Ian Welsh

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

Tag: Crimea

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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Why is Crimea Such a Great Crisis? It Shouldn’t Be.

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On March 20, 2014

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Really, I don’t understand why Crimea rejoining Russia is such a big deal.  While the referendum is dubious, it does seem that the majority of the population generally prefers to be part of Russia.  There have been almost zero casualties, and the Russian troops were mostly welcomed by the population.

Compare this to Kosovo, where there was ethnic cleansing on both sides, a major bombing campaign by the West which killed Serbs and so on. Or Iraq, or Libya, or Syria, or Chechnya, or South Sudan.  In all of those places there was a pile of violence, a lot of people died, got tortured, raped and lost their homes.  All of those, by any rational measure, are greater crises than Russia taking back a region which belonged to it for hundreds of years, whose population wants to go back.

Yes, yes, Munich, blah, blah.  Russia is not strong enough to start a conventional WWIII and win.  They are not insane enough to start a nuclear war.

The correct response to Crimea would be to say “well, it looks like they really do want to leave, they’re yours.”

If you don’t want Western Ukraine to go, then send in a NATO force and/or discuss formal partition of the Ukraine with the Western part immediately joining NATO. If you’re not willing to do that, then shut up.

This crisis is being made a crisis because of a hysterical over-reaction. The US and the EU thought they’d won this round, and moved the Ukraine back into their column. Putin didn’t accept that, and the West is freaking out over behaviour that is less egregious and killing far fewer people than wars that the US has been involved in for over a decade, and which is a cleaner break-off than Kosovo was.

As for setting a precedent, the precedent has been set already: in Kosovo, in South Sudan, in Eritrea and so on.  National borders are not inviolable if the population doesn’t want to stay in them, and can make their point militarily or has an ally who can make the point militarily.

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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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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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