Ukraine's NATO membership would be bad for Putin, but great for the Russian economy, professor says

11 months ago 15
  • Russia's economy could return to global markets if Ukraine joins NATO, Konstantin Sonin wrote.
  • The Russia scholar said Kyiv's membership in the alliance would make it harder for the Kremlin to justify outsized military spending.
  • While it wouldn't undo the damage Putin has inflicted on the economy, it would help with recovery.

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Allowing Ukraine to join NATO's ranks would weaken Vladimir Putin, but Russia's economy and its people would benefit, according to University of Chicago professor Konstantin Sonin.

Kyiv's membership in the alliance would make it harder for the Kremlin to justify outsized military spending, the top Russia scholar wrote in Project Syndicate. It would also help end Russia's isolation from global markets.

"While Ukraine's accession to NATO would be bad news for Russian President Vladimir Putin and his allies, it could yield significant benefits for Russia's citizens," he wrote.

Long before Putin ordered the invasion of Ukraine, Russian leadership had a history of consolidating power through warnings of supposed foreign threats. Such rhetoric typically prioritized high military spending over economic welfare, a factor in the Soviet Union's 1991 downfall, Konstantin said.

By keeping Ukraine outside of NATO, Putin could still justify favoring military expenditures, he added, noting even before the war, decades of preparing for conflict cost the nation billions.

In that period, Putin kept Russia insulated from global financial markets which resulted in economic stagnation, Konstantin said, estimating lost output from 2009 to 2022 amounts to 10%-15% of GDP.

The war on Ukraine has made the situation worse, shifting Russia's economy toward regressive import substitution and spurring a mass exodus of skilled workers. That comes after Western sanction largely shut out Russia from global finance and cut off top export markets.

"To be sure, bringing Ukraine into NATO would not undo the damage Putin has inflicted on the Russian economy," he said. "But it would be much harder to justify prioritizing military production over economic growth once the war ends. Ensuring Ukraine's safety would also make it easier, faster, and safer to reintegrate Russia into global markets, accelerating its economic recovery and ensuring that post-war Russia will not exploit its trade ties to fund future aggression."

Still, it's in Putin's benefit to drive the war on, as he has used the expansive military spending to turn a profit for him and his allies, according to Konstantin.

And the growth of military spending has been difficult to track because an increasingly larger portion of it has been determined a state secret.

"The veil of secrecy surrounding Russia's military spending has allowed domestic arms manufacturers to maintain profit margins that would be unattainable under normal market conditions," he wrote, later adding: "If Ukraine joins NATO, Putin and future leaders like him will have a difficult time persuading Russians that massive military investments are necessary." 

Konstantin acknowledged that it would take time to see the economic benefits stemming from Ukraine's NATO membership, but the move may save Russians from future policies that favor militarism over economic prosperity.

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