Canada has announced new economic and travel sanctions against Russian banks and high-ranking officials, and Russia responded by issuing its own, one-year ban on Canadian agricultural products. Canada also made a show of sending a planeload of non-lethal equipment to the Ukrainian army today.
Canada had already imposed sanctions against Russia for annexing Crimea and for its support of pro-Russian rebels fighting in eastern Ukraine. Over and above those previous sanctions, Canada will target 19 more Russian and Ukrainian individuals and additional 22 groups and economic entities.
Sanctions to hit big banks
“I think the big difference this time around is that there are sanctions against a broader sector of the Russian economy—the financial services sector, including some of the biggest banks in Russia, making it much more difficult for Russian banks to raise money,” says Roland Paris, director of the Centre for International Policy Studies at the University of Ottawa.
Similar action by the United States and the European Union has, so far, had an impact on the Russian economy, says Paris. He notes that economic growth is lower as are projections of economic growth, investment money is leaving Russia and Russia is teetering on the edge of recession. However sanctions have not so far deterred Russian President Vladimir Putin and may not do so in future.
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Putin could go either way
“It’s unclear whether these economic effects might shape Vladimir Putin’s thinking,” he says. “And even if it did it could just as much drive Putin to escalate as to de-escalate.”
Canada has worked hard to increase agricultural exports to Russia. They were valued at $563 million in 2012. The Russian ban will hit the pork industry hardest. But Canadian politicians were quick to downplay the effect, noting the country has increased trade with other nations and that will help pick up the slack.
Putin ‘creating options’ by amassing troops
Russian troops meanwhile have amassed on the Ukraine border. An estimated 20,000 are on manoeuvers there. Paris notes, this comes at a time when Ukrainian troops are having some success in encircling the rebel militias in the two main urban centres they control.
“I would think that by ramping up the Russian military presence on the border, Vladimir Putin is creating options for himself to be able to intervene on behalf of those Russian separatists should they be in danger of being defeated…
Putin looking for a negotiated settlement?
“He’s also seemingly applying political pressure to the Ukranian government and to the western countries with an implicit threat of a Russian intervention and may be trying to create the basis for some kind of negotiated settlement. It’s unclear,” says Paris.
A negotiated settlement could involve the rebels disarming in exchange for the Ukrainian government giving some areas greater autonomy to accommodate pro-Russian residents.
Negotiation better than ‘a proxy war’
It is very unlikely western countries would intervene militarily, says Paris, but they may step up support for the Ukrainian army. The Canadian government today invited reporters and Ukraine’s ambassador to the launch of the first of several military aircraft bringing supplies to Ukrainian troops, but was careful to note it would only carry non-lethal materiel like medical equipment and devices to track movement along the border with Russia. It did not preclude sending arms in future.
Should Russia however invade Ukraine in large numbers, Paris thinks western countries would be under considerable pressure to provide weapons and other, support to the Ukrainian army. This, he says, could lead to a long and bloody proxy war right on Europe’s doorstep. A negotiated settlement would be far preferable.
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