The Context S05E07: Ukraine Will Win

Russia's attack against Ukraine is the largest conflict in Europe since World War Two. There are countries that believe to be far enough to be able to ignore it, or to take a balanced stance without taking sides. They are wrong.

In today's globally interconnected world, these conflicts have repercussions, the geopolitics of war in the 21st century leaves no one untouched.

Putin decided to attack Ukraine in an attempt to incorporate it into a newly forming empire. This attempt is being fought on the ground, with people dying. It is unclear how it will end and how much it will last, but ultimately Russia will not win.

Ukraine didn't surrender. It wasn't just a rebel province that had to be controlled. It is a proud, independent nation. After the USSR fell, it has rebuilt an identity and a desire for self determination that doesn't contemplate being controlled by another country.

Over the next weeks and months, Russia will keep bombarding and destroying Ukrainian cities. The determination of the population will be crucial: if Russia is able to eliminate current elected Ukrainian government, they will install a new one who will be friendly to them.

But even if they were to declare victory with this government in place, that will not mean that they will have conquered Ukraine as a country.

Putin's decision has fundamentally undermined his own rule, and has inflicted lasting damage to the political, economic future of Russia. The consequences are far reaching.

Already, it has caused Europe to exhibit a cohesion and an ability to quickly decide on important factors that no one expected. Europe could go even farther.

It currently does not have a European level military, it could decide that parallel to NATO, the transatlantic alliance with the United States, it should indeed have a European level military and in order to fund it, it could decide that it needed a European level taxation.

Both of these would require new treaties. That would, as a matter of fact, re-found the European Union. But in times of crises, these decisions could be taken.

Russia is not going to be strengthened by this conflict at all, it will be weakened in a situation where it has already been weakened by decades of kleptocracy, and a corrupt regime.

The Russian economy is excessively dependent on exporting raw materials, such as natural gas, exactly because it hasn't been able to develop a healthy system of growing technologies, of growing service industries that would support its population, both internally and externally.

There are exceptions, but overall, the Putin regime has weakened the economy that today excessively depends on those exports that this conflict will undermine. It will take maybe 10 years, but Europe is now disentangling its energy future from natural gas coming from Russia.

The next steps for Russia are clear. Can it support Putin, with further conflict, further decline, further economic suffering, actually accelerating? Until how many months and years before both the Russian population and oligarchs will find a way for a regime change internally?

Now this change may not be actually towards an enlightened, democratic, open, constructive set of new rulers. It could be worse than before, more ruthless, more dictatorial, more closed towards the external world.

What is sure is that the demographic trend that has contributed to the decline of the Russian population, is going to further accelerate. Russia runs the risk over the next 20 to 50 years of approaching extinction level population declines.

China and India are smugly sitting on the sides. China is saying cynically: “If we cannot trade in Dollars due to Russia being under sanctions, maybe we can trade in Yuans instead. We just introduced the digital Yuan; isn't this a convenient way of modernizing our economic ties?”

India imports almost all of its weapons from Russia. And as the United States strengthened its ties with Pakistan in its fight against Afghanistan and the Taliban, India, the largest democracy on the planet, decided that cozying up to the Russian dictator was a good choice.

During the Ukraine-Russia conflict they are pretending that they can afford not to take sides. That democracy and the democratically elected government is not worth supporting and defending, even with just a declaration of principle.

The biggest surprise for those that don't look at the conflict in the broadest possible context is that the sanctions are going to hurt the US in the long term, because the dependence of so many countries on systems controlled by the US is going to become very clear.

The payment system that banks use, called Swift, out of which the Russian banks have been excluded. But also the internet itself, where the Domain Name System is practically controlled by the US.

And over the course of many years, decentralized and trustless internet system that is not controlled by ultimately any nation is going to be the outcome.

Whether it is the production of microchips in China or Europe, whether it is the development of alternative payment systems, why not, based on cryptocurrencies and the Blockchain, but at least central bank digital currencies like the digital Yuan.

Maybe it will take 10 years, but that is what is going to happen. Over the course of the next few weeks, we will see a lot more people dying. And we will see conflict going on. But Ukraine will come out of it winning, and their aggression and suffering will cease.

Watch TheContext S05E07 "Ukraine Will Win" for more detail of this argument.

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