One of the main critiques Karina Orlova and I received in the course of writing our recent piece had to do with sanctions. “So do you really think it’s good policy to sanction all these Russians?” our editor Adam Garfinkle asked me after reading through an early draft. “And isn’t there a meaningful difference between Putin’s real cronies and these ‘second order’ tycoons you’re describing?”
Those were both good questions. We answered the second one by explicitly acknowledging the distinction, and the first by punting. The essay, after all, was not about the sanctions themselves, but about the role Yeltsin-era oligarchs continue to play in Putin’s Russia, and the tendency among some Russianists in Washington to see these wolves as lambs. Yes, not all people “playing ball” with Putin are easily lumped together into a homogeneous mess of bad actors. But given that we in the West have accepted sanctions as our policy of deterrence against the Kremlin, we argued in our piece that most of these supposedly-blameless billionaires are valid and deserving targets. To add a nuanced argument about whether sanctions themselves represent good policy would have overcomplicated an already complex argument, and perhaps overstretched the patience of our readers.
But with our original points made, it’s time to now tackle that which we punted on: Is our targeted Russia sanctions policy a good idea? The answer is “it depends.” It depends on what we think the goal of sanctions is. And it depends on what the available alternatives are.
Have sanctions had an effect on the Russian economy? Undoubtedly they have, but the extent of the impact is hard to quantify. Their imposition coincided with a slide in the price of oil in 2014 that sent Russia into recession for the first time since 2009. Estimates vary, with some saying that the cumulative effect of both import/export restrictions and limits on financing are knocking off about a point of GDP annually. Restrictions on technology transfers may also be impacting the long-term success of the country’s aging oil sector—Putin’s golden egg-laying goose. The gigantic companies that monopolize Russia’s vast mineral resources will need to modernize in the coming decades as the country’s reserves start to require more unconventional methods for exploitation.
Damage, perhaps even lasting damage, has therefore been done to Russia’s economy. But one would be hard-pressed to say that the imposition of sanctions has modified Russian behavior very much.
- Shortly after the bulk of the “third round” of Western sanctions were imposed in the second half of 2014, Russia carried out its boldest and most brazen incursion into Ukrainian territory of the entire war. That offensive, culminating in the humiliating rout of Ukrainian armed forces at Debaltseve in January 2015, led to the signing of the Minsk II accords, the terms of which were virtually dictated by Moscow.
- Some nine months later, Russia was sending troops to Syria to prop up a weakened President Bashar al-Assad and has not flinched once from providing diplomatic cover for his regime’s repeated use of chemical weapons against civilians.
- In November of 2015, a cooperating witness and former adviser of Vladimir Putin was murdered in the middle of Washington D.C. by what appear to have been Russian assassins.
- By 2016, Russian adventurism was in full swing: an American spy was violently accosted inches outside the American Embassy in Moscow; various efforts were made to try to sway the U.S. presidential elections throughout the year. And a Russia-backed coup was attempted in then-NATO-aspirant Montenegro in November.
- 2017 saw no letup in the steady violence in eastern Ukraine despite the threats of a whole new round of sanctions being readied with the signing of the Countering American Adversaries Through Sanctions Act (CAATSA) into law in August. The attempted murder of former spy Sergei Skripal outside London with highly toxic chemicals in early 2018 was as brazen a move as any since sanctions were first implemented.
As a deterrent, then, sanctions are clearly not having their desired effect. Why might that be? It’s not simply that they are not painful enough. Rather, it’s that the Kremlin has correctly calculated that they represent the strongest response the West can collectively muster, and has determined that even at their highest level, they are survivable.
Sanctions are a source of abiding conceptual confusion in the West. Though many colloquially refer to them as a strategy, they are in fact a stand-in, a cheap means of telling ourselves that we’re “doing something”—that we are containing Russia, in this case. They are such a feel-good proxy, especially for American politicians in the executive branch, that we rarely realize how poorly we reason about them.
The West’s approach to Ukraine serves as a good case study. What would a real strategy look like? For starters, it should have well-defined goals. Here is one possible, if somewhat controversial, set, just for the sake of argument: We should be trying to grind down Russian proxies in Ukraine’s east in order to compel the Kremlin to a negotiating table at which Crimea’s future status would be hammered out.1
President Obama was of course right to point out that there is no appetite anywhere in the West for sacrificing the life of a single Pomeranian (or for that matter Kansan) grenadier on the Pontic steppe for Ukraine’s territorial integrity—and that the Russians understand this fact intuitively. He was wrong, however, not to see that an escalatory ladder exists even if committing our own troops is off the table.
Given a sufficient population in Ukraine willing to fight and die for its country—admittedly, a question-mark—a policy of arming, training, and advising the country’s armed forces might compel Russia to commit more resources to the fight. If calibrated correctly, the fight would slowly, over time, force Moscow into further mobilization, an unpopular move domestically. And any overreaction—a Debaltseve-like attempt to strike further into Ukraine with superior forces—would only draw the Russian mastodon deeper into the tar pits. In this context, a sanctions regime would make sense, both as a pain-multiplier and as a demoralizer—an additional hit to the economy as the government fights a low-grade, messy war on its doorstep, and a vivid demonstration of Western solidarity-in-hostility.
But instead of thinking strategically—applying means over time to achieve desired ends—we sanction because it’s an easy thing to build consensus around. And instead of serving as the start of a policy of escalation meant to bring Russia to the negotiating table, “arming the Ukrainians” has instead come to represent a discrete, single step—a check-box that indicates a “tougher approach” than sanctions alone. After a lot of hemming and hawing, the Trump Administration has opted to check that box. This does not, however, mean that we should expect Russia to be more deterred than by sanctions alone. Our problem remains: there is no strategy, and the Kremlin knows it. Their response is in effect, “And if we don’t comply with your demands, what will you do then?” We have no credible answer.
And not only are threats devoid of strategy broadly not credible, but our demands themselves are no longer clear. What do we want to see happen, exactly? Up through the end of Obama’s term in office, sanctions were primarily about changing Moscow’s behavior in Ukraine. Obama’s outgoing retaliatory move for meddling in the 2016 elections—the seizure of Russian diplomatic properties in Maryland and the expulsion of embassy staff—was not sanctions-based. But with the passage of CAATSA, sanctions have become a generic tool, a means of “countering America’s adversaries.” The latest round of sanctions were officially put in place due to Russia’s “brazen pattern of malign activity” worldwide. There is no longer any off-ramp.2 Sanctions have become purely punitive—a means of expressing our displeasure, and not much more.
Finally, this conceptual muddle coupled with the very nature of targeted sanctions has put policymakers in an unhealthy position of getting to pick political winners and losers within Russia. Ideally this is not something we should be doing—in Russia or anywhere else—if for no other reason than our appalling track record.
Additionally, it invites the potential sanctionees, wealthy and powerful figures all, to come and throw their money around the West’s capitals, suborning its intellectuals and institutions, in a bid to avoid getting clipped. For reasons Karina and I laid out in our essay, on Russia in particular, an entire generation of experts is ill-equipped to make sound judgments on these matters, all considerations of corrupting influences aside.3
Given all this, why do I still defend Russia sanctions? For one, given both the state of the world today and the priorities of both the United States and Europe, it’s hard to imagine anything like a more coherent strategy on Russia emerging. Existing sanctions are very much a second-best approach, but the alternative is nothing much at all.4 And a deterrent policy that ultimately fails to deter does not mean it is useless. Russia should continue to bear costs for the policy choices it makes, even if it decides that it can bear them.
More broadly, there is a case for Russia sanctions that has nothing to do with deterring the Kremlin’s aggressive behavior. It was most elegantly expressed by Dr. Mark Galeotti, testifying to the House of Commons Foreign Affairs committee this past April. He was asked by MP Royston Smith whether targeting these “second order” oligarchs was potentially playing into Putin’s hands. Galeotti’s reply is worth quoting at length:
With sanctions, in some ways we encourage de-offshorisation. We encourage people to move money back into Russia and also these rich people to become more dependent upon Putin because, basically, they will remain rich from the opportunities that he throws in their direction. Conversely, if we think that what we are looking for is to cleanse Britain of dodgy money, which we might think is a good thing in its own right, then we want to get in his way. Even if in the short term it seems to be playing into Putin’s hands, in the long term it helps cleanse the British system.
Galeotti sets it up as an even trade-off: empowering Putin on the margins and in the short-to-medium term by letting him further consolidate control at home as the cost of lessening the influence of dirty money at home.
Me, I’d put my finger on those scales. On the one hand, the fear of Putin “consolidating” is overstated, because any of the oligarchs supposedly being pushed into his arms—the Yeltsin-era oligarchs we have been writing about in particular—aren’t terribly independent anyway. They are not plausible centers of resistance to Putinism.
And on the other hand, whatever benefits Putin reaps from the policy are bound to be short-lived. Russia’s economy is not in great shape, and Putin’s new government is not set to enact the difficult reforms that would be necessary to set it on a better course. Some analysts have privately said that even $100/barrel oil won’t help given the deep structural issues in play. Consolidating control over a slowly sinking ship? Have at it, Captain Putin.
This is not to downplay the continuing significance of Russia, especially a weakened and weakening Russia, on the world stage. Like the Ottoman Empire before it, a Russia in decline will be an enduring source of instability and headaches along Europe’s periphery for the foreseeable future. That reality, however, is already baked in, and is not likely to be reversed; it can only be managed.
Sanctions cannot be the whole answer, but they’re the best one we have at hand.
1. Many would no doubt object that the immediate return of Crimea is not among the policy goals. That’s an unrealistic ask up front, and not just in my opinion: Mikhail Khodorkovsky said as much when we interviewed him in late 2016. The specifics of the theoretical strategy shouldn’t distract us here though. They’re beside the point for our purposes.
2. Not only is there no clear way for Russia to comply with our demands because the demands have become so nebulous, it’s also unlikely that we can ever lift the sanctions for domestic political reasons: doing so is a sign of weakness.
3. This last problem is far from fatal, but it’s worth paying attention to. It’s the reason we wrote our essay in the first place.
4. Perhaps I am mistaken on this point. I suspect, though, that we will soon find out, as the European consensus on Russia sanctions starts to collapse under the strains of a fracturing Transatlantic relationship.