As the Putin regime mires down in Ukraine 10 days into the invasion, an earthquake of international political changes have already affected the Nordic countries. We also know that the Arctic economic structure will shift significantly – perhaps for the better.
“Ukraine is perfectly situated for the European market. A maximum of two-hours time difference makes nearshoring easy for European companies. The general high skill, educational and technological levels of the Ukrainian workers and companies combined with the low wages makes Ukraine the obvious choice for companies that would like to minimise the risk of producing in China.”
Quotes like the one above have been commonplace in the Ukrainian news outlet for Scandinavian businesses that I edited for more than two years until 1 January 2022, with two Danish journalists based in Kyiv doing the heavy lifting of reporting our stories.
I was chosen in part due to my experience as an election observer in the now occupied Donetsk in the Ukrainian presidential elections in 2010. The election was won by Viktor Yanukovych, who wanted Ukraine to pivot towards Russia. A policy that was overturned after the Maidan Revolution. We saw no election tampering during our observations.
That does not mean that Russia was not heavily involved in trying to shape the future of Ukraine. Running for president in Ukraine at the time meant raising a lot of money to fund the campaign. Think US presidential campaign type money in a country with 20% of the US population and 5% of the US GDP / capita. Raising that type of money meant that you had to ally with one or more oligarchs, who expected something in return. For the Russian – or Russian funded – oligarchs that meant becoming deeply financially dependent on Russia. More like a vassal state than an actual democracy.
The Ukranian people on Maidan would have none of it. They wanted a true democracy without kleptocratic oligarchs pulling the strings of puppet politicians.
As the fictional president in the TV series Servant of the People, Volodymyr Zelenskyy gained massive positive support. The series imagined a Ukraine, with an honest president that did not serve himself and his cronies. To Zelenskyy, the response to the show foreshadowed what could be, and he formed a party of the same name, winning the presidency and the subsequent parliamentary elections in a landslide.
Since his election, Zelenskyy has had to battle multiple attempts by the Putin regime to subvert his efforts through oligarchs friendly to Putin’s regime.
And of course he has. It should come as a surprise to no one – though it seemed to take the US and NATO with their heads in the sand.
At the 2008 NATO summit in Bucharest, the official summit declaration stated that “We agreed today that these countries will become members of NATO.” To which Putin replied that expanding NATO into Ukraine and Georgia would be seen as a direct threat to Russia.
With the Russian position in mind, promising NATO membership in an open-ended process to the two countries is akin to starting a countdown for Putin. A countdown for his regime to stop Ukraine and Georgia from joining NATO with any means possible.
Relatively small and easily fractured Georgia was first on the list, and if NATO and the US had not understood the message the first time around, they should have understood then. The response should have been a massive effort to bring the Ukrainian army up to NATO standards. Training, education and economic support for the purchase of modern weapon systems to increase the deterrent cost of a Russian military intervention.
None of this happened, as we are all painfully aware today.
However, NATO and the US might have analysed the situation as I did. Talking to a PRPI colleague a week before the Russian invasion of Ukraine, I proposed a joint article arguing that Russia would not invade Ukraine.
My thinking was that Putin had already achieved most of what he could have hoped to achieve. The French–German axis in Europe was split, as Germany wrung their hands trying to balance the need for Russian gas with security policy. NATO had shown little resolve, with the US President even briefly opening the door for using only minor sanctions, if the Russian invasion was limited, before walking back on those words. However, the damage to NATO’s standing in the Central and Eastern European member states had been done already.
Having watched NATO and the US flinch in the face of Russian posturing, if you were the leader of say a Baltic country, would you really feel confident enough in US and NATO backing to stand up to Russia? Or would you have to tread a narrow path, appeasing Russia more? Keeping in mind that – with the bipolarity of US politics being as it is – we could be facing another eight years of a Trump or Trump-like presidency starting in 2025.
If I were the leader of such a Russian neighbour state in such a situation, I would choose my words carefully.
The Putin regime had so far violated no international laws in achieving all of this. Actually invading Ukraine would risk galvanising NATO and risk turning Ukraine into a new Afghanistan for the Putin regime. A country of 40+ million people, with a majority favoring an anti-oligarch western style democracy, would be a very tough pill to swallow for a sharply declining former great power like Russia. Additionally, an invasion of Ukraine, with US politics being as it is, might force the EU to become an actual military power in its own right. Then it would not matter to the Putin regime if NATO were at its doorstep, because the EU definitely would be.
“You go to war to win something. If what you stand to gain is less than what you stand to lose, you do not go to war as an aggressor – and Putin has proven to be nothing if not calculating”, I argued erroneously. Perhaps the same error that NATO and US leadership made.
Putin invaded, and so far all of the arguments I made for why Putin would not invade Ukraine have come true. Putin has needed to pass emergency laws to stabilise his shaking grasp on power. The Russian army is taking heavy losses in the face of fierce Ukrainian resistance. NATO has galvanised. Germany has pivoted and will now halt the Nord Stream 2 gas pipe and invest heavily in its military capabilities – as will a number of other European countries. Finland and Sweden are considering applying for NATO membership bringing NATO even closer to the Russian doorstep. Both NATO and non-NATO states have donated a large number of weapons to the Ukrainian defence, finally doing what NATO should have done back in 2008, turning Ukraine into the Afghanistan that helped end the USSR.
Additionally, western sanctions have broken the Russian economy, and while Xi Jinping in China is probably enjoying the current price drop, and Chinese companies will undoubtably get on Russian crude and LNG, Xi will probably be weary of what comes next. A Russian regime collapse replaced with a western style democracy might be the worst of all outcomes for Xi. Which means that Ukraine could turn into a proxy-war between China and NATO, with China propping up the Russian military efforts reducing Putin to being nothing more than a puppet for the Chinese communist regime.
The political fallout is already visible in the Nordic countries. Aside from the groundswell in Swedish and Finnish support for NATO membership, the Danish government initiated snap negotiations for a new Defence spending plan this week, and concluded negotiations on 6 March. In addition to increasing Danish defence spending by approximately 10% per year in 2023 and 2024, the parties agreed on increasing spending each year after that until defence spending reaches 2% of GDP in 2030, up from 1.47% today. The agreement will also send Danes to the polls on 1 June for a referendum on dropping the Danish EU defence opt-out.
The Faroe Islands government has signaled its willingness to join the sanctions on Russia, even if food becomes part of the sanctions, in spite of the fact that a quarter of the Faroese total exports consists of fish exports to Russia.
As a result of the sanctions of the Russian financial markets and following the call from the Greenlandic premier, Greenlandic fishing companies have already ended their exports to Russia.
Perhaps the most telling Arctic result of the Russian invasion of Ukraine has been the other Arctic Council member states refusing to meet with Russia, which means that Russia has effectively been kicked out of the Arctic Council.
“What happens in the Arctic does not stay in the Arctic”. Variations of that quote have been used to describe the effects of climate change, but perhaps it also goes for financial and geopolitics.
All of the Arctic countries will need to find new markets for their fish export in the short to medium term. The Nordic countries – and other European countries like Germany – will need to pivot even faster to renewables to reduce or stop outright the import of Russian fossil fuels. Until we have efficient means of storing renewable energy, nuclear power will be a central part of the European energy mix as well. With China leaning towards supporting the Russian invasion – indicated by Chinese TV only showing Russian media coverage of the invasion – there is a real risk of China being sanctioned at some point as well. This will have a massive impact on every part of the market. Living resources such as fish products are the most immediate concern for Nordic countries like Norway, Iceland, Greenland and the Faroe Islands, but mineral resources like rare-earth elements, iron, copper and radioactive elements might cause even greater shifts, as Europe and the US will want to incentivise production outside of China. The latter requires gaining access to new necessary resources, as China has contractual rights to much of the current resource production.
10 days ago, Putin was the president of a declining former great power that still held significant influence in many policy areas and sway over many of its neighboring countries. Less than 10 days into the invasion of Ukraine, the Putin regime is stuck in a quagmire that displays the Russian military as a paper bear not to be feared by NATO. Tough as the military battles in Ukraine may be, defanged by sanctions and an international pariah, the Putin regime will face its toughest battles at home fighting the Russian population, who will undoubtedly clamour for a regime change with increasing vigour, as each day of sanctions and loss of soldiers passes.
For all the human suffering the Putin regime has brought upon both the Russian and Ukrainian peoples, something good might still come from this. Aside from the hope for a second chance at a democratic transition for Russia, the prospect of a coherent and capable EU backing its soft power with hard power capabilities on a strategic level might just be the best shot we have at a more stable and peaceful international system.