2022 Year In Review

This is an audio transcript of the Rachman Review podcast episode: 2022 Year In Review

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Gideon Rachman
Hello and welcome to the Rachman Review. I’m Gideon Rachman, chief foreign affairs commentator of the Financial Times. And this is the last edition of 2022. To look back at a tumultuous year and to look forward to 2023, I’m joined by a panel of my colleagues, the FT’s editor-in-chief Roula Khalaf, our Moscow correspondent Max Seddon and our US editor Edward Luce. So 2022 was defined by Vladimir Putin’s invasion of Ukraine. Will 2023 be any different?

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Some dates into history as defining and historic. February the 24th 2022 will be one of those moments.

News clip
(bombing noise) It was unprovoked, but this is what Russian president Vladimir Putin unleashed on Ukraine. As the sun came up this morning, a missile striking an industrial park in western Ukraine. A helicopter assault on an airport outside of Kyiv. Close, intense fighting. And there are civilian casualties . . .

Gideon Rachman
The Ukraine war has redefined international politics. In the west, Russia’s become a pariah state. Here’s US president Joe Biden.

Joe Biden
And Putin’s aggression against Ukraine will end up costing Russia dearly, economically and strategically. We will make sure of that. Putin will be a pariah on the international stage. Any nation that countenanced Russia’s naked aggression against Ukraine will be stained by association.

Gideon Rachman
But large parts of the rest of the world have not joined in the sanctions on Russia.

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Gideon Rachman
Meanwhile, in China, Xi Jinping was confirmed for a third term as the country’s leader, with many believing he’s now set to rule for life. For me, one of the most memorable moments of the year was the Munich Security Conference, which took place the weekend before the Russian invasion and was addressed by, among others, President Volodymyr Zelenskyy of Ukraine. Roula Khalaf, our editor, was also at the conference with me. So I began our conversation by asking for her recollections of that meeting.

Roula Khalaf
I often remember us was walking on the streets and meeting someone I can’t really describe. Someone from a secretive agency who mentioned to us (laughter) like, yeah, 48 hours, you know.

Gideon Rachman
Yeah, I remember.

Roula Khalaf
Something like that. And of course, most of our meetings were suggesting that this was really happening. And I think we both went there thinking, well, maybe the French and the Germans at least were not as convinced as the Americans. And we had assumed that everybody had the same intelligence. And we still had Zelenskyy in Kyiv and other Ukrainian officials saying the Americans are making this up. But I think it was . . . it became very, very clear to us that the intelligence was solid. We were asking even detailed questions about what is the intelligence and that it was happening the following week.

Gideon Rachman
And then, yeah, as you say, that the extraordinary thing about that was that the Germans and the French still weren’t convinced and some of the Ukrainians weren’t convinced. I remember going to a dinner that evening with a Ukrainian and said, you know, “You’ve gotta stop all this invasion talk. It’s destroying our economy.” And I said, “Well, I’m sorry, but I’ve heard it’s happening next week.” And indeed it was. And that’s defined the year. And Roula, you’ve recently been to Kyiv. You saw Zelenskyy there. I guess it’s both a good and a terrible news story for Ukraine. I mean, ‘cause that week people thought Ukraine would be beaten very, very quickly. They’re still here, and they’ve had an extraordinary . . . 

Roula Khalaf
Three days.

Gideon Rachman
Yeah, three days.

Roula Khalaf
They’ll be in Kyiv in three days.

Gideon Rachman
But now, so they’ve done extraordinarily well, but now they’re being absolutely pummelled in their infrastructure. How do you see the situation right now and how did Zelenskyy see it?

Roula Khalaf
There’s one quote that really stayed with me. It rings really true, which is that we need to stop underestimating the Ukrainians. And I think while the intelligence about Russia’s intentions was very precise, what was missed here was the strength of Russian military forces and the strength of Ukrainian military forces. Because when you’re fighting for your existence and that is, this is an existential war for Ukrainians, you really fight. And what I found very striking is I didn’t get a sense at all that there is war fatigue. Obviously, they’ve suffered a lot. They know that they will continue to suffer. This new phase of the war, which is essentially an economic war. It’s a war to wear them down through attacks on the infrastructure. They live in the dark. I mean, when I was there, it was extremely dark. There are weekly attacks, massive attacks on infrastructure. They’re learning to just pick up the pieces very quickly. They fix everything, and they wait for the next one. And they know that the next one is going to arrive. And my impression is that this is going to make it very, very difficult to have any negotiated end to the war.

Gideon Rachman
And, Max, I mean, you were in Moscow at the time of the invasion, you’re there now. At what point did you actually think this is actually going to happen? And in retrospect, what led Russia to this point was very much Putin himself.

Max Seddon
I think really right up until even the moment it happened, there was an element of doubt in my mind whether it could be real despite everything that had come out of the White House and the US intelligence for, you know, the weeks leading up to it and the absolutely extraordinary meeting Putin had on the 21st of February with his security council when he decided to recognise the Kremlin’s separatist proxies in eastern Ukraine. That was the prelude to the invasion. But at the same time, absolutely no one in Moscow thought it was possible. And that isn’t just the people in the Kremlin, you know, people who’ve known Putin for, for decades I was speaking to. In the western diplomatic community for months in Moscow, people were saying to me, you know, “This is Iraq all over again. The Americans have been led down the garden path. There’s no way they would do this.” And it turned out there is (chuckles). All these people thought that there wasn’t going to be a war because Putin had told almost no one. There’s some reliable indications now that not just the civilian officials in the Kremlin and the cabinet and the central bank didn’t know. But even large parts of the military, the secret services had basically no idea. One thing that I think is very important to keep in mind just, you know, how much this was in Putin’s head. That also really explains how disastrously everything went because in Russia, you know, everyone likes making fun of how they have banned it here calling it a war or an invasion. You have to call it by the official name, which is a special military operation, because war and invasion sound too scary. That could, you know, stop public support. But actually, in many ways, it really was a special operation because it was planned to be this sort of secret-service-style blitzkrieg that a totally secret clandestine swoop that was going to end in just a matter of days. And we know not just that the American intelligence on what Putin was doing was pretty much bang on. But the intelligence we have about Ukraine and his own assumptions they had about the country were completely wrong. He really did think that there would be no real resistance. He really did seem to think that people would welcome the Russian army with open arms. I was actually reading his address that he made as the tanks are going over the border on February 24th for the first time since this happened the other day. And it’s not just an address to the Russian people. Almost half the address is him talking to the Ukrainian army, saying you don’t need to lay down your lives for these corrupt Nazis who have seised power in Kyiv. You should surrender and join up with your brotherly nation, Russia. He really did seem to think, and he said this a few times over the first few days, that this was going to be some sort of cakewalk.

Gideon Rachman
It wasn’t a cakewalk 11 months on. It’s pretty much a disaster, as you suggested. How do you think Russia and Putin will be thinking about it now? I was quite struck just now reading that some on the Ukrainian side are saying he hasn’t given up. He may even try to attack Kyiv again early in the new year. Do you think that’s possible, or do you think, on the contrary, that maybe Russia is going to have to give up? What, what’s your assessment?

Max Seddon
Someone said to me close to the Russian army, “Putin is, he’s a gambler, and he’s just going to stay in the casino. Yeah. He’s already lost. Everyone except him knows that he’s lost. And he’s just going to stay in the casino, putting everything he has left on this losing battle until someone drags them out of their feet first.” It’s been very clear what he said in recent weeks he has absolutely no intention of ending this, even if the Kremlin has really struggled to communicate not just to ordinary Russians but to the whole elite what exactly the goal is at this point because the blitzkrieg isn’t going to happen. The army is in a horrible state. The economy and the supply chains for the army have been hit very hard by, by sanctions. And they, according to some reports, are starting to run out of, out of supplies. But if anything, he’s driven himself into a corner. He annexed four provinces in southeastern Ukraine in September, not only controlling all of them fully at the time, but since then they’ve had to make some more humiliating retreats, including from Kherson, the only provincial capital that Russia had captured which he’s now under Russia’s constitution. He is now legally bound, Russia’s constitution written by him two years ago, the changes that he made, he is now legally bound to take them back. And he keeps saying that it’s, you know, the Ukrainians don’t want to have peace talks. You know, we can end the war tomorrow. But he’s been very clear that he has no interest in doing that under anything other than Russia’s terms, which means holding on to the land that he’s already seised from Ukraine and essentially destroying the Ukrainian state as we know it, which if there is any overriding goal of this invasion that was and remains absolutely what he wants.

Gideon Rachman
Just briefly, Max, I mean, Roula gave us a very vivid picture of what it feels like in Kyiv right now. What does it feel like in Moscow? I mean, is life unrecognisable from what it was 10 months ago or much the same?

Max Seddon
One of my friends in Russia who has now fled to avoid being drafted for the army, before that happened, he said living here was like the classic ‘70s movie with Donald Sutherland, Invasion of the Body Snatchers, where the aliens have come in and replaced the real people. And you don’t know. And everything outwardly looks the same, and people look the same. But there’s this atmosphere of fear and paranoia that has really just suffused absolutely everything. And it’s this absolutely surreal experience because outwardly everything looks more or less the same. You know, the buses are still running. A lot of western companies have left, but they’re trying to replace them. At the airport the other day, I made an obligatory stop at the ersatz McDonald’s that has come to (chuckles) replace McDonald’s. You talk to people, you know, at any level, you know, about anything. And it becomes pretty clear that there is this sort of paranoia, fear and general depression that is seeping in a lot of levels. And different people are coping with it in different ways. You know, something like close to a million people or more have left. You have a lot of other people, particularly in the elite, feel they don’t have anywhere else to go. They feel they can’t speak out against the war, and they’re trying to get on with their lives. And in some cases, that includes not just sitting in their post and being quiet, but finding ways to rationalise this effectively becoming complicit in the war effort by being part of the Russian machine. It’s a very strange place to be right now.

Gideon Rachman
So Ed, how does it feel from Washington? I remember, you know, looking back again at that Munich meeting that Roula and I were both at, talking to a White House official who was there, and he was pretty depressed ahead of the invasion. He said, you know, we got absolutely hammered over Afghanistan, which had happened only six months before and felt like a debacle. And now, there’s going to be this invasion by Putin. And we’ll get hammered again. But in fact, do you think the Americans feel that actually this has gone quite well for them? They’ve organised the west, and Russia’s didn’t quite badly. What, what’s your view of how they see it?

Edward Luce
At the best of times, Washington feels like the Invasion of the Body Snatchers. But these are pretty cheerful body snatchers nowadays. The Russian invasion is seen, I think, as a geopolitical windfall for the United States and a uniter of the west and a challenge that Biden has met. And I think, you know, even critics of Biden, even some Republican critics, will grudgingly admit that he’s handled this pretty well. He’s neither sort of gone over the top, nor has he failed to meet the challenge. He’s handled things fairly consistently. He’s fund . . . led the funding, maintain good relations between Nato allies, been pretty correct in saying it’s the Ukrainians and Zelenskyy who should decide when and how an off-ramp and the negotiated settlement occurs, been by far the largest supplier of sophisticated weaponry that Ukraine has used but been very careful not to give Zelenskyy things that Putin would see as crossing a red line like ATACMS, you know, at which Ukrainians would be perhaps tempted to use to target deep inside Russia. So it’s seen as a geopolitical windfall but also a complicating one because the Biden administration’s overriding aim is competition and strategic rivalry with China. And this does complicate that to some degree. And that’s a challenge I think we’re gonna see in 2023 between Biden and his European counterparts is to try and get them, to almost as a quid pro quo, provide the kind of support the United States wants to see in terms of containing China, that the United States will continue, without doubt, to provide to Ukraine and to the west in general to defeat Putin. So by and large, this is without trying to sound cold about it, but in that in a sort of non-emotional way, it’s seen as a good thing.

Gideon Rachman
Ed, I mean, Biden has always talked about being engaged in the battle for democracy, both abroad but also at home. And on that home front, do you think this has been a relatively good year for him? There’s rampant inflation, which is bad, but the midterms went well, and Donald Trump is looking a bit less threatening now, isn’t he?

Edward Luce
Yeah, the Trump soufflé is sort of collapsing before our eyes. And, you know, as the cliché goes, soufflés don’t rise twice. Now, people have said that about Trump before so I don’t wanna make rash predictions here, but his ratings among Republicans are going down quite sharply. And Ron DeSantis’ ratings are rising quite sharply. And that presents a whole new picture and a whole new challenge. But Trumpism without Trump is still here. But Trump, the person, I think, is deflating quite rapidly. The midterm elections were a positive shock for Biden and the Democrats. It could have gone very, very badly. They still lost, essentially. I mean, they lost the House. They actually added the seats in the Senate. But they’re taking it as a victory against the “red wave” expectations. Not just, you know, democracy at home is making the Democrats and Biden feel chipper, but Bolsonaro lost in Brazil. That was pretty good news. It’s not been a very good year for autocrats. The democracy agenda, I think in Biden’s mind, and it’s very much Biden’s thing, it’s not necessarily something all his staff are totally enthusiastic about, but the democracy agenda is going to remain the chief framing foreign policy for Biden. And Russia and Putin continue to play very deftly into Biden’s hands in that regard.

Gideon Rachman
And Roula, though, I mean it’s interesting for me, I just uhh, towards the end of the year got out of the kind of western loop and went to Asia and met the Indonesian president, Jokowi, who was chairing the G20. And it was certainly my impression that he certainly wasn’t on board on this democracy crusade, was pretty neutral as between Zelensky and Putin. And perhaps we in the west of kind of overlook too often what’s now called the “Global South” and the fact that large parts of the world are not on board for this and are taking a very different take.

Roula Khalaf
I think that’s right. Which is why I don’t think the framing of democracy versus autocracy is at all helpful in this case. The reality is that many of the US’s allies, which it depends on in all sorts of ways, are not democracies. And it always has to manage its relationship with autocracies. But that’s one point. The bigger point about Ukraine is that, yes, this is a western conflict with Russia and very much of a western conflict. I mean, you, if you go to the edges and the reaction is very different. What’s interesting is that I think much of the rest of the world doesn’t want to be in a, in the geopolitical framework that is black or white. You see the same in terms of the relationship with China. I just met an official last week who was telling me how unhelpful and how difficult it is and how frustrating it is for America’s allies to be essentially forced to choose because nobody wants to choose. So this fragmentation of the world is a concept that we’re not seeing yet so much in the west. We’re not really understanding that the impact of the big conflicts is more fragmentation and more, more frustration because I think down the road that could make it quite difficult for the US to go along with all sorts of things.

Gideon Rachman
But in a funny way, it also gives American allies options, doesn’t it? Because, I mean, I was thinking particularly, you know, in the Gulf, Saudi Arabia. Mohammed bin Salman is welcoming Xi Jinping.

Roula Khalaf
But I think he’s welcoming Xi Jinping in order to send the message to the US that this is not the world that we seek. I think even when it comes to China, even in Europe, I think it will be very difficult to get Europeans on board. You know, Scholz went to Beijing this year as well. I think various countries, yes, they want options, but I think they are also trying to send the message that the decoupling between the US and China, the conflict with Russia are not situations that they’re comfortable in and that they can easily operate in. So they try to create options for themselves.

Gideon Rachman
I mean, you mentioned Europe. How do you think European governments and the European corporate sector are gonna face the pressures in the year ahead? Because obviously the energy crisis hits Europe particularly acutely. There’s a really good big page in the FT not so long ago about German industry and the dilemmas of companies like BASF. Do you think European will is gonna hold out over the course of this year?

Roula Khalaf
The second extraordinary story of the year is that this illusion of the dependence on Russia has been shattered, and that’s a good thing. The reality is, yes, there’s been a lot of pain, but Europe is weaning itself off of Russian energy supplies. It really is. And I think you look down 18 months, two years from now, and Europe will be in a much better position. China is a different, it’s a different ball game in economic and trade terms. I mean, I’ve been in many meetings over the past year with European businesses where they just cannot fathom the idea of a decoupling from China. Russia was not a very important trading partner. I think it’s not just in Germany, it’s in Germany, it’s in Italy and it’s in France. And I think you will see a lot more resistance from Europe.

Gideon Rachman
And, Max, what do you make of Russia’s international situation? I saw that some spokesmen were saying, well, the hopefully well, yeah, we’ve suffered with Europe. We’re gonna develop these new relationships with Africa, with Asia. And as we were hearing, there are, you know, these are not countries that have sanctioned Russia. And then, of course, there’s this very important, if unbalanced relationship with China. Does Russia still have options?

Max Seddon
Dmitry Peskov, Putin’s spokesman, he basically sound like a Millwall fan. The other day he said, “No one likes us, and we don’t care”, or words to that effect. Then he had to be corrected that firstly that’s not true because China and India have not thumped Russia. They’ve, they done a lot to help keep the Russian economy going by buying large volumes of Russian oil at discounted prices. You also see with the negotiations over sanctions that have been hampering the Russian exports of grain and fertiliser, that Russia still has a lot of reach with African countries. I would completely agree with what Roula said about how this doesn’t really fit into the democracy versus autocracy paradigm. Because in the summer and, you know, the height of the food crisis that was eventually averted with a deal in Istanbul, you had the president of Senegal come to Sochi and basically the repeat all of Putin’s talking points about the food crisis and how it was sanctions rather than the war that Russia had started that was to blame. And there are a few things behind that. You know, Russia, back when it was the Soviet Union, spent decades building relationships with countries in the Global South, the Non-Aligned Movement, a movement communist countries in Africa and in Asia, some of which remain communist. So that’s been very effective for Russia in framing this as a conflict with the west. It’s very much not Russia against the world. The problem is that since Russia has been cut off from so many important global markets that relied on for its imports and also some of the markets for energy exports, that means that in relationships, specifically the one with China, it’s not Russia that’s the one wearing the pants. China very much calls the shots in that relationship. Russia needs China a lot more economically than China needs Russia. And we’re seeing that China has also been quite, quite cautious because China doesn’t want to escalate its support of Russia, which has been pretty restrained so far to the point where that would be harmful for the Chinese economy. We are seeing even sanctioned Chinese companies like Huawei, who you would see as the natural replacement for all the western technology that Russia is struggling to import, they have been, even company, Chinese companies have been restricting their presence in, in Russia and moving their offices to Kazakhstan and other countries in the region. So it’s definitely something where Russia really has very little leverage with its major allies these days, much less than it used to before the war. And that’s definitely a, you know, a strategic downshift for Russia medium to long term.

Gideon Rachman
OK. So, Max, a fairly bleak outlook for Russia in 2023. So let me finish by asking Ed and Roula about what we should be looking for ahead in 2023. Ed, do you want to go first? As you look ahead for the US, what are the main themes that you’re gonna be, you think you’re gonna be writing about? It’s always unpredictable, but what do you think?

Edward Luce
One is continuity on Ukraine. You know, we shouldn’t, shouldn’t underestimate the degree of continuity that’s gonna be in way, we’re seeing or, you know, right now. They’re gonna be, after humming and hawing all year, sending Patriot missiles to Ukraine. And that’s a very significant sort of stepping up of military support. The defence authorisation budget funding of the Pentagon that’s just been passed with $85bn more than what Biden requested is more than 10 per cent above what the White House wanted, which was already itself a pretty generous budget. That $85bn is larger than Britain’s annual defence budget, when Britain is the second largest Nato spending member. So there’s a strong, muscular political consensus and continuity in 2023, regardless of what the theatrical local politics is going to be coming out of a Republican-run House of Representatives. I think the chances that Biden will announce his re-election campaign in the first few weeks of 2023 are very high. The only thing that would stop him is his wife, the first lady, Dr Jill Biden, who is known to be sceptical. But she was known to be sceptical in the last time around and clearly that didn’t work. And Biden feels the midterm elections have really vindicated him. On the foreign policy front, there is enormous hope here and it seems to have some grounding that the Iranian situation. Some kind of, if not revolution then quite radical change in Iran is a non-trivial prospect for 2023. And all the more so given that the nuclear deal is essentially dead, and that it’s advancing towards nuclear threshold breakout potential. I guess the sort of final thing is inflation is coming down. It’s been an enormous pain to the US economy. Russia’s war in Ukraine is a huge driver of that. But the idea that it’s over, I think might be premature, not least because China breaking out from, you know, zero Covid is gonna create an enormous amount of infections and hospitalisation which will in the short term actually lead to worse supply chain problems and therefore new inflationary pressures.

Gideon Rachman
I guess 2022 has taught us something about how difficult it is to predict events because this year has been defined by a war. That was only just on the horizon at the beginning of the year. Still, Roula, I mean, it’s part of your job to try to think ahead and where you put resources and what we should be writing about. So, you know, we all get a break of maybe a few days now. What are you thinking about for the year ahead?

Roula Khalaf
Well, we are in the age of the polycrisis, right? So we’re trying to manage several crises at the same time and to anticipate. I think, let me just focus on two. One is China. I think China’s emergence from the zero-Covid policy is going to be extremely painful, and I think that will have repercussions, obviously, on the economy. But also, I think given the protests that we saw recently and which were really quite extraordinary and the fact that the authorities responded extremely quickly, I think you definitely need to watch Chinese public opinion. The prospects for an end to the war, I think is going to be on everybody’s mind. I think, to our surprise, both European public opinion and European official opinion has held up. You’ll remember that just a few months ago, around the summer, we were wondering whether we were entering the phase of Ukrainian fatigue. And I think Zelenskyy himself, in an earlier interview with us, had expressed his concerns. But Europe’s holding up. And I think that as the energy crisis eases, Europe will continue to hold up. One big question on the European front is whether storage facilities will be filled next year and whether we have a sort of second phase of energy inflation. That is something that I know the energy sector is looking at very closely. So while this winter that will not turn out to be and is not turning out to be as critical, we can’t forget that next winter could actually be more critical. It all depends on what happens on the battlefield. And when it comes to that, I don’t actually see an end to the war. One possibility, and I think you yourself, Gideon, wrote this in a recent column, is the kind of freeze that is not impossible to foresee. It is also possible that the Ukrainians win. What would winning mean? Because that will be a source of a lot of discussion and possibly tension between Ukraine and its western partners. Does that mean you stop at the doors of Crimea? Do the Ukrainians try to take Crimea if they are able to advance further? And I think they will probably be held back at least for a while so that they can perhaps try to have some negotiations over Crimea. So I think the options are open, but I don’t think that we will see an end to the war in 2023 in one form or another. The conflict will still be with us.

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Gideon Rachman
That was Roula Khalaf, editor of the FT, ending this edition of the Rachman Review. I was also joined by Max Seddon in Moscow and Ed Luce in Washington. That’s it for this week and indeed for this year. But please join us again in 2023.