Think Tank Review: Recent events such as the reduction of hostilities in Ukraine and the Russia-Ukraine-EU deal to resume natural gas shipments have shifted the focus of U.S. think tanks to NATO-Russia relation, ISIS and a rumored Crimean special economic zone.

A Ukrainian soldier holds a machine gun inside an armored personnel carrier as his unit leaves to the country's east in a military base in the village of Novi Petrivtsi near Kiev on Tuesday, Sept. 30, 2014. Photo: AP

The major U.S. think tanks seem to have been quietly and cautiously optimistic about the Ukrainian crisis in September. Tensions are not boiling over like during the Crimean crisis, pointing fingers is no longer in vogue: A reported reduction of Russian troops in Ukraine could be the beginning of the end of the recent crisis.

At a granular level, evidence shows that the financial predicament the Ukrainian people face is dire, according to Balazs Jarabik of the Carnegie Endowment.

“93 percent of Ukrainians” said their economy is not doing well, electricity prices are expected to rise “10 to 40 percent” over the next 12 months in Ukraine, and residual tensions foment a possible “radicalization of political disputes and disintegration of law and order,” he wrote.

However, despite the deteriorating Ukrainian situation and the looming threat of winter, a deal to resume natural gas shipments to Ukraine has reportedly been reached by Ukraine, Russia, and the European Union. The deal came Sept. 26, prompting Western experts to collectively breathe a sigh of relief for the moment and look elsewhere.

Their focus has now shifted from the Ukraine crisis to analyzing NATO, terrorism, and the feasibility of a rumored special economic zone (SEZ) in Crimea.

Is NATO a force to be reckoned with or not?

Last month’s roundup gave some historical background to Russia’s distaste for NATO and the country’s perception that the alliance was formed, in part, to mitigate any (real or perceived) Russian threat to Western interests.

Apart from that, Russia has been wary of NATO encroachment in the post-Soviet orbit for many years now and has sought some sort of insulation from NATO expansion.

Dmitri Trenin of the Carnegie Moscow Center indicates the Ukraine crisis, in particular, stems from the Kremlin’s “core national security interest: keeping Ukraine as a buffer zone between Russia and the West.”

Even more pertinent, Olga Oliker of RAND reports that Russia recently “announced it is crafting a new military doctrine” to inhibit further eastward expansion of NATO.  Clearly, Russia “is willing to act and pay the price” to ensure the West comes no closer.

But is NATO still a force to be reckoned with or an alliance without teeth? David Rothkopf, a visiting scholar at the Carnegie Endowment and the CEO of Foreign Policy, thinks that Russian President Putin may well be “laughing as NATO unveils its stockpile of strong adjectives that have been its principal weapons in containing the Kremlin’s aggression.” He further contends that NATO is but a “house of cards” that is not suited to deal with Putin.

Moreover, as Russian public opinion of the West and NATO is already at record lows, Andrew Kuchins of the Center for Strategic and International Studies (CSIS) indicates that Western sanctions on Russia may, unintentionally, “further push [Russian] public opinion against organizations like NATO.”

Whether Russia and the U.S. care to interact or not, counter-terrorism cooperation may be one of the few viable options left for the two countries to stem what Kuchins calls the “unprecedented escalation in chauvinistic and aggressive nationalism.”

Is the enemy of my enemy my friend?

It is no secret that the West has embarked upon a counter-terrorism operation to “degrade and ultimately destroy” the Islamic State of Iraq and Greater Syria (ISIS) and any affiliated group flying a banner of terror in the Middle East.

But it is also no secret that Russia has had a similar mission to defend against “ethnic Russian converts” to Islamic terror groups in the North Caucasus and Russian Muslims fighting alongside ISIS in the Middle East.

A Reuters report suggests that actually “Russia could gain from any U.S. success against [ISIS], which has been joined by fighters from Russia’s predominantly Muslim North Caucasus, a region where militants wage daily violence to establish an [Islamic State.]”

Now just over ten years after the Russian terrorist attack at Beslan, “terrorism still remains a factor of Russia’s political life.”

In this spirit, Russia Direct previously posed a question to Dmitri Trenin of Carnegie Moscow related to the potential for Russian-U.S. counter-terrorism cooperation: “Might there be common threats such as Islamic terrorism and the rise of the Islamic State [ISIS]” that could “bring Russia and NATO together?”

Russia and the U.S. – both considered enemies of ISIS – are unlikely to seek cooperation, however. In response, Trenin briefly examined past opportunities (e.g. efforts post-9/11) for bilateral security cooperation that did not lead to true partnership, and opined that he did not think the threat of ISIS would “force Russia and the United States to make security collaboration a higher priority than geopolitical rivalry over Ukraine;” a geopolitical rivalry which makes some Western experts wonder why Moscow got involved in Ukraine in the first place, what resulting costs Russia might pay moving forward, and the feasibility of a reported Crimean SEZ.

Crimea as a Special Economic Zone (SEZ)

Larry Hanauer, an expert at RAND, does not see the benefits but rather the costs of annexing Crimea. With hard financial costs of up $4.5 billion per year for “infrastructure improvements, development aid, and government operations” and more costly plans like the proposed $6.9 billion dollar bridge from Crimea to Russia over the Kerch Strait, annexing the Crimea comes with a lot of responsibility.

What is more, soft costs – like managing the difficulty of “exercising authority and promoting economic development in the region” from a distance – also come at a price to Russian time and energy, making it an important intangible to consider.

To stimulate economic investment, Moscow has considered turning Crimea into a large Special Economic Zone (SEZ), or a legally modified region specifically designed to spread investment to the region’s companies and attract foreign investors with tax exemptions and other incentives.

In theory, Russia benefits by increasing its Foreign Direct Investment (FDI) and a better quality of life. But in practice, Hanauer says, a Crimean SEZ would only foster “continued uncertainty, political risk, and Western sanctions [that] discourage companies – both foreign and domestic – from entering the Crimean market.”

Would the U.S. punish Crimea because of Russian intervention? The answer to that question will come only with time.

But Eugene Rumer of the Carnegie Endowment believes that however much the West demonizes Russian President Vladimir Putin for his actions in Crimea and elsewhere, “the next Russian leader could be more anti-Western and recalcitrant than he.”

It seems recent events have created a collective new U.S. think tank mindset: Although things could be better, things surely could be worse.