What Should Russia Do About Ukraine?

First must come the realisation that Russia failed…

And I mean failed, not lost, because to lose, Russia would have to put up a real fight. Russia failed to keep a country in her sphere of influence, where the majority thinks and speaks in Russian, which was linked to Russia by centuries of common history, had deep industrial and trade links, not to mention familial ties. And that’s quite a feat…

Anatoly Karlin thinks Russia should strip mine human capital from Ukraine the way China is doing with Taiwan. This may as well be on the table in near future. But I am skeptical about Ukraine’s ability to produce quality human capital. Ukraine ranks way lower than Russia on World Bank’s Human Capital Index, and as Karlin himself noted, does not invest enough in education.

Also, derussification will cause the pool of eligible Ukrainian talent to shrink. Taiwan never thought of replacing Mandarin education with local vernacular, and trade between China and Taiwan has been doing fine, which one cannot say about trade and cooperation between Russia and Ukraine. Russia would be better off increasing the natality of its own intellectual elite, or might as well import Indians.

But back to why Russia failed to maintain good relations with Ukraine? Recent video (if you speak Russian, watch and enjoy) by Tet’yana Montyan reminded viewers that it was RSFSR, which first declared sovereignty, not UkSSR. The builders of capitalism have shed the deadweight that was the empire generations of Russians have built since the eighteenth century. The elite of the nineties, which destroyed USSR, is still very much in power today, and they will not let something like Russia’s geopolitical interests get in the way of business.

This chart compares USSR republics according to production and consumption. While Russia and Belarus were net producers, Ukraine was a consumer.

Let me give you few examples of how Russian elite conducts business to the detriment of interests of the Russian Federation. Last year, the former wife of Dmitry Peskov, Ekaterina Solotsinskaya, who found a cushy place as the Head of Paris division of Rossotrudnichestvo, denied entry to writer Zakhar Prilepin, saying he is a “Donbass terrorist”. It later turned out that she was investing in Paris properties, and of course could not let Prilepins of this world to get in the way of business. Luckily Solotsinskaya was deposed.

Actor Mikhail Porechenkov is an avid supporter of Donbass rebels, and he says he is being called off from roles that he already has been booked for. Certain producers cannot have their way to Cannes, or at least to Odessa, blocked by “Donbass terrorists”. But should such producers be financed by the state, as they usually are in Russia? Finally, I can mention there are more Sberbanks in the Czech Republic than there are in Crimea. Clear sign German Gref is more interested in business abroad than geopolitical interests of Russia.

Not all Russia’s elite is like this, I heard in 2014 it was Glazev who supported the seizure of Crimea, while Shoigu warned against it, and Glazev won. But Russia clearly suffers from a split personality, and that’s why she fails. And at this point, any fantasies about USSR 2.0, Russian Empire, or Aziopan Union are impossible to successfully realise.

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