Russia still poses the most serious threat to the transatlantic alliance. And, for now, NATO is not enough.
To be sure, the military alliance has prevented major military conflict in Europe, but the Kremlin has formulated war by other means. Without confrontation, Putin will undoubtedly continue to spread misinformation and exacerbate corruption endemic in the economies of NATO’s eastern partners.
Put another way, NATO troop rotations in the Baltics may deter Russians from crossing borders, but military bluster will do little to stem the propaganda Moscow spreads and economic dependencies that it creates. If the transatlantic alliance intends to challenge the Kremlin and preserve its clout and global stability, it needs to instead craft an approach around supporting anti-corruption and economic reform.
The United States and its European allies can pool together expertise and create a new institution—a transatlantic infrastructure investment bank—to achieve this goal. Ukraine, struggling to reform and in need of aid, can be the proving ground for a revamped transatlantic alliance.
The Euromaidan revolution in 2014 signaled Ukraine’s shift toward the West after decades under Kremlin-friendly control. The country is now drastically restructuring its economy and government to combat widespread, entrenched corruption. Since independence, corruption in Ukraine’s many state-controlled sectors has invited the country’s elites to raid billions from the state with help from Russia. Ukraine’s continued economic and political progress is dependent on sustained reform.
Although the United States and Europe have offered some economic assistance, Ukraine will require more aid than that that which has been pledged to extricate its economy from decades of Russian manipulation. In the past, Moscow has wrested control over the Black Sea fleet and shut off natural gas flows over debts and non-payments.
With help, Ukraine can free up billions to rebuild critical infrastructure and shore up its own national defense. Also, if Ukraine frees itself from corruption, its growing economy would become an attractive market for the United States and Europe. On one hand, Ukrainians will become more prosperous and their appetite for foreign goods will grow. On the other, foreign investment will likely flow in as the ease of doing business increases.
First, the United States and Europe should offer financial and technical assistance to countries like Ukraine, potential allies to the transatlantic alliance where corruption and poor infrastructure limit economic growth, through a newly minted transatlantic infrastructure investment bank. This organization would offer funds conditional on specific corruption-reducing measures like those required by the IMF to encourage meaningful progress.
Specifically, the transatlantic infrastructure investment bank would finance critical infrastructure to strengthen overall economies. For example, in Ukraine where the energy sector is in dire need of investment, the bank could fund liquefied natural gas terminals and utility-scale solar installations to allow for additional non-Russian energy supplies. It could also fund information technology projects, transportation, and advanced manufacturing to facilitate higher economic growth.
Through this institution, the U.S. and EU should also jointly send advisors to help design the privatization process and anticorruption measures. These officials can leverage the best practices from both sides of the Atlantic to guide the efforts of the National Anti-Corruption Bureau, one of the most effective institutional reforms in Ukraine since Euromaidan.
And to guarantee free and fair privatization, the U.S. and EU should connect the Ukrainian government with domestic civil society groups and international investment banks to supervise the privatization of state-owned companies in transparent international auctions. With these partnerships, Kiev can shore up government revenues and avoid forfeiting its assets to the country’s oligarchy or Moscow.
In the future, transatlantic advisors can develop best practices to share with future allies in needs of similar assistance. Such knowledge could also be helpful to countries that are already members of the alliance as defense-sector corruption is astonishingly common in most NATO countries.
Second, the transatlantic alliance should support technology transfer to Ukraine through joint defense research. The country, the world’s eighth-largest arms exporter before Russia annexed Crimea, already has strong defense and information-technology sectors. U.S. agencies like the Defense Advanced Research Projects Agency should partner with Ukroboronprom, Ukraine’s defense industry, to raise Ukraine’s standards and develop new technologies.
In additi0n, NATO could grow these Ukraine’s defense sector with production contracts, an effort that will also work toward rebuilding the Ukrainian economy by supporting what already functions well.
Last, under the bank, economic advisors can also help Kiev develop deeper trade links throughout eastern Europe and Central Asia to guide multiple countries away from dependence on Russia. In particular, European and American expertise in negotiating regional free trade agreements can prove particularly useful as more post-Soviet countries move to untangle their economies from Russia’s.
For example, natural gas from Turkmenistan and Azerbaijan could substitute Russian supplies, not only for Ukraine, but the rest of eastern Europe as well.
Moving forward, true collective defense will require more than military might. By creating a strategy that promotes reform and fights corruption, the transatlantic alliance can cement its stand against Russia while accruing economic and diplomatic benefits.
Assisting Kiev can be the first trial for a new dimension in the transatlantic alliance. The bank will help the U.S. and Europe remain relevant by acting as a parallel institution to NATO that coordinates a wide range of nonmilitary instruments of security policy including economic and financial assistance and trade policy.
Without such a fund, Russia will continue to batter the alliance held back only by dubiously effective sanctions. And the Kremlin’s ability to circumvent NATO’s mutual defense treaty will only become more sophisticated.
This strategy will be a sustainable response. The threats that the transatlantic alliance face have evolved and the alliance must evolve with them. Even beyond the immediate conflict in Ukraine, a transatlantic bank would allow the alliance to further expand peace by economic means. After the second World War, Europe was reconstructed not with a mutual defense pact, but through the Marshall Plan. Infrastructure, not bombs, rebuilt Europe. As the alliance encounters new challenges, infrastructure can rebuild it, too.
Hi Sagatom,
I read your article with great interest and I think the idea of a transatlantic infrastructure investment bank is a way to bring the existing cooperation forward. Do you think the bank could support the establishment of a common market in armaments under the umbrella of NATO? I’m asking because especially the Europeans don’t share their abilities, there are too much different units and weapon systems.
Greetings Tim
Hi Tim, great question and I’m not sure. I’d actually like to hear your thoughts on the matter. What would the desired end goal be for a common weapons systems market and what are the current barriers?
Hi Sagatom,
thanks for article! I have a question regarding NATO’s response towards Russia: You wrote that NATO might want to „challenge“ Russia. I am not sure, if we should do that. Undoubtedly, we have to react and defend against Russian aggression. But our ultimate goal should be peace and cooperation, shouldn´t it (of course hard to achieve with the current Russian government)? Or did I misunderstand your point? Thanks for the clarification.
Cheers
Justus
Hi Justus, thanks for the comment. The United States and its European allies should pursue peace where it is an option, but that is not possible without penalizing Russia for its aggression. By spreading misinformation in the West, exacerbating the Syrian Civil War, and invading Ukraine, the Kremlin has undermined global peace. NATO should pursue policies that deters Russian hostility without inviting escalation. For this reason, I advocate for policies like investing in development and infrastructure rather than offering lethal military aid.
Hi Sagatom,
thanks for your reply! I think your right – we have to react and offering an economic perspective is a good plan. It is a pity that Russia pursuits an aggressive path. I just read a piece on the cooperation between Russia and Europe on cleaning up environmental hazards in Russia. One focus is dealing with nuclear waste from the Soviet military. No new programs are initiated because of the conflict. Do you thinks, that there is a chance for a less aggressive approach from Russia in the near future?
Cheers
Justus
My instinct is to doubt that, but a less aggressive Russia will only appear when the cost of aggression is too high for Moscow to pursue.
Hi Justus, thanks for the comment. The United States and its European allies should pursue peace where it is an option, but that is not possible without penalizing Russia for its aggression. By spreading misinformation in the West, exacerbating the Syrian Civil War, and invading Ukraine, the Kremlin has undermined global peace. NATO should pursue policies that deters Russian hostility without inviting escalation. For this reason, I advocate for policies like investing in development and infrastructure rather than offering lethal military aid.
Hi Sagatom – this topic is very intriguing. At the risk of invoking a tautological argument, I want to touch on some of the thinking that has developed in parallel with the deterrence piece of this – some scholars argue that the West underestimates the extent to which Putin and the Kremlin legitimately feel threatened by an expanding NATO and that Russia’s behavior in Georgia, Ukraine, Moldova, and other countries is functionally a deterrent against NATO expansion in the form of (1) creating territorial and political conflicts that might hinder these countries’ accession to NATO and (2) creating an economic and political dependency (which you mentioned) that heightens the opportunity costs for accession.
By this logic, some researchers argue that NATO should officially close the membership door and relax its support for Russia’s neighbors, which would reduce the incentives for Russia to create political disarray in the region and and work to subvert Western alliances. I don’t fully agree with this because we know that Russia seeks a robust “sphere of influence” beyond just as a response to NATO, but I do think that there is some merit to the contention that some of NATO’s actions actually encourages the behavior that the Alliance seeks to deter. What do you think about this, and do you foresee any consequences for enhanced material support for Ukraine that is designed to, among other things, reduce its dependence on Russia? -Mike
Hi Michael, the point that NATO expansion has incentivized the aggression from the Kremlin is well-taken. I would also add that, especially in eastern Europe, NATO should not risk military escalation unless it can credibly escalate. Outside of its own membership (e.g., the Baltics), that is not the case. For this reason, I advocate for economic support rather than military support.
Hello Sagotom,
I do believe that cyber stability/protection for the Ukraine must also be considered. Since 2000, Russia has initiated cyber attacks in the region and lack of response has failed to provide a deterrent for future attacks. Since a major attack in 2007, Estonia has invested heavily in cyber defense. This should also be a component for your plan in regards to information sharing for the Ukraine. What are your thoughts?
Great Article!
Brandyt
Brandy, great point — I completely agree that cybersecurity is a more important component to Ukrainian security than I express here. However, I do know that the U.S. is already working with Ukrainian counterparts to security Ukraine’s energy infrastructure from cyber-attacks. More work still needs to be done to secure the energy sector as well as other critical-infrastructure sectors.
Sasgatom,
I think the dialogue from the other contributors is a great resource. I enjoy the discourse and already have some items that I would clarify based on feedback!
SCADA attacks can have a devastating impact on critical infrastructure , but protection of the economy should also be a priority as it can affect stability of the economic systems in the region.
Best,
Brandy