The Russians will face the weaponisation of sanctions while the Europeans will face the weaponisation of energy
By Gautam Chikermane
In the ongoing geopolitical trend, when every part of the global economy has been turned into a strategic weapon to be deployed as part of a great power game, the reimagining of globalisation that has benefited almost all citizens of planet Earth is being scratched away. A deglobalisation wave is underway that ironically has globalised high food and energy prices and created an atmosphere of slowing global growth in most large economies. While the power elite shoots these weapons from protected and collective confines, the powerless citizens stand vulnerable and deal with change at individual costs, who after outsourcing their collective power are unable to negotiate together.
On 2 September 2022, Russia indefinitely suspended Nord Stream gas to Europe. This act is going to wreak havoc on a continent that has been used to cheap and steady energy flows. Call it the weaponisation of natural resources as a reaction to the weaponisation of wider sanctions—for instance, Russian banks being denied access to SWIFT—this will play out across two timelines. In both, the people on behalf of whom the weaponisation has happened will suffer.
Over the next six months, instead of gas, Russia will export an idea that Europe has long forgotten— discomfort. To borrow from the clinical manual for nursing practice that asks patients to describe the intensity of pain from 0 (no pain) to 10 (worst pain imaginable), an entire continent will be writhing in discomfort between October 2022 and April 2023. For citizens of northern Europe, the pain will be 7 to 10, severe. In southern Europe, it will be 4 to 6, moderate. In between will be islands of hyper-pain and no pain.
This pain will create eddies of solutions that will impact national political narratives. These will include but not be restricted to compromising and manipulating basic stances of clean air that the West expects from developing countries. The blackest of all pollutants, coal—on which India has been routinely shamed—will stage a clean comeback and drive power with a vengeance, as Berlin, Rome, Vienna, and Amsterdam plan to.
Driven by the politics of discomfort, new narratives as extensions of the western elite will support the entry of coal and nuclear plants. And through this, stain the clean moralities of the past. The pain of inconvenience will ensure that these narratives are swallowed whole. On the upside, there is a fair chance that this transition may create more respectful geopolitical conversations outside.
On the other side, Russia which is inflicting this pain as part of its strategic design will remain unaffected in the short term. In a conflict that is expected to last longer, 12 to 24 months of gas-free revenues to a nation already under great financial stress will not matter. Further, even though Moscow may not feel the pressures of politics of the sort that Berlin or Rome does, at some point the economic pain delivered through sanctions will begin to pinch. And if we peep into recent history, there are the Russian mothers, who in the 1980s pressured the Kremlin to give answers for their children returning in coffins from Afghanistan, and in 2000 had a face-off with Putin when the nuclear submarine Kursk sank with 118 sons in it. The political system did not overturn then, and it will not capsize now, but under the scrutiny of the weak and the powerless, it will definitely face pressures. It will hurt but will not be debilitating. Exports of gas and oil to China and India may cushion the economic hardship but will not match the demand from Europe. It could also mean a wider trade and investment embrace with China.
Fast-forward to 2024. Over the next two years, Russia would have built new demand chains to China, East Asia, and India, using cheap energy as a lever of opportunity and rebalancing European demand as a lever of risk management. This strategic diversification began as part of geoeconomics eight years ago, when Russia’s Gazprom signed a US$400-billion contract with China’s China National Petroleum Corp to supply gas for 30 years. On the chessboard of power games, Putin was prepared for the recent sanctions. As far as the US-led sanctions go, all they have achieved is a push of its two greatest adversaries, China and Russia, towards one another in a stronger strategic embrace, through the osmosis of cheap energy prices.
But it’s not that the EU will be sitting pretty. By 2024, it too would have recovered and reached a new normal around energy, leaning towards West Asia, and re-evaluating the geopolitics of the region human rights or gender violence, for instance—and will put strategic blindfolds to balance its need for energy security. Double-digit inflation would have created its own ripples of political wranglings. The EU may have managed its gas crisis. But two years is too long a time to expect political maturity from a people not used to the discomfort of high prices or wider implications of economic tensions, leaving aside hardship that is a rising possibility. Discomfort is out of sync with a geography that is now enjoying, and often frittering away, its third generation of inherited colonial wealth. And it is here that the power pinch of democracies will play out while transitioning out of its existing ideological-political disequilibrium to one of stability.
Looming ahead is a population shift. Cities with warmer climes within Europe, such as Lisbon (average winter temperature: 8 to 15 degrees Celsius), Barcelona (9-15 degrees Celsius), Athens (8 to 15 degrees Celsius), or Valleta (10 to 17 degrees Celsius) will see a winter migration from colder cities. As people migrate to work from home for four to six months, these cities will see short-term increases in rentals. Adjusted for shooting energy prices, perhaps, it could make sense to shift, though that economics is still to be worked out. When viewed through the market equilibrium theory, it could make sense to shift. But markets are untamed animals and are governed by their own laws. The strategic game could shift to town planners that can capitalise on this short-term energy politics-led blip and reposition their administrations for doing business in an age of energy uncertainty. Such cities could see a rerating in the long term. Geography could deliver economics and trade.
Taking this argument further, the migratory shift within Europe or more specifically among the EU members could be a start of a larger and longer trend. Citizens could explore going East to geographies where each Euro lives longer. Countries such as Indonesia and Thailand would provide comfortable confines. But if the Indian bureaucracy gets its act together, India could be the go-to destination: It is well-connected; it has scale; its large cities have most of the infrastructure needed to maximise short-stay gigs, and it is growing.
Outside these adjustments, the arena of conflict seems to be heading towards an end. On 17 September 2022, in response to Prime Minister Narendra Modi’s advice that today “is not the era of war”, Russia’s President Vladimir Putin said, “We want all of this to end as soon as possible”. The Russia-Ukraine conflict should inform democratic debates in the region about the futility of power plays. It should tame the aggressive ambitions of China in Taiwan, the South China Sea region, and India. And even as soldiers and citizens face the brunt of these games, leaderships need to evaluate the larger risk-reward equilibrium.
Narratives aside, there are no power victors in this game, only citizen victims.