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Fast Money & Foreign Objects
Cold War’s Tensions Unmatched in Putin’s Ukraine Fight
By Terry Atlas - Mar 17, 2014
The tensions between Russia and the West, inflamed by the Kremlin’s land grab for Ukraine’s Crimea peninsula, fall short of the Cold War that defined global politics for almost half a century.
While the Kremlin retains a large nuclear arsenal, Russia today is a shadow of its Cold War self by most other measures of power -- ideology, conventional military forces and especially economics. It also is more integrated with international trade and financial markets, which means it faces a price for President Vladimir Putin’s actions through strained business relations and economic sanctions.
Still, the failed talks between U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov, along with the Kremlin’s defiant moves toward annexing Ukraine’s Crimean peninsula, have fueled talk of a new Cold War. Some scholars of Russia are less inclined than politicians and commentators to revive that label.
Related:
Russian Weakness
“The days of the mighty Soviet Union are long since gone,” Jonathan Adelman, a professor at the University of Denver’s Josef Korbel School of International Studies, said in a phone interview. “Putin knows all that. This is not the Cold War, nor are they Nazi Germany.”
The changed circumstances facing Putin since the collapse of the Soviet Union in 1991 are striking, said Adelman, citing at least five areas in which Russia is weaker than the Union of Soviet Socialist Republics was.
“First of all, there’s no ideological gap here like between communist states and capitalist states in the Cold War,” he said. The Soviets’ Marxist ideology attracted a following in the Third World and in other communist states.
The Russians today, under Putin, “are basically conservative nationalists who are trying to maintain the status quo.” Without a rival ideology to promote, “they are simply one other nation-state,” he said.
Russian power is also numerically diminished. While the Soviet Union and its satellites had a population of about 400 million from Eastern Europe through Eurasia, today’s Russia has a population of about 143 million, he said.
Conscript Army
Russia’s conventional military forces, largely manned by two-year conscripts, isn’t nearly as intimidating as the old Red Army, particularly after its poor performance fighting insurgents in Chechnya. Adelman said he doubts that Putin will try to seize other parts of Ukraine at the risk of a war there “that could be a disgrace for the Russian army.”
Further, Russia has a $2.1 trillion economy compared with the $16.7 trillion U.S. economy and the European Union at $17.3 trillion, according to International Monetary Fund estimates for 2013. Russia’s per capita income, at $14,000, is a little more than a quarter of the U.S.’s $51,700, according to World Bank data for 2012.
Shortly before its dissolution, the Soviet Union had a gross domestic product that the U.S. Central Intelligence Agency estimated was half the size of the U.S. economy. Even the current data showing Russia’s economy is one-eighth the size of the U.S.’s is misleading because it largely reflects Russia’s oil and gas exports, while manufacturing and other parts of its economy lag.
Export Dependence
Unlike the Soviet Union, which was largely a closed economy, Putin’s Russia is tied economically to the world economy. Even near the end, in 1990, exports and imports accounted for only about 8 percent of the Soviet economy, and much of that was trade with its de facto empire. Now, trade -- largely oil and gas exports -- accounts for about 40 percent of Russia’s GDP, according to CIA estimates for 2013.
Russia’s Micex index (INDEXCF) rallied today as investors bet the country will weather sanctions after the Crimea referendum. The index surged 3.7 percent after declining 18 percent this year through last week, and the ruble rose.
Even with Russia’s large nuclear arsenal, neither Russia nor the Western nuclear powers -- the U.S., the U.K. and France -- keep their forces on hair-trigger alert. Russia had 1,400 deployed nuclear warheads and the U.S. 1,688 as of Sept. 1, according to the State Department. In 1990, each side had more than 10,000 deployed warheads.
Russia’s Leverage
Russia isn’t without leverage of its own. Much of Europe remains dependent on Russia for energy because hydraulic fracturing, or fracking, is still in its in infancy there and liquefied natural gas trade is limited. While the U.S. doesn’t need Russia’s oil and gas, it does need Russian cooperation in negotiations -- resuming today in Vienna -- to curtail Iran’s nuclear program and to seek an end to Syria’s bloody three-year civil war.
America’s most immediate vulnerability to Russian pressure may be in the same place that helped spell the end of the Soviet empire: Afghanistan. As the U.S. withdraws forces and heavy equipment from the country, the Northern Distribution Network through Central Asia and Russia is the only practical alternative to routes through Pakistan, which are shorter but have been closed periodically by the Pakistanis to protest American drone strikes. The only remaining option, airlifting supplies, is very costly at a time when the U.S. is trying to reduce defense spending.
By Terry Atlas - Mar 17, 2014
The tensions between Russia and the West, inflamed by the Kremlin’s land grab for Ukraine’s Crimea peninsula, fall short of the Cold War that defined global politics for almost half a century.
While the Kremlin retains a large nuclear arsenal, Russia today is a shadow of its Cold War self by most other measures of power -- ideology, conventional military forces and especially economics. It also is more integrated with international trade and financial markets, which means it faces a price for President Vladimir Putin’s actions through strained business relations and economic sanctions.
Still, the failed talks between U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov, along with the Kremlin’s defiant moves toward annexing Ukraine’s Crimean peninsula, have fueled talk of a new Cold War. Some scholars of Russia are less inclined than politicians and commentators to revive that label.
Related:
- Russia’s $160 Billion Stick Hinders Crimean Sanctions
- U.S. Joins EU With Sanctions After Crimean Secession Vote
- Putin Is No Mad Man to Russians as Power Play Trumps Economy
- Opinion: Obama's Sanctions Will Make Putin Laugh
Russian Weakness
“The days of the mighty Soviet Union are long since gone,” Jonathan Adelman, a professor at the University of Denver’s Josef Korbel School of International Studies, said in a phone interview. “Putin knows all that. This is not the Cold War, nor are they Nazi Germany.”
The changed circumstances facing Putin since the collapse of the Soviet Union in 1991 are striking, said Adelman, citing at least five areas in which Russia is weaker than the Union of Soviet Socialist Republics was.
“First of all, there’s no ideological gap here like between communist states and capitalist states in the Cold War,” he said. The Soviets’ Marxist ideology attracted a following in the Third World and in other communist states.
The Russians today, under Putin, “are basically conservative nationalists who are trying to maintain the status quo.” Without a rival ideology to promote, “they are simply one other nation-state,” he said.
Russian power is also numerically diminished. While the Soviet Union and its satellites had a population of about 400 million from Eastern Europe through Eurasia, today’s Russia has a population of about 143 million, he said.
Conscript Army
Russia’s conventional military forces, largely manned by two-year conscripts, isn’t nearly as intimidating as the old Red Army, particularly after its poor performance fighting insurgents in Chechnya. Adelman said he doubts that Putin will try to seize other parts of Ukraine at the risk of a war there “that could be a disgrace for the Russian army.”
Further, Russia has a $2.1 trillion economy compared with the $16.7 trillion U.S. economy and the European Union at $17.3 trillion, according to International Monetary Fund estimates for 2013. Russia’s per capita income, at $14,000, is a little more than a quarter of the U.S.’s $51,700, according to World Bank data for 2012.
Shortly before its dissolution, the Soviet Union had a gross domestic product that the U.S. Central Intelligence Agency estimated was half the size of the U.S. economy. Even the current data showing Russia’s economy is one-eighth the size of the U.S.’s is misleading because it largely reflects Russia’s oil and gas exports, while manufacturing and other parts of its economy lag.
Export Dependence
Unlike the Soviet Union, which was largely a closed economy, Putin’s Russia is tied economically to the world economy. Even near the end, in 1990, exports and imports accounted for only about 8 percent of the Soviet economy, and much of that was trade with its de facto empire. Now, trade -- largely oil and gas exports -- accounts for about 40 percent of Russia’s GDP, according to CIA estimates for 2013.
Russia’s Micex index (INDEXCF) rallied today as investors bet the country will weather sanctions after the Crimea referendum. The index surged 3.7 percent after declining 18 percent this year through last week, and the ruble rose.
Even with Russia’s large nuclear arsenal, neither Russia nor the Western nuclear powers -- the U.S., the U.K. and France -- keep their forces on hair-trigger alert. Russia had 1,400 deployed nuclear warheads and the U.S. 1,688 as of Sept. 1, according to the State Department. In 1990, each side had more than 10,000 deployed warheads.
Russia’s Leverage
Russia isn’t without leverage of its own. Much of Europe remains dependent on Russia for energy because hydraulic fracturing, or fracking, is still in its in infancy there and liquefied natural gas trade is limited. While the U.S. doesn’t need Russia’s oil and gas, it does need Russian cooperation in negotiations -- resuming today in Vienna -- to curtail Iran’s nuclear program and to seek an end to Syria’s bloody three-year civil war.
America’s most immediate vulnerability to Russian pressure may be in the same place that helped spell the end of the Soviet empire: Afghanistan. As the U.S. withdraws forces and heavy equipment from the country, the Northern Distribution Network through Central Asia and Russia is the only practical alternative to routes through Pakistan, which are shorter but have been closed periodically by the Pakistanis to protest American drone strikes. The only remaining option, airlifting supplies, is very costly at a time when the U.S. is trying to reduce defense spending.
If you haven't noticed, America has greatly shifted its focus to domestic production of oil and gas in the past decade to avoid giving foreigners leverage over us in that area. That wasn't the prize, try again.
Article written by Robert Peston 
