I want to question these arguments, especially the second one. I'd also like to get into the details of the new kinds of sanctions being applied in light of former Treasury official Juan Zarate's new book, but I'll save that for a follow-on post.
Will targeted sanctions bite politically?
Slantchev’s futility argument is that the measures have “zero chance” of accomplishing anything because the targeted elites are too dependent on Putin. Since we do not know many of the intricacies of regime structure from the outside, I will not push on this point too hard except to highlight some disagreement. Other commentators are more optimistic, seeing fault lines between the KGB-dominated inner circle and other more pro-business elites. Still others claim the targeted sanctions aren’t about inducing elite opposition at all: by going after medium-sized banks that nobody would have suspected, the U.S. is intimidating Putin by demonstrating that it knows exactly how he pulls the purse strings. There may be other sanction rationales that I will return to below. Regardless, I have a feeling Slantchev is just trying to stress that the chance of seeing any positive effect from sanctions is not worth the downside that he finds so worrying, which brings us to his second argument about perversity.
Could targeted sanctions make Russian behavior worse?
Slantchev’s case against sanctions is based on the notion that they will enable Putin to sell a narrative of Western encirclement to his people. Foreign policy, argues Slantchev in this response to another critic, now provides the only hope for regime legitimation since the country has no clear path for economic growth. As he puts it in his new post, “If our sanctions succeed in inflicting harm on the Russian economy, the inevitable conclusion will be that Putin was right all along and the West is punishing Russia for pursuing its only chance of prosperity. This can only bolster the popularity of his regime and strengthen its determination to continue its aggressive policies.”
I think that this puts too much faith in the ability of foreign policy to provide a basis for popular support, but let’s stipulate that his "Cold War Syndrome" story is operative. The key question: do we believe that there are any Russians for whom the Treasury sanctions, or any new sanctions, are the difference between believing an encirclement story and not doing so? Not only does the regime control information to the extent that it can pin almost anything on even fabricated Western causes, but it also already has a long list of Western and American actions to point to since the end of the Cold War to buttress its encirclement claims. Some of these, like American interference in Central Asian pipeline politics, can be easily blamed for economic stagnation.
To explore a further problem with the argument, let's undo the stipulation. As others have asked, does the survival of Putin's regime really hinge on selling a particular narrative to the public? There is a test: if Slantchev is right, we should see the regime spinning sanctions announcements as further evidence of painful Western encirclement. Slantchev believes that “Putin must tap into these emotions [of victimhood] for legitimacy,” so why would Putin not tie the Treasury announcements to serious ills—the IMF just released a gloomy report—in the Russian economy?
Contrary to the expectation, the Russian response at all levels has been to laugh off economic damage and any future harm that might be brought about by the West. When Treasury designated Bank Rossiya, Putin joked that “[This] is a medium-sized bank. I personally do not have an account there, but I will certainly open one there on Monday.” His aide Vladimir Surkov, who was personally designated, remarked that “The only things that interest me in the US are Tupac Shakur, Allen Ginsberg, and Jackson Pollock. I don’t need a visa to access their work. I lose nothing.” The Russian public has also reacted by mocking sanction announcements as meaningless. After the first wave of measures, Russian social media was abuzz with users posting pictures of pets next to signs with belittling messages like “Sanctions: U.S. President Barack Obama and members of the U.S. Congress are forbidden from petting my cat.”
Slantchev claims that “If our sanctions succeed in inflicting harm on the Russian economy, the inevitable conclusion will be that Putin was right all along and the West is punishing Russia for pursuing its only chance of prosperity,” but right now Putin’s domestic messaging is that sanctions don’t hurt. Trying later to point to sanctions damage will prove Putin wrong, not right.
Short of dealing Putin a defeat in a militarized crisis, Slantchev seems to believe, U.S. actions only affect the strength of Putin’s regime in one direction—by making it stronger. Even if this is true I doubt that what the U.S. does matters very much to regime legitimacy. I don’t think the sanctions alone rescue any of Putin’s narratives even if we think those foreign policy narratives are a make-or-break determinant of regime support as is claimed. And sanctions may have benefits not yet considered, though I am on weaker ground here. Treasury’s measures may not cause elite revolt, but they may make patronage more difficult by impeding the transfer of funds. And more than just “doing something" for its own sake, the targeted sanctions may have a demonstration effect, not necessarily related to credibility but rather to financial technology, for other regimes whose authoritarian structures render them vulnerable to these measures. I hope to get into the details of Treasury's new technology in a future post. In the meantime, Slantchev has written yet another post worth reading.