Kash Jain ’24
Three weeks ago, I wrote an opinion article arguing that the West needed to understand Putin’s calculus when considering how to thwart a potential Russian invasion of Ukraine. Now, that invasion has come.
The West has responded with expressions of support for Ukraine and condemnation for Putin, as well as a range of economic restrictions and sanctions. In large part because of this, the ruble has dropped significantly, as it did in 2014 following the response to Russia’s annexation of Crimea. Currently, it is worth less than a US penny.
So far, Putin, many Russian government officials, and oligarchs in both Russia and Belarus have received asset freezes and travel bans from the US, the UK, and the EU. Several Russian defense companies have been made subject to asset freezes, barred from exporting technology, or banned from conducting business. Banks and financial institutions have arguably been hit the hardest with sanctions, receiving asset freezes and debt and equity restrictions. Several of these institutions have also been cut off from the US financial system or kicked out of SWIFT.
However, though some reports indicate that the attack on Kyiv has stalled, there has been no sign that Putin intends to withdraw Russian forces from Ukraine. Of course, economic measures need time—potentially a long time—for their full impacts to be felt, but it is difficult to suggest that current economic measures will fully sink Putin’s plans. They will, however, have a severe impact on the Russian economy and the Russian people.
Russia’s economy serving as the central target of economic measures will cause serious disruption in the lives of civilians who have no involvement and may flatly oppose the invasion. One could argue that a severe economic decline could push Russians to rebel against Putin and impede his plans, but this isn’t very practical. Anti-war protests have begun in Russia, and Russian authorities have begun attempting to limit information and suppress dissent. The mix of propaganda and information suppression does not build a favorable environment for large-scale outrage to be stirred and pointed towards Putin, even if people feel a serious economic hit. Additionally, people could just as easily direct some of their ire towards the West for imposing the sanctions that will cause such economic harm—especially with the aid of propaganda placing the blame of Putin’s invasion of Ukraine on the West.
Even if a large-scale public pressure campaign against Putin could form, it is unlikely that it would be effective in changing his decision-making or ousting him outright. The struggle with autocrats is that massive protest is not a surefire way to break their power. While public-backed oustings of such leaders have been successful, nationwide protests against autocratic rule have often led to serious consequences for the population with little fallout for the autocrat themself. This has been the case with Belarus and its President, Alexander Lukashenko.
Lukashenko, who has consolidated his power to the point where he has become a dictator in all but name, was most recently re-elected in 2020, following an election that the domestic opposition, the international community, and many Belarusian citizens view as having been rigged. From May 2020 until March 2021, Belarusians held massive protests against Lukashenko. The result? Hundreds of civilians were arrested, a number of citizens disappeared, and Lukashenko remains in power. While these protests may have weakened Lukashenko and exposed some of his weaknesses, he has been left largely unscathed, due in large part to the lack of institutions that could contest his rule. While Putin does not hold the same degree of control over Russia as Lukashenko does in Belarus, it is undeniable that Putin’s grip on Russia is strong enough to place him in a relatively safe position when it comes to public discontent. Of course, this isn’t indefinite—serious long-term discontent could lead to Putin’s ousting at some point, but that could take a very long time and have a serious cost for the Russian people and the country’s institutions.
Russian oligarchs, however, are more central to Putin’s support. Many scholars hold that oligarchs have contributed significantly to Putin’s power. While Putin has gone after some oligarchs, he has really only gone after those who have attempted to exercise political influence through banks under their control and the government agencies that hold their accounts with said banks. It seems as though Putin has formed a tentative relationship with oligarchs in which they can maintain most of their power and wealth as long as they back Putin. Thus, Russia’s oligarchs are one of the strongest paths to Putin himself. Sanctioning them (targeting their personal wealth) is likely the best way to threaten Putin’s power and force him to reassess his course. While Putin can, to a certain extent, ignore the will of the population and thwart protests, he would have a tougher time dealing with billionaires that want to protect their wealth.
Plus, focusing on Russia’s elites is focusing on a much more culpable group than the general population. Those who directly support and enable Putin are, at least partially, at fault for his actions, including this invasion.
Admittedly, two issues emerge from this course. Firstly, many of Russia’s oligarchs are beholden to Putin and require his support to maintain their power and wealth. Even if they have said power, exercising it against Putin could be fruitless and lead to severe consequences; therefore, it is not guaranteed that targeting oligarchs would lead to success. Additionally, the West will invariably incur costs while targeting Russia’s oligarchs, who hold investments and wealth across Western countries. This makes asset freezes and seizures more difficult and more costly, which is why the West hasn’t been as aggressive with its sanctions towards these oligarchs as it can be. Though rebuffed by Italy’s government, some reports said that Italy had pushed for a carve-out for luxury goods in EU sanctions. Widening sanctions to include luxury goods would deal some damage to Russia’s oligarchs, but it would also hurt the sellers of these goods.
In short, the West needs to continue to have a strong economic response to Putin’s invasion of Ukraine, but this response must be the most detrimental to Putin and Russia’s oligarchs. While this will likely incur costs for the West, these costs must be accepted to hit Putin and his allies effectively. This is undoubtedly a dire situation and ending Putin’s war is a real challenge, but carefully focusing on Putin himself and Russia’s elite is the West’s best shot at using economic measures to change Putin’s course of action or threaten his power without resulting in massive, undue consequences for regular citizens.