Foreign Affairs came out last week with a piece authored by a team from the influential Center for Strategic and International Studies (CSIS) that argues for a sustained strategy of “containment” against Russia.
It’s a climb down (at least on the part of the US; judging from comments coming from Europe, they might keep looking to go all in despite a weak hand) from the goal of isolating Moscow and the “ruble is rubble” heyday of the economic war but still seeks to maintain the separation of Europe and other US-dominated states from Russia while drawing more nations to the West’s side.
The CSIS crew are recycling a 75-year-old strategy from George Kennan that no longer fits the geopolitical realities of the world in 2024. One of the few updates the same one we’ve been hearing about for a while, which is that Washington will lean more on its European allies:
A strategy of containment can enable the United States to deter Russia in Europe while still dedicating more resources to deterring China in Asia.
On the bright side, the CSIS crew keeps Kennan’s idea that containment seeking to avoid direct conflict between the US and Russia. On the other hand, it’s telling how little there is that is new in the Foreign Affairs piece, which is filled with bromides like the fact containment “will require different tools, such as support for governance reform and trade.” The path laid out in Foreign Affairs differs little from Washington’s current policies and those it has more or less followed since Kennan first proposed them. While the strategists at Washington think tanks tinker with Kennan’s post-WWII strategy, Russia is busy charting a new course for itself with Asia, Africa, and the BRICS.
Moscow weathered the shock and awe sanctions and is now in certain ways benefitting from the West’s economic warfare.
Russia posted a GDP growth of 3.6 percent in 2023 after contracting 1.2 percent in 2022. The International Monetary Fund expects the economy to continue growing and rise 2.6 percent in 2024. real wages in Russia grew by 7.8 percent in 2023. Compare that to the G7 nations:
There have been many complaints about the cost of living crisis in the US, but please take a look what has been happening in Europe pic.twitter.com/oyLuwJMN3b
— Michael A. Arouet (@MichaelAArouet) January 27, 2024
Whether it’s called “isolation” or “containment,” Russian transport and logistics continues to be a major target of the sanctions, which means much of this geopolitical struggle revolves around transit and trade.
With Europe wholly dominated by the US, the Foreign Affairs piece argues that “post-Soviet Eurasia and the rest of the world will be more central.” It’s two years into the economic war against Russia, and this realization is dawning on the thinkers at CSIS – that there is a “rest of the world” outside of the West.
That rest of the world is the reason why Russia not only survived the West’s economic war, but in many areas is actually flourishing. And if the West wants to now try to thwart all these trade links and “contain” Moscow, it has a lot of catching up to do.
Russia’s sea corridors are thriving under Western sanctions, which helped provide the impetus for their implementation. Moscow recently updated the public on its progress on its land corridors, and the same is happening there – especially in the region Foreign Affairs notes is of great importance: “post-Soviet Eurasia.”
The West had a lot of high hopes that the former Soviet states in Central Asia would join the isolation effort. That never came to pass, and the Central Asian states have arguably only grown more integrated with Moscow (and Beijing).
Central Asian Transportation Corridors
Let’s use the all-important Kazakhstan as an example. It plays a major part in transit flow between Russia and China, and that role is set to only grow.
The Russian Ministry of Transport is implementing memorandums of understanding with Kazakhstan and several other countries on the creation of two new transport corridors: The International Transport Corridor (ITC) and the Southern Transport Corridor (STC).
The ITC connects Belarus with Pakistan via Russia, Kazakhstan, Uzbekistan, and Afghanistan. Russia, China, and Kazakhstan also just announced an initiative to improve their transport and logistics infrastructure, including a direct transport link connecting Xi’an with Moscow.
Kazakhstan is central to the plans of both Russia and China (as the Foreign Policy Reserch Institute notes, “for China a war over Taiwan would cause a severe economic disruption for Beijing, and the country would need to turn to Central Asia for energy and to keep important supply chains open.”). Those supply chains are now rapidly expanding throughout Central Asia as we see how countries grow closer together in order to defend themselves from Western belligerence.
It’s not hard to see why both Beijing and Moscow are planning for the West to do everything it can to disrupt Asian integration. As Foreign Affairs noted, “A strategy of containment can enable the United States to deter Russia in Europe while still dedicating more resources to deterring China in Asia.”
The STC is an example of a plan to hedge against these types of “deterrence.” The route, which will connect Russia, Turkmenistan, Uzbekistan, Kyrgyzstan, and China via the Caspian Sea, could be viewed as a contingency plan in case the shorter Kazakhstan connection is disrupted.
Kazakhstan seems solidly onboard with its central role in Russian and Chinese plans at the moment, but it is also of great interest to the West for the very same reason.
Back in September, Kazakhstan’s president reassured the German chancellor that his country was going to implement sanctions against Russia; the very next day he stated that Kazakhstan was going to further develop trade relations with Russia.
It seems that in the end Kazakhstan sided with its economic interests – as did the rest of the Central Asian countries – after Western sanctions backfired yet again. As former Indian diplomat M.K. Bhadrakumar writes:
The economic performance of the region in 2023 registered an impressive GDP growth of 4.8%. And Russia contributed to this success story. The Ukraine war led to the vacation of western firms from the Russian market, which created new opportunities for regional states. At the same time, the conditions under sanctions prompted Russian firms and capital and Russian citizens to relocate their businesses to the Central Asian region.
Central Asian entrepreneurs haven’t missed the lucrative opportunities to source Western goods and technology for the Russian market — walking a very tight rope by ensuring compliance with Western sanctions, while also nurturing their interdependence and integration with Russian markets. The recovery of the Russian economy and its 3.6% growth last year created business opportunities for Central Asian countries.
International North-South Transport Corridor
This route gets a lot of attention, but there are still problems, and its full completion is years away.
The INSTC refers to the use of several routes through the Caucasus-Caspian region and onto Iran and India: Trans-Caspian – through the Russian ports of Astrakhan, Olya, Makhachkala; Eastern – direct railroad connection through Kazakhstan, Uzbekistan and Turkmenistan with access to the Iranian railroad network; and Western (Astrakhan – Makhachkala – Samur, and further on through Azerbaijan to Astara station).
The INSTC, which formally opened in 2002, is meant to provide a shorter route than the Suez Canal from Russia and central Asian countries to Iran, the Persian Gulf, India, and Pakistan. The project was largely a dud, but Western sanctions on Iran and Russia (with those on the latter leading to an explosion in trade with India), is revitalizing the route.
The INSTC still has issues to overcome. For one, there is US meddling at key points in the Southern Caucasus that appears designed to throw a wrench in these trade connection plans. There is also the problem of infrastructure in Iran, which is difficult to overcome due to sanctions. Moscow and Tehran are working to overcome these issues, but it will take time as Lana Rawandi-Fadai details at Modern Diplomacy:
On May 17, an intergovernmental agreement was signed in Tehran between Russia and Iran on the construction of the 162 km long Resht-Astara railway line, which is scheduled for completion by 2027. As a result of this route being launched, the transit of freights over the western corridor of the North-South ITC can be increased to the level of 30 million tons, whereas the overall cargo traffic of the ITC will have to increase from 15 million tons today to 41-45 million tons by 2030, and reach 100 million tons in the longer term. Russia is going to invest 1.3 billion euros in the construction of this line. Once the above-mentioned section of the railroad is completed, a through railroad corridor will be formed from Russia to the southern ports of Iran, which will open direct access to the Persian Gulf for Russian freights.
The ultimate goal is to have another route connecting India and Russia with Iran playing a central role. In the meantime, seaborne trade between Russia and India continues to explode. Over the first eight months of fiscal year 2023/24 ending in March, India’s total exports to Russia rose 46.2 percent. imports climbed 54.8 percent.
In late 2022, Russia shared with India a list of hundreds of items it wanted to import including axles, crankshafts, fasteners, pistons, bumpers, bearings and welding materials. India is now delivering on that request.
India’s engineering items exports to Russia recorded grew 88 percent in December, while for the April-December period they jumped 130 percent.
The ever-tightening US sanctions has complicated Russia-India trade, but they have yet to put much of a dent in its rise. India had been paying for Russian oil in rupees – a non-convertible currency with little value outside India, which was causing consternation in Moscow, but now that India is delivering more engineering items and Russia is able to use those rupees to pay for them, that issue has dissipated.
Asia Financial describes some more of the efforts from New Delhi and Moscow to work around Western sanctions:
Russian officials and oil executives have pressed Indian buyers to pay in Chinese yuan, which for Russia is a more useful currency.
For India, using the yuan is highly sensitive, although Indian private refiners have switched back to the yuan due to the lack of other options since the clash earlier this year, the sources said.Indian state refiners have turned to the UAE dirham, but that has been complicated by additional clearing requirements as Washington’s tougher line makes other governments wary.
From October, several UAE banks have tightened control over Russia-focused clients to ensure compliance with the price cap, according to five oil trading and bank sources. At least two UAE banks have introduced price cap compliance declarations for the clients involved in Russian crude, oil products and commodity trading, the sources said. They declined to name the banks.
Who’s Isolating Containing Who?
It’s worth taking a quick look at another of Russia’s key trading partners (and NATO member). Trade between Türkiye and Russia has exploded since the West unleashed its economic war against Russia, but hit a speed bump recently, however, following the US’ stronger threat of secondary sanctions in December. Trade was down significantly in both January and February, yet still well above the pre-war average. Türkiye’s exports to Russia in February fell 33 percent year on year while imports from Russia fell 36.65 percent to $1.3 billion.
It is likely the decline will only prove to be temporary as the two countries devise a plan to get around the threat of sanctions. From Reuters:
“It has become difficult to make some energy payments to Russia, especially after the new sanctions (threat) at the end of December. Some payments were disrupted,” a Turkish source familiar with the payments issue said.
“The originally agreed upon method had to be changed or the payment had to be postponed, but the shipment continued. There may be problems on a cargo-by-cargo basis,” the source said.
So again, while the threat of secondary sanctions is causing Russia and other countries to recalibrate, it will not change the overall trend. Far from strengthening US power, these will likely speed up the US decline as they provide encouragement for other countries to reduce their economic dependence on the US. The West is caught in the paradox where the more it tries to isolate Russia, the more lucrative it is to be an intermediary country.
And the more ridiculous and heavy-handed the West’s demands to choose a side become. If we go back to the example of Kazakhstan, imagine how absurd it must be to have US Secretary of State Antony Blinken or French President Emmanual Macron show up asking the country situated to essentially destroy its economy in order to help Washington and Europe isolate or contain Russia. (And the conversation and outcome will likely be much the same, with China in Russia’s place, as the US turns its attention to Beijing.)
On the other hand, the Russian approach has not pressured countries to choose sides and accepts ‘neutral’ stances on the war.
The folly of the West’s strategy seems to be dawning on an increasing number of Western analysts. Here is Alexander Libman, professor of Russian and East European politics at Freie Universität Berlin, who is representative of the trend. He bemoans the inability of the West to isolate Russia for its “unprovoked aggression”, but admits that isolation is impossible:
India and China import commodities from Russia precisely because Western sanctions force Russia to sell these commodities at a discount; Türkiye, the UAE and the countries of the Eurasian Economic Union benefit a lot from the rerouting of trade flows between EU and Russia through their territory. For Chinese companies (e.g., automakers), the exit of Western firms from Russia, along with Western sanctions, became an excellent (and historically unique) tool to acquire new markets: Russia is now the largest importer of Chinese cars in the world.
Certainly, the threat of new sanctions makes some companies from these countries to rethink their engagement with Russia; however, others will then come to take their place, attracted by even more lucrative economic opportunities. This does not mean that this “shadow integration” of Russia into the global world is in any way efficient or superior to how the Russian economy worked before the war. The costs of arbitrage are substantial – meaning that imports to Russia are getting more expensive (or are of lower quality) and Russian exports are sold at a lower price. However, the new model works. …
There are limits to the effectiveness of even the most severe secondary sanctions the West could impose against those willing to trade with Russia. At the very least, these limits are determined by the monitoring capacity not only of the West, but of national governments. In the worst case, Russia’s shadow integration into the world economy could trigger the emergence of alternative payment systems and trade routes that are entirely outside Western control – this would be a substantial blow to Western statecraft in the long run.
Yet, Libman ends his reality check not with calls to abandon such a self-destructive strategy, but with a new rallying cry for the downtrodden Russophobes: that Moscow will likely “self-isolate” through its own missteps. The projection, as it often is with Western analysts, is strong here, but this hope is gaining traction. Here’s a piece from RAND on March 4: “Moscow’s History of Unforced Errors Is the West’s Hidden Advantage.”
This appears to be a variation of the years of media and think tank pieces denigrating the Russian military as drunks fighting with shovels; this idea that Russian officials and diplomats who have outmaneuvered their Western counterparts every step of the way will suddenly forget how to tie their shoes is some magical thinking.
Regardless, the Foreign Affairs piece argues for a subtle shift from shock-and-awe isolation to a longer containment strategy coupled with the hope Russia will self-implode. Key to that plan is that the US execute its long-planned shift of focus to China while leaving Europe to handle point on Russia.
This leads to a series of questions, including:
- Is there any reason to believe the latter strategy will work better than the first?
- Is the West even capable nowadays of executing a long term plan on such a scale?
- Is Europe capable of directing the containment of Russia?
- Which side is showing more cracks in its foundation and is more likely to crumble? For example, German Defense Minister Boris Pistorius recently declared that Europe must prepare for a decades-long conflict with Russia. When one takes a close look at the current state of Germany, can keep from coming apart in ten months, let alone ten years?
- And lastly, would a US containment policy do more to contain the West than it would Russia?
As Foreign Affairs and others try to update Kennan’s strategy for the decades to come, it’s worth remembering that Kennan himself opposed the militarized form his strategy took on. Often overlooked in his writings on containment were the passages that called on the US to do work at home in order to “measure up to its own best traditions and prove itself worthy of preservation as a great nation.”
That element is being ignored in Europe and the US yet again in the most recent iteration of the containment strategy.
