Theresa May Is Huffing and Puffing but What Can She Realistically Do to Hit Russia?

Pretty much nothing unless she gets China on board which is a laughable proposition

So it looks like the British reaction to The Skripal Affair is assuming very serious proportions, especially with the most recent allegations that the nerve agent in question was Novichok.

(Incidentally, it is a gas so potent – an order of magnitude more so than VX – that carpet bombing a middle-sized city with it is projected to wipe out most of its population, but was apparently unable to even kill its main target).

PM Theresa May has now given Russia a two day deadline to prove it was not behind the attack, or else… Well, all sorts of wild suggestions are now flying on the Internet how the UK and “the West” ought to “punish” Russia.

I suppose this makes it as good a time to address this topic as any, in approximate order of severity.

Boycott FIFA World Cup 2018

The positive side is that the UK – so, presumably, England – will not have to worry about getting poisoned by the Russians “to slow them down” (as suggested byprofessional Russia basher Edward Lucas).

Not that anyone would notice.

On the other hand, if they could cajole the other Western countries into boycotting as well, it would be yet another humiliation for the kremlins, who seem to think they can buy their way into international handshakeworthiness by hosting very expensive international sporting events.

On the other hand, I don’t think that’s even a bad thing.

Kick out RT

This is being actively discussed.

This is going to seriously hurt RT’s international operations, since London hosts one of its two main foreign HQs. However, this gives Russia perfectly good cause to kick out the BBC and other British outlets. Hence why pro-Western journalists such as Max Seddon and Alexey Kovalev are beseeching Britain not to do it.

Since RT is not that successful anyway – viewership numbers are underwhelming, and 40% of its website visitors come from Russia itself – this will hurt Britain more than it hurts Russia.

The chances of other Western countries joining in are minimal, but if they do, I suppose the only result will be an across the board fold-up of the remaining major Western news bureaus in Moscow.

Further Financial Sanctions

E.g. prohibiting British investors from buying Russian sovereign debt, but this will have even less of an effect than the US doing it, which Mercouris explained here:

  • Russia has massive foreign currency reserves (currently $450 billion) and its budget remains essentially balanced.
  • Nothing stops it from floating bonds in the Asian money markets

So the effects from this will be negligible.

Step up Support for the Ukraine

Weapons supplies to the Ukraine are always an option but frankly Britain is unable to substantively change the military balance by itself.

However, the UK could recognize the DNR and LNR to be terrorist organizations.

This will, amongst other things, enable the UK to effect much more aggressive prosecution of Novorossiya supporters, should it also recognize the DNR and LNR to be terrorist organizations (which currently only the Ukraine does). In this case, Graham Phillips and Patrick Lancaster might want to apply for asylum in Russia.

Along with the nuclear/novichok “terrorism,” this will also lay further groundwork to:

Designate Russia as a state sponsor of terrorism

With associated further financial sanctions down the line, should the UK convince the US (realistic if Blackpill Timeline continues to pan out) and the EU (less likely but imaginable) to follow suit.

Cut Russia off from SWIFT

This is not something that the UK, nor even the US, can do by themselves; the organization itself is based in Brussels, Belgium, it is subject to Belgian and EU law, and is owned by its member financial institutions.

When Iran was booted out from SWIFT in 2012, it required the agreement of all 27 EU countries.

Russia has domestic alternatives to SWIFT (РАБИС, БЭСП) for commercial banks, and since 2014, the Mir payment system has been created for ordinary citizens. It is likely that internal transactions can be carried out without a hitch even in the event of a serious Western financial embargo.

As Alexander Mercouris points out, since 2014 the large state-owned banks that dominate the Russian banking system have been effectively cut off from borrowing in Western financial markets anyway. Consequently, it will be Western companies and businessmen with Russian investments who would be the most seriously affected, not to menton SWIFT itself, which will lose out from the loss in Russian institution membership fees.

Export Controls on Tech

Russia depends heavily on European (esp. German) machine tools.

A resurrection of Cold War style export controls on technology transfers to the USSR would hurt Russia badly. But this is not something that the UK or even the US seem to be capable of pushing on Germany and/or the EU.

Confiscate Russian oligarch assets in the UK/The West

This, ironically, presupposes a lack of rule of law in the West to an extent barely even imaginable in Russia. (For instance, nobody was confiscating Poroshenko’s chocolate factory in Lipetsk, to the chagrin of Russian nationalists).

But let’s suppose British judges are willing to overturn a millennium of legal norms just to punish Putler.

First, the UK will, at a single stroke, solve a large chunk of Russia’s problems with comprador elites, who make (or suck out) their money in Russia and spend it in London (Miami, Nice, Courchevel, etc.). The remote risk of losing your money due to a falling out with one of Putin’s henchmen sure beats the certain risk of losing your money by dint of being a “Russian oligarch” in the West.

Second, far from turning the oligarchs against Putin, it will just increase the already considerable control he has over them even further. This idea that pissed off oligarchs will feed Putin his own polonium tea is a beloved fantasy at places like /r/politics, but in the real world, it is 2018, not 1998, nor even 2003; Russia is no longer an oligarchy, but a “silovarchy” of security men clustered around Putin. With the “oligarchs’” remaining assets parked within Russia, their ability to create trouble for the regime will be even further diminished.

Cut Russia off from the Internet

This would again require the cooperation of the entire West, and if done forcibly – e.g., cutting the underwater cables connecting Saint-Petersburg to the world, as the Royal Navy quietly did to German telegram cables on August 4, 1914 – it would amount to a more or less overt declaration of war.

Will it cripple the Russian Internet? Of course not. The Internet perceives censorship as damage, and reacts by bypassing blockages. The West is not the world; short of NATO seizing control of the entire Russian border, it will retain access to the worldwide web, even though speeds will be much slower. The internal Internet (Runet) should not be greatly affected, since like China, Russia has taken care to build in redundancies that will enable it to function autonomously (ironically, efforts that Russian liberals have long interpreted as part of a totalitarian scheme to cut Russia off from the worldwide Internet).

Seizure of Russian Foreign Gold & Currency Reserves

Obviously, this is not something that the UK can do anything meaningful about, since less than 10% of Russia’s foreign currency reserves are in pounds sterling.

The USD and Euro each account for a bit more than 40% in Russia’s foreign currency basket, as well as a symbolic amount of yuan. Most of Russia’s sizable gold reserves ($80 billion) are parked in Russia itself.

Needless to say, seizing these assets will be illegal, extraordinary, and close to a declaration of war.

If anybody is going to do it in any possible universe, it is going to be the US (Europe is too fissiparous to push something like that through).

I am certainly not one of those people who predicts the Final Collapse of the petrodollar and US imperialism every year. But this will be a real risk if the US does something this insane. While seizing the assets of small and economically irrelevant “rogue states” is nothing special, doing this to Russia – as one of the world’s core Great Powers – will be an entirely different ball game that will discredit the American-dominated global financial system, most critically in the eyes of China (since what stops the US from eventually pulling something similar on them?).

Since this system massively favors America – the US dollar’s global reserve status artificially lowers risk premiums in the US, making foreigners willing to “irrationally” invest in US bonds at rates well beyond equilibrium – its unraveling will likewise hurt the US more than anyone else. This could even be the trigger that snaps the US back down to an economic level more correlated with the quality of its human capital.

Total Embargo

The Russian economy will crater, but Russia is at least self-sufficient in food and energy, while many EU countries – especially the former eastern bloc ones – depend on Russian gas to power their factories and heat their homes during the winter.

Now it’s not like they’ll be freezing to death. However, they will be paying through the nose for LNG imports, and the disruptions from the temporary interruption in Russian oil supplies will plunge the EU and probably the world into a depression.

Over time, Russia will orientate itself towards East Asia, especially China. Despite the necessity of it, this will not be a fast process, due to the paucity of the needed infrastructure as well as Russia’s poor understanding of Chinese realities. But this will be bridged with time, and as China continues to break out into technological leadership, the lack of access to Western tech and knowhow will become less and less of a debilitating factor for Russia.

Assassinate Putin

I do see this seriously suggested every now and then in comments (if not in official rhetoric, thankfully). Hopefully that’s because most non-crazy people recognize the downsides.

Conclusions

Some common themes:

  • Most prospective sanctions are some combination of: Ineffective, hurt its initiators as much as Russia, or carry grievous geopolitical implications.
  • Are not credibly capable of changing (alleged) Russian misbehavior
  • Most of them are likely to stoke even further Russian resentment against the West, discredit its domestic pro-Western forces, and strengthen the regime politically, even where they weaken Russia economically.

But by far the most crucial factor is that those measures that do have the capacity to truly wreck the Russian economy need the cooperation of Asia, and by Asia, I mean China.

This is why Russia’s development of China ties has been Putin’s single greatest foreign policy success, besides which everything happening in Syria is basically irrelevant. No wonder that this development has been consistently decried by the liberal fifth column.

Source: The Unz Review

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