The terrorist attack on Israel should be repelled before the world would be able to develop a new strategy vis-à-vis the Middle Eastern crisis, but some reflections on the recent events might – and should – already be made.

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In recent days we have seen a real terrorist state's action – it was not a mythical Islamic State presumably existing in Syria and Iraq: it was a quasi-state structure, recognized by 138 sovereign nations that attacked Israel in the name of Jihad exterminating more than a thousand innocent civilians. This "state" has been assisted by numerous governments and non-governmental organizations from around the world, and I cannot say who should be condemned more: Iran and Qatar who did this because of some (geo)political reasons, or the European liberal authorities who funded its structures because of sheer "humanistic" aspirations. Whoever they were, the result looks obvious: two million people were fed and funded without doing anything useful for at least two generations.

The Palestinian "state" is something that several experts use to call not a state, but an "ungovernable chaotic entity", a state created without "taking into account the minimum prerequisites for its governability", and "recognized as sovereign, but paradoxically remaining in need of international aid in order to survive" (Rivero, Oswaldo de. "The Myth of Development. The Non-Viable Economies of the 21st Century", London, New York: Zed Books, 2001, pp. 186, 19). Such entities exist in many parts of the world, but rarely there is so great contrast and disparity between them and their successful neighbors (Israel's GDP is 130 times bigger than that of Gaza in current prices while the country is less than 6 times more populated) – and there is not any single case of turning them into stable and developing societies. Therefore, the case of the Gaza Strip should set off alarm bells for many backward societies that cannot go forward on their own. It's a big mistake to believe that the Palestinians would prosper if they were allowed to create their "functional" state in their "historic" lands: Everyone may see how the Jews succeeded in this enterprise, and how the Palestinians failed. After 80 years spent fighting, and not working, any hopes for change look like pipedreams.

The intention to continue the assistance of the Gaza Strip, already voiced by the governments of Spain and France, is misleading. Such assistance might be delivered only on the conditions of full disarmament of this enclave, eradication of all the militant groups now present in it, and dismantling of its sovereignty. The global community of nations should recourse to the United Nations Charter, more precisely to the articles from 73 through 91 which address the "non-self-governing territories" and argue about the system of Trusteeship. The Gaza Strip should be made the first territory being put under the UN mandate for a significant period of time – at least for a couple of decades – in order to restore its economy, to educate and treat its children, to return the Palestinian refugees scattered around the world to their homeland and to turn this wretched piece of land into a home for an orderly and functioning society.

The international community cannot pretend any longer that the Palestinian lands consist of a "state" as its "President's" powers, not too uncontested from their beginnings, had expired ten years ago; as the major part of its budget comes from charity flowing in from different parts of the world; and as its people mostly work abroad since there is nothing to do inside its borders except to train to kill innocent bystanders. The best thing that can be done these days concerning the Palestinian society is to build up a wide international coalition being able to fund and govern this land for the sake of its people, investing in its infrastructure and development. The Palestinian society had never existed – it was born as a kind of a military organization aimed at destroying Israel which it had tried to do ever since. Such an activity is incompatible with any concept of people or/and nation – and if the leaders of the Palestinian tribes and clans have no other ideas for leading them, the civilized world should intervene.

The revoking of Palestinian sovereignty and rebuilding of this land under international control appears to be the only existing chance not only to save millions of lives but to draft a totally new way forward for those proto-nations that are now falling into chaos of ethnic and civil conflicts and wars. I understand perfectly well how the Europeans and Americans want to get rid of those "White man's burden" they carried for centuries and have good reasons to apologize for – but it seems that the time has come to once again, with all the morale and values of the 21st century, to make another civilizing attempt. The mistake made by the Americans in Iraq and Afghanistan should not be repeated: The mission of the international society shouldn't be nation-building in the places where nations never existed – it should be to organize a decent life where it has never been organized. Sovereign state isn't the one and only form of human society – and only taking this into account, the world can bring peace to the lands of ancient Judea, and to deliver a decent life to those who now inhabit it.

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The war in Ukraine profoundly changed the European energy architecture. European sanctions as well as Russia's res­ponse effectively ruined an energy part­nership that started in the early 1970s and survi­ved the Cold War. President Vladimir Putin be­lieved in Europe's irreducible dependence on Russia – but he appeared to be wrong. The Russian gas exports to Europe declined to the pre-2000 level, and by 2024 EU may get no longer use Russian supplies. The EU oil embargo that came in­to force just a month ago, will send oil shipm­ents tumbling in 2023. This shift isn't cheap: some sources estimate the cost of EU energy independence from Russia at 500 billion euros, but Russia's exit from the European market seems final.

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But as Europe is becoming more de­pendent on gas supplies from Norway, Li­bya, Qatar and the United States, a new regional actor that has flown under the radar for deca­des is rising – Turkey. President Recep Tayyip Erdogan seeks a special status for his country and wants to consolidate supply routes that can link Europe with gas suppliers, both old and new.

On the one hand, Erdogan plays a love-and-hate game with Moscow being an ally of both Russia and Ukraine: He orchestrates grain de­als and becomes Russia's largest channel for unau­thorized supply of Western-produced goods, and in return, he might get a prize in the form of a giant natural gas hub in Thrace, Turkeys European part, from where the Russian gas, pumped via al­ready existing Blue and Turkish streams as well as through a new planned pipe might be channeled to Southern Europe and also to Austria and Germany.

During Gazprom CEO Alexei Millers' recent visit to Turkey, the capacity of the pipe was estimated at 60bcm per year so Turkey's tran­sit potential may increase to around 115bcm per year. As Turkey looks forward to becoming one of the largest buyers of Russian oil that may be processed for resel­ling petroleum products to Europe, which is not restricted by sanctions, Erdogan might become the main dealer of Russian energy resources as early as in 2024 (if, of course, he succe­eds in his re-election bid). This means that not only Mr. Putin is losing his bold energy game in Europe, but Mr. Erdogan is winning it – and may therefore increase Turkey's geopolitical influence.

On the other hand, the Turks are mastering a great game in Central Asia and the Eastern Mediterranean. First, Ankara seems to stay behind the rapid failure of the Putin-proposed trilateral gas alliance between Russia, Kazakhstan, and Uzbeki­stan. Turkey, in close partnership with Azerbaijan and Georgia, may increase the ca­pacity of Trans-Caucasian routes as Russia blackmails Kazakh oil producers by ar­bitrary closures of the vital Trans-Caspian pipe allowing Kazakh companies to deliver their produce to Novorossiysk. Second, the Turkish authorities bet on pro­s­pec­tive oil and natural gas deposits off its southern coast (just recently a new oil deposit was unveiled here) and off the Northern coast of Cyprus where Ankara seeks to start drills in 2019. If Nikos Christodoulides, a Kremlin favorite, current­ly leading the polls, becomes president of Cyprus in February, the hard­line parties that support him may be not inclined to reach compromises with Turkey, so his victory would diminish the possibility of a new international effort to develop­ Cyprus gas fields. Thus, Ankara might move unilaterally toward exploring them off the coast of Northern Cyprus, also putting into action its plan for a two-state solution or even the annexation of the occupied area of the island. Third, one should mention Turkey is now re-establishing full diplomatic ties with Israel after Erdo­gan and then-Prime Minister Yair Lapid met in New York in September and looks forward to offering cooperation bids to both Israel and Lebanon in deli­vering natural gas from large deposits off the Eastern coast of the Mediterranean Sea to Europe.

Of course, Turkey's aspirations may not be realized – but it looks like Ankara is betting on becoming a major gas supplier to Europe. If this happens the EU may once again become supplied mainly by pipeline gas from a nearby country while the Ame­rican and Middle Eastern producers reorient towards Asian and Pacific Rim nations.

To conclude, I would argue that while Russia looks like a declining power, hu­mi­liated by its failures in Ukraine, Turkey emerges as a leader of the Islamic world as well as a major power in the Middle East – and a strong and rising autocrat might become a more problematic counterpart than a weakened and aging one.

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Three hundred days since the start of its assault on Ukraine Russia seems to be the world's most "renowned" rogue state, facing the largest number of sanctions imposed against it. When the first batch was announced ten months ago – including the seizure of almost $300 billion of its central bank's reserves, termination of air traffic with developed nations, disconnection of the country's leading banks from international clearing systems, and vo­luntary withdrawal of up to one thousand international corporations – many had predicted Russian economy will collapse this year. But it hadn't. Why and what should one expect further?

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For years, Russia has been depicted as a "gas station masquerading as a country", and this assumption became a foundation for the sanction policies. But even before the war, such an approach neglected at least four important points. First, the experience of Russian financial authorities that had improved significantly si­nce the 2008 crisis; second, both the size and character of the Russian domestic market; third, the intensive economic ties Russia has already established with non-West­ern nations. fourth, the degree of private enterprises in the Russian economy and the resilience of Russian consumers. There are more issues to take on, but I would argue that the abovementioned assumptions explain quite a lot already.

So, the Western powers envisioned that Russia may be shattered by the steep fall of its national currency as it happened during the economic crises of 1998 and 2009. This was may have been a valid assessment since for an ordinary Russian a devaluation of the ruble by half is the best sign the country is in trouble. But in March 2022, the financial authorities responded by introducing capital controls, banning the dollar cash withdrawals, and requesting the companies to immediately convert their incoming currency pro­ceeds into rubles. As the result, the exchange rate that shot up from 76-78 rubles for 1 dollar in February to 120 (and even 145 in interbank transactions) rubles in March, went back to 80 by mid-April and has been hovering at about 60 rubles for 1 dollar for the past six months. During this time, it should be mentioned, the Chinese yuan replaced the US dollar as the most traded currency at the Moscow Exchange. With the ruble rebounding, the rising inflation was tamed.

The Russian market was thought to be small and vulnerable, but in fact, it pro­ved to be not too dependent on Western supplies. Only several parts were hit hard or almost ruined – aircraft manufacturing (almost non-existent even prior to the war), the automobile industry, and heavy machinery production. But for consumers, there have been few changes since the typical Russian household spends up to 70% of its revenues on food and utilities which were almost unaffected (Rus­sia discontinued food supplies from the Western nations in 2014, so there were few changes on the market in 2022). Most of the office and home ap­pliances are either produced domestically or imported from China and other Asian economies not supporting the sanctions, and the stagnating incomes are taking the purcha­ses of homes and cars out of Russians' priority lists.

The tethering of the Russian economy to the European one has also been overesti­mated. Had all the events of 2022 happened 20 years earlier, the Russian eco­nomy would have died. But now it is supplied by many necessary hi-tech items from Chi­na, the needed Western products are coming via Turkey (the Russian government promptly allowed so-called 'parallel imports' making it possible to buy almost any goods bypassing official dealers), and even the Russian oil is now diverted from the European market to China (up 10% since the start of the war), Turkey (an incre­ase of 2.5 fold) and India (9 fold). These days even the oil price cap and the EU embargo aren't the game changers – Russia may lose up to 20% of its oil and 50% of its gas exports next year, but both figures account for 10-12% of their overall output since Russia consumes domestically 35% of its oil and 70+% of its gas.

Last, but not least, the Russian economy is one dominated by private enterprises (except the energy sector and banking), and its owners are doing their best to di­versify supplies, cut costs, and to look for new consumers; they are ready even to accept losses for some time to keep their businesses afloat. This differs greatly from the Soviet economy, to which the Russian one has often (and erroneously) been com­pared by Western analysts. On top of this, the Russian people who improved their well-being enormously in the 2000s, haven't seen much progress since 2012, and President Vladimir Putin turned his rhetoric away from economic issues to geopolitical on­­es since he returned to the Kremlin. Therefore, most of the people wish only the things were not turning worse and can tolerate another 5-10% decline in their re­al disposable incomes without being highly dissatisfied with their leadership.

So, I would say that the Russian economy these days is in a unique situation. The sanctions hit its core industries (energy sector, heavy industries, metal process­ing, and construction) but have left the consumer market almost intact. It means that the main effect of the sanction policies will become evident in two to three years, but not in the short term. Moreover, the Russian federal budget in 2022 got windfall proceeds due to all-time high prices for the energy mix Russia has sup­plied to Europe. By the year's end, it will be in red for only  2.6-2.8 trillion rubles or 2% of GDP. In 2023, I expect the deficit to double if the war continues but the budget will be easily balanced by the reserves from RUB 11.4 trillion strong Natio­nal Well-Being Fund and by Finance Ministry domestic borrowing (the bank depo­­sits held by the public, amounting to RUB 37 trillion, not to mention the possi­bility for direct central bank lending). With the federal spending intact, no one should expect a profound crisis in either 2023 or 2024.

So, my conclusion looks not too promising for those anticipating Rus­sia's economic collapse. The GDP will contract both in 2023 and 2024 by 3-4% each year sin­ce no sources for growth could be seen under the current conditions. The government expenses (including financing the war and defense industries) will keep the economic downturn at moderate levels as they eventually prevent GDP from seeing a steeper decline. The disposable incomes will go down by 2-5% annually but the public will tolerate this decline explained by the authorities by a war "the West" has been waging against Russia. I expect the difficulties to mount by mid-2024 if all the san­cti­ons are still in place with the National Wellbeing Fund depleted by the war in Uk­raine and by social spending increasing as President Putin seeks re-election in March 2024 – but these days 2024 looks too far to predict any trends.

To sum it up, I would say the assumption Western economic sanctions can chan­ge Russia's political imperatives, was misleading from the beginning of this policy – i.e. not from February 2022 but rather from as early as March 2014. Economic sanctions aga­inst Russia are as effective as would be trade restrictions vis-à-vis Nazi Germany. To stop Russia's invasion of Ukraine one needs to destroy the Russian army on the battlefield, not cause small troubles for the Russian economy. The Western world should rethink its as­sessments of Russia's economic resilience, and – last but not least – stop taking se­riously those Russian expats who argue that Russia's economic collapse is approaching just because they hate President Putin and dream of his demise.

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