Who will be the winners and losers? Part 2. The losers

Paul Fiolkowski
14 min readSep 10, 2023

A few days ago, I offered my analysis of who will be the biggest winners from this war. Which now brings us to the next part, the 3 biggest losers.


Russia is going to bleed economically in the years to come. And it is not merely due to economic retaliation by the West. No, it is going to be a double whammy.

The first one is that the economic sanctions being put into place are going to freeze most Western investments in Russia in strategic domains by quite frankly, making them a criminal activity. The assets of Russian oligarchs abroad are toast now. Now it isn’t like the West does not have any assets in Russia which will be screwed, but the thing is that thanks to Russia’s corrupt structure, there are far more Russian assets parked in the West than Western assets locked in Russia. And the sanctions are not just in terms of dollars or euros, but put a ban on exports for such critical items like semiconductors. Let me put it this way — remember the sanctions imposed on Huawei? The ones that crippled it? Yeah, that has just gone into effect except now it’s for the entire nation of Russia. With agreement by TSMC, the largest global chip manufacturer located in Taiwan. I’ll let you cobble the pieces then.

But the second one is unarguably even worse — the urgency with which the West are now going to run to make themselves as independent as possible of Russian fossil fuels. This is something which both the clean energy camp and the national security hawks can join hands on, though for very different reasons. Natural gas and oil exports are the bloodline of the Russian economy, they’re what power Putin’s war machine. And it means that even in some fantastic scenario where there were no sanctions at all, you simply still don’t want your biggest customer to start becoming less dependent on your product.

As a drug dealer, if I were forced to choose between two bad options -

1. Drugs being illegal and dangerous to sell, but my customers still desperately want to buy them.
2. Drugs are completely legal to sell, but demand for them by my customers sharply falls.
I know which one I’d take. Now Russia will get BOTH.

To be clear, the purposes of sanctions now is not deterrence, that ship has sailed four days ago. Now sanctions have one purpose and one purpose alone — punishment. To starve Russia’s economy and especially her war machine.

Good luck with that, Comrade Putin. He may be gone within a couple of decades, but the devastating effect on the Russian economy and her people by these sanctions which will extend for years if not decades, and asphyxiate Russia cruelly and systematically? That suffering will linger well beyond after Putin is put six feet under.

Russia has now condemned her future economic survival, because quite frankly, she does not have much to offer the world in terms of goods except energy and weapons. Nobody buys a lot of Russian cars, computers, textiles or medicines. Most of Russian exports are stuff which you dig out of the ground, an extractive economy. And when that model changes, such an economy is simply not innovative enough to adapt.

Russia is also now in the hock to a nation (China) which is as brutally realpolitik as they are. A nation which they have a border with in the East, except that the Chinese have 200 million on their side of the border while Russia has 4 million. And where the Russians have considerable fuel resources.

Mark my words here — Mongolia may well prove to be for Russia, what Belarus has proven to be for Ukraine. A future Chinese puppet state which then acts as a staging ground for a gigantic invasion. And no, this isn’t the China of the 1950s which Moscow can just dismiss as “Their military is just a glorified horde of armed rice peasants!”

Putin and Xi’s marriage may not be nearly as dystopian as that between Hitler and Stalin, yet. But it’s very much of an unstable marriage of convenience. It always is between any dictators for a simple reason — dictators are by nature extremely mistrustful and paranoid, since you don’t get to that position of brutal power without being that way. It’s a job where you won’t just walk out of the office like a democratic leader but will leave in a casket with a bullet hole in your head. And you didn’t have to be popular or affable to get elected to that office. It’s a reptilian psychopathic cocktail and that cold-blooded nature can’t just be turned on or off at will. It’s like the typical cartoon of two dictators shaking hands even as each one clenches a pistol behind his back with the other hand.

Hitler and Stalin’s “partnership” above is the most well known, but the list is endless in just the last century.

Pick whichever pair you please, dictators who shared the same neighborhood or a border — Hitler-Mussolini, Stalin-Mao, Saddam-Hafez, Hafez-Nasser, Saddam-Reza Pahlavi, Mubarak-Gaddafi — how many more do you want me to list, how much time do you have?

It never changes, and it won’t change now.

Putin’s proffered objective with the whole prelude and then act of invasion was the supposed threat from NATO? (which btw is a complete crock of shit, which I will address another day) — well congratulations Tsar! You’ve just managed to achieve the precise opposite. I honestly don’t think he was that dumb which is why I say the reason given was largely disingenuous.

He made a calculated gamble that this crisis would fracture NATO and that he would be able to peel off the EU and especially Germany away from America and evict the latter from the continent. Notwithstanding the fact that Germany has embarrassingly had to be dragged kicking and screaming into supporting the others, the fact is that the Eastern Flank of NATO, now will be armed right to the teeth.

Even as I write these words, five thousand more US troops are deploying rapidly into southeastern Poland where she borders Ukraine, and the Poles are as relieved as they are delighted to have them on their soil. The American military establishment with bases all over the planet, is usually trigger ready to go at a moments notice. I’ve often said that for better or worse in terms of the stereotype, while the American people are Athenian, the American war machine is decisively Spartan with a ruthless ability and appetite for destruction of the enemy.

So Russia has alarmed her enemies, made them beef up their defenses, made them move as fast as they can away from the one product she must sell, and simultaneously delivered her fate into the hands of a ruthless regime with whom a reckoning in the East will come. And when (not if) that reckoning arrives at the east end of Siberia, Russia will be in a level of trouble which is hard to now comprehend.

Anyway you try and square it, this was NOT about Russian security or interests at all. No, it was about Putin maintaining power in the Kremlin.

Russians will come to see it in the decades ahead (I suspect that many already do), but for a nation whose men are quite literally drinking themselves to death, the hour will be too late by then.


Where to start?

Everything I said about France above? Yeah okay now, just flip it over and you have Germany. Germany’s credibility as a geopolitical partner and her potency at doing anything but pleading, is in tatters. Forget the credibility of her power, her partners especially in Eastern Europe now doubt even her motivations now.

Look, it is easy to mock the Germans for their contribution of .. helmets…. to Ukraine. I sarcastically said that they’d next contribute trucks of condoms to Kiev so Ukrainian women can avoid pregnancy and STDs after mass rapes by Russian soldiers. But seriously, you have to understand that the position which Germany finds herself today in, is a culmination of systematic miscalculation, mercantilism and short-sightedness over at least two decades. In that sense, I feel genuine empathy for the current German government because they’ve been dealt a very bad legacy by previous German leaders, especially Gerhard Schroeder who as best friends with Putin was termed as a “political prostitute”. Mocking Olaf Scholz (as I’ve been guilty of doing myself) is not fair or reasonable because it is like yelling at the customer service representative for a bad product which they had little part in putting together.

Ever since her unification, Germany all but jettisoned any security considerations. In the decision halls of Berlin when it came to foreign policy, EVERYTHING was subject to Germany’s mercantile interests. Everything was through the lens of “Will this help or hinder German exports and economic growth?” Germany in terms of her geopolitical strategy was like an anti-Russia. And that’s not a good thing because you should not veer to either extreme, focusing entirely on the military or completely ignoring the military.

Today Germany finds herself with no military credibility at all.

Her army, the Bundeswehr, is acknowledged by German insiders to be a shell of a force with a pitifully low proportion of actually operational equipment. I recently read an answer by Roland Bartetzko about how the quality of soldiers in the Austrian Army (I’d never heard of it ever since WW1) was one of the best in the world and almost as good as Germany’s! Very persuasive, I was impressed and wrote a comment on his answer saying that it’s like boasting

“My mother’s cooking is so good, it’s almost as good as Taco Bell!”

It’s of little relevance what a nation’s training program for officers and enlisted men is when you don’t have enough heavy equipment! Soldiers and officers can’t just “theoretically” gain experience in using complex machinery. What are they expert at? Hand-to-hand combat?

Are your naval officers honing their skills in fishing boats? Are your artillery officers practicing with water cannons? Are your future fighter aces training with Lufthansa’s commercial fleet?

How good can your warriors be when you don’t provide adequate machinery in peace time for them to sharpen the skills they will need in war time?

Even Germany’s vaunted economic size proved at best to be hollow, and at worst to be a hindrance. She had to be dragged kicking and screaming because Russia could just cut off her energy. I had warned repeatedly in the last few months in my writings here, again and again, how this talk of German GDP was in reality a white elephant in geopolitical terms. How her economy was in fact hostage to Russia (and will increasingly be to China), but many thought I was just being rabidly “anti-German” and even Europhobic. Every prediction I made, every assessment, has proven been on point in the last few weeks, but believe me when I say that it is not pleasurable at all when your foretelling of unpleasant events eventually comes to pass.

Germany will suffer the hardest economic pain now because this weaning off Russian oil and gas will be the sharpest for her since she is the one most dependent on it. And to be fair, it is ridiculous and unrealistic to ask her to just cut it off overnight. She’s already cancelled Nord Stream II which is significant. Even with a chronic drug addict or alcoholic, if you just cut the drug off overnight you seriously risk killing the patient themselves. No, they need to be weaned off as quickly as possible but also as sensibly as warranted. You want to destroy the disease, not the patient. Even with German (and Italian) opposition to cutting off Russia from the SWIFT financial communications system, it isn’t as stupid as some seem to think — because doing that would make it extremely difficult for Germany to pay for Russian gas supplies and literally condemn millions of people in these aging nations to the cold and dark. German sins of the last two decades are bad but not so terrible that her people be punished in such brutal fashion!

That said, Germany needs to be acutely conscious that for so long as she understandably needs and pays for Russian gas and oil, she unfortunately will be funding the Russian military machine. Likewise with trade with China. And hopefully that consciousness lights a fire under her to urgently do everything within her power to pivot away from those dependencies.

To please try and get yourself away from men who you know…. wantonly invade their neighbors and also throw hundreds of thousands of their innocent citizens into concentration camps for no reason but their ethnicity. After all, your nation did have a guy once who did precisely both of those things in spades. Then be conscious of it and don’t be complicit in such evils any more than you absolutely have to be only for the time being understandably for your survival. Because believe me Germany, in the long-term you really don’t want to have the blood of thousands, if not millions of innocent people on your soul once again, even if that be through just unwittingly funding these crimes against humanity rather than committing them yourself.

Germany is also likely to see another serious influx of refugees only second to Poland — but this time around at least the migrants won’t go around sexually assaulting German women en masse.

There is no upside to this for Germany. None.

Her military impotence has been exposed. Her energy dependence on Russia making her vulnerable to economic blackmail, has been the chief hindrance to Western sanctions. And finally her refusal to let even allies send arms to Ukraine prior to the conflict has plummeted her reputation among her partners to new depths.

I don’t want to rub it in any further but I hope that she seriously takes stock of the long path in how she came to be in the terrible position where she finds herself right now, then weans herself off Russian energy and finds new suppliers, re-opens her nuclear plants, starts spending more money on her defense.

Oh, and all of this talk of a “United States of Europe” which was the policy declared by the the current German coalition government as soon as they came to power late last year? Yeah, forget about it.


Most Indians don’t even seem to realize how bad this is for them, given that the theater of conflict in Ukraine is seemingly so far away. Let me piece it together this way -

· Russia has traditionally been India’s most powerful patron.
· Russia’s most powerful patron right now and for the foreseeable future is China.
· China is India’s most dangerous and mortal enemy.
You do the math.

Do I have to remind people of the Sino-Indian war? There is still a border dispute.

When it comes to prioritizing Indian or Chinese interests, the choice will not even be a close one for Russia.

Because though Russia traditionally likes India more than she does China, she now is inextricably dependent on China for her survival. India to put it quite bluntly, does not have the money to match Chinese patronage. It’s as simple as that, Putin has ensured that his nation has no other choice in the future for at least a decade, and probably way beyond that.

To make matters worse, Russia seems to be warming up to that other old enemy of India, Pakistan. Pakistan as China’s client state in South Asia, comes as a ‘package deal’ with China. Or as one of my favorite Indian analysts, Shekhar Gupta put it quite comically, it’s like how in the 80s if you bought a large box of washing detergent powder (China), you also got a tiny soap bar (Pakistan) for free.

Indians who still continue to support Russia don’t realize what terrible risk they are running, as China continues to encircle their nation systematically with bases in Myanmar, Sri Lanka and now Pakistan.

And this danger to India and geopolitical competition from China is not like that between America and Russia. Because China is big, she is going to be powerful and most importantly, she is going nowhere. India is stuck with her. These two nations are too big and too close to each other for there to be a lasting peace between them, the threat will never go away.

To make matters worse, it is clear to me that with China’s population ageing rapidly, she will seek to make India a client puppet state as a dumping ground for her goods. To knee cap India, and then do to my nation, what the British East India Company once did for a century. Those national memories are too painful to countenance having to experience them again.

Now it is understandable and prudent that the Indians have not come out condemning Russia. But the few morons among my countrymen whose hatred for America is so great that they are wishing for Russian and Chinese dominance? That old saying about “cutting your nose off to spite your face!” They have no idea what unimaginable fate awaits their people if they are dominated by a nation which is so powerful, so close, and so malevolent.

Some of these clowns even talk about Russia mediating between India and China. These people don’t seem to grasp a simple principle of geopolitics — you do not have any leverage in a dispute between two enemies if even one of them is vastly more powerful than you are.

It would be like a wolf (Russia) trying to negotiate between a tiger (China) and a boar (India). The tiger will quite simply tell the wolf “Who the hell are you anyway? Go get lost, I’ll kill and eat the boar when I please!”

Russia’s ever closer movement into China’s patronage is HORRIBLE news for India.

India needs to do three things in my estimate and do them on a war footing like her existence depended on them. Because it does.

1. Drive her economy as hard as she can.
2. Establish a domestic armament industry and construct new nuclear energy reactors as fast as she can.
3. Build a network of alliances outside the Moscow-Beijing axis as quickly as possible. Mainly with Japan, and then with America.
India is sorely lacking in self-sufficiency in two critical components — energy and armaments. So long as she is not secure with both of those, she will always risk being held hostage by her suppliers, no matter how rich she may grow.

Nations have no permanent friends or enemies, only permanent interests. And India needs to realize that this attitude of non-alignment was all good and fine during the First Cold War. It was prudent even but then she had the luxury of sitting it out since the sphere of potential conflict was far away in Europe.

That is not the case now. The mortal danger is right next door, both on the east and west flanks in North India. You cannot be hanging off a cliff with waves violently crashing below you, and say that you are neutral in your opinion about drowning!

But it is clear to me and to some Indian national security advisors at least, that this episode driving a traditional ally into the arms of the worst and most powerful enemy is an unmitigated catastrophe for India.

In conclusion,

· Russia’s loss is China’s gain.
· Germany’s loss is France’s gain.
· India’s loss is well, who knows? May end up being America’s gain in terms of an alliance in fear of a common enemy (China).



Paul Fiolkowski

I am just another American expat, who found that yes indeed, the grass can be greener elsewhere.