Here it is:
Here it is:
“Imperialist Putin “Steals” Ukraine”… If only all those hysterical newspaper articles were true!
In reality, the only thing he stole was Ukraine’s credit card debt. He’s no idiot, of course, and is in no rush to pay it off. The drama certainly hasn’t ended. But a geopolitical pivot on the model of Khmelnitsky’s 1654 decision this is not.
Let me try to explain the actual motivations of everyone involved:
(1) The EU wants the Ukraine. No, have to be more precise. The Poles, Balts, Swedes, and Anglos want Ukraine in the EU, without Yanukovych. Scratch that. They want Russia without Ukraine without a Yanukovych. As long as Ukraine politely waits in the queue alongside Turkey and Egypt and all those other peripheral countries enjoying the glories of “European civilization” with Associate memberships, all is well.
(2) Putin wants a weak Yanukovych – because Yanukovych is loyal to his oligarchs, not Putin (duh!) - in control of Ukraine. He also wants Ukraine in the Customs Union. (But not its credit card debt). To do this he has been applying pressure, with Russia banning the import of Roshen chocolates, which belong to a particularly outspoken proponent of the EU, the oligarch Petroshenko. There are warning that EU Association will mean the setting up of tariffs on Ukrainian imports (Russia does not, after all, wish to have to compete with European goods on level territory at this stage). Russia’s long-term goal (with the Eurasian Union) is gradual convergence with EU standards, and eventually even integration. But that is very far off (2040′s maybe). The greater the scope of the Eurasian Union, the more advantageous the terms on which said integration can occur. There is no hurry.
(3) Yanukovych wants what the Donbass oligarchs want. The Donbass oligarchs want to legitimize and secure their wealth by integrating into Western institutions. But the Donbass oligarchs also want their main protector to remain in power. And unfortunately, things like raising gas prices by 40%, salary freezes, and big spending cuts – as demanded by the IMF in return for loans – is going to collapse whatever remains of Yanukovych’s support in the east and south. And why does the EU/IMF demand such stringent concessions? See above. They want a Ukraine without Yanukovych! It’s all logical.
Hence, when PM Azarov says that the decision to suspect the EU deal is “tactical,” he is in all likelihood saying the truth – as opposed to opposition claims that it is all some kind of elaborate conspiracy concocted with Putin to deny Ukraine its “European choice” and return it to imperial moskali domination.
It is also worth noting that during much of the summer, Ukrainian TV channels were propagandizing the benefits of EU association. This is presumably what caused support for the EU to start exceeding support for the Customs Union/Eurasian Union. It would have been exceedingly stupid and irrational to carry out this information campaign with the ultimate intention of performing a volte face and turning back to Russia. It would just piss off the Ukrainians who had become more energized about Europe. An own goal. Why would they possibly do it?
Now that we have a more realistic idea of how things actually work – as opposed to the fanciful tales that the Lithuanians are spinning of Russian blackmail towards Yanykovych, and its faithful repetition in the Western media – we can now look to the future.
Even a few months ago, it looked as if Ukraine had taken a significant step towards Eurasian integration by signing up as an observer to the Customs Union between Russia, Kazakhstan, and Belarus. However, in the past month, evidence is emerging that it was but a temporary ploy to appease Russia while in reality speeding up the Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union. This is scheduled to be signed in Vilnius late this November.
The Ukrainians say that that does not preclude further integration within the framework of the Customs Union. However, it is difficult to see how it could simultaneously have free trade with Europe while simultaneously being a part of strategic protectionist bloc. Although it is entirely possible that in the Customs Union will eventually be gradually merged with and into the European economic area – Putin himself has hinted as much – any such scenario will likely be decades in the making.
Putting aside for the moment geopolitical (Atlanticism vs. Eurasianism) and cultural (European civilization vs. Orthodox-Slavic brotherhood) considerations for the moment – which have been overdiscussed anyway both on this blog and Leos Tomicek’s and many others, with the result that there is now little left to add – I would like to frame the debate in economic terms.
If you ever manage to get a troupe as diverse as Latynina, Mark Adomanis, the Cypriot Communist Party, virtually every financial analyst, Prokhorov, and Putin united in condemning your crass stupidity and cack-handedness, it’s probably time to stop and ponder. But it’s safe to say that’s not what the Troika – the European Commission, European Central Bank, and IMF – tasked with managing the European sovereign debt crisis is going to be doing any time soon. They seem to be living in la la land.
Here is the low-down. Contrary to German/ECB propaganda, Cypriot public finances, while nothing to write home about, are not in a catastrophic state. The debt to GDP ratio, far from ballooning out of control like Greece’s, was actually lower than Germany’s as late as 2011! This was despite Cyprus being steadily hammered by the global financial crisis and the massive explosion at a naval base in 2011 that cost it about 10% of its GDP.
The main problem was in its financial sector. Although it should have been safe on paper, Cypriot banks had the bad fortune to have had many operations in Greece – which hemorrhaged money as Greek debts were restructured under EU guidance. These involved painful austerity, but the principle that bank deposits would be inviolable held across the PIIGS. But for Cyprus, the Eurocrats – egged on by Schäuble in particular – decided to make an exception, demanding a “bail-in” as part of any financial rescue package. For the ultimately trifling sum of $6 billion, they were prepared to erode basic principles such as sanctity of property that the EU is founded on.
According to Edward Scicluna, the Maltese Finance Minister, his Cypriot counterpart Michalis Sarris was for all intents and purposes brow-beaten into accepting the deal – a 6.75% levy on deposits of less than 100,000 Euros, and 9.9% on everything above that – that the country’s parliament would later decisively reject. The Europeans, according to him, were dead-set on “downsizing” Cyprus’ supposedly overgrown financial sector and in particular its status as a tax haven and alleged center of Russian money laundering. After 10 grueling hours of discussions, Sarris finally conceded, and as soon as that happened, “Schäuble demanded that all wire transfers to and from the Cypriot banks would cease forthwith.”
In other words, they wished to destroy Cyprus’ financial system, and it seems certain that they have succeeded in this. As soon as the banks reopen (now delayed until at least May 26th), who exactly will continue to keep their deposits in a Cypriot bank?
I just remembered I’d made some in 2012. It’s time to see how they went, plus make predictions for the coming year.
Of course I failed to predict the biggest thing of them all: The hacking that made me throw in the towel on Sublime Oblivion (remember that?), but with the silver lining that I could now split my blog between my interest in Russia and my interest in many other things. After all tying my criticism of the Western media on Russia with topics like climate change and futurism and HBD was never a very good fit. Overall I am very satisfied with the new arrangement.
(1) Russia will see slight positive natural population growth (about 50,000) as well as significant overall population growth (about 400,000). Do bear in mind that this prediction was first made back in 2008 when a Kremlinologist who did the same would have been forced into a mental asylum.
(2) The life expectancy will reach 71.5 years, the total fertility rate will rise to 1.8. The birth rate will reach a local maximum at about 13.3-13.5 (it will then remain steady for a couple of years, and then begin to slowly decline) while the death rate will go down to about 13.0-13.2). Net immigration should remain at about 300,000.
(3) Putin will not be overthrown in a glorious democratic revolution. In fact, things will remain depressingly stable on the political front. As they should!
(4) Currently Russia is one of Europe’s most corrupt countries. While it’s certainly not at the level of Zimbabwe, as claimed in the Corruption Perceptions Index, it’s not like having the Philippines, Romania, or Greece for neighbors on an objective assessment is anything to write home about. I believe that Russia missed a great opportunity to undermine the rotten culture of official impunity that exists there by refraining from prosecuting former Moscow Mayor Luzhkov with his Montenegrin villa, billionaire wife, and his VP Mayor Resin who wore a $500,000 watch following his dismissal in 2010. Today a similar opportunity presents itself with blatant evidence of large-scale corruption on the part of former Defense Minister Anatoly Serdyukov and his female hangers-on (see the comments threads here, here at the Kremlin Stooge for details). There are conflicting signals as to whether charges will extend to the very top, i.e. Serdyukov himself. Having incorrectly anticipated a Luzhkov prosecution, I am now once bitten, twice shy. So I’ll take the lame way out and call it a 50/50.
(5) Needless to say, the economy remains as uncertain as ever, and contingent upon what happens in the EU and the world. In the PIGS the economic contraction is finally starting to slow down, but Greece is something of a disaster zone, and Spain is raiding its pension fund to keep afloat. If this becomes unsustainable this year then the EU member states will have to make some fundamental choices: Fiscal union? Or its division into a “Hanseatic” core and Mediterranean periphery? Which of these three things will happen I find impossible to even begin to foretell… As applied to Russia, under the first two scenarios, it will continue plodding along at a stolid but unremarkable pace of 3-4% or so GDP growth; if things come to a head (as they eventually must) and Germany decides to toss the Latins overboard, then the divorce I assume is going to be very, very messy, and we can expect Russia’s economy to fall into recession.
(6) No special insights on foreign policy. Ukraine may join the Customs Union; however, I suspect that’s more likely to happen in 2014 or 2015, as Yanukovych faces re-election and has to make a choice between continued prevarication between it and the EU, and encouraging his Russophone base. The creeping influence of the Eurasian Union will likely keep US-Russian relations cold; whatever the current disagreement that’s talked about (Magnitsky Act; Dima Yakovlev Law; Syria; Libya…) I lean to the “Stratfor”-like position that at heart the US just does not want what it sees as a “re-Sovietization” of the region – which the Eurasian Union is, in geopolitical terms, if under conditions much softer than was previously the case – and will thus be driven, almost by force of instinct, to oppose this trend.
Over the years, I have come across my fair share of liars and incompetents writing about Russia in major Western media outlets. But rarely have I encountered such heights of self-righteous arrogance and clownish, pathetic ignorance as Edward McMillan-Scott displays in his latest screed for The Guardian: “David Cameron must stand up to Putin“, where he uses Elena Bonner’s recent death to argue for a harder line against Russia.
Time to go grenade fishing again, i.e. fisking Russophobe articles – it’s as easy as it is ultimately pointless. As I’m banned from the Guardian‘s pond (for drawing attention to its mendacity and plagiarism) it will have to take place on my own blog.
Assume we’re discussing, let’s pick a totally random scenario, a British humanitarian intervention in 2014 to liberate Venezuela’s oil reserves oppressed citizenry from Hugo Chavez’s dictatorial regime. (Somewhat implausible true, as Britain will have the aircraft carriers but not the planes, but let’s indulge ourselves a bit). Activists are planning protests in London. Then an MP in the Duma’s ruling party, Ivan Ivanovich Ivanov, writing on the necessity of standing up to Cameron for a national Russian newspaper, argues that only George Osborne will decide whether there will be kettling and preemptive arrests of demonstrators. Now considering that Osborne is the Chancellor of the Exchequer, responsible for economic and fiscal matters, would you retain much respect for the paper or Mr. Ivanov after this?
I have long noted Russia’s resurgence back into the ranks of the leading Great Powers; I predicted that the global economic crisis will not have a long-term retarding impact on the Russian economy; and within the past year I have bought into Stratfor‘s idea that the defining narrative now in play in Eurasia is Russia’s intention to reconstruct its empire / sphere of influence / call-it-what-you-will in the post-Soviet space. This “resurgence” is advancing along several major fronts: geopolitical, economic, demographic, military, and ideological. In this post I will cover recent major news on the first four.
The most consequential big event is the electoral victory of Viktor Yanukovych (35%) in the first round of the Ukrainian presidential elections, followed by Yulia Tymoshenko (25%), Serhiy Tihipko (13%), Arseniy Yatsenyuk (7%), and Viktor Yushchenko (5%) – a result that I called 100% accurately. Disillusioned with the incompetence, economic decline, and “anarchic stasis” of five years of Orange rule, polls indicate three times as many Ukrainians now favor a “strong leader” over a “democratic government”, so no wonder that the liberal ideologue Yushenko, though the only major Ukrainian politician who is consistent and sincere in his views, suffered a crushing defeat as the last true representative of the Westernizing “Orange” movement. This marks a threshold in the accelerating “regathering of the Russian lands”*.
Below is an electoral map of the first-round Ukrainian presidential elections. As is always the case, the urban, Russophone / Surzhyk-speaking, Russian Orthodox Church-affiliated south and east voted for the pro-Russian Yanukovych, head of the Party of Regions, while the more bucolic, Ukrainian-speaking, Kyiv Patriarchate-affiliated / Uniate center and west favored Tymoshenko.
So let’s get this straight – breaking their own ceasefire, Georgia attacked Russian citizens and peacekeepers, and there are grounds to believe they committed war crimes, in violation of the latters’ peacekeeping mandate. All Russian military action is aimed at repelling the Georgian military from South Ossetia and Abkhazia, which at times involves bombing the source of attacks originating in Georgia proper. Saakashvili mounts a pathetic, whiny PR campaign of “Russia murdering poor democratic Georgia” and the Western media swallow it line and hooker, despite their own governments’ complicity in making this happen (i.e. offensive arms’ sales).
Putin: ”The very scale of this cynicism is astonishing — the attempt to turn white into black, black into white and to adeptly portray victims of aggression as aggressors and place the responsibility for the consequences of the aggression on the victims.”
Interview by Minister of Foreign Affaires of the Russian Federation Sergey Lavrov to BBC, Moscow, August 9, 2008. Granted, a bit dated as of today, but none the less important for understanding Russia’s reasons for getting involved in maintaining peace. I have highlighted in bold Lavrov’s most important points.
Question: What is Russia’s aim in South Ossetia?
S.Lavrov: Russia’s aim is to keep peace. This is not just Russia’s aim, this is Russia’s obligation. Russian peacekeepers have been brought there under the agreement between the parties after the war which started in the early nineties. The late President Gamsakhurdia who was the leader of Georgia at that time declared his policy “Georgia for Georgians”. He cancelled autonomies of Southern Ossetia, Adjaria and of Abkhazia. He brought his troops into these areas and then the resistance took place. And Georgian army was wiped out of those regions. It was then that after quite nervous and intense negotiations a peacekeeping mechanism was established comprising Georgians, Ossetians and Russians. The peacekeeping force was established and this peacekeeping force has a mandate. The mandate is to make sure that there is no violation of quiet in the zone of conflict and the peacekeepers are required by this document to prevent any violations and to put out any violations. Since Georgian forces for the second time are engaged in aggressive actions in full violation of the obligations under those international agreements and international humanitarian law by attacking civilians, residential quarters, humanitarian convoys, attacking the convoys trying to remove the wounded from the area of the fighting and even, by some reports, finishing off the wounded. So this is absolutely unacceptable and the responsibility of Russia as a peacekeeper could be only sustained by responding to this aggression.