With the vote over in Crimea, and having proved to be relatively uneventful, press reports are beginning to worry about what may happens to the Russian economy as a result of its interference in Ukraine. It’s a question that can’t be answered without knowing what Russia will do. European economic moves will have little long-term punitive effect, but if Russia is about to shoot itself in the foot, there is no one who can come to its rescue either. This is important to consider because the talk two weeks ago in Russia was of the Russian army invading Ukraine to force regime change, then occupying as much as half of Ukraine for years to come. That is a scenario that would have unimaginable costs for Russia, not just in terms of money, but also in human lives. One must remember that the occupation of Afghanistan was instrumental in bringing down the Soviet economy. The occupation of half of Ukraine is a far bigger challenge than Afghanistan, and Russia is a smaller country than the old Soviet Union. But observers may take some reassurance from Putin’s speech today, in which he insisted that the territory of mainland Ukraine is not a proper concern for Russia.
Russia will nevertheless take a hit economically if it steps forward to right Crimea’s economy, and it may take years to mend fences with Ukraine. If Ukraine is wary of serving as Russia’s western gateway, as it surely will be for decades to come, that’s a relatively new problem that leaves Russia more isolated from Europe than it historically has been. Perhaps it is a chance for Russia to try to fix its broken manufacturing sector and in general to seek the ideal of economic self-sufficiency that was abandoned in the Putin years. But Putin is still in charge, so these are steps that are not likely to be taken very soon.