Books: "Punishing Putin" By Stephanie Baker

 

Punishing Putin: Inside the Global Economic War to Bring Down Russia

By Stephanie Baker

Scribner; hardcover, 368 pages; $29.99; available today, Tuesday, September 10th

Stephanie Baker is a veteran journalist who is an award-winning investigative reporter at Bloomberg News. She began her career reporting from Moscow during the 1990s, which was an unpredictable period of social optimism, economic opportunism, and chaos that sent Russia into disarray in the wake of the end of the Cold War. Since 2018, Baker has chronicled the rise and fall of Russian billionaires and written extensively about the sanctions placed on Russia. 

In the engrossing new book, Punishing Putin, Baker examines the unprecedented economic war that the United States and Europe waged on Russia after it invaded Ukraine in February 2022. President Biden announced sanctions against Russian banks and its elites within hours of this unprovoked attack.

Over thirty countries, representing over half of the global economy, sought to isolate a major economic power. Russia became the most sanctioned country in the world after the invasion, as there were over 19,000 designations of individuals and entities in place, from the United States to Canada, the European Union, United Kingdom, Japan, Switzerland, and Australia. Before this, Iran was the only country that came anywhere near sanctions of this scale, and its economy pales in comparison to Russia, and is certainly not as integrated into the global economic system. 

Baker also points out that Russia's vast natural resources give it an inherent advantage, as they prevent them from ever being truly shut out of the world economy. Russia reshaped the global oil market to find new buyers, such as India, which has opened a backdoor route for Russia to sell hydrocarbons globally. This also leads to the influence China has had backing up the Russian economy by buying oil and exporting semiconductors, and this has also dented a lot of the effect of the sanctions.

To complete the full scope of the strategic planning, global economic risks, and behind-the-scenes machinations that shaped this high-stakes poker game, Baker includes exclusive details from over 100 interviews she did with Western diplomats, Russian oligarchs, crooked bankers, and anonymous tax experts. 

This is just one of several areas Baker breaks new ground on a story that made worldwide news. She reveals the comprehensive and coordinated strategies that the West employed to cripple Russia's economy and war machine. This was a financial experiment that was a global financial risk and could have led to a potential recession caused by these economic sanctions. These economic strategies are reshaping global alliances and influencing the world order for years to come. She also looks at the ongoing nature of the sanctions and their evolving impact, including recent enforcement actions and how they've affected Russian oil transportation. 

This economic war is covered, from the power centers in Washington, London, and Brussels to sanctioned oligarchs taking desperate measures to keep their assets, including mansions and superyachts. This is something Baker saw evolving, as over the past three decades, sanctions became a pivotal tool of Western foreign policy, as economic sanctions have become fused with national security. 

A possible purpose for the billions of dollars of frozen Russian assets could be to help the reconstruction of Ukraine, which the World Bank estimates will take at minimum $486 billion. It all goes back to the Central question Baker has, which is "Who will pay for Putin's catastrophic invasion?"

Baker writes of how we got here and what could be coming in this battle, "Putin's strategy is to wage a war of attrition, waiting until the United States and Europe tire of supporting Ukraine, and hoping that Biden would be replaced by Donald Trump, who has vowed to end the war in a day. The argument that sanctions aren't working is in fact a key plank in Russian propaganda aimed at undermining support for maintaining the restrictions in the West.

"Like a protracted land battle, the economic war has seen both advances and retreats. Though the sanctions haven't been as crippling to the Russian economy as some thought at the outset, Putin is bankrupting Russia, sacrificing the country's long-term prosperity for short-term gains. The Kremlin more than doubled defense spending to a level not seen since the collapse of the Soviet Union - it's now more than a third of all government spending. That's boosted growth but it all depends on Russia being able to sell its oil at lofty prices while the West tries to squeeze the Kremlin's revenues. Russia has already lost an estimated $168 billion in oil and gas export earnings in the first two years of the war because of Western restrictions and Europe finding other sources of energy.

Pressure from sanctions cause the Russian ruble to tumble almost 45 percent by the second anniversary of the invasion from a wartime high in June 2022. Perhaps most important, hundreds of thousands of Russia's best and brightest have left the country, a brain drain that will hobble the country for years to come. U.S. deputy secretary of the treasury Wally Ademayo has argued the goal is to put 'sand in the gears' of the economy, not end the war in one fell swoop. Sanctions were never meant to be a magic bullet. Rather, the economic war was designed to work alongside the military one, to undermine Putin's ability to fund his military-industrial complex while arming Ukraine to give it the best chance of heading off a Russian victory. On both fronts, the West has moved too slowly, adhering to a path of gradual escalation."