Western governments are spluttering with indignation following Russia鈥檚 invasion of Ukraine鈥檚 Crimean peninsula 鈥� but in an economically interconnected world, spluttering may be their only response. US President Barack Obama promised 鈥渃onsequences鈥�, and European Union foreign ministers rushed to emergency meetings. 鈥淏ut there鈥檚 nothing we can do,鈥� says , an international affairs think-tank based in London.
You might think that the main obstacle to any Western military action is Russia鈥檚 size and ready to launch. Moreover, such a confrontation would derail US-Russian collaboration on key matters such as Iran鈥檚 nuclear programme, Syria鈥檚 chemical weapons, even the route for US withdrawal from Afghanistan.
However, analysts contacted by New 杏吧原创 say the chief stumbling block to any Western action is the interconnectedness of the global economy. Sevastopol, the Crimean town which is the only port for Russia鈥檚 Black Sea fleet, is also vital for grain shipments. Ukraine is the world鈥檚 sixth-largest exporter of wheat and , accounting for 18 per cent of the world鈥檚 maize exports. Disrupting that with military action or a blockade would destabilise grain prices, causing political unrest worldwide. over the current confrontation.
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The price of sanctions
Economic responses, such as sanctions, also stand little chance. The EU, especially Germany, needs Russia for 30 per cent of its natural gas, says Anders Aslund of the Peterson Institute for International Economics in Washington DC, and Russia controls the pipelines. Russia, in turn, needs the $100 billion Europe pays annually for its gas. Who would blink first? With no sanctions on the EU agenda, there seems little appetite to find out.
Rich nations could try to . 鈥淭hat would hurt us more than it hurts them,鈥� says Giles. The UK鈥檚 trade surplus with Russia brings in much-needed income. Some banks, especially in London, rely on the $56 billion that flows out of Russia yearly. Those banks are part of a fragile, tightly coupled system on which most of the world鈥檚 economy depends.
If we are all interconnected, don鈥檛 Russia鈥檚 actions hurt it as much as everyone else? Giles sees no downside for Russia, or any obvious way to enforce rules against this kind of aggression within our networked system that doesn鈥檛 do too much collateral damage elsewhere in the network.
Yaneer Bar-Yam of the New England Complex Systems Institute in Cambridge, Massachusetts, is more hopeful. 鈥淎n action that disrupts the system is just as likely to rebound to hurt the actor as others.鈥� The big question, however, is whether that will make the actor stop.