Isolating Moscow will not help India

By all accounts, the Russian economy is in imminent danger of collapse. After a period of relative economic stability under President Vladimir Putin, the rouble is now in free-fall. The central bank has announced an increase in interest rates from 10.5 per cent to 17 per cent. But, the move failed to stabilise the rouble. This has reduced the purchasing power and seriously affected ordinary Russians, as the bulk of food and consumer goods are imported.

There are rumours that state-run energy company Gazprom would lay off 25 per cent of its staff. Suspicion that the Ukraine intervention by Russia would inevitably attract a sharp response triggered capital flight of $70 billion by the first-half of 2014. It is estimated to touch $160 billion by the end of the year. Russia seems to be staring at a possible recession.

Western sanctions have undoubtedly hurt. The sudden collapse in oil prices from $115 in June to below $60 per barrel choked off the revenue the economy relied on. But it is the price tag of the military operation in Ukraine, though difficult to precisely compute, which has possibly hurt even more.

A US Senate bill (Ukraine Freedom Support Act), which is yet to get the nod from the White House, could exacerbate matters as it would introduce fresh sanctions and also deliver US military hardware to Ukraine. This has delighted Kiev and prompted Moscow to threaten retaliatory sanctions.

Putin is now in the bad books of Washington and its allies. At the recent G20 summit, he was severely criticised for his actions in Ukraine. Furthermore, the host of the summit, Australian Prime Minister Tony Abbott, threatened to confront him on the downing of a Malaysia Airlines aircraft by suspected Russian backed militia, killing all its 238 passengers, 38 of whom were Australians.

Russia denied any involvement. Bizarrely, just days before the summit, Russian warships entered international waters off the Australian coast and when quizzed, the Russian embassy nonchalantly said it was to test the fleet's range and to protect Putin. Abbott was, understandably, outraged and said that Putin was trying to re-create the glories of the former Soviet Union. UK PM Cameron, equally furious, said Russian actions in Ukraine were similar to those of expansionist Nazi Germany. In the face of mounting criticism from his counterparts, Putin left the summit.

The West's ostracism of a Putin-led Russia will push Moscow to 'Look East'. Washington's Asia Pivot policy would, most certainly, face a serious strategic challenge if there were a Beijing-Moscow alliance in the Asia Pacific region. China realises that Moscow is currently vulnerable and will take advantage of the situation. For Beijing, this would be the ideal 'axis of convenience' to counter Washington. It would turn the Pacific into a new Cold War arena, setting the stage for long-term instability in the region.

In this context, the State Department's annoyance at Putin's 22-hour visit to New Delhi as part of annual summit level bilateral meetings is surprising. Surely, Washington realises that in diplomacy, making new friends does not mean that you abandon old relationships. Furthermore, recent developments of warming Moscow-Islamabad relations, particularly on the defence front, including joint naval exercises and counter-terrorism, are a cause of genuine anxiety for New Delhi. Distancing Moscow will seriously jeopardise India's security and defence architecture. Isolating Putin does not help. What the US and its allies need is a strategy based on risk analysis. All they now appear to be doing is reacting. This will have serious implications.

By: Amit Dasgupta