Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Tag: Ukraine

Russia claims American Mercs are in the Ukraine

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On April 7, 2014

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Not a good idea, if true:

“We are particularly concerned that the operation involves some 150 American mercenaries from a private company Greystone Ltd., dressed in the uniform of the [Ukrainian] special task police unit Sokol,” the Russian Foreign Ministry said in a statement. “Organizers and participants of such incitement are assuming a huge responsibility for threatening upon the rights, freedoms and lives of Ukrainian citizens as well as the stability of Ukraine.”

Remember when US mercs got strung up in Fallujah?  Using Americans, even “deniable” Americans, could blow up badly.

Ukraine’s Unelected Government Imposes IMF Austerity

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On March 28, 2014

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This is perhaps best article on what actually happened in the Ukraine and Crimea: the story is a little different than what you’ve been hearing on TV or reading in the newspapers, at least if you’re in most of the West.  The author does leave out some bits (like the Tatars boycotting the Crimean referendum), but overall it’s accurate.

Meanwhile the new PM in the Ukraine is imposing IMF austerity measures, like removing subsidies on Gas (50% increase) and cutting pensions (50%) cut. He says he’s on a Kamikazee mission.  That’s because he’s not elected, so he can do thing that an elected leader could never do.

Which is to say: there is a coup, backed by a popular uprising in the capital, which puts in place an unelected government, which does things that elected governments repeatedly refused to do.  The East and South of the country, which voted in the last elected government, is unhappy with this.

It’s really hard to conclude that Crimea didn’t do the right thing for most of their population by joining Russia.  50% increase in natural gas prices and 50% cut in pensions?  Would you stand still for that? Oh, and the average pension in the Ukraine is—$160/month.  $80 after it’s cut.

The last government may have been a bunch of corrupt assholes, but it’s hard to conclude that taking Russia’s deal of 15 billion dollars and subsidized gas wasn’t, actually, a better deal for most Ukrainians than approximately the same amount of money from the West + IMF austerity.  And these are only some of the measures: the civil service will be slashed, the government natural gas company will be privatized (meaning even higher prices down the road), the ban on selling agricultural land to foreigners will be lifted, and so on.

The EuroMaidan’s legacy won’t just be losing Crimea, it will be turning the Ukraine into Greece.

If I were Crimean, I would have voted yes in the referendum. Russia’s a corrupt oilarchy run by a near-dictator, but it has a stronger economy and better standard of living than the Ukraine, and that’s before the IMF gets through with the Ukraine.

I don’t know what Putin’s going to do.  If NATO membership were truly off the table, he’d be best served by doing nothing more.  Let the Ukrainian’s destroy their own economy through IMF austerity, and in a few years, at least the eastern half of the country will be begging to join Russia.

However, if NATO membership is on the table, and it seems to be, Putin may feel he has no choice to invade.  Problem is, after the West lied to Gorbachev about not expanding NATO, could Putin believe any Western promises if they were given?

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Western and Russian Hypocrisy on Crimea

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On March 7, 2014

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Perhaps the most tiresome part of the Crimean move to join Russia is the rhetoric on both sides.  On the Russian side, we have Putin, who has long railed against states being broken up, starting with Kosovo; on the other side we have the Americans and Europeans nattering on about how no state can be broken up when they broke up Serbia, forcibly removing Kosovo from it.

States can be broken up—when it suits the West, or Russia.  But when the West does it, we hear a heck of a lot less caterwauling

I remain unconvinced that starting a new cold or hot war, or imposing significant sanctions and suffering the Russian retaliation, is worth keeping Crimea in the Ukraine, when the majority of its population most likely wants to leave and it was part of Russia for centuries.  The sheer hysteria of the Western response bores me: this is not the end of the world, unless we make it such.

It is also not about whether Obama is “tough enough to stand up to Putin”.  As Sean-Paul Kelley has repeatedly pointed out, that’s infantilizing.  There are actual issues here, around NATO expansion, around whether States can be broken up and when, around Russian economic ties to Europe; around the fact that Ukraine is practically a failed state; around the strong neo-Nazi presence in the new Ukrainian government; around the IMFs intention to impose terrible austerity on the Ukraine; on whether protesters have the right to overthrow a government and expect the rest of the country to accept it; and so on.

There interests at play here: oil and natural gas for Europe; Russian money for London; Russian military orders for France; American access to Afghanistan through Russian territory; Syria; the implicit deal for the Russians not to arm insurgents around the world with SAMs which can take out American drones; and so on.

These are issues that should be discussed, not whether Obama is “tough”.  What is in America’s interest, Russia’s, the Ukraine’s, Crimea, and the people in the Ukraine who don’t want to be part of a Ukraine run by the protesters?

Oh, and were the snipers who killed all those people and led to the fall of the government actually government snipers?

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“Consequences” for Russia over the Ukraine

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On March 3, 2014

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Obama and Kerry have both told Russia there will be consequences for their actions in the Ukraine.

The question is “what consequences?”  The only thing the West can do which would really hurt Russia and Putin is strong financial sanctions: freeze Russian accounts, institute a trade embargo, etc—the full Iran treatment.

The problem is that Europe needs Russia’s natural gas and oil and Britain, aka. London, aka. The City, needs Russian money.  London is awash in Russian cash, and the London Real Estate market would most likely crash if real financial sanctions were put on Russia.  Since real-estate and financial games are the only thing keeping Britain afloat, this is a total no-go: completely unacceptable to Britain.

Germany, meanwhile, will find any sanctions on energy completely unacceptable.  They can’t replace all that natural gas before next winter, even if the US agrees to sell American natural gas to Europe.

The Russians, to put it crassly, have paid their bribes.  They have made the right people in England, and Europe, rich.  On top of that they supply something Europe absolutely must have: hydrocarbons.

Further, if real sanctions, like the Iranian ones were applied to Russia, the price of oil and natural gas would spike so high the world economy would go into a tailspin, even before one considers the spin-off financial effects.  Russia would then orient hard to China, who in no way would go along with such sanctions, and while the initial affect would be massive, in time, all that would happen is that Russia would now firmly be a Chinese client state.

Many have noted that the ruble is dropping relative to the dollar and the Euro and say that “markets” are punishing Russia.  They aren’t, because oil and natural gas prices have increased, and Russia doesn’t get paid for hydrocarbons in rubles.  In fact, the crisis will probably make Russia money.

The intermediate sanction would be Visa restrictions on Putin’s closest associates, along with freezing their accounts.  The problem with that is that Putin has plenty of ways to retaliate, starting with not letting the US get its gear out of Afghanistan when the Afghan government kicks the Americans out.  (Getting that gear out through Pakistan will be much harder, dangerous and much more expensive.)

China, of course, is the actual threat to American hegemony.  It is also the country that the Ukraine should actually be going to for help, not to the West.  More on that in future posts.

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The 2012 IMF/Ukraine Negotiations

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On March 2, 2014

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These are the reform the IMF wanted for a 4 billion dollar loan:

the IMF demanded that Ukraine double prices for gas and electricity to industry and homes, that they lift a ban on private sale of Ukraine’s rich agriculture lands, make a major overhaul of their economic holdings, devalue the currency, slash state funds for school children and the elderly to “balance the budget.”

This is what the IMF does to your country. Note that 4 billion doesn’t even come close to covering Ukraine’s debts.  Moscow offered 15 billion and a one-third reduction in natural gas prices.

If the Ukraine wants something close to prosperity, this is a sideshow.  The first thing they have to do is destroy their own oligarchs: take away their money and power.

But remember how the West squealed when Putin brought his oligarchs to heel?  Or at Venezuelan redistribution?  Oligarchs are even more sacrosanct in the West than the East.  The IMF would never allow the Ukraine to destroy their oligarchs and throw them all in jail.

The next step after that would be solidly reorient to China.  They want Ukraine’s food, and  the Chinese are willing to pay a premium for the resources they buy, at least by developing world standards (and that this point, that’s what Ukraine is.)  What, exactly the Ukraine thinks it will sell the West is beyond me: their Soviet era factories don’t make anything we want, and the West heavily subsidizes its own agricultural production.

Some Perspective on Russian Intervention in the Ukraine

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On March 1, 2014

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1) The journalists talking about anschluss are morons.  This is not Germany in the 30s, Russia is not going to try and conquer Europe.

2) The Ukraine was part of Russia for centuries, and has been independent for about 20 years.

3) The Russian Army is not the Red Army: it is not capable of conquering Europe.

4) The Crimea is majority Russian already and had been part of Russia, yes, for centuries.

5) Russia was NEVER going to allow Ukraine to kick them out of Sevastopol and the Crimea.

6) Americans spent 5 billion dollars promoting the Ukrainian revolution.  That’s a lot of money.  Granted that the Ukrainian government was a corrupt bunch of thugs, Putin is not crazy to think the West fomented the revolution.  The West DID foment revolution.  There was fertile ground, but 5 billion dollars is not chicken feed.

7) The West is not going to fight a war for the Ukraine.  Russia is.

8) The East of Ukraine is still pro-Russia.

9) What the Ukrainian parliament did with armed protesters standing over them is not, ummm, necessarily what they would have done without guns being waved in their general direction.

Analysis: it is highly unlikely that Putin will go for Kiev, though I won’t categorically rule it out.  Crimea will be part of Russia, whether de-facto or de-jure.  The eastern parts (which is where all the industry is, by the way), may be partitioned off as a rump state, or brought into Russia.  In both cases, if it happens, referendums will be held.  They will not need to cheat on them, as long as they don’t go too far West, they’ll win them fairly.

I will be frank: the West needs to stop fomenting these revolutions.  Russia is not going to allow NATO to creep up to their border without taking action.  You’d have to be crazy to think that Russia was going to allow the Ukraine, including Crimea, to become part of NATO, and yes, that was the West’s (or rather, America’s) endgame.  (The Europeans think the Americans are crazy to be baiting the bear like this.  But the Europeans need Russian natural gas.)

Russia is no longer the USSR.  It is not an existential threat to the West, or even to Europe.  It is a corrupt resource state with a big army and nukes which controls a lot of territory, but the idea that it would win a full-on conventional war with America is deranged.

All the US is accomplishing here is driving Russia into the country which is actually a danger to American dominance: China.  This was totally unnecessary, but the entire thrust of US policy since the USSR has been to try and cripple Russia, starting with the completely deranged “shock doctrine”  economic policies foisted on Russia right after the USSR’s collapse: doctrines which lead to an actual collapse in Russian population.

Putin thinks the US and the West are Russia’s enemies. He is not wrong.

Can you imagine if Russia spent 5 billion dollars fomenting a pro-Russian revolution in Mexico?  How would the US react? (And let us not forget the US invasions of Grenada and Panama).  If the US had broken up and California was its own state, would the rump US state feel they had a right to intervene in it?

Also, once more, the IMF will give Ukraine money in exchange for “reforms”. If you think those reforms will be good for the Ukraine, you are not just sadly mistaken, you are an idiot, or I hope you’re well paid to have such opinions.  IMF reforms do not help ordinary people.

Finally, if I were a Western Ukrainian, I probably would have supported the revolution: Yanukovych was just too corrupt and too brutal. This isn’t about choosing sides, this is about understanding them.

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This Ukraine Stuff Writes Itself

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On February 27, 2014

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Gunmen seize parliament and the main administrative building in the Crimea and NATO’s Secretary General says:

Rasmussen, NATO’s secretary general, described the seizure of the regional government administration building and parliament as “dangerous and irresponsible.”

Wait?  Weren’t other government buildings seized by gunman in Kiev, just recently?

Meanwhile:

International Monetary Fund chief Christine Lagarde said Thursday that her organization was ready to respond to a request for assistance from Ukrainian authorities and would send a fact-finding team to Ukraine to assess the situation and begin discussion of reforms the country needs. “We are also discussing with all our international partners — bilateral and multilateral — how best to help Ukraine at this critical moment in its history,” she said.

Reforms, eh?  Remind me of the occasions on which IMF reforms have been beneficial to the average citizen of any country?

Then there is this:

A senior U.S. official familiar with the most recent administration assessment told CNN that now that the Russians “have brought troops out of garrison,” they could potentially move “quite quickly” once an order comes.

At that point, the official says, the U.S. assessment is that its “warning time” that Russian forces were on the move might be so short, it would be difficult for the United States to move diplomatically to try to stop it.

I—I, what?  If you don’t want them to, the diplomacy is done now, and it involves threats and carrots.  But the problem is that Ukraine is in Russia’s sphere of influence.  Do you think that the new, IMF funded, Western supported government will be asking for NATO membership?  I would be if I were them.  Do you think Russia finds that, in any way, acceptable?  Have you looked at a map?

The Ukraine in NATO is a strategic threat to Russia. It is of no value to NATO except as a threat to Russia.  Russia knows that.

The strategic situation is such that Putin has many reasons to find an excuse and annex both the Crimea and Eastern Ukraine (which contains most of Ukraine’s industry, by the way.)  The rest can do whatever they want.  And if Europe doesn’t like it, well Gazprom can sell its natural gas to the Chinese and Europe can go dark.  As for the US, bluster all they want, they aren’t going to fight a war against Russia for the Ukraine.  Russia’s still a real country; it has nukes.

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