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Is Vladimir Putin irrational?

By Leonid Volkov
April 3, 2014 -- Updated 1533 GMT (2333 HKT)
A man looks at a bullet shell next to a destroyed car after a gunfight between pro-Russian militiamen and Ukrainian forces in Karlivka, Ukraine, on Friday, May 23. Much of Ukraine's unrest has been centered in the Donetsk and Luhansk regions, where separatists have claimed independence from the government in Kiev. A man looks at a bullet shell next to a destroyed car after a gunfight between pro-Russian militiamen and Ukrainian forces in Karlivka, Ukraine, on Friday, May 23. Much of Ukraine's unrest has been centered in the Donetsk and Luhansk regions, where separatists have claimed independence from the government in Kiev.
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STORY HIGHLIGHTS
  • NATO general said Russian forces are ready and could strike Ukraine in days
  • Leonid Volkov: For Vladimir Putin, annexing Crimea is a win-win situation
  • He says Putin wants to build a financial iron curtain between Russia and the West
  • Volkov: Putin is playing by his own rules, the West can't really do much to stop him

Editor's note: Leonid Volkov, a political blogger and author of "The Cloud Democracy," served as the manager for Russian opposition leader Alexei Navalny's campaign for mayor of Moscow in summer 2013. He is currently chief business development officer at Artec Group, a company based in Luxembourg that makes 3-D scanners. The opinions expressed in this commentary are solely those of the author.

(CNN) -- This week, NATO suspended all civilian and military cooperation with Russia. NATO's top general said that 40,000 Russian troops are in a high state of readiness and could strike Ukraine within a few days.

The world is watching. Will Vladimir Putin take territory from Ukraine, again?

Before Putin annexed Crimea on March 18, not too many observers thought that he was seriously going to grab a piece of Ukraine. Maybe it's just another political game for him -- all talks and nothing more.

Leonid Volkov
Leonid Volkov

After all, Russia is legally bound by the Budapest Memorandum of 1994, an agreement signed originally by the Russia Federation, the United States and Britain. This document is an important part of the world's nuclear non-proliferation pact. It secures sovereignty and territorial integrity of Ukraine in exchange for its non-nuclear status. At the time of the agreement, Ukraine had the world's third largest stockpile of nuclear weapons.

That's why when Russian nationalists began saying Crimea should be a part of Russia, few imagined that would become true. Putin can be iron-fisted and harsh, but he has shown respect for international treaties.

During his press conference on March 4, when Putin was asked if Russia was considering annexing Crimea, he said no. Then something changed. When the referendum was pushed forward to March 16, it was amended to include the option of Crimea becoming a part of Russia.

NATO: Land deterrence needed against Russia
Russia could invade 12 hours after order

What happened? Is Putin just out of touch with reality, as German leader Angela Merkel once said? This would be an easy explanation for Russia's takeover of Crimea.

But I suspect that Putin wants to create a new reality, one in which a breakup with the West is no longer viewed as a potential drawback, but rather, a smart and savvy move.

In Putin's new world order, existing institutions do not matter anymore: Neither the G8 nor the U.N. Security Council. What are they going to do? Suspending Russia from G8 membership isn't going to scare Putin. The United States, Britain and Canada are upset that Russia has breached the Budapest Memorandum, but so what?

Putin's approval rating has increased, his political oppositions are split, and many Russians support the return of Crimea. Russia has more territory now, and there's been no significant side effect.

Moreover, Putin wants more control over the Russian elite and their money.

Back in 2003, the wealthiest of the Russian oligarchs, Mikhail Khodorkovsky, was suddenly arrested and served over 10 years in prison -- mostly because he was aggressively sponsoring different opposition parties and planning to run for president. Putin, who himself became president of Russia partly because of heavy contributions from oligarchs in his first presidential campaign, knows that the only thing that can defeat him is huge money. So he spent the last decade turning himself into a very rich man and making sure that he owns more resources than any potential competitor.

Being an oligarch in Russia is great -- as long as you don't get involved with politics. The regulations are strict and the transactions are traceable. The oligarchs know the rules: When they want to have access to their money in Russia, they get out of Putin's way. Certainly, after 2003, no one really dared to try to compete with him. They can just look at Khodorkovsky as an example.

What worries Putin is money from abroad that would leak through the borders easily. That money is harder to keep track of. Putin has long insisted that the country's new elite should bring money back to Russia. But the Russian oligarchs have been spending their money outside of Russia -- by sending their children to Western schools, buying up homes in Manhattan, or going on shopping sprees in neighboring European countries.

The capital flight from Russia has steadily increased in the past years, reaching over $60 billion in 2013. Now, every Russian oligarch has to decide either to leave the country and lose access to its endless resources, or bring all the money back.

Crimea gave Putin exactly what he desired -- an opportunity to build a financial iron curtain between Russia and the West. And now that some of the elite are being sanctioned by the West, they're finally forced to turn their attention -- and pocketbooks -- to Russia.

Acquiring Crimea and breaking up with the West is a win-win situation for Putin.

Putin can also take a page from other bad guys who didn't obey existing rules. Maybe their successful experiences have taught Vladimir Putin that it's OK to play an enfant terrible of the world's politics. Just look at Fidel Castro, Kim Jong Un and even Bashar al-Assad -- they are all doing quite well, aren't they?

Putin is playing by his own rules. What could the modern world do against a dictator with nuclear weapons and vast approval within his own country? Not much. And about the economic sanctions: How often are they truly successful?

Only Putin knows whether he's going to take more pieces of Ukraine. The answer, "No, because Putin said he would never go beyond Crimea," is incorrect.

"Maybe yes, maybe no" is much closer to the reality. That's bad news for the world.

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