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Isolation: Russians will feel that its entirety is Siberia

Economic bleakness is ahead for Russians under Vladimir Putin. Knocking a few points from its anemic growth will put the nation into a recession. Surely, there will be negative economic impact on its European and U.S. trading partners too. However, if that results in greater independence and a shift to alternatives in the supply chain, that would be a good thing.

Economic Siberia ahead for Russians
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In a global supply chain, the free world must be choosier about its relationships. On one hand, conducting business with nations that are on the fringe of acceptability may result in positive influence. On the other hand, bailing out roque and harsh regimes is an unintended consequence. For the U.S., trade and commerce policies must provide stronger guidance to capitalists, otherwise they won’t police their own behavior.

The U.S. Department of Trade provided guidelines to Russian entrepreneurs advising them about business ethics. You wonder if American corporations have read them?

“The purpose of these Guidelines is to fill the information and methodology void that has formed as Russian entrepreneurs realize the utility and practical benefits of business ethics as a key instrument for effective business management and development. The writers of the Guidelines sought to provide Russian companies with clear signposts to put them on a fast-track from need acknowledgement to practical implementation of corporate ethics in business. These Guidelines are targeted at owners and senior managers of large, medium and fast growing small enterprises, board of directors members, board of directors committee members and experts, and managers charged with developing
and implementing corporate ethics and social responsibility programs.

These Guidelines are universal and apply to all Russian companies, regardless of sector, size, structure or specifics.

These Guidelines are based on leading international and Russian experience as regards building effective business relationships. The content and structure of these Guidelines have been optimized to enable their practical implementation.

The introduction to this manual, which explains the urgency of the Guidelines and describes business ethics traditions in Russia and country specifics regarding their implementation, could be used as a starting point for the discussion and adoption by companies' executive bodies of resolutions implementing business ethics standards. It can also be used as a basis for the preamble to corporate ethics codes.

Exxon Mobile publish their “ethics” standards:

Specific business transactions may be conducted ethically, but the entire notion of Americans doing business with rogue nations, some sponsors of terrorism, and the like is unacceptable. Unacceptability begins with Congress and the President in establishing policies, plans, and energy strategy in the instance of petroleum.

Threatening Russians with a significant economic recession is too little punishment for the crimes committed by Putin and his military. The pain should be severe and designed to last until the Russian citizens come to their own recognizance that their behavior in the world must radically change.
Good news is that inside and outside Russia, there are Russians and ethnic Russians who see the evil in the present situation. As a matter of pride, they might be implored to act.

“While the facts about who shot down Flight MH-17 can only be settled by a full investigation, Ukraine's government has said it has "compelling evidence" that a Russian-supplied battery, manned by Russian operatives, fired the missile.

'Moment of truth' for Putin

Suddenly, the risks inherent in Putin's gamble are glaringly obvious. By supplying weapons to the rebel militias, with their strange mix of intelligence agents, local thugs and trigger-happy Russian volunteers, Putin made himself a hostage to their brutish blundering. On Saturday, some of these "freedom fighters," apparentlydrunk, were said to be manhandling the corpses, while barring OSCE observers from the crash site.
All must now await the results of the international investigation. If it concludes that the plane was shot down by rebels using a Russian-supplied missile -- or, worse still, by Russians themselves -- the pressure on Putin will become intense. The West, led by President Barack Obama, will demand that he cut off support to the rebels once and for all and seal the border.

If Putin does not do so, tougher economic penalties are almost certain. Already, the latest round of U.S. sanctions, announced on July 17, surprised observers by their severity. They targeted the third and fourth largest Russian banks -- VEB and Gazprombank -- as well as the energy companies Rosneft and Novatek, which are associated with the Putin cronies Igor Sechin and Gennady Timchenko.

Putin will, thus, have two options, both dangerous for his regime.

He could reject the conclusions of the international investigation and stand by the separatists. This would result in serious damage to the Russian economy from sanctions that might now target whole sectors such as banking or energy. Such measures would send the economy -- already forecast by the IMF to grow just 0.2% this year -- into a painful recession.

At the same time, the Kremlin would find itself more internationally isolated than at any time since the end of the Cold War.

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