Putin may lose it all by going all-in for Ukraine

Russia’s continued isolation from the G7, and the expansion of sanctions against Moscow, have made the severe consequences of President Vladimir Putin’s invasion of Ukraine clearer than ever. During the G7 summit last week, Russia’s state media was quick to trumpet the announced capture of Bakhmut, criticise Ukrainian President Volodymyr Zelensky’s G7 speech, and ultimately attempt to hide Russia’s lack of influence on the global stage.

Russia’s protracted invasion of Ukraine has been a complete blunder, leaving Putin’s regime exposed and increasingly isolated.

Russia invaded a stalwart Ukraine while underestimating its defensive capabilities, commitment and political resiliency. While Kyiv and its allies must proceed carefully and victory is far from certain, as it stands the invasion is an overextension that presents an opportunity for Ukraine to win not only the war, but also the following peace.

Since the invasion Putin, and the Kremlin, have learned that the Russian military is far less capable than they believed. The stalled invasion revealed their willingness to apply direct military force to achieve political aims in Europe, but at the same time exposed Russia’s inability to wield its military force capably, even close to home.

Pinned to a costly conflict in Ukraine, Russia now faces a devolving security environment as its neighbours adapt to Russia’s diminished influence. European states are capitalising on Russia’s weakness and are collectively uniting against it. Putin’s allies, for their part, have shown their limited utility.

Since he came to power more than 20 years ago, Putin and his autocratic regime have promoted a view of Russia as a resurgent nuclear power, regional hegemon and successor to the Soviet Union. Paralleling Cold War behaviours, under Putin Russia has also returned its attention to the Middle East and Africa, demonstrating a resumption of global ambition.

Before the invasion, military power was thought to be Russia’s greatest asset and the guarantor of its continued geopolitical relevance. The Russian military decimated Chechnya in 2000, invaded Georgia in 2008 and created the de facto Russian regions of Abkhazia and South Ossetia, and militarily supported Bashar al-Assad’s regime in the Syrian civil war.

Across these conflicts, Russian military strategy consistently resulted in high civilian casualties and earned Putin a reputation for ruthless effectiveness. This, combined with sustained high military spending during this period and a push to modernise its nuclear arsenal, enabled Russia to project strength domestically and abroad with its military.

But then it went too far.

The annexation of Ukraine is fundamentally important to any Russian concept of regional hegemony and ‘empire’, bringing it closer to those goals than it has been since the fall of the USSR. Putin’s foreign policy had long prioritised destabilising Ukraine and bringing it under Russian suzerainty. Instead, the invasion has diminished Russian influence across post-Soviet territories—undermining the narrative the Kremlin spent so many years carefully building.

The war has imposed significant costs and damaged Russia’s economy, and the Kremlin has resoundingly failed to achieve its military objectives and maintain Russia’s military image. Circumventing sanctions through trade with China, India, Turkey and several Central Asian nations has muffled the impact of the economic downturn and sheltered Russian metropolitan areas, but it is not a permanent solution.

Since the invasion, Russia’s energy revenues and market position have crashed and its trade has become increasingly reliant on China. Domestic consumption has collapsed, and the central government is running a historic deficit.

European nations are already manoeuvring to capitalise on Putin’s military and economic exposure. Sweden and Finland maintained official positions of neutrality before the conflict, but in late March, Finland officially joined NATO, and Sweden’s bid to join is widely expected to succeed. Finland is capitalising on a moment of opportunity, now patently aware that the Kremlin is a threat to norms of sovereignty and is militarily overextended.

In 2021, Putin penned an essay that accused NATO of trying to use Ukraine as a ‘springboard against Russia’. Yet it is thanks to his invasion that the Kremlin must now respond to its professed worst-case scenario of an additional NATO member on its border in Finland, with the knowledge that Sweden, and even Ukraine itself, could follow.

As Russia faces NATO’s expansion, its own international network is straining. Authoritarian coalitions are fraught at the best of times, and Russia’s weakened position has widened the cracks in the Kremlin’s friendships.

Belarus, for instance, is a unique ally that remained culturally, politically and economically centred around Russia in the post-Soviet era. Belarussian President Alexander Lukashenko has been a belligerent Putin supporter on the international stage. Yet, prior to a Moscow visit in March 2023, he publicly announced that Belarussian troops would not join the war unless directly attacked. It was an embarrassment for Putin.

Putin’s influence over Hungary and its authoritarian-leaning leader, Viktor Orban, has also diminished. Hungary left the Russian-led International Investment Bank in mid-April to comply with sanctions on Russia. It had been the bank’s second-largest shareholder. The Kremlin had been successful in recent years in cultivating pro-Russia sentiment and supporting the Hungarian far-right. Hungary’s rejection of the International Investment Bank as a viable institution signals that it too has noticed a decline in Russian influence.

Asian partners, too, are capitalising on Russia’s overextended position. With the Kremlin dependent on energy revenue and unable to access the European market, it has been forced to sell vast amounts at below-market rates to China and India, which now account for roughly 80% of Russia’s energy exports.

Russia is constructing new pipelines to China to re-route supplies from Europe in another sign of its increasing economic dependence on China. On the surface, Chinese President Xi Jinping stresses greater friendship with Russia, but the two countries’ terms of trade are increasingly unbalanced, lending China huge leverage in price negotiations.

The war in Ukraine has only further strained Russia’s ‘calcified’ economy, and China’s actions reflect that power games between autocratic states usually end up meaning more than principled support.

Speaking in April at ASPI’s Sydney Dialogue, Ukrainian representatives expressed the national intent to achieve victory in 2023. They should be supported as much as possible and for a long as necessary.

Still, policymakers should note the scale of Putin’s miscalculation in invading Ukraine. The war has left Russia internationally maligned and in an increasingly desperate position. In the eventual peace, leaders must take the opportunity to develop sustainable security structures in Europe. Significant institutional reform was not attempted at the end of the Cold War, and the burdens stemming from that have been severe. With Russia’s foreign policy in disarray, peace will provide the opportunity to make a fresh attempt.