Putin risks ‘move against him’ as Russian economy fears long war in Ukraine | Timothy Ash

Putin risks ‘move against him’ as Russian economy fears long war in Ukraine | Timothy Ash

uh the longer it goes on there there is a risk of something happening within the country against Putin and I’m not sure he’d particularly want to risk that you know the longer the world goes on it doesn’t get any better for Russia more casualties more loss of economic power more erosion of its International standing I would think eventually Putin I I think actually Putin would probably want to talk peace now um the question is obviously you know what the deal would be whether the ukrainians will be willing to negot neate uh but I think perhaps towards the end of the year there may be some scope for some kind of negotiation hello and welcome to front line for times radio with Me Kate shabo and this time we are joined by Timothy Ash an economist with a key focus on Ukraine Russia and Turkey he’s an associate fellow in the Russia Eurasia program at the London based Think Tank chattam house and a senior strategist at RBC Blue Bay Asset Management in London Timothy good to speak to you um nice to see you uh let’s start by looking at the state of the Russian economy when you last talked to Front Line in April you described how Russia prepared the economy for the invasion of Ukraine in 2022 but it was anything but the quick toppling of zalinski they might have been planning for in what state do you see the economy right now well pretty much similar I mean it’s not performing particularly well it’s surviving as I mentioned previously uh sanction regimes can survive a long time look at Cuba look at Venezuela North Korea Iran they learn to live with sanctions and you know they divert resources typically away from consumption to military spending that’s kind of painful for the population but as as I mentioned before Russia has a lot of durability build up a lot of reserves they’re still there suggestions though we we’ve seen recently some secondary sanctions secondary sanctions essentially are the US and its allies essentially tell third countries guys like turkey like Central Asia or China even uh be careful in trading with Russia and if you if you try and get around sanctions and help Russia we will sanction you so there’s some evidence now that the Chinese and some of those third countries are beginning to reduce their trade with Russia so I think things are are getting a little bit more difficult for Russia now and actually some of those reserves that I mentioned have been worn down a bit more on sanctions can we just take a step back and could you just give us an overview of exactly what sanctions are in place against Moscow and how much International consensus there is on those sanctions well we’ve seen sanctions on individuals within the regime key business people uh oligarchs for example we’ve seen key uh Russian companies sanctioned uh Banks uh major energy companies utility companies uh and we’ve seen uh trade sanctions so for example uh sanction the West has sanctioned uh trade in energy gas oil uh gold recently coal uh just making it much more difficult for Russia to transact globally there’s also been an oil price cap where the West has basically said you know we recognize that oil is an important commodity for the international economy uh if we uh ban Russian exports completely we’ll crash the global energy Market that won’t be very good for the global economy won’t be good for us either but what we can do is try and limit the amount of money that Russia gets from this trade so it it imposes a $60 uh a barrel limit on what Russia can sell for its oil uh now there it’s it’s trying to get around that actually uh and it’s learned to get around that uh through using a shadow Fleet of its own ships for so it can get around compliance but actually in the end I think it has a it has actually limited the flows of energy and well o receipts from those exports of oil uh so it’s pretty complicated complex there’s a it’s a cobweb of sanctions around Russia makes makes it very difficult companies that do want to transact you know there are costs of doing that and I think more generally what these sanctions mean is they increase the cost to Russia of trade it means they have to spend more on Imports it costs them more because it’s more complicated as I said third third countries you know are a bit nervous about tra doing trade with Russia so they charge Russia more and on the export side Russia has to sell all its Comm Commodities at a discount so in the end the the inflows to Russia are reduced because of it but they don’t go to zero because Russia is obviously a huge uh commodity and energy exporter and you know again the West is very reluctant to completely sanction Russia because of the impact on global markets I’m going to ask you a little bit more about those Shadow fleets in a moment but I just wanted to ask you about Washington recently introducing another package against Russia’s Financial energy and Technology infrastructure can you explain how this Builds on on what was already in place well interestingly I mean the West has sanctioned uh many banks many Russian Banks uh there’s this uh International financial transaction system called Swift and it’s cut many Russian Banks away from that system uh there are be because of the need still to have Russia as an exporter Commodities there is still need for a transaction so a limited number of Russian Banks and and International Banks particularly Chinese banks have been allowed to continue to trade what was interesting about the last set of sanctions though it sanctioned moex which is a uh it’s a trading platform uh a trading exchange based in Moscow and uh the Americans essentially banned that exchange well it sanctioned that exchange and they actually uh they transa act they carry out a lot of these transactions in dollars uh many people trade lots of different products through the MOX exchange using the dollars now that really complicated things and actually a lot of the um a lot of those third party countries and their companies kind of gave up they they kind of thought actually this is just too complicated now uh and we’ve seen real complications for Russia we actually interestingly uh immediately after the imposition of those sanctions we saw saw Q’s uh Q’s people lining up outside Russian Banks because they worried about their ability to get dollars and I think you know it will make it more difficult for Russians to access dollars and again it’s making life more difficult for Russia that will weigh on the overall economy it will um it will weigh on Russia’s ability to regenerate its uh conventional military capability that’s been lost in Ukraine it and and that and reduce their ability to wage offensive actions against us malign actions against the West so they all help they’re but they’re all pretty peac Mill and kind of limited you know that’s the problem one of the problems with this in that light then do you think that if this part of the aim of this is to to hamper Russia’s ability to continue going on in the war in Ukraine do you think that this is only a small part look absolutely what what’s kind of interesting now is you know initially sanctions were imposed on Russia after the annexation of Crimea in 2014 and its intervention in dbass right and the me and then we saw a ramping up of sanctions obviously in February 22 with a fullscale Invasion and the message was we’re doing this because we don’t like what you’re doing in Ukraine please stop and so then there’s a question well what happens if Russia stops doing all those things will sanctions be completely rolled off and I think there’s been a realization Dawning in the west that actually Russia is a long-term threat to Western liberal Market democracy it’s not just about Ukraine he’s attacking us uh he’s whatever happens in Ukraine you know we have to reduce Russia’s military capability and that would suggest that sanctions will remain in place for a long time because it’s in our interests to weaken the Russian economy to weaken Putin’s ability to again regenerate and build rebuild and Advance its its military capability because you know he will use that against us in the future so sanctions remain in place for a long time now the other question is well surely we could do more and and perhaps we haven’t done enough I mean I think we haven’t done enough we’ve been overly cautious we’ve been overly cautious because yes we are worried about the unintended consequences of some of the sanctions disruptions to Global markets for example there’s been a huge amount of lobbying by Western companies that still actually want to do business and make profits from Russia uh many individual countries as you know G7 or or partner Western Partners in the Western Alliance uh supporting Ukraine and again against Russia that have been trying to moderate sanctions because they argue that that they’re having a uh a disord a disproportionate impact on their own economy so there’s all a wrangling uh they’re incredibly complicated and the net result of that it’s been it’s been sanctions by the highest common denominator we end up doing less than we need to do right and and um on that um objective to reduce Russia’s military capability a recent Russy report points out the failure by Ukraine’s allies and international Partners to significantly significantly curb Uh Russian defense production where is the problem exactly is is it is it just that we are too slow to react or is it a combination of factors well it’s a combination factors I mean the overall I’d say overall sanctions are not harsh enough they’ve been too slow to be rolled out there’s again all the lobby I mentioned you know sanction regimes try and get around them right so we’ve not been uh DEA enough in terms of our response a key problem is dual use goods for example I mean uh there are products that are used in tanks they’re used in washing machines uh Russia has been importing a lot of those uh products like washing machines or cars from third countries and then you know taking them apart and essentially using the microchips etc for military production so now the West is actually again tightening up it’s there’s a real focus on those dual use products uh and we I think now again with the sanctions on moex as I mentioned before on on the ability of Russia to transact in dollars and and pay for a lot of those things it’s it’s just becoming a lot more difficult so hopefully that should limit uh Russia’s ability to do that so how do you actually tighten up sanctions on Dual use products how do you do it practically well you you you’re you be you’re more specific in terms of you you know you you signal to those countries uh you know again the third like turkey the Gulf States Central Asia transcaucasia your signals to those countries that you are going to uh cast a fine eye on trade with Russia and particularly on those dual use products and if you see Russia is exploiting trade with those countries to get access to that those those microchips you will come down very very hard on those countries and those companies within those countries that are doing those trade remember actually also it’s not only third uh third countries that are doing these trades I mean a lot of uh Western companies continue to trade in products that Russia is exploiting for its military production right I mean that’s unfortunately the harsh reality so but again it’s about uh actions it’s about sanctioning people and sanctioning companies for for playing around the rules and trying to circumvent sanctions to make lots of money and to help Russia and on that circumvention of sanctions so so for example I mean it’s obviously a two-way thing and if you’re using a third country like for example kyrgistan how would you um stop a big company perhaps in the UK for example as a sort of imaginary uh scenario exporting a car to Russia via kyrgistan well you know you have to make it clear to the British company that in the end this is UN I mean there’s been a lot of unusual trade flows right so suddenly there’s been a huge increase in trade between Russia and Central Asia in products like cars right and it’s absolutely crystal clear what it is what they’re doing what how Russia is trying to get around it so um you know you you signal to those Western companies that are doing those trades that you know that that ultimately these products are ending up in Russian tanks and you know killing people in Ukraine and you unfortunately you have to have hard conversations with those companies that you know they need to stop what they’re doing because ultimately they H helping Russia in its aggression in Ukraine and you know what we’ve seen is uh increasingly the West has begun to sanction companies and individuals in those third countries but actually also in Western countries you know we’ve seen people in in the Switzerland in Germany those individual sanctions it’s about sending a very very strong message that we know what you’re doing uh there will be repercussions you need to stop what you’re doing m on the subject of the Shadow fleets we were talking about Denmark has brought together a group of allies to try and stop the transit of Russia’s Shadow Fleet of tankers from carrying Russian oil through the Baltic Sea it would affect about a third as I understand of Russia’s seab oil exports um how would that work and where else could you stop that shadow Fleet well it’s pretty complicated I mean obviously the the the Danish the Danes and the scandis are worried about the environmental impact right I mean you know essentially our sanctions have forced Russia not to use well-regulated Western vessels uh and they’ve started this Shadow Fleet that is unregulated probably don’t doesn’t meet environmental standards the Danes and the Scandinavians and other countries are worried about the risks of catastrophe what happens if one of those tankers sinks because it’s it’s not well regulated so it’s it’s a really important issue ultimately uh the the response has to be through increased inspections you know the West NATO and countries like Denmark Etc have to be willing to deploy Naval assets to stop those vessels and and do inspections I mean that obviously ra raises issues around uh direct conflict between Russia and NATO because you know the West is is going is actually being quite invasive in terms of actions against uh Russian carriers you’ve been uh critical about the West lack of resolve to clamp down on Russia’s circumvention of sanctions by by the way it’s doing business VI these third third party countries in South America Central Asia Middle East Turkey um the EU has just introduced new sanctions against Belarus to try and stop Russia using it as a back door to get EU sanctioned products um how significant do you think that is well it’s it’s incremental you know uh Russia uses many different countries to try and circumvent sanctions obviously belus is look at president lenko in belus is a a partner and Ally perhaps of of Russia I mean were difficulties in that relationship which is why I was a little bit nervous about calling them allies uh but certainly Leno has helped the Russians certainly um you know it’s somewhat it it helps it closes a loophole or hopefully helps to close a loop loophole but with sanctions there’s many many moving Parts there’s you know incredibly complex you know Russia is a big economy it’s very intricated with the global economy has many trade Partners there’s many routs by which you can get Imports in and exports out uh it it involves a huge effort by Western governments to kind of uh maintain sanctions in place and you know there are a lot of players in the west and in those third countries and in Russia that try and get around them so you know it’s a constant battle um and obviously the bellush action is is is part of that overall strategy let’s talk about the the seized Russian uh assets you want more than $3 billion of Russian government cash in intern national banking systems to be given is it given all loans to Ukraine that you want that to be done and and what could Ukraine actually do with that sum of money well there’s actually $330 billion do of Russian well Central Bank of Russian cash in our bank accounts in Western bank accounts and that’s Russian taxpayer money so here’s the the angle and here’s the pitch to you I mean this war is costing the a100 billion do a year and that’s Western taxpayer money that’s been paid to keep Ukraine to defend help Ukraine defend itself meanwhile so we’re spending that you know our taxpayer money while we have this lump of Russian money just sat doing nothing in bank accounts it’s extraordinary it should be a political Scandal actually that the aggressor has not paid a penny of reparations and you know and Meanwhile we’re paying all this money so the money’s there there is a legal basis for it to be seized uh but the Europeans are terribly kind of nervous about doing this um and there’s there’s opposition in Belgium in Italy uh in Germany in particular uh to it and you know I think in the end they they need to get the big picture if Ukraine doesn’t get the money to survive and win the war it loses what are the consequences of a Ukrainian defeat I would argue tens of millions of ukrainians will move west you know we’ll see we we’ll will’ll face a huge security risk from Russia we’ll have to increase defense spending massively those those migrants moving West will cause more social and political upal in Europe it will play to the hands of populace in Europe it will destabilize Europe that’s the reality that’s terrible for the Euro and the ECB is one of the the the players arguing against this so I would argue you know if we’re not going to use frozen Russian assets and it’s clear there’s a morally issue there’s a there’s an issue of equity again why should Western taxpayers pay but you know if we if we’re not going to use that money where is the money going to come from who is going to pay the ECB hasn’t said that so the money is there should be used it will ensure Ukraine’s Victory uh it can be used for lots of different things it can be used to fund its defense it can buy weapons to defend itself it can be used for recovery and reconstruction the hundred billion dollars a year I mentioned just to survive that doesn’t include recovery and reconstruction the World Bank has done a report it suggests that the cost of Rec reconstruction of Ukraine is about $500 billion and it’s rising every day who’s going to pay for that a western taxpayers going to pay I don’t think they are willing to given cost of living crisis and and politics in Europe and the US Etc the obvious source of funding uh Ukraine’s Victory war and its recover is these Frozen Russian assets why are we doing nothing why are we not touching Russian tax pay a money in bank accounts in the west extraordinary okay I suppose the compromise situation that we have at the moment is is the the move towards using the profits on those assets and the eu’s found this legal loophole to do that and push ahead to use profits obviously much less money we’re talking about than the the 300 plus billion dollars and the G7 is is hoping to use that loophole as well to allocate the $50 billion worth of future proceeds it wants for Ukraine um it’s it’s a move and I’m sure you’re going to say that’s just too little uh and too cautious um but do you think it we are gradually edging towards more of a kind of financial conflict situation over this look as you meant it doesn’t touch the sides in terms of Ukraine’s needs right I mentioned a hundred billion dollar a year for Ukraine to survive probably to win the war to go on the offensive it’s about $150 billion right the interest from those 330 billion of immobilized Russian Assets in Western Banks it generates about 3 to four billion euros a year so 3 to4 billion euros versus 100 to 150 billion it’s not a game changer now as you mentioned the G7 have come up with this fix you know it’s window dressing you know it will generate perhaps 50 billion euros but again in the context of a 100 billion to 150 billion dollar a year need 50 billion is not enough now interestingly if if you think again of that 100 billion that we’ve provided already a year so actually it’s 215 billion total since the war started the US provides about 40% of that or has done now what happens if Trump wins in November I he said he’s going to cut funding off to Ukraine is Europe going to fill that Gap uh I don’t think so uh again what happens if we don’t fund Ukraine it loses the war that’s terrible for European security so we need to you know we need to think really quickly right I mean uh we can’t afford a gap in Ukrainian funding if there’s a gap it losers that’s the harsh reality and and when you hear people who who who are more cautious than you are about about the these frozen assets saying things like it’s going to undermine confidence in the US Global Financial system I mean I I presume you say no that’s not going to happen but but but what what do you say to those people who have have those fears okay there are a number of objections to the use of pres assets one is a legal issue there’s a argument called counter measures that provides a framework for ceasing pres russan assets it it actually argues that sovereign immunity uh a government’s assets are immune from conversation under international law only as long as the country abides by international law clearly Russia isn’t and in a period when it’s out of compliance with international law sanction can can be implied including seizing their assets so the I think the EV the legal case is clear um now the other arguments are as you mentioned that if we seiz these assets that they’ll undermine confidence in the euro in the dollar in Sterling Etc um I would argue the the in particularly amongst other countries that hold uh Western currencies of reserved assets the Gulf States China actually uh we’ve already had a situation where the assets of itively been taken away from Russia right they’ve been immobilized they’ve been put out of Russia’s use Russia cannot access them we’re just saying please let’s use them to help Ukraine win the war and defend itself now the message to countries like Saudi Arabia the Gulf States China has already been sent right if you act against international law uh your assets in Western jurisdictions are at risk and but we’ve seen no evidence of any movement of their assets out of Western jurisdictions the assets were frozen very early after the invasion in February 22 zero evidence of movement out of the dollar out of the Euro and out of Western jurisdictions right they haven’t done it already they’re not going to do it um I would also argue that in particularly for the Euro you know if we don’t do this and we don’t secure Ukraine’s financing a Ukrainian defeat is a disaster for the Euro as a project as I’ve mentioned tens of millions of ukrainians moving West inst political social and economic instability in Europe a huge need to increase defense spending you know this 1% of GDP well the 2% of GDP NATO Target likely will have to go to 3% of GDP that means increasing European defense spending by another 200 billion euros is that Euro positive I don’t think so I think the whole European project will be in doubt and Jeopardy that’s the biggest risk to the euro I would argue in terms of its stability it’s losing this war because people like lagard at the ECB have been overly cautious the other arguments are things like well what about Western Assets in R Russian Russian jurisdiction Putin will just go and retaliate by seizing those assets right he’s already doing that and You’ you could also say well actually those companies who have assets in Russia are just stupid I mean they made bad investment decisions they shouldn’t now be bailed out by Western taxpayers writing a check to cover the cost of the war when there’s Frozen Russian Assets in Western jurisdictions that we should be using but we’re we’re bailing out those companies that basically took Putin’s 40 pieces of silver right they made huge profits from from working with the Putin regime they made the wrong decision we shouldn’t change our uh National national security policy in effect to to bail these guys out meanwhile uh Timothy um Ukraine has to fight a war uh by keeping its economy afloat how is that economy holding up well remarkably well actually I mean uh it’s growing at a faster Pace than the Russian economy its inflation is lower than the Russian economy uh we just had the first quarter GDP numbers 6.5% growth pretty remarkable from a low base you know the durability of the the Ukrainian the fact that Banks work that the currency work works it’s stable that the transport system infrastructure mobile phones work is utterly extraordinary and you know it’s it’s because of a number of reasons one Ukraine has despite all the talk about corruption and rule of law has a very strong CAD of of capable technocrats running that you know good people at Central Bank good people at Ministry of Finance we saw a lot of reforms in Ukraine in the period after the Iden in 20145 that cleaned up the banking sector cleaned up the Central Bank there is underlying trust in the banks in money in the central bank that’s really really helpful also it’s helped that the West has provided about $40 billion a year in budget support I mentioned the 100 billion total support that includes military but just the budget support to Ukraine has been about $40 billion the problem is again if we go back to the financing if there is you know a trump presidency or Europe falters in terms of its willingness to support Ukraine if that those numbers begin to drop we will see a shortfall in budget financing they will have to print money to cover the budget it will mean inflation hyperinflation currency adjustment one of the big positives about the macro stability that we’ve seen is that the ukrainians have been able to focus on fighting the war they haven’t had to worry about macroeconomic destabilization there’s been some stability it’s been one less problem for the ukrainians to think about but they need money from us and as I said you know we have to be we have to absolutely assure Ukraine’s financing to make sure they can win the war there’s macro stability uh and unfortunately I think the Outlook uh for the financing of Ukraine is very uncertain at this point in time and how are businesses actually coping with the challenge of generating a Workforce when the country needs a fighting force yes I mean it’s difficult especially when you know you’ve lost there are many people the front uh Ukraine has lost a lot of people throughout migration some have come back but not that many uh obviously there’s been a ramp up in in women in the workforce they’ve made an incredible contribution but it’s difficult right and uh it’s been a a pressure towards inflation uh but you know I think the Innovation that the ukrainians have shown uh in surviving for two and a half years against a supposed Global power has been extraordinary you know if you look at the military technology front look at drones what they’ve achieved you know it it is remarkable you know the very brave people in the front line for us against Putin’s expansion we owe them you know a huge debt of gratitude and you know I think we need to provide a bit more Finance for them and again those frozen ran assets are pretty critical there but there’s been a lot of durability it gives you it gives you a lot of Hope when the war ends in terms of Ukraine’s ability to bounce back from the war right uh you know there be a huge reconstruction story going on there’s a low base recovery and then all the Innovation uh and Enterprise that we’ve seen from ukrainians through this war should hold the country in relatively good stead when the when the war ons and also the big positive Ukraine now is this they finally have an EU accession anchor do you have it might be impossible to answer this question but do you have any sense about um what effect the how big the black market is at the moment in Ukraine at people who may be wanting to avoid being avoid subcription by not officially registering to work but working on the quiet do you have an idea what kind of impact that’s having on the economy no I it’s hard to gauge that I mean in any you know in the UK it’s it’s hard to figure out you the boys from the black stuff whatever I mean boys and girls in the from the black stuff I mean it’s very difficult to gauge in emerging markets in general it is quite big Ukraine is no no different to that I assume it’s increased because of the war um you know people do pay to avoid going in the military that’s that’s you know we I guess we saw that in the second world war in the UK it’s just a natural uh thing unfortunately it’s an impediment I guess on the military performance an impediment on the economy but it is one of those things the US ambassador to Beijing has said effective that China has effectively sided with Russia what do you see as China’s long-term strategy and what opportunities do you think it sees that it can exploit in this war well I’m not sure I necessarily agree with him I would argue that actually uh the chinesee could have done a lot more to spot Russia in the war they’ve tried to avoid been you know they they certainly haven’t provided significant Military Support the fact that Putin has to go to North Korea to beg for Munitions uh and also he’s dependent on Iranian drones suggest they’re not really getting that much from the Chinese the Chinese have been very mindful because their their key relationship is not with Russia it’s with the US right I mean the Chinese story is they want they think that globalization is still really important to their economic the ultimate economic hemony with the US right that’s what they want they want normalization on global markets they want the Americans to stop imposing tariffs and they’ve kind of used the the war in Ukraine to suggest the Americans that maybe they shouldn’t be overly aggressive in terms of its tariffs and its restrictions on Chinese um Chinese exports to the US and I think that’s really been the case the Biden Administration have pulled its punches really in terms of of what it’s done on China because it knows if it’s overly aggressive the Chinese will go all in in supporting Putin in Russia in terms of Russia CH Russia China relations the two are not natural Partners particularly there’s a lot of tensions between the two the Russians are obviously very worried longterm about its Far East you know they have this huge expans of territory with no people in it lots of resources the Chinese have lots of people and not many resources so you know uh they’re worried about Chinese encroachment on territory uh the Chinese exploited the Russians they’ve exploited Russian weakness they’ve uh they’ve taken because of sanctions they’ve basically taken lots of cheap Russian Commodities uh knocked down prices and as I said they they’re also charging top dollar prices for exports to Russia um and and interesting if you think of the Beijing Olympics just prior to the invasion uh early 2022 the Russians were making a big thing about the fact when Putin arrived in Beijing that they were equal Partners uh what is crystal clear now is they’re not equal Partners Russia is very much the junior dependent partner and and Russia’s I think Global position has been much eroded because of this invasion you know in the end me many people think that Putin is a genius many UK politicians have suggested that the reality is Putin’s got dragged into a war that he hasn’t been able to win and it’s too two and a half years later huge loss of soldiers half a million uh huge loss of economic result I would estimate something like a trillion dollars have been lost to the Russian economy because of the war Russia’s status globally massively reduced again this idea China Russia clear Russia is totally dependent now on China uh so I think you know in the end uh this is not really a winning strategy from Putin so how long do you think Moscow can afford financially and politically to fight the war in Ukraine well you know it it still has reserves it’s a police fascist State Putin controls the media narrative he can force people to the front lines Russia is still a huge country big population 140 million people um but what I would say is you know the longer the war goes on the the bigger the risk to puting have another progan I mean it’s remarkable you remember one year year ago progan and his troops the Vagner brigades were a couple of hundred kilometers outside Moscow we were all looking at the flight data to see if uh Putin and Medvedev were fleeing that’s only a year ago uh the longer it goes on there there is a risk of something happening within the country against Putin and I’m not sure he’d particularly want to risk that you know the longer the world goes on it doesn’t get any better for Russia more casualties more loss of economic power more erosion of its International standing I would think eventually Putin I I think actually Putin would probably want to talk peace now um the question is obviously you know what the deal would be whether the ukrainians will be willing to negotiate uh but I think perhaps towards the end of the year there may be some scope for some kind of negotiation when you stand back from this in your position um what are your takeaways from from the whole experience since the fullscale invasion well uh We’ve realized fortunately Russia didn’t win you know if you go back to those first few days Western intelligence thought he would invade and thought it would be over in two weeks thank God that didn’t happen imagine a scenario that he had won in two weeks all those bad scenarios I pointed out tens of millions ukrainians moving West social political instability in Europe a massive increase in defense bending as a result uh potential for Putin to go further he would be energized he will be cocky arrogant confident where would Putin stop thank God the ukrainians held the line it’s bought us time it’s bought us time to realize the threat from Russia remember macron made the famous statement just prior to the invasion that NATO is brain dead it’s not brain dead anymore it’s Crystal Clear who the threat is what it is and what we need to do we need to increase defense spending uh to improve our defenses uh against future threats from Russia um and also I mean in the end you know uh Russia is a relatively small economy $1 1.8 trillion the West is $40 trillion more than 20 times the size of the Russian economy we have unbelievable uh Power uh to uh to make sure Putin doesn’t win we’ve been too constrained in the use of that power now I think it’s interesting we’ve all learned as the the war has gone on I mean initially I think we all thought that Putin had escalation dominance he cared about Ukraine more than us uh he he was you know willing to do anything to stop uh Ukraine and stop the West in Ukraine you know he’s what we’ve now learn is he is actually scared of the West he does we set red line or he sets red lines doesn’t keep them just think over here that uh initially we were very careful about the supply of conventional equipment you know big debates about t72 Mig 29s highas leopard tanks f-16s long range missiles you know lots of reasons why we shouldn’t do it we’re worried about what Russia has done would do actually on WE supplied those weapons and he hasn’t had there’s been no reaction there’s been no reaction because I think Putin realizes Russian military technology is massively underperformed in Ukraine massively you know second generation NATO kid has basically beaten fourth generation Russian kid he know knows in a direct confrontation with NATO Russia would lose very quickly because of the massive technological advantage so I think it’s moderated what he’s done I think the other interesting angle is he hasn’t used weapons of mass destruction uh people thought he would I think one of the factors there has been China China I think has given guard rails to him the Chinese have said don’t do that that would be massively disrupted to Global markets we don’t want that um and actually the Chinese angle is interesting another conclusion is perhaps not for me but for the Chinese and going back to to that performance of Russian military technology it’s performed so badly and the Chinese essentially use the same variance if you were the Chinese looking at the the failure of Putin in Ukraine you would also think on Taiwan can we well one one conclusion is don’t get involved in a war that you can’t win and I would I think the Chinese would be questioning their ability to win a war in Taiwan quickly because of how po poorly Russian military technology has performed and again they use a very sovet so I think it’s reduced the chances of a Chinese attack on Taiwan at least for a few years until they perhaps draw some conclusions in terms of how Russia performed military and reformed their own Army because of it so lots of things to take out from that one is thank God thank God uh Putin didn’t win initially we now know how weak Russia is actually he’s scared of the West uh you know he he respects power we have uh you know we we can can we can deter Putin we have the power to stop him to deter him but we’re afraid to use that power to deploy that power uh and also as I said the other conclusion is I think Taiwan will be sorry China will be less reluctant to take action in Taiwan which is a positive I guess a very interesting thought to end on thank you so much Timothy Ash it’s been great talking to you my pleasure you’ve been watching Frontline for times radio with me K chabo my thanks to our producers today lis I’m Morgan berdick and for you for watching if you’d like to support us you can subscribe now or you can listen to times radio for the latest news and in-depth analysis or go to the times.co.uk for now though thanks for watching bye-bye

Russia’s war economy is not yet geared towards a long war and Putin’s position will become less stable, Timothy Ash tells Kate Gerbeau on Frontline for #timesradio

📻 Listen to Times Radio – https://www.thetimes.co.uk/radio

📍 Subscribe to our channel – http://www.youtube.com/channel/UCTjDhFuGXlhx9Us0gq0VK2w?sub_confirmation=1

🗞 Subscribe to The Times https://www.thetimes.co.uk/subscribe/radio-3for3/

📲 Get the free Times Radio app https://www.thetimes.co.uk/radio/how-to-listen-to-times-radio/app