Before Putin’s actions in Ukraine, nearly every senior Russian government official I spoke with was stressing Russia’s desperate need for increased investment as the only viable means to stimulate growth. Since Putin’s actions in Ukraine, roughly $75 billion has left the country, while tens of billions more of Russian taxpayer money has been spent to defend the ruble and finance more expensive debt. Serious economic sanctions, as well as the specter of new sanctions, imposed by the United States and Europe, are already triggering uncertainty among both Russian and foreign investors and caution among Russian consumers. And the task of integrating Crimea into Russia will costs tens of billions of dollars. Are these economic outcomes in Russia’s national interest? I don’t think so.
New American sanctions on the export of energy technology could be especially damaging to Putin’s agenda. More than once while I was in the U.S. government, I heard Putin explain to U.S. officials that the multibillion-dollar joint venture between Rosneft and ExxonMobil to develop energy deposits in the Arctic was the most important achievement of U.S.-Russian relations in the last two decades. Many now wonder if this ambitious project can proceed along the timetables originally planned. Brilliant strategist for pursuing Russian national interests? I wonder what Igor Sechin, the head of Rosneft who is now on the U.S. sanctions list, thinks.