Officially known as the Russian Federation, Russia is politically defined as a sovereign, federal semi-presidential republic in northern Eurasia. While the country is geographically the largest of any in the world (taking up more than an eighth of Earth’s populated land), Russia is the ninth most populated with just over 144 million individuals as of the last quarter of 2015. The country’s intervention into Ukrainian territory and their subsequent ongoing war has caused massive internal economic destruction along with foreign relations amongst countries involved in the United Nations and the European Union. Under Putin’s leadership, Russia will continue to suffer further damages to internal economic infrastructure and diplomatic relations with foreign countries.
Economically, Russia is ranked by nominal gross domestic product (GDP) as the sixth largest in what is known as purchasing power parity (estimation of higher exchange rate of national currency) as of 2015 (BBC News, 2016). The heart of Russia’s economic system lies within their bountiful surplus of energy and mineral resources (the largest of these reserves on the planet); making the country one of the greatest oil and natural gas producers in the world (BBC News, 2016). According to a study performed by the Stockholm International Peace Research Institute (SIPRI) from 2010-2014, Russia was the second highest exporter of major arms in those 4 years. In addition, it currently has the largest reservoir of weapons of mass destruction and is recognized globally as one of the five existing nuclear weapon states (BBC News, 2016). One of the great powers (ability to exert its own influence on a scale that stretches across the world), Russia is currently lead by the hand of President Vladimir Putin.
Putin originally served as President of the Russian Federation during the years of 2000 to 2008 after his previous service as Prime Minister (Biography.com, n.d.). Beginning May 7th, 2012 he was re-elected after seeking a third term and will now serve until 2018. Under his original presidency the economy saw 8 years of consistent, uninterrupted growth and the purchasing power parity responsible for measuring GDP saw a 72% uptrend (Biography.com, n.d.). This was a direct result of the global financial boom of the early 2000s which saw a massive inflation on all commodities; most specifically oil and natural gas prices. However, Russia was not impenetrable to the financial crisis and crash of 2008-2009 which slowly devalued the commodities of oil in subsequent years (BBC News, 2016). To make matters worse, Western sanctions that began in 2014 were imposed as a response to the country’s military intervention in Eastern Ukraine and their annexation of Crimea. The economy’s GDP saw a 3.7% net loss in 2015 as a result of this (BBC News, 2016).
In defining Crimea’s annexation by Russia in addition to military involvement in Eastern Ukraine, the prolonged “Ukrainian Crisis” began November 21, 2013 when the President at the time known as Viktor-Yanukovych canceled a proposed association agreement with the European Union (TASS Russian News Agency, 2014). In context, the agreement was meant to function as a treaty that would serve as the framework for the political convergence and cooperation between the European Union and a country existing outside of the union including technical and consumer standards. Various conformities that Ukraine would have agreed to include the exchange of staff and information in the field of justice, visa-free movement, energy infrastructure modernization, and equal rights for all workers (TASS Russian News Agency, 2014). Conforming would allow the country to utilize the European Investment Bank (TASS Russian News Agency, 2014). When it was decided that this treaty would no longer be taking place, Putin secured military invasion to reclaim Crimean territory for Russia (annexation) (TASS Russian News Agency, 2014). Beginning in early 2014, sanctions were approved and secured by the European Union, United States, and various other countries in response to the allegedly illegal political moves taken by the Russian armed forces and Putin’s administration (Walker, Nardelli, 2015). In response, Russia has also imposed its own sanctions against foreign countries, most notably the ban on food imports from the United States, Canada, Australia, Norway, and the European Union. As a result, the sanctions are responsible for the creation of the historic 2014-15 Russian financial crisis and the Russian ruble’s currency collapse (Walker, Nardelli, 2015). These various sanctions imposed on the Russian Federation were delivered in three rounds.
The first principal sanction prevented hostile Russian entry into the territory of Ukraine and froze the United States assets of any who entered (Walker, Nardelli, 2015). Japan’s sanctions suspended any international talks regarding the matters of investments, visas, space, or military. Less than a month after the 17 United States/European Union sanctions, Australia imposed similar travel and financial bans on any individuals that were instrumental in Russia’s military involvement with Ukraine (Walker, Nardelli, 2015). Starting in April of 2014, the countries of Iceland, Albania, Montenegro and Ukraine followed the imposed sanctions of the European Union; including similar travel restrictions (Walker, Nardelli, 2015).
A second round of sanctions began near the end of the month of April 2014 starting with the United States ban of any financial/business-related transaction within its own existing territory; specifically imposed on seven key Russian political officials (Walker, Nardelli, 2015). These financial bans have since expanded to an additional 15 individuals by order of the European Union (Walker, Nardelli, 2015). Of the original seven members, the most important of note is the executive chairman of the powerful oil company Rosneft known as Igor Sechin (Walker, Nardelli, 2015). Moreover, Sechin serves as executive chairman in an additional 17 companies. According to the European Union, the sanctions have only been put in place to instigate forced change in Russia’s policies and activities and not to interrupt the affairs of the corporations themselves. The union furthermore ascertains that it attempts its best to avoid and minimize any political affairs that contain negative consequences for civilians engaged in “legitimate activities”.
Thirdly, as a political answer to the escalation of the War in Donbass (Ukraine), the United States’ financial transaction bans on certain executive members of corporations have since been expanded to include the entirety of the corporations themselves; specifically the two primary energy companies including the aforementioned Rosneft and Novatek (Sharkov, 2015). These transaction bans also extended to two particular banks known as Vnesheconombank and Gazprombank. After being urged by the United States to follow their trend and continue to expand sanctions, the European Union introduced their third succession that included a trade embargo on all military equipment and related materials including technology, arms, goods possessing dual-use, extending a tight control on oil industry exports, and finally a trade restriction on particular equity, bonds, or other related financial tools existing greater than 90 days (Sharkov, 2015). In the months that followed, Canada, Japan, Australia, Norway, Switzerland, Ukraine, and Greece all expanded their sanctions to follow the actions originally taken by the United States and the European Union (Sharkov, 2015). The 90 day financial asset restriction imposed by the European Union has since been reduced to a mere 30 days as of September 2014.
Most recently in 2015, President Putin issued authorization of military intervention by the Russian Federation in the Syrian civil war beginning in September of 2015 as a response to a request from the Syrian government (McDonnell, Hennigan, Bulos, 2015). The actions taken by the Russian armed forces included “air strikes, cruise missile strikes, and the use of front line advisors against militant groups opposed to the Syrian government”. Certain militant groups of note include the Islamic State of Iraq & Syria (ISIS), the Army of Conquest, and al-Qaeda. The mission declared largely successful by Putin in March of 2016; ordering withdrawal of the bulk of the Russian military from Syria (McDonnell, Hennigan, Bulos, 2015).
Throughout the past 3 years under the leadership of Vladimir Putin, Russia has suffered catastrophic economic damage totaling to nearly €100 billion (approximately 112 billion U.S. dollars) (Sharkov, 2015). Given his current track record and no current end in sight to the ongoing War in Ukraine, the future of a Putin-lead Russia does not bode well for the country nor for its foreign policy with the rest of the political world. Continued aggressive military actions will only serve to weaken the economy and further close off the country to the resources of the rest of the world. According to Mikhail Khodorkovsky, a former oligarch and Russian businessman/philanthropist now exiled from his home country, Putin’s Russia is a political state based on illusions. He believes that the greatest illusion of all is that there is no alternative to Putin’s leadership when in fact “even the most loyal supporters are keeping their eyes out in search” of one (Khordorkovsky, 2015).
- Biography.com (n.d.). Vladimir Putin – Biography. Retrieved April 17, 2016 from http://www.biography.com/people/vladimir-putin-9448807
- BBC News. (27 June 2014). Guide to the EU deals with Georgia, Moldova, and Ukraine. Retrieved April 17, 2016 from http://www.bbc.com/news/world-europe-28038725
- BBC News. (29 February 2016). Russia country profile. Retrieved April 17, 2016 from http://www.bbc.com/news/world-europe-17839672
- Khodorkovsky, M. (February 2015). “Putin is not the future of Russia. The future of Russia is us”. Retrieved April 17, 2016 from http://imrussia.org/en/news/2187-khodorkovsky-p utin-is-not-the-future-of-russia-the-future-of-russia-is-us
- McDonnell, P. Hennigan, W.J., Bulos, N. (30 September 2015). Russia launches airstrikes in Syria amid U.S. concern about targets. Retrieved April 17, 2016 from http://www.latimes.com/world/europe/la-fg-kremlin-oks-troops-20150930-story.html
- Sharkov, D. (19, June, 2015). Russian Sanctions to ‘cost Europe €100BN’. Retrieved April 17, 2016 from http://europe.newsweek.com/russian-sanctions-could-cost-europe-100-billion- 328999
- Stuart, K. (15 March 2016). In Ukraine a War Rages on, and America Should Care. Retrieved April 17, 2016 from http://www.huffingtonpost.com/kelli-stuart/ukraine-vs-russia-why- the_b_9452532.html
- TASS Russian News Agency. (21 March 2014). Putin signs laws on reunification of Republic of Crimea and Sevastopol with Russia. Retrieved April 17, 2016 from http://tass.ru/en/russia/724785
- TheGuardian. (24 February 2014). Ukraine crisis fuels secession calls in pro-Russian south. Retrieved April 17, 2016 from https://web.archive.org/web/20140223212525/ http://www.theguardian.com/world/2014/feb/23/ukraine-crisis-secession-russian-crimea
- Walker, S. Nardelli, A. (18 January 2015). Russia’s rouble crisis poses threat to nine countries relying on remittances. Retrieved April 17, 2016 from http://www.theguardian.com/world/2015/jan/18/russia-rouble-threat-nine-countries- remittances