Ukraine Crisis: Global Ramifications

Russia's decision to intervene in Crimea, Ukraine, has several geopolitical ramifications:

1: It demonstrates Russia's willingness and ability to defend its interests militarily in the 'near abroad'. Russia has long regarded Ukraine as being part of its sphere of influence, and is determined to ensure that the country does not join Western institutions such as NATO. Other former Soviet republics will take note of Moscow's move, and may be deterred from making changes to the status quo. For example, Azerbaijan might be even more deterred from forcibly retaking the breakaway Armenian-occupied territory of Nagorno-Karabakh, and the Baltic states, especially Estonia and Latvia, will be nervous about future internal tensions stemming from their ethnic Russian populations. (That said, the Baltic states have the benefit of being NATO and EU members, making Russian aggression against them very unlikely.)

2: Russia will - rightly or wrongly - be considered a major power, increasing its global influence in the near term. Defence Minister Sergei Shoigu stated at the end of February that Russia would like to see its navy using bases in Cuba, Nicaragua, Venezuela, Algeria, Cyprus, Seychelles, Singapore, and Vietnam, thus demonstrating Moscow's desire to be a global rather than merely Eurasian power. Nonetheless, we believe that Russia's actions in Ukraine will tarnish its image in the West, by making it seem anti-democratic and overly aggressive. Over the longer term, Russia's ability to maintain 'great power' status is threatened by an excessively hydrocarbon-dependent and uncompetitive economy, poor demographics, and the rise of more dynamic countries such as China and India.

3: The US-led West may be seen as weak, owing to the constraints it faces. These constraints are war-weariness after a decade of combat in Afghanistan and Iraq, and the risks associated with fighting a nuclear-armed Russia. No Western official is advocating military action against Russia in Ukraine, for the obvious reason that conflict with Russia would be too dangerous, even if the nuclear dimension does not come into play. Nonetheless, if the US and its allies fail to make a tangible economic or diplomatic response against Russia, they will be seen as weak. Although NATO is not legally obliged to defend Ukraine (notwithstanding some confusion about whether the US and UK are required to act under the terms of the 1994 Budapest Memorandum which guarantees Ukraine's sovereignty), some observers have pointed out the West has a moral obligation to do something. Against this backdrop, the governments of Syria, Iran, and North Korea will be watching the US closely to see how it responds to a major foreign policy crisis. Pyongyang, in particular, has a tendency to initiate provocations on the Korean Peninsula to test American, South Korean, and Japanese resolve.

4: US efforts to enlist Russia in foreign policy challenges may now suffer. In recent years, the US has been seeking Russia's support to pressure the government of Syria to reach a peace deal in that country's civil war, and to pressure the Iranian leadership to end the more controversial aspects of its nuclear programme. In addition, Russia has been facilitating the transit of American troops to and from Afghanistan via the so-called Northern Distribution Network (NDN), and Washington and Moscow share an interest in ensuring stability in Afghanistan and Central Asia after NATO withdraws the bulk of its troops in 2014. If the relationship between Russia and the West experiences a freeze of sorts, it will be difficult for them to cooperate on these matters. This could result in Russia stepping up its support for Syria's Assad regime, and reducing pressure on Iran to compromise on its nuclear programme. Both developments could result in setbacks for US President Barack Obama's foreign policy.

5: China will have mixed feelings about Russia's actions in Ukraine. Publicly, Beijing appears to be siding with Moscow, while remaining aloof. However, Russia's actions are tapping into two long-standing Chinese fears, namely 1) the violation of the sovereignty of another country; and 2) interference in the internal affairs of another country by aiding separatists. Realistically, Russia is unlikely ever to take action against China, but it could well act against a former Soviet state in which China has interests, such as the Central Asian republics. Thus, China will view events in Ukraine with caution.

Nonetheless, Russia's actions could also have benefits for China, in several ways: 1) They demonstrate the weakness of the US, which is China's main geopolitical competitor in Asia; 2) China could use Russia's justification for the seizure of Crimea (which is historically a Russian territory) to justify an operation to reclaim the disputed Senkaku/Diaoyu islands from Japan or other disputed territories in Asia (which Beijing may perceive as historically Chinese) in future; 3) A Russia that is more focused westward on European security would be less likely to challenge China's rising influence in the Asia-Pacific region.

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