Russia Reform Monitor: No. 1920

Related Categories: Russia; Ukraine

August 14:

Russia's ongoing standoff with the West over Ukraine is having a major destabilizing effect on the country's economic fortunes, Reuters reports. Russia's Ministry of Economy has projected that $100 billion could leave the country this year as a result of Western sanctions. However, observers believe the real figure could be far higher; economists from Moscow's Higher School of Economics have estimated that capital outflows will total between $130 and $150 billion in 2014. European estimates, meanwhile, place the figure higher still, with European Central Bank president Mario Draghi stating that some 160 billion Euro ($214 billion) will leave Russia by year's end.

August 16:

Moscow is working to cement the legitimacy of its newest territorial holding. RIA Novosti reports that the Kremlin has announced that it is "ready" to allow the UN's nuclear watchdog, the International Atomic Energy Agency, to have full access to nuclear sites on the Crimean Peninsula. "Acting within the boundaries of its jurisdiction, the Russian Federation took over full responsibility over the nuclear facilities located on the territory of [Crimea]," Russia’s Foreign Ministry has said.

August 17:

Russia is reinforcing pro-Russia separatists in eastern Ukraine with high-tech weaponry, Australia's ABC News reports. Alexander Zakharchenko, head of the so-called "Donetsk People’s Republic," has told reporters that his fighters are awaiting a massive shipment of Russian arms, encompassing 30 tanks and 150 armored vehicles. Just as significantly, the rebels will be reinforced with some 1,200 fighters who have spent months training in Russia. "They are joining at the most crucial moment," Zakharchenko has said.

Russian President Vladimir Putin's recent diplomatic tour of the Americas is already paying dividends. The Moscow Times reports that Argentina is planning to send a trade delegation to Russia in coming days. On the agenda is an expansion of trade ties between the two countries, and an increase in food exports (including beef, grains and fruit) from the South American state to the Russian Federation.

August 18:

Tensions with the West over Ukraine will not play out in Afghanistan, Russian President Vladimir Putin has declared. According to EurasiaNet, the Kremlin has confirmed that it will not stand in the way of U.S. or NATO transit and resupply to forces operating in Afghanistan via the so-called Northern Distribution Network, which has served as an area of quiet cooperation between Moscow and Washington over the past several years.

Moscow's motivations for continued cooperation on Afghanistan, Putin has made clear, are pragmatic. "[W]e should never follow the principle of harming ourselves simply out of spite," the Russian president recently told members of the Duma, Russia's lower house of parliament. "We are interested in stability in Afghanistan. So, if some countries, say the NATO states, or the United States are investing resources, including money into this – it is their choice, but it does not run counter to our interests. So why should we stop them?"