Newswise — The recent crisis in Ukraine has spurred a new round of thinking about the region’s political and economic situation by UChicago scholars Eric Posner and Stanislav Markus.

Posner, the Kirkland & Ellis Distinguished Service Professor of Law, has written numerous articles on the Ukraine crisis since Russia’s seizure of Crimea last month. An expert on international law, he authored The Limits of International Law and The Perils of Global Legalism.

Markus is an Assistant Professor of Political Science. His book Property, Predation, and Protection: Piranha Capitalism in Russia and Ukraine is forthcoming with Cambridge University Press. An expert on property rights and state-business relations in the region, he has published his research in World Politics, Socio-Economic Review, Polity, and other journals.

Posner and Markus recently discussed the latest developments in Ukraine with UChicago News.

The United States and European Union have imposed a new round of 'targeted economic sanctions' on Russia in response to the crisis in Ukraine. Will these sanctions work?

Eric Posner: The West is reacting properly to Russia’s continued provocative and aggressive behavior in Ukraine. However, I don’t think the current sanctions will work because they are too weak. The sanctions will only affect a small number of companies and individuals. The West could increase the severity of sanctions if they want to, but any type of strong sanctions could be very costly. For example, if the EU agrees not to buy gas from Russia, it could deal a fatal blow to Russia’s oil export business. But, at the same time, the measure would also hurt Europe a great deal because they will lose a major gas supplier. Unless Russia does something truly outrageous, I doubt the world will impose severe sanctions.

Stanislav Markus: Western sanctions have not worked so far, but that doesn’t mean that they won't be effective in the medium to long term. There are several types of possible sanctions, some of which target specific individuals, while others aim at specific Russian companies, or target the entire Russian economy. So far, the first two types of sanctions have been implemented, in a limited manner. The dangers of targeting Russian companies or the entire economy (rather than individuals close to the Kremlin) is that (1) this effort would boost Russian public support for the Putin government, and (2) the sanctions would force a further re-orientation of Russia’s trade—including energy—toward China, thus reducing Russia's economic integration in Europe.

Prof. Posner, you’ve analyzed Putin’s 'grand strategy' in a posting on your blog lately. What is the strategy?

EP: Putin is seeking to advance Russia’s interests by ensuring a sphere of influence around the Russian homeland. I don’t think Putin is interested in conquering his neighbors. They would be too difficult to rule. He just wants them to be in Russia’s orbit. So, his strategy is to punish any neighbor that shows excessive pro-Western inclinations by sowing disorder among the Russian-speaking population. Most of Russia’s neighbors have substantial ethnic Russian populations and, among these countries, most are poor and badly governed, except Estonia and Latvia. This means that Russia can easily stir up unrest in these countries by encouraging the Russian populations to express separatist ambitions.

That is the story of Georgia and Ukraine. Russia would never have bothered annexing Crimea if a pro-Russian government remained in place in Ukraine. Where governments cooperate with Putin (for example, Kazakhstan and Belarus), Putin does not trouble them.

This strategy is a less ambitious version of the Soviet Union’s strategy, and also not much different from what the United States did during the cold war, in places like Cuba and Nicaragua. It’s perfectly logical, and also likely to succeed because a big country cares more about its neighbors than other countries do, and can exert influence over them more easily than other countries can.

SM: Putin hopes to achieve three goals: (1) increase his support at home at a time of economic decline; (2) weaken Ukraine's new pro-Western government and retain leverage over Ukraine in the future; (3) rule out Ukraine's future NATO membership.

What do you think the West should do?

EP: In the long run, the West has to make a decision on whether the benefits of attracting Russia’s neighbors into the Western orbit are worth the risks of disorder that result from Russia’s retaliation. My guess is that places like Georgia, Ukraine, and even Estonia are not strategically important enough for the West to warrant conflict with Russia, although in the short run NATO countries must come to Estonia’s aid if it is ever attacked. Ultimately, the West will have to make a deal with Russia, giving Russia the influence they want over Ukraine, in return for which the Russians would agree not to stir up trouble and disorder in the way they have been doing.

For Russia’s other neighbors, they will now have to do everything they can to appease the Russian populations in their own countries so that they are not responsive to irredentist appeals from the Kremlin.

SM: Since the West is not willing to commit to a military defense of Ukraine in case of Russian invasion, it can buttress the guarantees to the East European NATO members as well as rely on economic sanctions to rein in Russia.

Russia has argued that Ukraine should be given a 'federalist' structure. What do you think?

EP: I do think it is a reasonable proposal. Russia’s real objective is to make Ukraine weaker—if Ukraine, as a whole country, became a partner of the West, that would deal a blow to Russian prestige. A federal model in Ukraine would definitely weaken Ukraine. It would allow Russia to have a foothold in the eastern part of the country. But, since people in western part of Ukraine are more pro-West, it would also be possible for them to forge closer ties with the West. This seems like a reasonable compromise to me. At this point, with the annexation of Crimea, it wouldn't be a realistic solution to keep Ukraine as a more united country, as it used to be. When you have a country with a divided and heterogeneous population, a federal structure is a reasonable solution.

SM: Sensible or not, at this point federalization is inevitable if Ukraine is to be preserved as a sovereign state. The devil is in the details, and the key question is whether Kyiv will be able to design a federalist structure that pacifies the eastern part of the country while minimizing future Russian interference.

Should Ukraine have kept its nuclear weapons?

EP: After the collapse of the Soviet Union, Ukraine inherited a huge nuclear arsenal, which it subsequently gave up. In return Ukraine received assurances from Russia, the United States, and the United Kingdom that its territorial integrity would be respected.

One can imagine that it would have been in Ukraine’s interest to possess nuclear weapons. If Ukraine had its weapons, Russia would not have engaged in such aggression and taken the risks grabbing Crimea. The risk of nuclear war would have been too great; Putin would have stayed his hand.

However, I suspect that Ukraine would eventually have been forced by Russia and the U.S. to give up its nuclear weapons one way or the other long before 2014. Ukraine acquiesced to giving up its nuclear arsenal partly because of the guarantee that was given to it. But really they had no choice because of their extreme dependence on Russia for gas. Other countries are in different situations. The lesson that a lot of medium-sized countries should take from the crisis is that they should develop nuclear weapons. They cannot depend on the U.S. to protect them. They’ll do better with nuclear weapons.

SM: There is little doubt that Ukraine would have been more successful in deterring Russia with a nuclear arsenal. But history does not like counterfactuals: there was a real danger of nuclear proliferation in the 1990s should Ukraine have kept its weapons. In retrospect, it is difficult to ascertain whether that danger would have been easily manageable.

With the escalating tension, do you think Ukraine is on the verge of a civil war?

EP: It’s hard to tell what will happen even in the short term but it is premature to say that Ukraine is experiencing a civil war. There is instability, but that instability will exist only as long as Russia encourages it. If Russia takes away its military from the border and reaches some form of settlement with the West, the disorder that currently exists in Ukraine will probably vanish. Putin will only do it after Russia gets what it wants—placing Ukraine in Russia’s orbit.

SM: The situation is volatile, but a civil war is still unlikely. This may change either through a much larger-scale Russian support of the rebels in the East, or catastrophic mistakes on the part of Kyiv’s government.

What will happen next? How can the international community help with the dire economic conditions in Ukraine?

EP: Ukraine can never be fully independent from Russian because of its reliance on Russian gas and other natural resources, its small economy, and its military weakness. This means Ukraine cannot be completely oriented toward the West. In addition, since Ukraine is not vital to their national interests, Western countries like the United States will be unwilling to commit a lot of resources to supporting it. When the West has little to offer to Ukraine, the Ukraine government will have to make some compromise about Russia. It has to give something that Russia wants.

Until Russia gets what it wants, Putin will continue to take advantage of the existing pro-Russian sentiment in Ukraine, but fortunately, the sentiment is not that strong. I think eventually, Putin would be willing to compromise.

It’s very unlikely that he will use force, trying to conquer Ukraine in some sense. If things worsen there, he will probably send some troops to Ukraine based on some phony humanitarian rationale. I think that could be a risky move. Russia is not a rich country and its military is not very strong. If Putin sends a lot of troops to Ukraine, Russia could get embroiled in a civil war. But I want to emphasize again that it is very hard, given the limited information about popular sentiment in Ukraine, and the domestic political forces that Putin must contend with, to make predictions about what will happen next.

SM: The West can provide low-interest loans and grants conditional on basic provisions for a consensus government in Kyiv that will respect the rights of Ukraine's diverse population. The danger of failing to provide robust economic support is that Ukraine will, out of necessity, become more dependent on Russia. However, providing support without conditions runs the risk that the funds will be misappropriated by an administrative apparatus in turmoil.

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