A few thoughts on Ukrainian-Russian standoff

“Ukraine is not dead yet," as the country's national anthem goes, but the fears that I expressed in op-eds – that the alternative to the Feb. 21 peace deal could be disintegration of Ukraine  – are materializing. (See Saradzhyan, Simon. "Does Russia Really Need Ukraine?." National Interest, February 25, 2014 and   Saradzhyan, Simon. "Threat of a Failed Ukraine." Boston Globe, February 22, 2014.)
There is still a weak hope that Russia would choose to accept a neutral, but weakened Ukraine, in which Crimea would enjoy very wide autonomy or even become part of an Ukrainian confederation rather than incorporate the peninsular and see western and central Ukraine try to gravitate towards West.  
I actually tried to crunch out some numbers on would happen if the most radical scenario materializes and Russia takes over  not just Crimea, but entire Eastern Ukraine.Eastern Ukraine’s GDP equals 3.4% of Russian GDP, but its population equals 14% of Russian population, so demographic gain for Russia, but not a huge economic gain. The social burden would not be as great given that the eastern Ukraine’s GDP per capita is $3397 while Russia’s GDP per capita is $4,037 in current dollars. In comparison, the losses for Ukraine would be disastrous: almost half of population and  GDP. (See chart and map I did on regional gross products and population of Ukrainian regions below).
I should also note that Russia will continue to exercise influence over Ukraine even if Crimea secedes.
Russia is the source of half of raw materials that Ukraine imports and supplies about 60% of its gas, at a price, which it agreed to discount by almost 40% last year. Ukraine’s metallurgical and chemical industries, that account for roughly one-third of Ukraine’s GDP, are largest consumers of Russian gas and their list of clients is topped by Russia, which is by far the largest importer of goods and services from Ukraine. Should Russia revoke the gas discount for Kiev and decide buy steel pipes elsewhere, consequences for the Ukrainian economy would be catastrophic.
I'd end this post with
drawing an imperfect historical analogy with feudal Poland. It so plagued by feudal strife to such an extent, that its nobility used to boast that “Poland's strength is in its divisions.” But then, of course, a divided Poland got partitioned by its neighbors. It almost seems that Poland's eastern neighbor – Ukraine – has entered a period of protracted instability under the same
doomed slogan.
As for Russia, as  I pointed out, if the Kremlin does incorporate Crimea,  it should expect  a cold war  redux with West in which China will benefit most as Moscow will no longer be able to play the balancing role in aspires to play in international relations and will have no choice, but align closely with the Middle Kingdom. And this won't be a partnership of equals.
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