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Ukraine Ceasefire?

Angela Merkel grew up under Communist rule in the old East Germany. She speaks fluent Russian. She has been the chancellor of Germany for the past ten years. And for all that time she has been negotiating with the Russian president, Vladimir Putin, on wide variety of subjects – including, for the past year, Ukraine. They may not like each other much, but they certainly know each other.

So listen to what Angela Merkel said about the debate in the US military, in the Congress, and even in the White House about sending direct American military aid to the Ukrainian government. “I cannot imagine any situation in which improved equipment for the Ukrainian army leads to President Putin being so impressed that he believes he will lose militarily,” she said. “I have to put it that bluntly.”

Does anybody think that Angela Merkel is wrong about this? Does any sane person think Putin would flee in panic if he hears that the US is going to send Ukraine “defensive weapons” (anti-tank weapons, anti-artillery radar and the like)? If not, then this is crazy talk.

Nobody in the United states is talking about sending state-of-the-art US tanks and planes to Ukraine, and they’re certainly not offering to send American troops. Secretary of State John Kerry is merely talking about giving some sophisticated “defensive weapons” to an army that doesn’t even use the weapons it has very well. The Ukrainian army is poorly trained, badly led, and controlled by a government in Kiev that is as incompetent as it is corrupt.

It sometimes wins when it is fighting the equally ragtag troops of the two breakaway “republics” of Donetsk and Lugansk. But if the Ukrainian government troops and the assorted volunteer battalions that fight alongside them start to win, then the Russians send in a few thousand well-trained soldiers and push the Ukrainians back.

That’s what happened last August, and now it’s happening again. Putting more advanced “defensive weapons” in Ukrainian hands is not going to change this pattern, and military professionals in Washington know it. This proposal is pure, strategy-free tokenism.

Of course, Putin’s stated concerns about Western plots to draw Ukraine into NATO are not very rational either. He’s exceptionally ill-informed if he thinks that Western European countries like France and Germany would let Ukraine join NATO, since that would mean they were taking on a treaty obligation to fight Russia on Ukraine’s behalf.

He’s completely deluded if he takes his own military’s hoary arguments about Ukraine’s military importance seriously. It is 2015, not 1945, and Russia has lots of nuclear weapons. It simply doesn’t matter whether NATO’s tanks are far from Russia’s border or close to it. Wherever they are, nuclear deterrence still works.

And Putin can’t really be worried about the example that a democratic and prosperous Ukraine might set for his own people. Ukrainian incomes are far lower than Russian ones (thanks mainly to Russian oil and gas), and the West shows no inclination to pour money into Ukraine in quantities large enough to change that. And though Ukraine is more democratic than Russia, its government is no less corrupt.

What drives Putin, therefore, is a grab-bag of emotional motives. His man in Kiev got overthrown, and he doesn’t like to lose face. Even if Ukraine has little strategic or economic importance, it was part of Russia for 300 years, and he hates the idea that it might just slide into the West on his watch. He shares the paranoia about the evil intentions of the West that every Russian inherits (for very good historical reasons).

None of this is worth a full-scale war in Ukraine, let alone a serious military confrontation with the West or a new Cold War. Maybe if the United States were prepared to go in boots and all, showering Ukraine with weapons, money and even US troops, Putin might back away, although it would be a terrible risk to take.

But some token “defensive weapons”, basically to make Americans feel better? That involves less risk of a huge Russian over-reaction, admittedly, but it would still be a big step towards a new Cold War, and for no possible gain.

That is why Angela Merkel and French President Francois Hollande flew to Moscow last Friday: to head Kerry off by patching up some new ceasefire (or reviving the old one) in eastern Ukraine. They will be meeting with Putin and Ukrainian President Petro Poroshenko in Minsk on Wednesday in the hope that they can make it happen.

At best, that would mean the effective loss of Ukrainian sovereignty over two more provinces (Crimea is already gone), and a semi-permanent “frozen conflict” on Ukraine’s eastern border. Not great, but realistically Ukraine has no better options anyway.

We know that Putin is willing to settle for such “frozen conflicts” in order to cripple disobedient former Soviet republics, because he has already done it with Moldova and Georgia. We know that the victims of such tactics can thrive despite Moscow’s games. Georgia certainly does, and Ukraine could do even better with strong European Union and US support.

There is no satisfactory military solution for either side. Settle for a stalemate, and move on.
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To shorten to 725 words, omit paragraphs 5, 6 and 9. (“It sometimes…tokenism”; and “And Putin…corrupt”)

The “Oil War”

“Did you know there’s an oil war? And the war has an objective: to destroy Russia,” said Venezuelan President Nicolas Maduro in a live television speech last week. “It’s a strategically planned war … also aimed at Venezuela, to try and destroy our revolution and cause an economic collapse.” It’s the United States that has started the war, Maduro said, and its strategy was to flood the market with shale oil and collapse the price.

Russia’s President Vladimir Putin agrees. “We all see the lowering of oil prices.” he said recently. “There’s lots of talk about what’s causing it. Could it be an agreement between the U.S. and Saudi Arabia to punish Iran and affect the economies of Russia and Venezuela? It could.” The evil Americans are at it again. They’re fiendishly clever, you know.

We are hearing this kind of talk a lot these days, especially from countries that have been hit hard by the crash in the oil price. Last Thursday Brent crude hit $55 per barrel, precisely half the price it was selling for last June. The Obama administration’s announcement last week that it is preparing to allow the export of some US oil to foreign markets may send it even lower. (US crude oil exports have been banned since 1973.)

When the oil price collapses, countries that depend very heavily on oil exports to make ends meet are obviously going to get hurt. President Putin, who has let Russia get itself into a position where more than half its budget revenue comes from oil and gas sales (some estimates go as high as 80 percent) is in deep trouble: the value of the rouble has halved, and the economy has already slipped into recession.

Venezuela, where government spending is certainly more than 50 percent dependent on oil exports, is in even deeper trouble – and, like Putin in Russia, President Maduro of Venezuela sees this as the result of an American plot. Various commentators in the West have taken up the chorus, and the conspiracy theory is taking root all over the developing world.

So let us consider whether there really is an “oil war”. The accusation is that the United States is deliberately “flooding the market” with shale oil, that is, with oil that has only become available because of the fracking techniques that have become widespread, especially in the US, over the past decade. Moreover, Washington is doing this for political purposes, not just because it makes economic sense for the United States to behave like this.

In order to believe this conspiracy theory, however, you really have to think that a rational US government, acting in its own best economic interests, would do the opposite: suppress the fracking techniques and keep American oil production low, in order to keep its imports up and the oil price high. But why on earth would it want to do that?
You will note that I am going along with the notion (a necessary part of the conspiracy theory) that all important business decisions in the United States are ultimately made by the US government. That is ridiculous, of course, but we don’t need to refute this delusion in order to settle the question at hand, so let it pass.

Hydraulic fracturing (“fracking”) as a means of recovering gas and oil, particularly from shale formations, has its roots in early attempts dating back as far as 1947, but it was the development of cheap and reliable techniques for horizontal drilling in the late 1980s that slowly began to transform the US oil industry.

By 2012, over a million fracking operations had been performed in US wells – but in 2012, last year’s events in Ukraine were unforeseen and the United States and Russia were still on relatively good terms. Many oil-exporting countries were worried by the prospect that rising US oil and gas production would shrink American imports and thereby cut their own profits, but it was still seen as a supply-and-demand problem, not a strategic manoeuvre.

The operators wanted to make a profit, and Washington liked the idea that rising US domestic oil production might end the country’s dependence on imported oil from unstable places so much that it gave tax breaks and even some direct subsidies to the companies developing the fracking techniques. But that’s no more than what any other government of an oil-producing country would have done.

So did the US develop fracking to hurt its enemies? The dates just don’t work for Russia: fracking was already making US production soar years before Washington started to see Moscow as an enemy. As for Venezuela, it continues to be the fourth-largest exporter of oil to the United States, at a time when the glut of oil on the market would let Washington cut Venezuela out of the supply chain entirely.

And Barack Obama is not opening the flood-gates for massive American oil exports that will make the oil price fall even lower. The US still imports a lot of oil, and will go on doing so for years. He has only authorised the export of a particular kind of ultra-light oil that is in over-supply on the domestic market: only about one million barrels of it, with actual exports not starting until next August.

If this is a conspiracy, it’s a remarkably slow-moving one.
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To shorten to 725 words, omit paragraphs 8, 9 and 12. (“You…industry”; and “The operators…done”)

Ukraine Cock-Up

This is what former Ukrainian President Viktor Yanukovych, subsequently driven from office by mass protests in Kiev, said to German Chancellor Angela Merkel just one year ago, at the start of the crisis. It was recorded by a Lithuanian television crew, eavesdropping on the conversation with a directional mike, at the European Union summit in Vilnius where Yanukovych announced that he was not going to sign an EU-Ukraine trade deal.

“The economic situation in Ukraine is very hard, and we have big difficulties with Moscow,” Yanukovych explained to Merkel in Russian (which they both speak fluently). “I would like you to hear me. I was left alone for three and a half years in very unequal conditions with Russia…one to one.”

The Ukrainian president was not overthrown by a “fascist” plot, as Russian propaganda would have us believe, nor was NATO hoping to make Ukraine a member. (Indeed, NATO had repeatedly told the previous Ukrainian government, which was very pro-Western, that under no circumstances could it ever join the Western alliance.)  Exactly one year into the crisis, it’s useful to remember what really happened.

The basic question you have to ask about any international crisis is: conspiracy or cock-up? The Ukrainian crisis definitely falls into the latter category. Nobody planned it, and nobody wanted it. Here’s how they stumbled into it.

Yanukovych inherited the negotiations for a trade deal with the EU from the previous government when he returned to the presidency in 2010. (He was overthrown by the “Orange Revolution” in 2004, after winning a rigged election, but in 2010 he won narrowly but cleanly.) And he didn’t break off the talks with the EU because that would have alienated half the country: the western, mostly Ukrainian-speaking part.

Yanukovych was a typical post-Soviet political figure, deeply corrupt and almost comically greedy – the presidential palace he lived in on the banks of the Dnieper was so lavish it could have been in the Middle East – but he was a competent politician. Almost all his votes had come from the eastern and southern, mostly Russian-speaking parts of the country, but he knew that he couldn’t simply ignore the west.

On the other hand, he couldn’t ignore Moscow either. Russia’s President Vladimir Putin saw the EU as a stalking horse for NATO, and was trying to persuade Yanukovych to join his own “Eurasian Economic Union” (EEU) instead. Moreover, Russia had huge economic leverage, since it provided most of Ukraine’s energy and bought half of Ukraine’s exports (mainly coal, steel and heavy industrial goods made in eastern Ukraine).
So for three years Yanukovych temporised, trying to get financial guarantees out of the EU that would make up for the economic punishment Putin would inflict if Ukraine signed the trade treaty. The EU wouldn’t budge: there would be no special help for Ukraine. It would just have to take its punishment, Yanukovych was told, but the trade deal would be good for the country in the long term.

Politicians have to live in the short term, however, and in 2012-13 Ukrainian exports to Russia fell by half as Putin turned the screws tighter. Those exports mostly provided income for people in industrial eastern Ukraine, i.e. Yanukovych’s own supporters. The EU had left him “alone for three and a half years in very unequal conditions with Russia…one to one” – so in late 2013 he made his choice: break off the EU talks, and sign up with Putin’s EEU instead.

Did Yanukovych foresee that there would be big demonstrations against him in Kiev, where people had pinned their hopes on association with the EU? Of course he did, but he probably didn’t foresee that the protests would be fuelled by the ham-fisted resort to violence by his own officials. He certainly didn’t foresee that he would ultimately be overthrown – nor did Putin, who had put him in that impossible position.

All the subsequent escalations of the conflict in Ukraine – the Russian annexation of Crimea, the pro-Moscow revolts in the two eastern provinces with the largest ethnic Russian minorities, the direct Russian military intervention that saved those revolts from collapse last August – have been driven by Putin’s determination to reverse his original error.

If Ukraine cannot be brought back into Moscow’s sphere of influence, then Putin’s strategy is to neutralise and paralyse it by maintaining a permanent “frozen conflict” in the east. In coldly rational terms, Ukraine’s best strategy now would be to abandon those two provinces, Donetsk and Luhansk, which are basically open-air industrial museums, and leave it to Russia to subsidise them instead.

But it’s not going to do that, because sovereign states never give up territory voluntarily. Realistically, therefore, Kiev’s best option is to strengthen the current ceasefire and let the front lines congeal and stabilise into de facto borders, while maintaining its legal claim to the two provinces. It remains to be seen if Moscow will even let that happen.
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To shorten to 725 words, omit paragraphs 12 and 13. (“If Ukraine…happen”)

Caspian Games

Russian politician Andrei Zhirinovsky is all mouth, so it would not normally have caused a stir when he suggested earlier this year that Russia should simply annex the parts of neighbouring Kazakhstan that have a large Russian population. But the ultra-nationalist leader of the Liberal Democratic Party actually frightened the Kazakhs, because there is a bigger game going on.

Kazakh President Nursultan Nazarbayev, in power since before Kazakhstan got its independence from the former Soviet Union in 1991, was so alarmed that he openly expressed doubts about whether Kazakhstan should join Moscow’s “Eurasian Economic Union” (EEU) when it launches next January. “Kazakhstan will not be part of organizations that pose a threat to our independence,” he said in August.

The EEU is the same organisation that Ukrainians rebelled against joining last year when their pro-Moscow former president, Viktor Yanukovych, abandoned plans for closer ties with the European Union (EU). But Kazakhstan under Nazarbayev has always been on good terms with Russia, so Russia’s autarch, Vladimir Putin, immediately cracked the whip.

“Kazakhstan never had any statehood (historically),” Putin said. Nazarbayev merely “created” the country – with the clear implication that it was an artificial construct that might, if the wind changed, just be dismantled again. With Russian troops in eastern Ukraine “on holiday” from the army (but taking their armoured vehicles and artillery with them), it was a veiled threat that Kazakhstan had to take seriously.

There has actually been a Kazakh state. Almost the entire area of the current country, and substantial parts of neighbouring countries, were ruled from the 15th to the 18th centuries by a powerful Kazakh khanate, the traditional form of state among the Islamic, Turkic-speaking peoples of Central Asia. The reason it never evolved into a modern state is that the whole area was conquered and colonised by the Russian empire.

Russia is still the only great power within easy reach of the Central Asian states, and it underlined its displeasure with Nazarbayev by holding military exercises near the Kazakh border in early September. But Putin was not just restoring discipline in a prospective member of the EEU, his pet project to rival the EU.

Putin’s strategic objective is to control oil and gas traffic across the landlocked Caspian Sea. The last thing Moscow needs is cut-price competition from Central Asian producers in its European markets.

Moscow at the top of the Caspian Sea and Iran at the bottom have their own pipelines to get oil out to the markets. Azerbaijan, on the western shore, has built pipelines through Georgia into Turkey, one of which reaches the Mediterranean, so Russia cannot control its exports. But Moscow still has a stranglehold on the big oil and gas producers on the eastern side of the sea, Kazakhstan and Turkmenistan.

Neither of those former Soviet republics can escape Moscow’s grip unless it can move its oil and gas in pipelines across the Caspian seabed to Azerbaijan and out to the Mediterranean from there. So Putin has been trying for years to get a Russian veto on any such pipelines. He’s nearly there.

If the International Law of the Sea applied, then each country’s Exclusive Economic Zone, with control over seabed developments, would extend 300 nautical miles from its coast. The Caspian is not that big, so all five EEZ’s would meet in the middle – and Kazakhstan and Turkmenistan’s zones would both touch Azerbaijan’s, so the question of trans-Caspian seabed pipelines would be beyond Moscow’s control.

But since the Caspian Sea is not part of the world ocean, the five countries around it can agree on any local rules they like. Russia is by far the greatest power on its shores, and the rules it likes would confine each country to a 15-nautical-mile sovereign zone and a 25-mile exclusive fishing zone.

Under this regime, the middle of the sea would remain a common area where any development would need the consent of all five countries. Hey presto! A Russian veto on any pipelines crossing the Caspian Sea, and continuing control over oil and gas exports from Central Asia to Europe.

Following a summit meeting of the five countries’ leaders in Astrakhan at the end of September, it’s practically a done deal, although the final treaty will not be signed until 2016. Late last month Richard Hoagland, U.S. assistant secretary of state for South and Central Asian affairs, visited Astana, the Kazakh capital, and said that the US firmly supported Kazakh independence and territorial integrity, but everybody knows who’s boss in the region.

Sidelining Kazakh and Turkmen competition in the European gas and oil markets will not help Moscow much, however, if Putin’s behaviour on Russia’s western borders continues to frighten the Europeans. They will be scrambling to cut their dependence on Russian gas and oil as fast as they can, and the fracking Americans, with their soaring production, will be more than happy to help.
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To shorten to 725 words, omit paragraphs 5 and 6. “There has…EU”