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End of globalization for Russia
Who poisoned Russian oligarch Roman Abramovich? Does Russia's invasion of Ukraine mark the end of globalization? Will Shanghai's lockdown begin to shift China away from its zero-COVID policy? Ian Bremmer shares his insights on global politics this week on World In :60.
First, who poisoned Russian oligarch Roman Abramovich?
Yeah, it's quite a story involved in the Russia-Ukrainian negotiations, and apparently claimed that he was poisoned. And it's interesting, he is, of course, a very well-known Russian oligarch. He's made his billions of dollars, purely because of the support and alignment with President Putin. And he has been fairly public in his concern with opposition to the war. Indeed, one of the reasons why some of the sanctions have been more limited against him than they would've been is because Zelensky, the Ukrainian President, reached out to the Biden administration and said, "This guy's actually being useful to us, and so it would be, you don't want to hit him too hard." And clearly, the Kremlin is angry about that. And so, I have no intelligence at all about who would've been responsible for his poisoning, but if it happened, the list from the Kremlin would be as long as my arm.
Does Russia's invasion of Ukraine mark the end of globalization?
No, but it marks the end of globalization for Russia. And even if we're able to get to a ceasefire, even if we can get a frozen conflict in Ukraine, and increasingly that does look likely to me, in part because the Russian military performance on the ground in Ukraine has been so abysmal and there isn't the general mobilization and negotiations are increasingly reflecting a climbdown from the Kremlin from the military aims that they originally had when they thought they were going to get to Kyiv and take over in a relatively short order. But that's very different from the idea that sanctions will be removed. And even if you unfroze the Kremlin's assets, which I think you could do if you had a negotiated settlement and all the Russian troops verifiably moved out of Ukrainian territory, or very, very far from that, but you're not going to get the Europeans willing to actually invest in Russia going forward. You're not going to see the Americans or the Europeans say, "No, okay, we're comfortable now with Nord Stream 2 or with getting oil and coal and gas from Russia."
So I believe that Russia's relationship with the West, with the advanced industrial economies, is broken irrevocably, and that's a really big deal. The broader question is to what extent that also starts to disalign China more from the advanced industrial economies as well. Now if that were to happen, you'd say that's a tipping point against globalization. We are not there right now. I hope that doesn't happen because the interdependence is enormously important, not just for the global economy, but also for the avoidance of war. But that's a really big question that we're going to be looking at very carefully in the coming weeks.
So finally, will Shanghai's lockdown begin to shift China away from its zero-COVID policy?
Maybe at the margins, but I don't see it. Keep in mind that Xi Jinping really believes that the Americans are massively irresponsible for allowing a million people to die during COVID, and the fact that the Chinese economy is taking a huge hit and a lot of Chinese citizens are being massively inconvenienced by Shanghai being locked down, and it's the biggest city in China. Sothis is a huge deal. And this is after the Port of Shenzhen and the city was closed and Jilin and other places across China.
But Xi Jinping's position is, this zero-COVID policy, it's my policy. I implemented it, and I'm stopping the Chinese from dying. And what we are seeing is that, once they implement a complete lockdown, you very quickly go from symptomatic cases to asymptomatic cases because they're getting much more clarity and transparency in exactly where the COVID has spread, and then they're shutting it down. And the impact on that is, of course, I mean limitations on individual rights and liberties, and it's also a huge economic hit in the country. And it wouldn't surprise me, we're not going to see 5.5% growth, nothing close to that in China this year. But zero-COVID is going to stick, and that's going to be a big problem for the Chinese continually until they get mRNA vaccines and therapeutics that work at scale. They're not close to that right now.
- The Graphic Truth: What does Roman Abramovich own? - GZERO ... ›
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- The Graphic Truth: European reliance on Russian gas - GZERO Media ›
- Will COVID-19 kill globalization? - GZERO Media ›
- Omicron & the undoing of China's COVID strategy - GZERO Media ›
- What We’re Watching: War spillovers, Biden bolstering allies, Modi’s free-trade rethink, Russian defection - GZERO Media ›
- The future of globalization - GZERO Media ›
A Belarusian soldier during a shooting exercise.
What We’re Watching: War spillovers, Biden bolstering allies, Modi’s free-trade rethink, Russian defection
Ukraine war spillover
As President Joe Biden meets with EU and NATO leaders this week, they’ll be talking about how best to prevent the war in Ukraine from spilling across borders. But Russia’s President Vladimir Putin will have much to say about that, particularly as he tries to punish Ukraine’s Western backers for making the Russian military’s job in Ukraine much tougher and for waging war on Russia’s economy via sanctions. On Wednesday, Putin announced that “unfriendly countries” that want to buy Russian natural gas must pay for it in rubles. That would force Europeans hungry for Russian energy to boost Russia’s sagging currency, which would help Putin finance his war in Ukraine. There is already much behind-the-scenes discussion in Europe on how to avoid that problem.
But war spillover can move in multiple directions. In August 2020, Alexander Lukashenko secured a sixth term as president of Belarus by rigging an election. Fed-up protesters took to the streets, and a cycle of protest and repression plunged the country into turmoil until backing from Putin allowed Lukashenko to crush most dissent. Plenty of Belarusians, including tens of thousands who fled to Ukraine and other countries, would still love to send Lukashenko packing. Thanks to the Belarusian president’s willingness to allow Russia to use his country to launch attacks in Ukraine — and the possibility he would contribute troops to Russia’s effort — lots of Ukrainians want him gone too. If the war in Ukraine is fought to a stalemate, and if continuing flows of Western weapons allow Ukrainians to launch a sustainable military insurgency against Russian occupiers, it’s entirely possible that militancy will expand across the border into Belarus. That means Ukrainian and Belarusian fighters working in coordination, with arms flowing from Ukraine into Belarus. That would threaten Lukashenko’s pro-Russian government on a scale he has never faced.
Biden bolsters trade ties ahead of Europe talks
Ahead of President Joe Biden’s meetings in Europe today, the US announced a new trade accord with the UK. The deal will lift US tariffs on British steel and aluminum for “historically-based sustainable volumes,” and Brits will remove their own tariffs on American whiskey, motorcycles, and tobacco. It's the latest effort by the Biden administration to mend ties with US allies — and keep them united with Washington against Russia — by scrapping tariffs imposed by former President Donald Trump (although Canada still resents Biden-approved American subsidies for electric vehicles under the USMCA). The agreement will require UK steel companies that want to export to the US to audit possible influence by China and share their findings with American authorities. Why? To prevent cheap Chinese steel — which remains under Trump-era US tariffs that Biden has kept in place — from finding a backdoor into the American market without paying duties.
Modi’s trade policy U-turn
In another trade policy shift, India’s famously protectionist PM Narendra Modi has been quietly rekindling talks to sign free trade agreements with a handful of countries. After inking an FTA with the United Arab Emirates last month, Modi is now set to sign another trade deal with Australia in the coming weeks. Similar talks are in the pipeline with Canada, Israel, the UK, and the EU at a time when India is eager to attract foreign investment to help the economy recover from the pandemic. But India remains reticent to join big regional trade accords, such as the RCEP — mainly because it includes rival China — or the revamped TPP, which China also wants to join. Also, Modi will be wary of any trade negotiations that could hurt Indian agriculture — even more so after caving last year to widespread protests by repealing laws aimed at liberalizing the farming sector. Upshot: Modi is no longer as protectionist as he was when he came into office, but don't expect him to turn into a born-again free-trader.
What We’re Ignoring: Russia’s first elite defection
Anatoly Chubais was once one of the most powerful men in Russia. In the 1990s, he was a principal architect of the country’s post-Soviet transition to capitalism, with all the opportunity, chaos, wealth, and resentment it entailed. On Wednesday, Chubais, who was most recently serving as Vladimir Putin’s special envoy for “sustainability,” fled the country because of his opposition to Russia’s invasion of Ukraine. Observers have rightly pointed out that Chubais is the highest-ranking official to defect over the war so far. But it’s not quite as big a deal as it seems. Chubais is part of an economy-minded, technocratic wing of the Russian elite that has almost zero influence over Putin’s war and peace decisions. So his departure will hardly alter the Kremlin’s calculus about Ukraine — that would only happen if people with epaulettes, judo uniforms, or telltale brooches start heading for the border. That said, Chubais’ fate will be watched closely by one group of people: others in Russia who may be considering defection and who want to see how he’s treated abroad. Will he be welcomed as a defector, or ostracized for having served Putin for so long?The Graphic Truth: What does Roman Abramovich own?
Of all the Russian oligarchs facing Western sanctions over the Kremlin’s invasion of Ukraine, one name stands out: Roman Abramovich. The owner of Chelsea FC soccer club used to be one of the world’s richest men, but recently he’s seen his net worth slashed by almost a third to about $8 billion and had most of his assets frozen. We take a look at all the nice things Abramovich has — but can’t touch while sanctions remain in place.
Footage released by Ukraine's defense ministry allegedly shows a convoy of Russian military vehicles near Kherson.
Russia takes its first big prize
Russian forces on Wednesday captured their first city since the invasion began, taking control of Kherson. Holding the southern city creates a fresh bridgehead for Putin’s armies to advance north on strategic areas in central Ukraine. Home to 290,000 people, Kherson under Russian military administration could also set the tone for how a wider occupation might go. Fierce fighting continues, meanwhile, around Kharkiv and Kyiv.
Meanwhile, at the UN, 141 of the organization’s 193 members supported a resolution condemning Russia’s invasion of Ukraine. Usual suspects Eritrea, Belarus, Syria, and North Korea all voted with Russia while Moscow’s most important ally, China, abstained. Brazil notably voted for the resolution but remains opposed to the “indiscriminate application of sanctions.”
In Russia,more than 600 people were arrested at anti-war protests in Moscow, St. Petersburg, and several smaller cities. The latest demonstrations came just a day after the government shuttered TV Rain and the radio station Echo Moskvy, two of the last independent outlets in the country.
Worse could come. On Friday, Russia’s upper chamber will hold an unscheduled meeting that some Russian experts warn could be about implementing harsh wartime measures, including martial law, which would restrict Russians’ movements and communications. There have been scattered reports of Russians encountering resistance from border officials as they seek to flee the country.
In a sign of growing pressure from sanctions on Russian oligarchs, Roman Abramovich confirmed Wednesday that he would sell the multi-billion dollar London-based Chelsea Football Club and donate the proceeds to a fund for “victims of the war in Ukraine.” Abramovich is not on the UK sanctions list, but calls to put him there are growing louder. Several other prominent oligarchs have called for an end to the war in recent days.