Economic Statecraft
From the Middle East to Ukraine. A Milestone

The outcome of the Ukrainian conflict, whenever it occurs, will be a fundamental milestone in the order that is taking shape right before our eyes, writes Valdai Club Programme Director Ivan Timofeev.

The aggravation of the Palestinian-Israeli conflict is an indicator of the growing imbalance in the existing system of international relations. This imbalance is characterised by the emergence of new conflicts and resumption of old ones, with large-scale human casualties and risks of further escalation. While laying claim to international leadership and the role of guarantor of the existing international order, the United States has been unable to prevent the growth of yet another hotbed of conflict. For now, there remains a possibility that the new crisis will be isolated without allowing it to escalate into a conflict between major regional players. However, the very fact of the crisis suggests that the fabric of the order that emerged after the Cold War on the ruins of the bipolar system is tearing at the seams more and more frequently. It is becoming more and more difficult to mend such developments.

The developments in the Middle East have pushed the fighting in Ukraine to the background of the media agenda. Meanwhile, the situation there hardly speaks in favour of the strength of the post-bipolar status quo. A sign of such strength could be Russia’s return to the status of a defeated power and the final consolidation of the results of the collapse of the Soviet Union. However, facts on the ground tell a different story. The widely advertised and expensively purchased offensive of the Ukrainian army has not met its objectives. The Russian army is slowly but inevitably increasing pressure at the front. Economic sanctions have not led to the collapse of the Russian economy. Despite extensive damage, it quickly adapts to new conditions. The West also failed to isolate Russia politically. For the Western partners of the Ukrainian authorities, the conflict is becoming more and more expensive. Its price may increase in the future, taking into account the knocking out of Soviet-made equipment from the armed forces of Ukraine and the growing need for new supplies. Ukraine’s economy also requires external injections amid military losses, demographic failure and persistent governance problems, including corruption.

If the Ukrainian conflict was the only problem for the United States in controlling the post-bipolar order, then there might be fewer risks for it.

The Western allies could concentrate all their power on countering Moscow. But the spread of problems in other directions seriously complicates things. Resources have to be wasted not only on containing China, but also on putting out fires where they supposedly shouldn’t have broken out. With a high probability, Washington will be able to provide Israel with significant military and diplomatic assistance, limiting the next outbreak of conflict. But each such fire requires the concentration of material and financial resources, which are limited even for such a power as the United States.

Moreover, there are other unresolved problems. Thus, many years of efforts to prevent the military growth of the DPRK ended in failure. Pyongyang now possesses both nuclear warheads and the means of delivering them. The crisis in Russian-American relations gives the DPRK the means of manoeuvre — a possible increase in cooperation with Russia will run counter to the goals of the United States, whereas previously Moscow was much less of a problem for Washington in that area. 

Economic Statecraft
Russia-West: Rising Stakes
Ivan Timofeev
Underestimating the will of the Russian leadership to restore statehood and prevent a zero-sum game in the post-Soviet space was a major miscalculation. With each new crisis, the West did not take into account the realistic worst-case scenarios in which Russia would defend its interests by force, playing a counter-game to reform the post-Soviet states, writes Valdai Club Programme Director Ivan Timofeev.
Opinions


The situation is similar with Iran. The US withdrawal from the JCPOA in 2018 did not lead to Iran abandoning positions on its missile programme and policy in the Middle East. Moreover, it created the conditions for Iran to return to its nuclear programme. In both the case of the DPRK and Iran, a military solution to the problem is hardly optimal. Other smouldering fires remain. Afghanistan has been largely forgotten, but forces hostile to the United States and the West are growing stronger there. In Syria, the government of Bashar Assad retains power, despite sanctions and attempts at isolation. In Africa, US allies are losing their influence.

Terrorists, drug traffickers, and transnational criminal networks have not disappeared anywhere. It was possible to fight them in jointly with other major players, coordinating policies with them via the UN Security Council. But the previous level of trust has been undermined.

Finally, amid the “hybrid war” with angry Russia and growing contradictions with China, it will be more difficult to effectively counteract these problems. At the same time, the Ukrainian conflict seems to be key for the post-bipolar order. The launch of the Special Military Operation in 2022 provided the United States with a number of tactical advantages. Washington now has powerful leverage over its allies in Europe. NATO has received a new lease of life, and the process of alliance expansion is underway. The longstanding resistance of major European countries to persistent US calls to increase their defence spending and arms purchases finally has been broken. The militarisation of Europe will proceed at a rapid pace. European countries will have to pay for it themselves, diverting resources from social services. Conditions have arisen for the Americans to at least partially seize the European energy market: what former US President Donald Trump could only dream of happened almost overnight. Another important tactical success was total control over Ukraine. The ability to conduct military operations and support the economy largely depends on the United States. Control of Ukraine or a significant part of it negates the prospects for the revival of the “Soviet empire,” at least in the European theatre.

However, strategically, the Ukrainian conflict has presented the United States with serious problems. The main one is the loss of Russia as a possible ally, or at least as a power that does not interfere with the United States’ interests. At the turn of the 20th and 21st centuries Russia itself was ready for equal partnership relations with the United States, provided that its interests were taken into account, especially in the post-Soviet space. Moscow clearly did not set for itself the goals of “reviving the USSR” and did not strive to reformat the post-Soviet space. On all key issues on the global agenda, Russia has long either cooperated with the United States or refrained from active opposition. One can argue for a long time about who is to blame for the growing mutual confrontation — the positions of the parties here are directly opposite.

The results are important: the United States was eventually able to count a major power, Russia, among its irreconcilable opponents.

Moscow is building close ties with China, which Washington considers a long-term threat. The cost of a conflict with Russia for the United States will be measured not only and not so much by support for Ukraine, but also by the enormous cost of containing the Russian-Chinese tandem, as well as the costs of those problems in which Russia will, with varying degrees of enthusiasm, harm the United States. The fact that Russia itself bears costs and losses does not in any way improve the position of the United States itself.

The bottom line is that the tactical gains from the conflict in Ukraine turn into a major diplomatic defeat for Washington in the form of an increase in the number of influential opponents where there were all the conditions to avoid this. For the EU, the strategic costs of the conflict, despite its tactical advantages, have turned out to be even greater. The geographic proximity of the conflict and the more significant security risks in the event of an intentional or unintentional military clash with Russia play a role here. China, on the contrary, is strengthening its position. Beijing received the peace of its long borders in the north, a large Russian market, and a dispersal of American resources.

It cannot be ruled out that in such conditions the United States and its allies will reconsider their ideas about defeating Russia in the Ukrainian conflict at any cost. The big question is how Moscow will reconsider its approaches? Russia is committed to a long-term struggle for its interests. The level of trust in any Western proposals tends to absolute zero. The burning of American leadership on other “burners” of the world political kitchen further reduces the motivation to support any compromises without the full consideration of Russian interests.

The outcome of the Ukrainian conflict, whenever it occurs, will be a fundamental milestone in the order that is taking shape right before our eyes.
Economic Statecraft
Asynchronous Multipolarity: Control Parameters and Development Vectors
Ivan Timofeev
A multipolar world has long become a reality. We are already living in a new world order, the contours of which we are not fully aware of. An adequate understanding of the new order requires a clear understanding of what exactly we mean by a multipolar world, and what kind of multipolarity we are dealing with today. This new world can be called “asynchronous multipolarity,” writes Valdai Club Programme Director Ivan Timofeev.
Opinions
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.