Vladimir Putin is not anybody’s image of a Rotarian. That may be part of his undoing.

The takeover of Crimea was crudely executed. The technique was reminiscent of the way Russia, the Ottomans, and the Austro Hungarians built their empires centuries back. In those days, before widespread trade and communication, individual regions in the hinterlands of Eastern Europe tended to be isolated and self-sufficient. The formula was simple: conquer them, integrate them, and demand tribute.

It is no longer so simple. Crimea’s economy depends on tourists – mostly from Ukraine. It depends on the export of wine – mostly to Ukraine. People in Crimea have enjoyed close and essential connections with the rest of Ukraine. Banks, accountancies, and trade groups operate at a national or multinational level. Putin’s rough seizure of Crimea disrupted all sorts of connections.  The citizens of Crimea have been well connected to Ukraine by roads, railroads, airlines, telephone and the Internet. As free people, they have had the freedom to associate in voluntary organizations, the kind that have characterized the United States since its inception.

This fact came home to me when I attended a Rotary meeting in Kiev last week. There are five Rotary clubs in Crimea. Their members are businessmen and professionals who travel a lot. They have close personal relationships with many of the members of the Kiev clubs. People at the meeting told about their conversations, by telephone or by Internet, with Crimea and club members after the Russian takeover. They are scared. They do not yet know what it means whether businesses, the value of their property, the education that their children will receive and so forth, but the portents are not good. People who are young and mobile are looking for job opportunities anyplace else, starting with Kiev. Those with deeper connections feel trapped.

What can Putin do? It is impossible to shut off all communication between Crimea and the rest of Ukraine. Without travel and communication, it would regress to the status of a medieval duchy occupying an arid peninsula isolated from the mainland. On the other hand, if communications remain open, one can be sure that the Rotarians in Crimea will let their brothers in the rest of the world know exactly what is happening. There is no way that the business was Ukraine will approach its former levels anytime soon. Putin has only bad choices. He can let the Crimeans suffer and bellyache. He can push Russia further into debt, supplying subsidies to Crimea to make up for lost business. In the extreme, he could push to conquer the rest of Ukraine. Then he would have the same kind of problem, except with 45 million people instead of merely two million.

The volunteer spirit is one of the things that sets Ukraine apart from Russia. Kiev has six Toastmasters clubs; in all of Ukraine there are ten.  Tiny Moldova has a thriving club. Russia, on the other hand, has only three and they are struggling. The Rotary club in Lviv recently celebrated its 75th birthday, not counting a long hiatus under communism. Rotary appears stronger in Ukraine than Russia; its spirit of mutual support and international brotherhood seems quite at odds with Putin’s view of the world.

I look forward to closely following developments in Russian occupied Crimea. I am sure I will hear stories personally from my Russian speaking friends, and I may be able to follow a few on Facebook. I will not be alone. This simple spread of knowledge, facilitated by friendships develop in business and voluntary organizations, is the kind of threat that Putin cannot contain. It undermined the Arab dictatorships, it undid Yanukovych here in Ukraine, and I have to imagine it will undo Putin himself.


1 thought on “Vladimir Putin is not anybody’s image of a Rotarian. That may be part of his undoing.

  1. Thanks for the update. I think that I suggested much the same thing in some prior comment. Russia’s heavy foot will discourage tourism. I didn’t know that wine was a significant part of the Crimean Economy. I’ll have to tell my two sisters in Napa that they should get their winery friends to do a tad of yellow journalism on Crimean wine. Then Napa will come to the rescue of what were consumers of Crimean wine. Regardless, if Russia can’t extract enough from Crimea to continue its subjugation of Crimea we might see something akin to the 23 years ago breakup of the old Soviet Union because it was spending itself to economic death.

    Did the Russian takeover of Crimea cause much trouble in Kiev? I’m guessing that the displacement of Yanukovich and creation of a new government might make the identification of causes of changes in attitudes, trade, etc. difficult. Nonetheless people might not be inclined to hoard or move if they thought that their problem was getting their nation restarted as opposed to their being threatened by an invasion by Russia. More particularly, do or did you perceive an increased capital flight as a result of the Crimean Anschluss?

    In one of my former lives I was a commercial lender for a couple of banks before I want over to the SBA. One thing that didn’t concern me was political risk. I doubt if there is a rational or consistent basis for assessing a political risk premium in Ukraine. From my perspective up here in Alaska, Ukrainian banks, leasing companies, liability insurers, and a bunch of other intermediaries must be going nuts.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s