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Abstract
The Russia–Ukraine war is not approaching stalemate but remains dynamic and unpredictable. The balance of resources favours the West: its economic superiority over Russia is much greater than during the Cold War. But the balance of resolve favours Russia: it is mobilising its capacity more effectively than the coalition of open democracies that supports Ukraine. The West needs a geo-economic strategy to harness its inherent strength to security goals. It should do three things: mobilise military–industrial production; move towards a general prohibition on trade with Russia with few exceptions; and confiscate the $300 billion in Russian central-bank assets frozen in Western financial systems. Given the stakes of the war, unfounded fears of adverse consequences should not deter Western countries from taking these steps.
Notes
1 Kathryn Armstrong, ‘Ukraine War: Vatican Envoy Called In over Pope “White Flag” Remarks’, BBC, 12 March 2024, https://www.bbc.co.uk/news/world-europe-68538267.
2 ‘“Ukraine Has No Future, We Do”: Putin’, Al Arabiya English, 11 December 2023, available at https://www.youtube.com/watch?app=desktop&v=jpaAWmjcdxQ.
3 ‘Putin ob’’iasnaet taktiku Rossii na Ukraine: “kurochka po ziornyshky kliuet”’ [Putin explains Russia’s tactics in Ukraine: ‘A hen pecks grain by grain’], Tsargrad TV, 22 December 2022, https://tsargrad.tv/news/putin-objasnil-taktiku-rossii-na-ukraine-kurochka-po-zjornyshku-kljuet_690906.
4 As Paul Kennedy put it, the success or failure of a great power has historically been ‘the consequence of lengthy fighting by its armed forces; but it has also been the consequences of the more or less efficient utilization of the state’s productive economic resources in wartime’. Paul M. Kennedy, The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000 (New York: Vintage, 1987), p. xv.
5 See World Bank, ‘GDP, PPP (Constant 2017 International $) – Russian Federation, European Union, United States, United Kingdom, Canada’, 2023, https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.KD?locations=RU-EU-US-GB-CA.
6 IISS, ‘Dr Bastian Giegerich’s Launchevent Remarks’, 13 February 2024, https://www.iiss.org/publications/the-military-balance/2024/bastian-giegerich-launch-event-remarks/; and NATO, ‘Defence Expenditure of NATO Countries (2014–2023)’, Press Release, 7 July 2023, https://www.nato.int/nato_static_fl2014/assets/pdf/2023/7/pdf/230707-def-exp-2023-en.pdf.
7 One estimate suggests this could be as low as 0.25% of GDP per year specifically for military aid to Ukraine. See ‘Estonia’s 0.25 Percent GDP Aid to Ukraine Proposal Needs Support of Western States’, ERR.ee, 15 January 2024, https://news.err.ee/1609222386/estonia-s-0-25-percent-gdp-aid-to-ukraine-proposal-needs-support-of-western-states.
8 There is now growing recognition of the need for such a realignment. See, for example, James Cartlidge and Andrew Griffith, ‘Joint Opinion Piece on ESG’, Gov.uk, 12 September 2023, https://www.gov.uk/government/news/joint-opinion-piece-on-esg-july-2023; and Peggy Hollinger, ‘Ukraine War Prompts Investor Rethink of ESG and the Defence Sector’, Financial Times, 9 March 2022, https://www.ft.com/content/c4dafe6a-2c95-4352-ab88-c4e3cdb60bba.
9 Heli Simola, ‘Latest Developments in Russian Imports of Sanctioned Technology Products’, BOFIT Policy Brief no. 15, Bank of Finland Institute for Emerging Economies, 29 November 2023, https://publications.bof.fi/bitstream/handle/10024/53179/bpb1523.pdf.
10 See, for example, Viktoria Dendrinou and Alberto Nardelli, ‘Seizing Frozen Russian Assets over Ukraine War Wins Endorsement of Legal Experts’, Bloomberg, 21 February 2024, https://www.bloomberg.com/news/articles/2024-02-21/seizing-frozen-russian-assets-over-ukraine-war-wins-endorsement-of-legal-experts?sref=fCrVhgAM.
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Nigel Gould-Davies
Nigel Gould-Davies is IISS Senior Fellow for Russia and Eurasia. This essay is adapted from a shorter version published by IISS Online Analysis in February 2024.