of
his pronouncements and actions have been met with public outrage.
I understand this feeling very well. Several years ago, when
Khodorkovsky was still in prison, I wrote a piece in Moscow Times saying that Khodorkovsky deserved to be awarded a
Nobel Peace Prize. Last week, when a picture made rounds on the Internet
showing him in London posing with singer Valeria and her husband Iosif
Prigozhin, I felt, in my own very small
way, betrayed and quite embarrassed about that old article. After all, that due
had been active and vociferous supporters of the annexation of Crimea, and
Valeria performed on the occupied eastern Ukrainian territories, providing
material support to international terrorists. A decent person should not be
seen dining in their company, and while everybody has the right to do so, I
felt it was different in the case of Khodorkovsky.
In some ways, it is the same with Ukraine. Ukraine owes it not
only to itself and to its heroes who died for it on Maidan and defended it in
Donbas not to sink back into post-Soviet kleptocracy, but also to all those
around the world who support its struggle – including those few who have raised
their voices in its support inside Russia.
