Putin’s Ukraine gambit may not be as mondo bonkers as first thought

OTTAWA—Last week’s announcement that Canada would make an exemption to the sanctions imposed on Russia to allow for the export of specialized turbines had to have been one of the most difficult decisions made by the Trudeau Liberals to date. The Canadian-made turbines are an essential element required to keep the Nord Stream pipelines pumping Russian oil and gas to Germany. Canada prides itself on being Ukraine’s strongest supporter, and up until this recent development, one of Russia’s harshest opponents. Since 2015, the Canadian Armed Forces have deployed a contingent of roughly 250 combat trainers to mentor the Ukrainian military. Prior to Russia’s Feb. 24 invasion, Canada had provided advanced training to more than 33,000 Ukraine soldiers. Canada had also supplied Ukraine with lethal, non-lethal, and financial aid prior to the war. Since Putin’s army forced its way onto Ukraine territory, Canada has increased the flow of aid and tightened the already strict sanctions against Russian interests. However, by allowing the transfer of these pipeline turbines we are effectively facilitating the Russian war effort. The alternative would be an immediate cessation of all Russian fossil fuels exports to Europe, which would collapse the German economy. Despite having more than a decade to try and secure alternative sources of energy, Germany still imports roughly 40 per cent of its fossil fuel from Russia. Germany is not alone, as the European Union collectively purchased 61 per cent of Russia’s US$98-billion worth of oil and gas exports during the first 100 days of the conflict. It is not that these countries condone the invasion of Ukraine. It is that they simply cannot wean themselves off their dependency on Russian fuels without suffering a massive impact to their own economies. Canada had to weigh the political pressure from Germany against its strong desire to stand with Ukraine. In the end, Canada caved to the German pressure, and Ukraine President Volodymyr Zelenskyy was rightly steamed at our choice. The decision also sparked the ire of Paul Grod, the president of the Ukrainian World Congress. The UWC has actually launched a legal claim with the Federal Court in a last ditch attempt to keep the turbines from being shipped. Now that the U.S. has publicly endorsed Trudeau’s decision to support the Germans in this instance, I’m afraid the UWC challenge will amount to nothing. What this all serves to illustrate is the possibility that Russian President Vladimir Putin may not be as mondo bonkers as we first believed. From a strictly financial perspective, the war has thus far benefitted Russia immensely. As the world’s second-largest exporter of fossil fuels, Russia has reaped the reward of oil prices rising from a pre-invasion cost of US$70 a barrel, to the current value of $125 a barrel. Although the European Union is desperately seeking to reduce Russian imports, Russia has actually increased production and is fast developing new markets in China and India. This is also true of Russia’s wheat exports. Due to a bumper crop, Russia claims it will export close to 39-million tonnes of wheat this fiscal year. Given that the war has challenged Ukraine’s ability to export its wheat, this has driven up wheat prices by 165 per cent in the past year. Most of that increase has been since the Feb. 24 invasion began. Between the hugely profitable fossil fuels and wheat exports, the Russian ruble is presently trading at a 20-year high. The initial stages of the war in Ukraine have demonstrated the limitations of the Russia military. Thanks in part to NATO-provided sophisticated weaponry and training, the Ukrainian forces have destroyed vast volumes of Russian armoured vehicles. It will require a costly and time consuming process to replace those losses. However, given that Russia produces its own arsenal, this will only bolster and create jobs in Russia’s high-tech defence sector. They will undoubtedly replace all that older junk that the Ukrainians are destroying with new and improved systems. The human cost is something more difficult to understand. The losses in Russian personnel to date have been staggering. Yet, the will of the Russian people remains undaunted. It is estimated that Putin enjoys an 82 per cent approval rating. There is not a western democratic leader who wouldn’t love to have such popular support. One possible explanation could be the fact that Russians truly glorify their fallen soldiers. That said, I’m not suggesting that Putin is not crazy, just that he may not be completely crazy. Editor's Note: This story was updated on July 19 to correct that it is the Ukrainian World Congress, not the Ukrainian Canadian Congress, that has launched a legal claim over Canada's decision to return turbines to Germany. Scott Taylor is the editor and publisher of Esprit de Corps magazine. The Hill Times

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Putin’s Ukraine gambit may not be as mondo bonkers as first thought

From a strictly financial perspective, the war has thus far benefitted Russia immensely.

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