unhindered ability to tap into Ukraine’s skilled and
numerous workforces, Saradzhyan said.
“If there is one prize in Ukraine that Russia is after,
it is not land because all these lands that Russia
acquires [have] to be subsidized,” he said. “The prize
is human capital. Ukraine has a population of 40 mil-
lion. If you add the population of Russia of 140 mil-
lion, you get a substantial increase. If you add
Ukraine’s entire GDP [Gross Domestic Product] to the
GDP of Russia, you will see an increase of less than 8
percent. Russia is the largest country in the world. The
last thing Russia needs is more land.”
While Russia-U.S. cooperation in the Arctic has
slowed considerably, Saradzhyan said that is not so
much a result of the crisis in Ukraine, but more the fact
that oil prices have plummeted since June. Current
prices raise the question of profitability, given the huge
cost of investing in an infrastructure for exploiting
Arctic resources.
“Until the price [of oil] rebounds, if it rebounds, the
question of Russia’s drilling there and cooperating with
the U.S. in patrolling the areas of the Arctic would not
remain on the forefront, but would remain on the back
burner, even if the [Ukraine] crisis is resolved,” Sa -
radzhyan said. “Russia has plenty of oil to pump in the
short term from easier-to-extract fields.”
In a twist that only a macro-economist could appre-
ciate, China has tread cautiously into forging valuable
energy agreements with Russia in an effort to move
incrementally away from coal as a primary driver of the
nation’s energy mix and diversify into natural gas,
Consonery said.
“China still puts very high priority on maintaining
stable relations with the United States and sees that
stability and that relationship as integral, crucial, for
their overall in ter nal development goals and their
reform goals,” he said.
“I think China wants to benefit from Russia’s prob-
lems, but it does not want to own their problems.
Given all the events over the past eight months, China
has looked on these developments [in Russia] very
opportunistically.”
As a major energy importer with very aggressive nat-
ural gas goals, China has neared completion of some
major energy deals with Russia that have been in the
works for quite some time, he said.
“Our view is that they are going to be very opportunis-
tic but they are not going to be limitless in their support,”
Consonery added. “China may go a little bit further than
the U.S. is comfortable with, but at the end of the day I
think the priority of maintaining a stable relationship
with the U.S. puts significant limits on how far China is
really going to be willing to go in supporting Russia either
economically, or, definitely, strategically.”
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