Thread by @DAlperovitch

Some reflections on #MSC2022 and Russia-Ukraine conflict as the conference wraps up:

One of the things that struck me the most in conversations with officials here is the lack of discussion of the “Day After Invasion” scenarios 🧵

https://twitter.com/MunSecConf/status/1494807019190112259

I’ve been convinced since early December that Russian invasion of Ukraine was highly likely. The Biden administration is now assessing that it is ‘imminent’

https://twitter.com/DAlperovitch/status/1473362460673515527

Indeed, the Russian force mobilization and positioning is now complete and they can launch the invasion at any moment

https://twitter.com/DAlperovitch/status/1495303715288502277

As has been widely reported in the press and @VP confirmed here at #MSC, the US and its allies plan to have ‘the largest and most severe <sanctions>, targeting <Russian> financial companies’

https://twitter.com/EliStokols/status/1495002939664084995

In addition, there are reports of intention to use the foreign direct product rule to ban global exports of semiconductors to Russia

https://twitter.com/PIIE/status/1492566425113927685

Make no mistake about this: the combination of sanctions on top Russian banks and ban on chips has high potential to cripple the Russian economy

And while many in the West may initially cheer at the prospect of crippling Russia economically and see it as a just punishment for invasion, it also has a high likelihood to trigger a massive retaliation from Russia

So this conflict will almost certainly not end with an invasion of Ukraine and imposition of severe sanctions on Russia, after which everyone moves on to other issues, such as domestic politics and China

Faced with a ‘we have nothing to lose now’ attitude, Russia will no doubt lash out at the West in a number of ways. It can limit export of grain, fertilizer, titanium, palladium, aluminum, nickel, forest products, to say nothing of oil and gas

https://twitter.com/DAlperovitch/status/1492603386394558464?s=20&t=f0EDDvATxqjbSXtb3J6JQQ

It can also ban overflight rights for Western airlines on routes to Asia
defenseone.com/ideas/2022/01/…

All of this will, of course, be enormously expensive for Russia itself, but facing crippling economic sanctions already and still having $630b in foreign reserves that can last them some months, Putin is likely to take the chance and hit back

Russia’s goal would be to rapidly inflict huge economic pain on the US and Europe in the form of spiking inflation (already at 7.5% in US) and enormous stresses on supply chains, already at a breaking point

In the US, in the midst of a midterm campaign season, such significant economic pain—disproportionally affecting the poor and middle class—would not be easily brushed off. Russia may calculate that it just might get enough leverage over the West to get some sanctions relief

The West most likely won’t climb down from sanctions and the pain suffered by Russian economy will be much worse than to us. However, then Russia may escalate further with cyber attacks on US and European financial systems, as well as energy infrastructure
edition.cnn.com/2022/02/18/pol…

Of course, the US, UK and others—having already nearly exhausted the power of economic sanctions weapons—will have ability to retaliate with their own offensive cyber strikes against Russia

And then Russia and the West will be on a path to a highly dangerous cyber tit-for-tat escalation hitting each other’s critical infrastructure and trying to impose maximum economic costs on each side

The probability of that escalation staying in the cyber domain are quite low unless we find ways to climb down from getting into a hot conflict that no one in the world desires

I write all this not to argue that Russia should not experience any costs for invasion of Ukraine but that we have to be extremely careful about triggering uncontrolled escalation with a major nuclear and cyber power, and one that is a major global supplier of critical materials

There is no doubt that Russia has to pay a big price should it invade Ukraine but using our full sanctions toolkit against them right away will almost certainly be dangerously escalatory and have significant blowback on US and European economies

At the time when the Biden administration has rightly made it clear that our #1 goal is to avoid getting into a hot war with Russia, we have to be extremely thoughtful about how our response can be tailored to avoid that unimaginably horrible scenario

END