Echo Of Stalin’s Last Laugh: Is Ukraine Headed The Georgia Way?

The Ukraine crisis has entered its fourth year after grinding wars of attrition, the return of First World War-style trench warfare, crippling sanctions, a resurgence of the Cold War mentality in the West, and the trappings of a new Soviet autarky in Russia.

Trump's efforts at playing the peacemaker have not turned out well, in part because of the collective West nudging Zelensky for being irrationally intransigent, and in part because of the policy paralysis, decisional deadlock, and vested interests of the weapon companies.

Now, with Ukrainian Kamikaze drones destroying as many as 40 Russian bombers under Zelensky-led Operation Spider Web, the war enters a new phase. All hopes for a deal and ceasefire have evaporated.

The promised zeitenwende (turning point) of the former German Chancellor Olaf Scholz didn't exactly arrive as anticipated. Although Germany is embarking on re-armament and Rheinmetall stocks are soaring, the country still faces slowing growth, a sluggish economy, and is fraught with domestic political problems.

Move over the 'collective West' that vowed to stand firm behind Ukraine. The rupture between European and American priorities and differences regarding the future of Kiev is tangible.

From Minsk to Astana, and Riyadh to Istanbul, so far the various parleys between Russians and Ukrainians have failed, because, to paraphrase Henry Kissinger on the intractable Israel-Palestine conflict, "the minimum that one side asked was more than the maximum the other is willing to cede."

For the Kremlin, the annexation of Crimea as well as the four oblasts in eastern Ukraine, home to a majority Russian-speaking population, is a cartographic fait accompli. While Kiev wants nothing less than a restoration of the pre-2014 status quo ante.

There's no middle ground, and Moscow seems to be in no hurry to ink a deal unless it extracts security guarantees as well.

Vladimir Medinsky, the Russian historian and one of Putin's chosen interlocutors at the recent peace summit in Istanbul, stormed out of the room after hearing Ukrainian demands, saying, "We are ready to fight for 21 more years."

Russia won't accept any deal that doesn't acknowledge its territorial gains and include explicit guarantees against Ukraine's NATO membership, which has been nothing but a ruse ever since George W. Bush broached it at Bucharest in 2007.

Despite SWIFT sanctions and $300 billion in frozen assets, military Keynesianism, import substitution, as well as shadow oil fleets are keeping the Russian economy buoyant.

Due to a mix of capital controls, high interest rates, and forex restrictions, the Russian Ruble has surprisingly emerged as the world's best performing currency this year till now, as per data by the Bank of America.

Russia, after all, is a country with a robust manufacturing base, surplus energy, minerals, metals, as well as engineering and scientific prowess. Moscow is also inured to shortages, sanctions, and even utter collapse. The economic impact of the 1991 Soviet collapse was more disastrous than the 1930s Great Depression in the US, as per many leading economists.

More importantly, Russia is not well integrated with global supply chains. This causes inefficiency and bottlenecks, but also insures against the downsides of connectivity and integration: excessive dependency, unpredictability, and butterfly effects.

“If you are the Netherlands and are subjected to Russia-like sanctions, you would collapse in three months. If you are Chad and are subjected to the same sanctions, you will hardly notice them. High technological level and interdependency make you fragile,” the Serbian-American economist Branko Milanovic wrote on X in 2022.

"Europe runs low on weapons, Ukraine on fighters, the U.S. on patience, and transatlantic unity frays," says a report from the newly established JPMorganChase Centre for Geopolitics.

Interestingly, the forecasters at MorganChase believe that some sort of a deal would be reached by the end of Q2 this year, which I find rather hard to believe.

The most optimal scenario for the future of Ukraine, with 50 percent odds as per the report, is being similar to Georgia, once an aspirant for EU and NATO membership, which has since done a turnaround and is now friendly to Russia once again.

As per the global bank, 15 percent of Georgia's GDP, whose economy is less than 15 percent the size of the US state of Oklahoma, comes from remittances sent from Russia. Moscow also accounts for significant tourism revenue.

Tbilisi, with its share of color revolutions, five-day war, flaring separatism in South Ossetia, and a former president sentenced in absentia for corruption who now heads an executive reform committee in Ukraine, is now again in the Kremlin orbit.

It's noteworthy that prior to the Maidan uprising and the conflict in the eastern regions of Donbass and Lugansk, Ukraine was a seller of cut-rate Russian gas.

Dependency and Rivalry

As per estimates, Ukraine earned around $3 billion each year just from charging transit fees from Russian pipelines. Gazprom, the state energy behemoth, alone paid $800 million. Gas was a contentious issue between Moscow and Kiev, but both reached a modus vivendi, however imperfect.

The overthrow of pro-Russia Viktor Yanukovych, the head of the pluralist Party of Regions, and the increasing virulence of Ukrainian Nationalists who see the nation as a monolith changed the scenario forever.

Robert Putnam, the American political scientist, described the glaring economic and cultural differences between north and south Italy. The same is true of Ukraine.

The eastern part of the country, dotted with creaking and rusted Soviet-era factories, was known for defense and space, mining and metallurgy, avionics, shipbuilding, and nuclear power plants.

In a 2014 article for Al Jazeera, Vladimir Golstein, Professor of Slavic Studies at Brown University and a global scholar, described eastern Ukraine as 'Marx's Last Stand' due to industrial relations of production shaping society, and most of the disturbance and disruption arising due to the vacuum left by the collapse of the Soviet state.

Leonid Kuchma, the Yuzmash rocket factory boss turned second president of Ukraine, wrote a book titled Ukraine is Not Russia. Kuchma stressed the complexity of Russo-Ukrainian relations, stating that while post-Soviet Ukraine is certainly not Russia, there's a strong need for the country to define itself in terms of what it is, rather than what it is not.

Ironically, Western Ukraine, which is mostly agrarian, includes territories annexed by the Soviet Union from Poland, Hungary, and Romania. From the mountains of Transcarpathia to the flatlands of Novo-Rossiya, modern Ukrainian borders were delineated by the Soviet state under Stalin.

If JP Morgan's optionality for Ukraine turns out to be true, which would be a reversion to a Yanukovych-lite era, the last laugh in his grave would be of Koba, a Georgian seminary dropout boy turned Soviet leader, whose stature still stands firm on its plinth in a small town called Gori, 100 km from Tbilisi.