Russia’s Nord Stream II Concerns Reveal Its Severe Systemic Vulnerabilities
Putin actually sounded pretty concerned about the future of Nord Stream II for the first time ever during Tuesday’s press conference with his Austrian counterpart, strongly suggesting that Pompeo might have delivered a serious message to him during Monday’s meeting that got the Russian leader to finally have a more realistic assessment of the grand strategic challenge that the US poses to its interests, therefore pushing him to consider what compromises his country might have to make in order to reach a sought-after “New Detente” for relieving this unprecedented pressure.
Sanctioning Nord Stream II?
Putin seems to have a much more realistic assessment of the challenge that the US poses to his country’s energy interests after Monday’s meeting with Pompeo, with the Russian leader actually sounding pretty concerned about the future of Nord Stream II for the first time ever during Tuesday’s press conference with his Austrian counterpart. Sputnik quoted him as saying that “As for the attempts of our American partners to derail certain agreements, some projects — I mean Nord Stream 2 and some other projects, we have repeatedly said this and want to reiterate: these are attempts of unfair competition under various political pretexts…I already said it yesterday, the United States has become the largest oil producer and we need to think about how we influence the global energy market.” For a man who’s carefully cultivated a “tough guy” image, it’s out of character for him to complain about how “unfair” the US is being, which is an allusion to the possibility of sanctions being imposed on the pipeline and its partners in order to create unbearable costs on the European side and subsequently derail the project.
The Reagan Redux
Putin’s right, though, because Trump is using all the tricks in the book to make matters more difficult for Russia, though what he’s doing really isn’t anything too novel in and of itself. While it can be said that the weaponization of sanctions as one of his administration’s preferred foreign policy instruments is unprecedented in its scale and scope, the underlying principle of increasing costs on his adversaries and their partners in order to reverse some of their policies isn’t anything novel. In fact, it’s actually very similar to what Reagan did against the USSR in restarting the arms race through “Star Wars” simultaneously with manipulating global oil prices in order to bankrupt the so-called “Evil Empire”. Trump, as a successful billionaire businessman, has a keen ability to sniff out economic weaknesses in his adversaries, and he understands that there’s no better time than now to put maximum pressure on Russia ahead of negotiating a “New Detente” in order to get as many concessions as possible out of it prior to clinching this long-sought deal.
The Systemic Transitions
The fact of the matter is that Russia is in the beginning of two interconnected domestic systemic transitions, the “Great Society” socio-economic one and its political counterpart PP-24 (Post-Putin 2024). Chaos theory preaches that the outcome of complex processes such as these is disproportionately influenced by their initial conditions, so in other words, disrupting these transitions as much as possible at this highly vulnerable time could possibly lead to their ultimate failure. The modus operandi that the US is applying seems to be raw economic warfare through primary and “secondary” sanctions, with the whole point of this asymmetrical assault being to compel Russia into agreeing to a lopsided deal that’s tilted against its grand strategic interests but is publicly presented as a “New Detente” in order for Putin to “save face”. For as much as Alt-Media might dismiss this as a “neocon conspiracy theory”, it shouldn’t be overlooked just how sensitive Russia is to economic shocks at this moment, particularly in terms of the political and strategic consequences that they might lead to.
Two Decades Of Missed Opportunities
Despite being in office for nearly two decades already, Putin failed to reform Russia’s economy, and its state budget is still significantly dependent on natural resource (energy and mineral) and arms exports. The US’ sanctioning of these industries is intended to reduce the amount of revenue that Russia receives from them precisely at the moment when it needs those funds the most, which could in turn jeopardize the “Great Society” socio-economic development plan and possibly inflict irreversible damage to its overall competitiveness in the technologically driven Multipolar World Order. Although Russia currently holds a monopoly on hypersonic missile technology, it’s been unable to leverage this beyond the military sphere of defensively upholding its nuclear second-strike capabilities and actually reaping real-sector economic dividends from it for its people. In the event that some of the “Great Society’s” projects are curtailed or outright canceled, Russia’s already restive and highly influential oligarchic elite might once again begin rumbling for regime change ahead of PP-24.
The Return Of The Oligarchs
There’s no credible threat to Putin’s presidency, but since he’s basically a “lame duck” in the sense that this is his final term in office, he might gradually lose the power to determine his successor if his meticulously crafted domestic political “balancing” act of the past two decades begins to unravel as a result of the US’ sanctions assault at what would be precisely the worst time for that to happen. It should be remembered that while Putin made a notable example out of several oligarchs who refused to stop meddling in politics during the early 2000s, he actually never got rid of this class like his “Putinist” followers abroad assumed that he did but only “incentivized” them through those dramatic precedents to remain outside the political sphere in exchange for not being investigated for tax and other crimes by the FSB (which he led right before the presidency). The oligarchs are still very much in power in Russia, it’s just that they’re all allied with Putin nowadays, though that could change if the country’s macroeconomic conditions worsen and they don’t receive the “payoff” they expected from the “Great Society” if Trump’s sanctions hit the Kremlin’s coffers hard enough in the future.
After all, it’s precisely because of the effect that these weaponized economic instruments could have on the oligarchic class that the Obama Administration initially wielded them in the first place, only to be intensified under Trump who has personal knowledge of what makes people like him tick. That actually explains why Russia has been so desperate to lift the sanctions ever since they were first imposed half a decade ago in spite of its many media surrogates playing “reverse-psychology” and pretending that that’s the last thing that the country wants. It’s true that there have been many unintended benefits of the sanctions and that these have more often than not been in the interests of the average Russian (especially in the sense of encouraging domestic production and inspiring their country’s overall reorientation to the “Global South”), but they’ve been absolutely detrimental to the oligarchs’ interests, which is why they’ve been intensely lobbying Putin to get them lifted as soon as possible. It’s with this in mind why he’s so interested in reaching a “New Detente” as soon as possible so long as it results in at least partial sanctions relief.
The Perfect Storm?
According to chaos theory, the drastic reduction of budgetary revenue caused by America’s sanctions regime could threaten the success of the “Great Society” and lead to a chain reaction of political consequences that might complicate PP24, both of which are only in their initial stages and therefore highly vulnerable to external disruptions that could disproportionately influence their ultimate outcomes and altogether massively disadvantage Russia by possibly inflicting irreparable damage on its strategic competitiveness in what is also coincidentally the beginning of the global systemic transition to the Multipolar World Order. Russia is therefore unprecedentedly vulnerable to the effect that American sanctions could have on its three interconnected systemic transitions of the “Great Society”, PP-24, and the Multipolar World Order, something that Putin appears to have finally grasped after his meeting on Monday with Pompeo. That’s why he’s worried for the first time ever about the future of Nord Stream II, since it’s one of the most prominent examples of where the US is trying to hit Russia the hardest in compelling it to compromise as much as possible as part of a “New Detente”.
By Andrew Korybko
Source: Eurasia Future