Mr. Putin badly misjudged the climate of Ukrainian politics and the survivability of his ally, Viktor Yanukovych. But since Mr Yanukovych's flight from Ukraine in late February, Mr. Putin has pursued a relentlessly clear-eyed policy meant to achieve one of two objectives. His preferred outcome is to have a compliant government in Kyiv, oriented eastward in foreign policy and, like Russia, authoritarian domestically. But his fallback is to take enough of Ukraine to leave it a rump state still subject to Russian pressure if it looks westward.
Kremlin Instruments of Influence
Mr. Putin has a variety of tools short of military aggression to achieve these objectives and has used most of them. He can exert economic pressure by blocking the import of Ukrainian goods, as he did in the fall to persuade Mr. Yanukovych to turn away from a trade association agreement with the EU. He can raise the price of natural gas, or limit gas supplies to Ukraine, although this is a less effective tactic in the spring than the winter. He can exert political pressure as the self-proclaimed protector of ethnic Russians and Russian speakers in Ukraine. He can send provocateurs into Ukraine to create turbulence in the East and South, and point to the disorder as proof that ethnic Russians are in danger. He can conduct military exercises on the border with Ukraine to suggest that intervention is imminent. He can crank up the Russian media to launch the most extensive disinformation campaign seen since the failed Soviet media efforts against President Ronald Reagan's Strategic Defense Initiative (Star Wars). This media effort has failed miserably in Ukraine and the West, but has succeeded in creating a patriotic, if not xenophobic, frenzy in Russia.
President Putin and his Russia, however, suffer from several significant weaknesses that explain why the use of military force is his last resort. His economy grew like gangbusters until the Great Recession in 2008 thanks to higher prices for hydrocarbons; but it grew at less than 2 percent in 2013.
Russian Central Banker Elvira Nabiullina recently predicted that growth in 2014 would
fall below 1 percent. Asset flight in the wake of the Ukraine crisis is one reason for Ms.
Nabiullina's downward revision of Russia's economic forecast. Russia's Ministry of Economy projects capital flight at $70B in the first quarter of this year and could reach $150B for all of 2014.
Moreover, while Putin is bestriding Russia as a nationalist hero thanks to his compliant media, most of his inner circle are more opportunists than nationalists. Even his allies do not want to lose their assets abroad as a result of Western sanctions imposed due to the crisis with Ukraine. It is no surprise that Boris Rotenberg and Gennadiy Timchenko, two close associates of President Putin, are also citizens of Finland.
In short, while a media-induced nationalism has boosted Mr. Putin's popularity in the wake of his seizure of Crimea, he understands that this will not last. If the economy faces more hits, his standing among the Russian public will drop significantly. He knows too that the Russian
elite, including his closest supporters, are eager to avoid additional sanctions that might follow if the crisis continues or worsens. (One comparative strength of Ukraine is that its oligarchs, including in the East, have rallied around the government in Kyiv.)
This explains Mr. Putin's turn towards negotiations. While Ukraine's supporters in the West complain about the weakness of the American and EU response to Kremlin aggression, Mr. Putin was unpleasantly surprised by the two rounds of sanctions. President Obama's sanctions on Putin's inner circle—the Rotenbergs, Timchenko and Sergei Ivanov—made an impression. So did the listing of Bank Rossiya, which demonstrated that key institutions were
also subject to sanctions. The fact that Mr. Obama announced his authority to sanction entire sectors of the Russian economy reinforced this point. Even without European support, U.S. sanctions against the Russian financial sector would deal a body blow to the nation's economy.
Moscow Seeks to Ease Tensions
For the first time since "Russian-looking" troops fanned out across the Crimean Peninsula, Mr. Putin called Mr. Obama on March 28, and the result of the awkward conversation were U.S.-Russian negotiations. Mr. Putin was trying to ease tensions by assuring nervous Westerners that he had no further territorial designs on Ukraine. He was even willing to reduce slightly the number of Russian troops exercising on the border with Ukraine.
Yet Mr. Putin conceded nothing essential. In his public pronouncements, he spoke of parts of Ukraine as historically part of Russia ("New Russia"), insisted on his right to "protect" ethnic Russians and Russian speakers in abroad, complained about the ongoing "threats to Russian speakers" in Ukraine, and continued to send provocateurs to swell rallies in Ukraine's East calling for independence from Kyiv.
In addition, the Kremlin's terms for negotiations keep his two objectives firmly in view. Ukraine must not pursue a westward-leading foreign policy. It cannot be a member of NATO or even the EU. Ukraine must have federal governing structure that permits regions substantial domestic authority.
Yet Talks Will Not Achieve President Putin's Objectives
The Kremlin is hoping that Europe will pay attention to the headline (Russia seeks negotiations) and not the fine print (the unacceptable threats and limitations on Ukraine's sovereignty). He is hoping too that the United States will be so pleased that the Kremlin may not launch a second aggression into Eastern Ukraine, that it will help Mr. Putin secure his objectives. Twice in the past two weeks, news reports suggested that the White house considered another Russian invasion imminent. Now Washington is negotiating the terms for resolving the crisis with Moscow; and as the Kremlin wants, Ukraine is not at the table.
The characterizations of the talks also tell us something about the Kremlin's tactics. Russian Foreign Minister Sergei Lavrov has praised the substance of the talks, which appear to touch on the issues that Moscow has stressed: a federal structure for Ukraine and the protection of ethnic minorities. The American side is not talking publicly about the issues of concern to Ukraine: Russia's illegal seizure of Crimea; Ukraine's sovereign right to determine its constitutional order including the degree of federalism; Russia's sending provocateurs into Ukraine to create disorder.
While it would certainly be better if Ukraine was brought into the talks, as long as the Obama Administration keeps Kyiv well informed and represents Ukraine's legitimate concerns in the talks, Putin will be unable to achieve a compliant, "neutral" Ukraine via negotiations.
Additional Options Before the Use of Force
In that case, Mr. Putin's next play will be to intensify efforts to undermine Ukraine's interim government and to delegitimize the scheduled May presidential elections. In order to make economic conditions in Ukraine more difficult, the Kremlin announced that the price of natural gas would rise after the first quarter of this year. Regarding the May elections, Putin’s agent, extreme nationalist Alexander Dugin, was caught on Skype urging pro-Russian Ukrainians not to participate in the elections and to do everything possible to render them illegitimate. If the Kremlin can achieve that, or reach an "understanding" with the winner of those elections, it might be able to achieve its goals short of force. Only if these steps fail, does Mr. Putin look seriously at further Russian military aggression in Ukraine.
Even then, however, a second Russian invasion is not a foregone conclusion. Yes, Mr. Putin has struggled mightily since the Orange Revolution to secure a docile government in Kyiv, and has invested a great deal over the past four months. But he can also be a pragmatist. If the Russian economy continues to suffer because of Western sanctions, and if he believes that a second invasion of Ukraine will spark much harsher measures, he might conclude that he can live with a democratic Ukraine pursuing a closer economic relationship with the EU.
The key for the West is its sanctions policy. Mr. Putin is hoping that if he stops hinting at a military strike, pressure will grow, especially in Europe, to ease the sanctions. At a minimum, it is essential for the West to keep the sanctions in place as a punishment for the seizure of Crimea; and they should be enhanced if the Kremlin seeks to destabilize Ukraine by economic coercion (the arbitrary raising of gas prices or a boycott of Ukrainian goods, for example) or subversion (the sending of provocateurs into Ukraine). Such an increase need not be large, but just enough to convince the realists and opportunists in the Kremlin that the West will lower the boom if there is another invasion of Ukraine.
John Herbst is director of the Center for Complex Operations at the National Defense University. He served as U.S. Ambassador to Ukraine from 2003 to 2006. This piece represents the views of the author and not of the National Defense University.
Image: Wikimedia Commons/Vitaly V. Kuzmin. CC BY-SA 3.0.