It’s cheaper to just replace Putin

  • 2014-03-25
  • by Martin Nunn, Foley & Nunn, KIEV

Russian President Vladimir Putin has clearly outlined his dream of a new Russia. A Russia that is a respected, nay feared, international superpower, a Russia whose borders are restored to their pre-1990 boundaries, a Russia that the Russian people can be proud of…

His tactics and his speeches seem to have been taken straight out of 1930’s Nazi handbooks of propaganda and military aggression, which he now uses to take militarily what he has failed to take through conniving politics… But has he miscalculated?

Certainly there are parallels between the Nazi and Russian tactical approaches, but Russia today is not Germany in the 1930’s.

From a military perspective Russia certainly has a massive army capable of inflicting serious damage on any neighbor, but unlike the German army of the 1930’s, which was one of the best equipped in the world, the current Russian army is nowhere near the current leading edge.

Putin has spent millions on military upgrades, but in the majority of areas Russian military technology is still decades behind the West. In fact, the Russian army has not actually won a major war since 1945, and even then they needed a lot of Western equipment to do it. That said, it is very good for frightening civilians as it masses on the Ukrainian border and it makes for impressive parades in Red Square.

The Nazi’s were the first nation to harness the power of propaganda for military purposes and Putin has certainly used this weapon well in the early stages, but the Russian propagandists are not used to advanced Western marketing or the impact of a free press; thus the Western public, whilst at first falling for their lies and half-truths, have now recognized Russia for what it really is; thus Russian propaganda now works very effectively against Russian interests. Putin has seriously damaged any faith the West had built up in Russia and this will have serious long-term implications.

In Russia the jingoism continues to inflame much of the Russian population, but Russian soldiers in Crimea already have to be recycled because they are questioning quietly why they are now fighting their fraternal brothers.

There are two areas of this campaign, however, that differ greatly from 1938 and these may well be where Putin has miscalculated. In 1938 there was no television, no Internet and no world wide web.  The Nazi’s relied on radio, newsreel and newspapers, thus there was no effective way to question those in power.

As the Chinese have found, once you tell your population that they can’t view certain Internet sites, many find a way around the censorship. Russians are very good hackers so, despite the best efforts of the state censors, information continues to flow relatively freely and Russians are now starting to ask questions.

The second is on the financial front. With one stroke of the pen President Obama has completely outmaneuvered Putin and demonstrated international financial power to the full.

In black listing Bank Rossiya, Visa and Mastercard were forced to temporarily withdraw their services making the bank’s credit cards useless and stranding and embarrassing many customers.  Bank Rossiya is also a major shareholder in many other Russian banks, so the ban spread to many of the banks in their network.

On its own it looks like a rather feeble sanction until you realize that all of Russia’s millions of state workers have their salaries paid into their bank accounts and use Visa and Mastercard to withdraw cash from ATM’s.

Rumors spread like wildfire and, as a result, large numbers of people, who had already experienced losing their savings in the 2009 crash, started queuing to withdraw their savings.  This caused a run on the currency which resulted in many banks closing as they ran out of cash.

More importantly, people started to ask why… the answer was it’s a result of Putin’s campaign in Crimea… That alone has started to show seeds of doubt in the minds of the Russian public, and whilst the service has now been restored, the Kremlin and the Russian people got the point.

In addition, international institutions are currently divesting themselves of Russian stock so that their shareholders cannot point the finger later. The Central Bank of Russia is having to burn foreign currency reserves just to keep the Rouble afloat, and has been forced to cancel a massive eurobond issue for later this month.

It is estimated that Putin’s ambitions have already cost Russia well over $200 billion in less than two months, and it can only get worse as his actions are now directly linked to international sanctions. And it isn’t going to stop here. Crimea is going to cost the Russian state budget billions a year in infrastructure and investment, let alone the social cost of the 600,000 pensioners and the replacement of all the jobs in Ukrainian businesses that have and will close.

Furthermore, Russia is going to have to recompense Ukraine at some point in time for the billions in annexed assets and future energy revenue earnings, and all for what… A chunk of land about the size of Jamaica and a totalitarian leader with an over-inflated dream. It would be cheaper for Russia to change their president.