OK, when Putin starts venting his frustrations over the Ukraine morass by aligning with Harry Potter, you know things aren’t going well for him.
Vlad got so mad this week that he went on a televised rant against, among other things, Western “cancel culture,” using Harry Potter creator J.K. Rowling’s tussle with transgender advocates over “so-called gender freedoms” as an example. He then went on to accuse the West of trying to “cancel” Russia. He’s trying to do anything he can to rally Russian citizens around him, even using the hero of Hogwarts as a second-hand proxy in his crazy war (for the record, J.K. tweeted that he should mind his own business).
In one sense, you can’t blame him. Putin’s world has been turned upside down over the past 30 days. Not only did he fail to achieve his “lightning strike,” but he also catalyzed a global response that has been stunning in its scale and scope. Just last month, the world seemed to be slowly stumbling out of its pandemic quarantine, rubbing its eyes, and wondering where to go next. Then Ukraine happened. It not only galvanized the world around a military and moral crisis — it also created and magnified enormous changes in the established world order. War will do that, especially one of this nature, where crimes against humanity are broadcast 24/7.
Change of the magnitude we’ve witnessed over the last 30 days doesn’t really happen that quickly. As Eddie Cantor once said, “It takes 20 years to become an overnight success.” But Ukraine prompted a global response which, in turn, accelerated some trends that had been percolating during the pandemic and even earlier. Ukraine just gave us a little push over the edge. Consider these fundamental shifts in the tectonic plates of geopolitics, business, energy and other areas.
The Waging of War. On the ground, the Ukraine war is brutal and horrific, not a whole lot different than urban warfare has been over the past century. Whole blocks have been bombed to rubble. Civilian casualties are in the thousands. It’s created one of the largest waves of refugees in European history. Tactical advantage is still decided by a bullet, mortar or missile, but the big change is in economic strategy, where Russia is being pummeled. About 30 countries, at last count, have levied economic sanctions against Russia — everything from being kicked out of the global SWIFT payments network to shutting down Ikea stores and other Western businesses Russians have grown to love. Economics are always part of war, of course, but the scope, scale and coordination of sanctions against Russia is unprecedented and devastating. You can be sure China is watching all of this very closely.
We’ve also not seen a war quite like this in terms of media coverage. Reports from the ground in cities like Mariupol and Kharkiv have put the war in the palms of our hands, literally. Social media, in particular, is a new and unique player in terms of its impact, highlighting images like this cellist playing a Bach Suite amid the rubble, this pianist playing Chopin in her bombed-out apartment and the little Ukrainian girl we all now love singing “Let It Go” in a bomb shelter. Or this image symbolizing the babies who have been murdered by Russian missiles. The use of social media has been a key element in galvanizing global response to the war.
Russia’s Global Standing. In 2012, Russia became the 156th member of the World Trade Organization, which followed its accession to the G8 in 1997. McDonald’s opened in Moscow in 1990. It wasn’t exactly kumbaya, but for more than two decades following the collapse of the Soviet Union, Russia aspired to join the world community, at least economically. Putin’s growing imperialist aspirations got the better of him and in 2014 he took back Crimea, which started his long rollback of liberalization. Ukraine put a dagger through its heart. Russia has secured its status as a pariah, an untouchable, among a majority of the world’s countries. It’s likely we’ll see Elon Musk colonize Mars before Russia regains any semblance of global stature.
Energy Security. The U.S. and the EU announced an agreement this week to increase imports of American LNG (liquefied natural gas) into Europe by an order of magnitude. Finally. No one likes to be an armchair quarterback, but you could almost see Europe sleepwalking into this dilemma by allowing its dependence on Russian energy imports to continue growing, accelerated by the construction of the Nord Stream 2 pipeline.
Now Europe has become woke about energy and is doing everything it can to deny Russia market access, thereby fortifying EU’s energy security. It won’t happen overnight — LNG infrastructure takes billions in capital, a sustained regulatory commitment and years to build, but it will happen. In the meantime, Europe is furiously trying to plug the gaps with other measures, including using more coal in Italy (unfortunately) and accelerating the development of renewable resources. By the way, China is now the world’s largest LNG market and is probably entertaining some scenarios about what might happen if those imports are cut off.
NATO. About three years ago, France’s President Macron declared NATO “brain dead.” We all remember what Trump thought about NATO. But, as Mark Twain would be pleased to note, reports of NATO’s death were greatly exaggerated. It rallied to the cause of Ukraine with energy and alacrity. Some might argue that NATO is being too cautious by not supplying Ukraine with more troops and weapons, but it’s walking a fine line between tactical support and poking a bear that’s sitting on a nuclear arsenal. No one today can doubt the unity and resolve of this once-moribund organization.
Globalism. Even as NATO has come together, it seems like the old model of globalism is rapidly disintegrating. The inchoate alliance between China and Russia that had been forming as both countries retreated to insular, nationalistic postures reached full fruition at the Winter Olympics when Putin and Xi declared themselves best friends forever (Trump’s “America First” rhetoric may have played a role too). The incumbent vision of globalism was defined by Tom Friedman’s “McDonald’s Rule,” which said that two countries where McDonald’s did business would never go to war with each other because getting rich and eating a good cheeseburger trumps all. Forget that one!
The most evident and far-reaching change in the globalist model is in supply chains. Since the 1990s, global supply chains have been built around cost, with manufacturing flowing to the lowest bidder. Southeast Asia, China and India became the working class of the world. Wages caught up, which started shifting the tide, but supply chains will be irrevocably changed by the pandemic and now Ukraine. They are realigning themselves not around cost (although that will always be important), but around resiliency. Supply chains are evolving into supply webs.
As mentioned above, even with all this change, some things stay the same. Human misery, for one. Thousands dead, millions uprooted, essential services destroyed. While technocrats and world leaders whiteboard their response, these tragedies continue. But so too does human courage and determination, which is on full display in Ukraine, from the president to 7-year-old girls. It now appears that Russia has been the first one to blink in this standoff as Ukrainian pride and perseverance prevail. Thank God some things don’t change.