The Ukraine standoff as a harbinger of broader shifts in the global order

Russian President Vladimir Putin

By Daniel Rakov

Russia’s concerns include the enlargement of NATO and the subsequent deployment of forces and weapon systems near its borders. Although U.S. President Joe Biden has been trying to position U.S.-China competition at the forefront of the international agenda, far ahead of any other issue, the Ukraine crisis initiated by Putin in recent months has pulled the rug out from under his feet by taking the pressure off Beijing.

This crisis proves that Biden’s Russian policy has reached a dead end over the past year. Since the Russian annexation of the Crimean Peninsula in 2014, U.S.-Russian relations have effectively been in free fall.

In mid-2021, a Strategic Stability Dialogue (SSD) was launched to reach new agreements on nuclear arms control and cybersecurity. Biden assessed that a cautious dialogue coupled with a policy of containment would enable him to stabilize U.S. relations with Russia and thus slow down the process of Moscow’s growing proximity to Beijing.

The problem is that Biden wanted Russia to assume a role that is not part of Putin’s vision of Russia’s global importance. At the same time, Russia perceived the sluggish dialogue between Washington and Moscow as an attempt to evade any genuine discussion of its material demands.

The current standoff embodies a conflict between two worldviews: Putin’s realistic approach, demanding acknowledgment of Russia’s special status in Europe due to its power, compared with the Western liberal system that champions the right of states to determine their fate. However, in Putin’s view, liberalism has long been used by the West as a disguise to justify ousting Russia from a position of influence in the states of the former Soviet Union and Eastern Europe and to undermine Putin’s regime by constantly applying pressure for greater democratization.

Former President Barack Obama’s dismissal of Russia as merely a “regional power” in 2014 represented the establishment view in Washington that Russia was a secondary-level threat. The paradigm of Russia as a declining power is a common misconception, which ignores its relative strengths and attributes too much importance to the size of the Russian economy compared with that of China and the United States.

However, it is more appropriate to measure Russia’s largely autarchic economy in terms of purchasing power parity rather than gross domestic product (GDP). In 2021 Russia’s nominal GDP was estimated to be $1.6 trillion (11th globally). Still, the purchasing power was estimated at $4.3 trillion (sixth globally after China, the United States, India, Japan and Germany).

Another deceptive figure is Russia’s defense budget of $60 billion, a mere trifle compared to the American $800 billion budget or China’s $250 billion. In practice, however, Russia, which domestically manufactures all of its arms, has the equivalent of $170-200 billion available to it annually.

Moreover, in contrast to Western armies, most of the Russian defense budget is used to procure state-of-the-art weaponry rather than pay salaries.

Russia currently boasts the most extensive and best-equipped conventional military in Europe, and with considerable combat experience. In addition, it has a nuclear arsenal comparable to that of the United States. Moreover, Russia has successfully translated its leading role in commodities markets, such as oil, gas, metals and grain, into political levers.

Russia has become relatively immune to Western sanctions to which it has been subjected for numerous years, as can be seen by its low national debt, foreign exchange reserves of over $600 billion, and a “comprehensive strategic partnership” with China (in the energy market, an alternative financial system to the West, and a source technology imports).

As far as the Kremlin is concerned, the current standoff is a perfect opportunity to maximize Russia’s strengths, while its rivals are forced to contend with multiple, complex challenges simultaneously. Following the hasty and somewhat chaotic U.S. withdrawal from Afghanistan, the Biden administration has been perceived as shying away from the use of force. It has already made it clear that it will not fight for Ukraine.

The Biden administration has failed to promote comprehensive reforms on domestic issues due to its thin majority in the Senate. The electorate is beginning to feel the impact of rising inflation due to high energy and commodity prices, which Russia also influences.

As usual, America’s European allies are divided. Although they believe that Putin’s demand to close the door on NATO expansion should be rejected, they express concerns that biting sanctions will hurt them much more than the Americans due to their economic and energy dependence on Russia.

Further, Ukraine fully understands that it will be left alone to face Russia if war breaks out. The ongoing standoff erodes public support and economic stability in Ukrainian President Volodymyr Zelensky’s government.

Whether Putin decides to wage war on Ukraine or prefers to adopt the diplomatic path, time seems to be on his side. The multiple diplomatic moves and slow buildup of forces are designed to obscure Russian intentions and undermine Western unity. This path also serves to pressure the West for concessions.

The current crisis might have a historical impact on European security similar to the results of the Second World War or the dissolution of the Soviet Union. It will also project on the global dynamics when Moscow seeks to draw closer to Beijing, giving it a stronger hand to play with Washington and Brussels.

Israel, too, should try to look beyond its own domestic and regional challenges and analyze the implications of the developing strategic shifts in the international community.

The expected damage to Israel’s Western partners’ power in favor of Russia, at least in the eyes of Middle Eastern actors, reinforces the need to maintain channels of dialogue with Moscow but might also bolster Western support for Israel’s actions in the region.

Daniel Rakov is an expert on Russian policy in the
Middle East and great-power competition in the region. This article was first published by the Jerusalem Institute for Strategy and Security.


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