Russia’s annexation of Crimea in 2014 was an inflection point for globalization. The economic integration between east and west that began with the fall of the Berlin Wall in 1989 started to unravel.
That process will accelerate dramatically if Russia invades Ukraine and is met with punishing sanctions by the West. The resulting rupture would effectively leave Russia and China in their own economic bloc and the Western market-based democracies in another. It’s too soon to predict who wins this new economic Cold War, but not too soon to say that Russia will lose.
The end of the first Cold War transformed Russia’s economy in two ways: Markets replaced central planning, and Western trade, investment and know-how flooded in. To be sure, the benefits took a long time to materialize. The transition was marred by a depression at the outset, privatization that left the economy’s crown…
