The Ukraine crisis is just the first of what will become a series of territorial interventions by Russia. Understanding why NATO’s members failed to anticipate Russia’s intervention enables us to visualise one stream in the coming global military conflicts.
There is an economic logic to President Putin’s strategy. This is exposed by examining the trading relationship with Germany.
German exports €35bn to Russia every year in the form of machinery, equipment, cars and chemicals. Russia pays for the imports by exporting oil, gas and raw materials.
Translation: German prosperity rest on value-adding activity. Russia’s prosperity relies on extracting resource rents from other nations.
Russia is a classic case of a predator economy.
When the Iron Curtain fell, the West did its best to inhibit Boris Yeltsin from creating a value-adding economy. Western corporations purchased Soviet-era factories and closed them down (to prevent competition on global markets). The West was content with extracting the raw materials for its factories.
Russia’s would-be oligarchs obliged, and the vodka-guzzling president went along with the scam. Result: Russia is now locked into a culture of cheating. The only way to sustain its model of economics is the classic colonial syndrome – capturing other people’s territories, to extract their rents. Slicing off a piece of Ukraine is just the start of that Kremlin project.
The West protests that the creature which it helped to create is acting true to form!
As for the West, which is locked into a 1930s-style depression – President Putin’s intervention was timely. NATO is now recommending that more should be spent on re-arming the “free world”. That will pump up production, and employment, so the growth figures will be greeted with glee. But, one day, those weapons will have to be put to the use for which they were intended.