Попробуем поиграть за Путина
Jun. 14th, 2014 11:02 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
timeletsLet's assume Putin is rational and try to see what his game strategies are in the current conflict with Ukraine.
A rational Putin would like to maximize his utility from selling Russian natural gas and buying foreign goods, preferably technology. To accomplish this goal he can trade with EU, China, and Ukraine.
Trading with EU is the best option because they have a growing natural gas market, stable financial system, and technology goods. In short, transaction costs are low.
Trading with China requires significant investments and potential losses for 10-15 years.
Trading with Ukraine involves trade disputes across a broad range of products, including gas prices, transit and storage prices. In short, transaction costs are high. Moreover, when disputes arise Ukraine acts as a holdup in Putin's trade with EU.
The rational Putin would prefer to trade with EU and eliminate Ukraine. Ultimately, Putin would like to increase his share of the EU energy market, by redirecting natural gas from Ukraine to EU.
To accomplish this goal he needs to
1) build physical gas "pipes" around Ukraine (North and South streams);
2) find reliable substitutes for Ukrainian gas storage facilities or control them in other ways (???);
3) convince EU that they can depended on Putin's gas supplies, i.e. EU's reliance costs would be low if they cooperated with Putin.
Does the annexation of Crimea and instability in SE Ukraine help advance this strategy?
1) Yes. New physical pipes can be built easily.
2) Yes, if Putin beats Ukraine into submission, both economically and militarily.
3) Yes, if Putin convinces EU to dump Ukraine as a neo-Nazi state and increase their reliance on trade with Putin. He also needs to neutralize US influence on EU wrt US support for Ukraine.
I think the rational Putin miscalculated on the annexation of Crimea because it failed to accomplish pp 2 and 3. Ukraine hasn't collapsed, yet. The EU didn't buy the neo-Nazi argument. The EU didn't buy the "historical justice" argument either. Furthermore, EU now sees its Putin reliance costs increasing; therefore, they are likely to reduce Putin's market share, if possible.
A rational Putin would like to maximize his utility from selling Russian natural gas and buying foreign goods, preferably technology. To accomplish this goal he can trade with EU, China, and Ukraine.
Trading with EU is the best option because they have a growing natural gas market, stable financial system, and technology goods. In short, transaction costs are low.
Trading with China requires significant investments and potential losses for 10-15 years.
Trading with Ukraine involves trade disputes across a broad range of products, including gas prices, transit and storage prices. In short, transaction costs are high. Moreover, when disputes arise Ukraine acts as a holdup in Putin's trade with EU.
The rational Putin would prefer to trade with EU and eliminate Ukraine. Ultimately, Putin would like to increase his share of the EU energy market, by redirecting natural gas from Ukraine to EU.
To accomplish this goal he needs to
1) build physical gas "pipes" around Ukraine (North and South streams);
2) find reliable substitutes for Ukrainian gas storage facilities or control them in other ways (???);
3) convince EU that they can depended on Putin's gas supplies, i.e. EU's reliance costs would be low if they cooperated with Putin.
Does the annexation of Crimea and instability in SE Ukraine help advance this strategy?
1) Yes. New physical pipes can be built easily.
2) Yes, if Putin beats Ukraine into submission, both economically and militarily.
3) Yes, if Putin convinces EU to dump Ukraine as a neo-Nazi state and increase their reliance on trade with Putin. He also needs to neutralize US influence on EU wrt US support for Ukraine.
I think the rational Putin miscalculated on the annexation of Crimea because it failed to accomplish pp 2 and 3. Ukraine hasn't collapsed, yet. The EU didn't buy the neo-Nazi argument. The EU didn't buy the "historical justice" argument either. Furthermore, EU now sees its Putin reliance costs increasing; therefore, they are likely to reduce Putin's market share, if possible.
