Ходжа Н. (hojja_nusreddin) wrote,
Ходжа Н.

Russian aggression unstoppable in interconnected world

Western governments are spluttering with indignation, following Russia's invasion of Ukraine's Crimean peninsula – but in an economically interconnected world, spluttering may be their only response.
US President Barack Obama promised "consequences", and European Union foreign ministers rushed to emergency meetings.
"But there's nothing we can do," says Keir Giles of Chatham House (http://www.chathamhouse.org/about-us/directory/193279), an international affairs think-tank based in London.

You might think that the main obstacles to any Western military action are:
- Russia's size and
- 1300 nuclear warheads ready to launch.
- Moreover, such a confrontation would derail US-Russian collaboration on key matters, such as:
--- Iran's nuclear programme,
--- Syria's chemical weapons,
--- even the route for US withdrawal from Afghanistan.

However, analysts contacted by New Scientist say the chief stumbling block to any Western action is the interconnectedness of the global economy.
Sevastopol, the Crimean town which is the only port for Russia's Black Sea fleet, is also vital for grain shipments.
Ukraine is:
- the world's 6th-largest exporter of wheat and
- 4th-largest of maize, accounting for 18% of the world's maize exports.
- Disrupting that with military action or a blockade would destabilize grain prices (http://www.newscientist.com/article/mg19826601.600-what-price-more-food.html), causing political unrest worldwide.
- Wheat and corn prices have already jumped (http://www.bloomberg.com/news/2014-03-03/ukraine-grain-loading-seen-steady-as-wheat-jumps-most-since-2012.html) over the current confrontation.

The price of sanctions

Economic responses, such as sanctions, also stand little chance:
- The EU, especially Germany, needs Russia for 30% of its natural gas, says Anders Aslund of the Peterson Institute for International Economics in Washington DC, and
- Russia controls the pipelines.
- Russia, in turn, needs the $100 billion Europe pays annually for its gas.

Who would blink first? With no sanctions on the EU agenda, there seems little appetite to find out.

Rich nations could try to block Russian president Vladimir Putin's wealthy supporters
from accessing the world's financial markets (http://carnegieeurope.eu/strategiceurope/?fa=54731).
- "That would hurt us more than it hurts them," says Giles.
- The UK's trade surplus with Russia brings in much-needed income.
- Some banks, especially in London, rely on the $56 billion that flows out of Russia yearly.
- Those banks are part of a fragile, tightly coupled system on which most of the world's economy depends

If we are all interconnected, don't Russia's actions hurt us as much as them?

Giles sees no downside for Russia, or any obvious way to enforce rules against this kind of aggression within our networked system that doesn't do too much collateral damage elsewhere in the network.

Yaneer Bar-Yam of the New England Complex Systems Institute in Cambridge, Massachusetts, is more hopeful:
"An action that disrupts the system is just as likely to rebound to hurt the actor as others."
The big question, however, is whether that will make the actor stop.
Tags: кризис, россия, хохляндия, экономика

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