Randy McDonald (rfmcdpei) wrote,
Randy McDonald
rfmcdpei

[BRIEF NOTE] Ukraine's Estonian Example

Earlier today, frumiousb blogged about the recent decision of Russia to cut off Ukraine's gas shipments. This effort is now abandoned, since the Russian government apparently didn't take into account that cutting off gas supplies to Ukraine would antagonize the entire European Union. frumiousb's central conclusion, that the Russian government wanted to punish Ukraine for its post-Orange Revolution reorientation with rapid steep fuel increases, does seem sadly plausible to me in an era when Russia under Putin seems to be heading for a revived authoritarianism coupled with reckless domestic and foreign policies.

Ukraine seems bound to pay for its renewed independence. It is far from evident that these effective sanctions will harm Ukraine in the long run, in fact quite the contrary. Take a look at Estonia. Soon after that Baltic state regained its independence, Russia levied heavy duties on Estonian imports in retaliation for Estonia's citizenship policies, which granted automatic citizenship only to people who were citizens of Estonia in 1940 or were descended from said, and which required all other residents--including the one-third of the population made up of Russophone Soviet-era immigrants--to meet certain stringent requirements for residency and language fluency to become citizens. The Russian sanctions hurt the Estonian economy in the short term. It also accelerated the rapid reorientation of Estonia's foreign trade and economy, from one geared towards trade with the Russian Federation to one closely integrated with northern Europe. More, those heavy industries and regions most closely geared towards the Russian market tended to be staffed disproportionately with Russophone workers.

The final result, in Estonia's case, is a prosperous and modern economy that is now highly integrated with that of the European Union, Russia regularly ranking behind Sweden, Finland, and Germany as a trade partner. Russia's trade sanctions caused some pain to Estonia, but in the long run it ended up drastically diminishing Russia's potential leverage over Estonia. Even the Russophones that these sanctions were supposed to help seem decidedly disaffected from Russia, more interested in Estonian capitalism than Russian nationalism. If Russia tries to take the same tack with Ukraine--a likely inevitability, it seems--not only will Russia's relationship with the broader European Union be threatened, but Ukraine's integration with Europe and detachment from the former Soviet space (economic, cultural, mental) will be accelerated.
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