The Win-Win Solution for Ukraine: Sell the Contested Territories to Russia

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The following article is guest authored by Thibault Serlet

Resistance is futile. Russia has already recognized the independence of the embattled eastern states of Donetsk and Luhansk. Donetsk and Luhansk will become Russian puppet states. Worse, Ukraine will spend the money of its taxpayers and the blood of its young men fighting a useless war.

War is expensive for everyone. Turning war into a commercial exchange of territories would benefit the Ukrainian economy, foster good relations between the US and Russia, and prevent more bloodshed.

The Iraq war cost $3 trillion USD. The Afghanistan war cost $2.3 trillion USD. By contrast, Ukraine’s 2022 GDP is only $155 billion USD. The worst thing that could possibly happen would be for major powers such as Russia, the US, or the EU to create another massive fiscal mess in their own backyard.

There is an obvious win-win-win solution that nobody will adopt. Ukraine should sell Donetsk and Luhansk to Russia. The government could then use that money to compensate victims of the war, rebuild the country’s crumbling infrastructure, or pay off its $125 billion USD in debt. Ukraine would win by securing a long lasting peace and injecting its economy with cash. Russia would win by legitimizing Donetsk and Luhansk in the eyes of the international community. The EU would win by preventing geopolitical tensions with Russia. Even the US would win, especially if it helps Ukraine at the negotiations table.

Solving war through commerce is an ancient solution. In the middle ages, cities were routinely bought and sold. Sale of land in between nation states is rare, but still happens. In 1963, West Germany purchased the towns of Elten, Selfkant, and Suderwick from the Netherlands. Smaller border corrections are common.

So why won’t Ukraine adopt this obvious commercial solution?

Because the ideology of toxic nationalism tells people that giving up your sovereign soil means that you are cowardly. It convinces old men to send young men to fight and die over pieces of dirt. It tells citizens that it is alright to oppose secession purely on aesthetic grounds to make maps look pretty.

Most wars caused by territorial disputes could be stopped with commerce. Azerbaijan could sell Artsakh to Armenia; India could sell Aksai Chin to China. Argentina could sell the Fitz Roy mountains to Chile.

The global foreign policy community needs to move beyond outdated 19th century nationalism. Peace between nations can only be achieved once passionate nationalism is replaced by pragmatic commercialism.

Reflecting on the Napoleonic wars, Bastiat famously wrote that “when goods don’t cross borders, soldiers will.” This world needs less Napoleon and more Bastiat.

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