Domino Effect

The western nations have moved to kick Russia out of the SWIFT system. What is SWIFT, and what was your reaction to this news?

SWIFT is the primary system used by banks around the world to transfer money. Essentially, it is a third party that will take money from Citi Bank in New York and deposit it in a bank in Zurich. The only precedent for a country being taken off the SWIFT system in recent times, as far as I know, was Iran. Russia is the second one, although these current sanctions are far more limited, in the sense that they only cover about twenty entities and two primary banks. Even so, they have already caused a significant drop in the rouble and forced the Russian central bank to increase interest rates by an unprecedented ten points.

As for using SWIFT as a weapon to punish serious breaches of international law: well, the Russian action could be said to warrant it. However, by this standard you’d have to do the same to China based on its treatment of the Uyghurs, and UAE and Saudi Arabia for their actions in Yemen. According to the UN there are about five million people starving in Yemen right now, and another nine million on the verge of joining them. And then there’s Turkey, which has invaded three of its neighbours and committed ethnic cleansing in Northern Iraq and Syria. So I’m all for using these standards, but if they are simply for countries you don’t like then they are not standards at all – they are hypocrisies.

Ukraine seems to be winning the battle of narratives. Is that going to tip the odds in its favour? And can you explain what we mean when we say ‘the PR war’?

The PR war is anything that involves weaving a narrative about the conflict. On this front, what the Ukrainians are doing is avant-garde, cutting-edge stuff. Granted, they have it easier because they’re the ones that are being invaded; but they’re doing a masterful job. There have been some very effective fabrications coming from their side: for example, the border guards on Zmiinyi Island who were declared to have been killed after telling the Russians to ‘go fuck themselves’, but turned out to be alive and well; or the so-called ‘Ghost of Kyiv’ fighter pilot, who was said to have shot down six Russian planes, but never actually existed. The tone of such communications is very American – Anglo-Saxon, you might say – and has played well with the US public. Much of this is probably not being done by Ukrainians themselves; it is probably being assisted by Western actors (state or otherwise), because they know which buttons to push. They understand not only how to speak to a Western audience, but to a young, social-media savvy one. They’ve managed to make Ukraine a cause célèbre among young people who don’t know anything about this region or about this conflict.

How is the war going militarily? On the Ukrainian side, the narrative is that Russia was expecting to Blitzkrieg through Ukraine but hasn’t managed to; on the Russian side, they are talking about advances in a lot of different regions of Ukraine. What is actually going on?

Well, they’re both right. The Ukrainians are clearly putting up a much tougher fight than anyone expected, but that doesn’t fundamentally alter the power dynamics. The Russians are making slow and steady advances. To put things in perspective, it took the Americans three weeks to get to Baghdad in the face of almost no resistance. By contrast, the Russians were outside Kyiv in a day and a half, and I think they made a foolhardy attempt to see if they could end it quickly by sending special forces into the city – which proved to be a disaster. Ultimately, the PR war doesn’t move lines and doesn’t involve tanks. So the Ukrainians’ narrative might win out, but if you look at the actual situation, they’re steadily losing ground. Mariupol has been surrounded, which means that most of southern Ukrainian coastline down to the Black Sea, outside the area around Odessa, could soon be captured. In the north, they’re making their way to the big cities, encircling Kharkiv and Kyiv, and there seems to be a pincer movement to trap the Ukrainian troops facing the Donbass. The best of the Ukrainian forces are on the eastern front, and if they get surrounded that will be a major blow. So I think there’s a tendency to miss the forest for the trees. This has obviously been more costly to Russia than expected, but so far only one side has been retreating every single day, and I frankly don’t see that reversing.  

The economic war has also started. What do you think will be the real-world ramifications of the Western sanctions?

The implications of the economic war are in some ways more geopolitically relevant than the actual war, because Russia is an integral part of the world economy. If you look at the sanctions that have been applied, they are not directly targeting the energy sector, from which Russia gets most of its income. There is an extent to which they can’t sanction it, because then the Germans and Danes and whoever else is buying Russian gas won’t be able to pay for it, and the Russians will cut it off. So I think that, in a couple of days, Russia will adjust to the economic bite and realise this is not the same as what happened to Iran. Whereas the rouble has now fallen by about forty percent, the Iranian rial fell by almost three hundred percent in a couple of days. There’s a question of scale here, and there’s only so much you can sanction.

However, a more frightening element is the issue of food security. Ukraine and Russia are the bread baskets for most of the region, including North Africa and the Middle East, and if their shipments are interrupted you’re looking at bread prices rising three or four hundred percent, which will destabilize various countries from Turkey to Egypt to Lebanon. Russia is also one of the biggest fertilizer producers in the world at a time when there is great demand for it, and there is also the critical issue of oil prices, which will trigger another recession if they continue to rise. Meanwhile, many countries are closing their airspace to Russia. If Russia reciprocates, then pretty much every flight to Asia from North America will need to be rerouted, because every flight that goes to China, Korea, Thailand, Singapore, also goes through Russia. This rerouting means they’ll either need to go to Alaska or South America to refuel, which would make every trip ten hours longer and twice as expensive. So I don’t think people understand the domino effect of disasters that will flow from this.  

What is the likely trajectory of the war?

Historically speaking, Ukraine is highly dysfunctional. It was essentially an Argentina in the middle of Europe: a large wheat-producing nation with an imbalanced economy and a corrupt political system. In fact, I think it’s the only post-Soviet country that hasn’t returned to 1990 GDP levels, which is extraordinary. It is clearly not a threat to anyone. I totally understand Russia’s desire to not have NATO at its border, but the greatest geopolitical threat to Russia does not come from the West; it comes from the south. In between Armenia and China there are seven current and future Afghanistans, current and future failed states. If you remove the carbon industries from all these countries, their GDP levels would be in the seventy to one-hundred dollar per annum range. One of the effects of this war will be to accelerate decarbonization, as Western Europe learns that if it cannot rely on Russia, it must make the switch to renewables. That will endanger Russia’s long-term national security by creating seven Afghanistans on its doorstep, with flat border regions in which millions of people will try to migrate by foot. When these states collapse and implode over the next twenty years, the consequences for their neighbours will be severe.

On the Western side, we are descending into madness with former generals of NATO and members of US Congress talking about no-fly zones over Ukraine. This would mean a war between two nuclear powers – an insane price to pay for gaining influence in this dysfunctional country. Whoever wins the war may come to regret it, because for many different reasons, economic and demographic, it is exceptionally difficult to transform Ukraine into a workable state. If the conflict continues for an extended period, Ukraine will go from being the Argentina of Europe to the Syria of Europe, with six or seven million refugees displaced on the continent.

There is speculation that the Polish military have been telling Western powers they can use their airbases to fly in and out of Ukraine. Well, what if one day Russia decides to destroy your base? Then you’ll have war between NATO and Russia. None of this is worth it. We don’t need more weapons being shipped to this area; what we need is a ceasefire and direct negotiations – ones in which Russia recognizes Ukraine’s independence and agrees to withdraw, in exchange for a neutrality agreement that prevents Ukraine from joining NATO. There is a widespread notion that Ukraine has a right to associate with whoever it wants. And yes, that right exists, just as I also have the ‘right’ to be a centre-forward in the Premier League – but that doesn’t mean it’s going to happen. It’s not a question of what your rights are, it’s a question of what price is worth paying for them. So I am confounded and disappointed that we could be sleepwalking into an entirely unnecessary nuclear confrontation over this issue.

Right now there should be immediate shuttle diplomacy, involving Blinken, Macron, Putin, et al. People have criticised Macron for speaking to the other side, but how are you going to end this conflict unless you agree to talk? What we need is intensive negotiations to end the war and find a solution that saves face for everyone. The Ukrainians have already proved their independence. One thing the invasion has done is create a distinct Ukrainian identity – a narrative and a story – which they previously lacked in some respects. Meanwhile, the Russians have made their point that they’ll blow up the world if Ukraine joins NATO. So what’s needed now is active diplomacy rather than more irresponsible warmongering.

An earlier version of this interview appeared on CivilNet.

Read on: Georgi Derluguian, ‘Recasting Russia’, NLR 12.