RUSSIA'S DECLINE

Whatever scenario comes next, there is little doubt that Russia will enter a period of faster decline. Only in the case of an early end to the fighting, a peace settlement, and Putin’s ouster could Russia hope to stem its loss of power. Even then, distrust of Russia in the West will remain for generations.

In cutting all ties—economic, political, and social—with the West, Putin is gambling on a deepened economic and military partnership with China and sustained ties with India, Gulf nations, Brazil, Iran, and other developing countries that may become part of a new nonaligned bloc. But is China really prepared to risk its financial standing and access to US and EU markets—adding up to more than one trillion dollars of trade per year—to prop up an ever-needier Russia as China’s economy stumbles?

Even if Russia is assured of some support, obtaining that assistance will most likely involve giving over its crown jewels, such as energy and minerals assets, to Chinese investors at fire-sale prices now that Western companies are beating down the door to leave the country. Moscow’s deepening dependence on Beijing will no doubt grate on the Russian psyche and spur resentment in China.

With a deep recession already baked in for the foreseeable future, Putin is also counting on the quietism of the Russian public. But as the situation deteriorates, with growing popular unrest, one can imagine a coup d’état attempt by a cabal of senior siloviki (the security elite) and irate oligarchs, or Putin’s peaceful removal from office. It will take time for Western sanctions against Russia to be reversed even in the best case, and it will be hard for Western companies to go back into the country until a different regime takes power. In all the scenarios, Russia will come out of this crisis more dependent on China.