February 3, 2023

Athens News

News in English from Greece

Expert opinion: forecast on the escalation of the war in Ukraine

In an exclusive interview with LETA, a native of Nizhny Novgorod, an economist, author of 15 monographs Vladislav Inozemtsev (1968), who lives and works in Washington, gave his vision of the events in Ukraine. He constantly monitors the situation in his native country and makes forecasts. According to the expert, the bitterness of the war of the Russian Federation against Ukraine will only increase. Further – without cuts *.

– Vladislav Leonidovich, before the New Year you expressed a formula under which both the war will stop, and Kyiv and Moscow will save their face. Have the events of recent weeks shaken your optimism?

– Probably, there is some misunderstanding of my point of view. I talked about the fact that the war is seriously damaging the stability of the Russian regime, and the Kremlin should think about accepting the inevitability of defeat. At the same time, I objected to the point of view, which is extremely widespread today, that the current Russian regime will not survive such a defeat. Moreover, I did not express any “optimism”, because I considered (and still consider) it is extremely unlikely that V. Putin will choose the option of a “controlled” withdrawal of Russia from the war, and will not cling to the last for the supposedly existing chances of victory over Ukraine. So it’s hard for me to answer your question, except for the last part: yes, I’m sure that the escalation of the war is inevitable – with the influx of Western weapons, Kyiv will try to advance, and Moscow will do everything possible to, if not move deeper into Ukraine, then at least hold the occupied territories. Therefore, the bitterness of the confrontation will only increase.

— As a person living in the United States and familiar with the peculiarities of the political mentality there, how would you rate the article by Condoleezza Rice and Robert Gates “Time is not on the side of Ukraine”, published in the Washington Post? Can it be assessed as the personal opinion of retired politicians, or is it a reflection of the position of part of the establishment?

– Of course, this is the position of a part of the political class of the United States – I have no doubt about that. Among American politicians – both right and left – there are many who believe it is right to resolve the conflict as soon as possible. Instability in Europe, the likely instability of the regime in a nuclear power, the threat of the conflict spreading and drawing new countries into it – all this makes such a desire very strong.

The idea that Ukraine cannot emerge victorious, or that Russia cannot be defeated on the battlefield, is just one part of the argument to convince politicians that the West should lobby for peace talks. However, it is important to keep in mind here that this position as a whole should not be passed off as an opinion about the desirability of ending the war by any means, which may include refusing to support Kyiv. The latter, as I see it, is not discussed at all today, and the US position is evolving from less to more decisive, and not vice versa.

To be perfectly frank, I think that Washington now benefits from the continuation of the war and the exhaustion (and increased isolation) of Russia at the hands of the Ukrainians, albeit thanks to military assistance from the West. The strategy of supporting one of the warring parties, with its own non-participation in hostilities, was characteristic of America throughout the entire twentieth century, there is nothing new in it. At the same time, I repeat, one should not look in “signals” like the one you noted for evidence that the United States may suddenly understand V. Putin’s “concerns”.

– How do you assess the position of Western Europe: sometimes they promise weapons, sometimes they don’t? Can Ukraine trust the European Union?

— The European Union is the main victim of this war outside of Ukraine itself. He did a lot for Ukraine and Ukrainians: he placed millions of refugees, provided serious economic assistance and loans, to the detriment of his own interests, imposed sensitive economic sanctions against Russia.

As for the supply of weapons, the European countries did not have and do not have agreements with Ukraine that would require the provision of military assistance to it, and therefore everything they do is a kind of act of goodwill and, accordingly, is not done automatically. Of course, there are concerns about how much such supplies will anger Moscow. There are also questions about their own defense capability.

Finally, it is also very important that EU is a powerful supranational structure, with the rules of which all countries have to reckon (or which can be used as excuses for inaction). Therefore, it was difficult to expect decisive action from the Europeans from the outset. Actually, I would answer that Ukraine should not trust the European Union, but rely on it – simply because, no matter how cynical it may sound, the EU did not promise anything to Kyiv, and Ukraine has no right to demand from it. I understand that this can console few people, but that’s how it is. Europe is helping Ukraine, and aid will increase, but pressure in this area can be counterproductive.

– And the EU itself is able to stop the opposition in its ranks – in this case, I mean the statements and actions of Viktor Orban? Will it come to Hungary’s exit from the EU or its exclusion?

– No, it won’t. Orban is playing a clever game of maximizing his own gains and fueling the populist sentiment he capitalizes on. Neither he nor the EU leadership is seeking Hungary’s exit from the EU.

How would you rate the effectiveness of EU economic sanctions against the Russian Federation on a 10-point scale?

– By 5-6 points.

— What does your experience as an economist suggest: for how long will Moscow be able to maintain the ruble exchange rate and provide products on store shelves?

– Infinitely long. As for the course, Moscow showed last summer how manageable it is. It was enough to introduce a rule on 100% sale of foreign exchange earnings by exporters, and the panic subsided. It is not profitable for the Russian authorities now to destroy stability in the foreign exchange market, so I believe that the dollar and euro will grow a little faster than inflation, but we will not see any failure.

As for the goods on the shelves, in terms of food, Russia is self-sufficient. In addition, I note that there are no sanctions from the West in this area – Russian farmers also use European seeds, hatchery eggs, animal vaccines, hops or flavorings, as before. And if Russia wants to import products from the US or the EU, it will only need to revise its own rules introduced in 2014, and not ask for the lifting of Western sanctions, and consumer goods are imported mainly from developing countries.

In addition, since the spring there has been a system of “parallel imports”, in which each person or company can import Western goods into Russia without any formalities, so the same iPhone14 is sold in every Moscow communication salon, despite the fact that Apple does not formally do business in Russia. Russia. So let’s separate reality and violent fantasies in the style of the return of scarcity from the late Soviet era.

– Well, if you look at the other side of the front, will it not turn out that the Ukrainian economy, its financial system will exhaust the possibilities of the European Union? After all, Europe has a lot of problematic countries – the same Greece, for example.

– Here it is necessary to clearly separate the political and economic aspects. In a purely economic/financial sense, there is no such danger. Europe has already spent at least 20 billion euros to support Ukraine, through the provision of various types of financial and military assistance, and has planned to allocate another 18 billion for 2023, but at the same time, direct damage to European countries from increased prices for energy resources amounted to about 500 billion last year.

Therefore, I think that now, when making decisions regarding support for Ukraine, Brussels compares the allocated amounts not with loans provided to Greece, and not with funds aimed at combating covid, but with the damage caused by Russian aggression to European economies, and therefore the motives enough to support Ukraine, and the scale of costs for these purposes has been and remains quite moderate by European standards.

– Do you consider the possibility of a riot on the outskirts of Russia due to instability in the socio-economic sphere, from dissatisfaction with the mobilization?

– Not. On the whole, the situation in Russia remains much more stable than the fugitive Russian oppositionists make it out to the European public. We can say with confidence that the war with Ukraine began like Putin’s war, but in fact it turned out to be a war of Russia. Murders and abuses in the same Bucha are not so much the fulfillment of Putin’s order, but the actions of ordinary Russians, freed from any responsibility. Before any war in Russia, about 5,000 women a year were killed by their own husbands and cohabitants, so one should not admire the wonderful qualities of the people, who are supposedly just fooled by Putin’s propaganda.

As the war continues, its support may even grow, as there is a factor of revenge, resentment for defeats, etc. a soldier drafted in the Ivanovo or Kostroma regions and his relatives will receive all the federal and regional compensation due for his death, their amount will be from 19 to 23 average annual salaries that people in these regions receive, so I do not think that the war will meet more and more resistance. Riots on the outskirts can happen, but only if there is a serious weakening of the central government, and I do not yet see any evidence that this may happen soon.

— What do you think about the nearest perspectives of the Baltic states?

“It seems to me that Russia will never dare to attack any of the NATO countries, and therefore I do not expect any changes in the fate of Latvia or neighboring countries associated with the Russian invasion of Ukraine. I see a large-scale influx of Russian immigrants as some problem, who, as the screws are tightened in Russia, will have less and less opportunities to support themselves at the expense of funds coming from their homeland, and they will not be ready to integrate into the societies that have accepted them. However, this is probably the only serious challenge on the agenda.

And, probably, Latvia and other Baltic countries will have to get rid of the presence of deep-rooted Russian business in them, which may have some consequences for the economy. However, of course, comparing any of the above with the hardships that befell the Ukrainian people is somehow not entirely decent …

*The expression “without cuts” means that the text is published without cutting out some or some of their parts.

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