Tag Archive | Russia

The Coldest Hot War in Ukraine

It had been speculated, over the last four months of a shaky ceasefire, that Putin intended to “freeze” the conflict in Eastern Ukraine in order to maintain a hold over the Ukrainian government.  Over the last three days, the conflict has unfrozen.  The Russians and Russian-backed rebels have launched an offensive, and according to their puppet prime minister there will be “no more ceasefires”.  The timing certainly makes sense: the Russian Army is much better-equipped than the Ukrainian one for high-tempo operations in the dead of winter, and it also allows use of the “gas weapon” to pressure the civilian government.

It remains to be seen if this operation is serious. If past offensives are any guide, it will last for a few days or a week and then peter out by pressuring the Ukrainian leaders into a ceasefire.  It seems as though the Russian MO is to alternate between sharp escalation and drawbacks, in order to alternatively panic the Ukrainians and lull them back into complacency.  But that does not seem like a long-term sustainable strategy – it has not accomplished the Russian goal of toppling the revolutionary government, and it’s not clear what gains the Russians extract from the status quo.  Given the direct occupation costs and the indirect costs of sanctions, a frozen conflict is an expensive policy that gains Russia little.  It will eventually have to either withdraw or escalate to the point it can actually gain something.

There is only one way Ukraine can win this conflict: escalation to full-scale war.  It will almost certainly lose every battle in that war, and the devastation would be horrible. However, it’s a matter of relative willingness to bear costs.  Ukrainians would be willing to lose much more in a struggle for independence than Russians would be willing to lose invading a fully mobilized Ukraine and then struggling to occupy it.  Hopefully this would not be necessary – Putin knows the above, and so would prefer to go to great lengths to avoid a full-scale war.  Credible signaling by Poroshenko that he would go all the way might be sufficient to deter Putin.  But escalation is very difficult to control, and while I think Ukraine would win a war it would entail almost unimaginable human costs.

Both Putin and Poroshenko face very unpleasant choices ahead of them.  I hope each thinks carefully about what they would hope to win and fear to lose – if Putin had more thoughtfully considered that, we might not be in this situation today.

Putin vs. The Bankers

I’ve been thinking a lot about Russia’s slow-moving currency crisis.  It has taken the form of most financial crises: very slowly, then all at once.  The ruble began crashing in earnest in mid-December 2014, until Russia’s government and central bank began pulling out all the stops in order to arrest it.  Volume has been very low, and momentum manageable, over the New Year and Orthodox Christmas holidays, but as the year gets started in earnest it will be harder for Russia to keep a lid on the ruble’s value.  Capital controls may not be very far away.

One thing I think it has revealed is that modernity – and globalization – truly are something of a Faustian bargain for the ambitious nation-state.  Russia’s crisis stems in large part from the collapse in gas prices, and the energy market is of course the most primal arena of global finance.  But a large part of its unique difficulty is that it faces serious sanctions.  Its government and companies (and individuals!) need dollars to pay their debts and import goods, and with American/European sanctions it has a very hard time laying its hands on those dollars.  Normally the IMF already would have stepped in, but the IMF doesn’t bail out countries that are invading their neighbors.  By attempting to run a modern, globalized society that is also pursuing imperial dreams in its near abroad, Putin is trying to have his cake and eat it too.  It isn’t working very well, and this currency crisis is just a small hint of what can go wrong when global finance turns on a nation.

This argues that in some way, globalization is a force for peace in the world.  It is certainly not the case, as The Great Illusion so notoriously predicted in 1910, that globalization means war is a thing of the past.  Globalization and international finance can make a country much wealthier and stronger – as it has Russia.  But it carries with it costs, and opens up nations to serious harm when they stop playing by the rules.  An autarkic Russia might be able to invade Ukraine with far fewer consequences – but an autarkic Russia would likely be a far poorer place than Russia today, and less powerful in many ways.  Putin may face a choice between dominion over Ukraine and the benefits of modernity.

World War I Never Really Ended

The world is terrible today.  The US has just begun bombing in Iraq, the Russians are still menacing Ukraine, Syria remains in shambles, the African ebola outbreak continues to worsen, the Israel-Hamas ceasefire has collapsed, and to top it all off Azerbaijan seems to have decided the time is right to declare war on Armenia in a rerun of one of the deadliest conflicts of the Soviet collapse.  This may just be a bluff, it may be serious, or it might be both.  Not coincidentally, last week we just commemorated the 100th anniversary of the beginning of the First World War.  The amazing thing is that (except for the ebola outbreak) all of the above crises can be traced back to the events of a hundred years ago.

The wreckage of World War I still marks these conflicts. The fall of the Russian empire set off vicious wars amongst the various nationalities – including the Azeri-Armenian war and the failed Ukrainian War of Independence.  The Soviet takeover froze those conflicts, but the fall of the USSR booted them right back up and they continue to play out. The Israeli-Palestinian conflict is a direct consequence of the British seizing Ottoman Palestine and opening it up to Jewish settlement.  Iraq and Syria are creations of the war as well, and the weakness of these multi-ethnic, loosely-bound states are the legacy of heir creations as ad-hoc colonial divisions.  In some sense, the blurring of the border under ISIS control may be more stable than the rigid state boundaries that existed before.

World War I deeply broke the prevailing international system, and a century later the consequences are still playing themselves out at the cost of many, many lives.  Something that you should keep in mind when anyone confidently predicts the outcomes of military action.

The Risks of a Russian “Gamble for Resurrection”

Dan Drezner nails it – Putin is backed into a corner, and that should frighten us.  Putin is actually paying massive costs for his strategy in Ukraine, for no discernible gain.  Sanctions are increasingly biting, and with the MH17 incident mobilizing Europe this will only get worse in the near-term future.  And so far, his gains from this strategy amount to: Crimea.  At tremendous economic and financial cost, and for the loss of his client state in Kiev. Even worse, the sanctions are beginning to splinter his domestic base.

One classic IR idea is the “gamble for resurrection“.  This is the idea that leaders, especially in authoritarian states, cannot afford to lose in major crises or conflicts – the regime’s support is shallow, and they might lose control if they show weakness.  So rather than back down, often leaders will escalate conflicts because it serves their best interests rather than those of the state.  The more sanctions undermine Putin’s elite coalition, and the less he has to show for it, the greater the risk that he will decide he cannot afford to lose and will start being riskier and more aggressive.

I’d add one more point to Drezner’s – that sanctions aimed at splitting Putin’s domestic base might well be read by Putin as an attempt to force regime change.  Putin surely understands the above logic, but might well put a different spin on things – that the point of these sanctions are to undermine his base of power and hope for a new government.  If so, the incentive for him is clear – each new round of sanctions must be met with more escalation, because if he backs down the personal costs could be immense.

Russia, the EU, and Sanctions as Subsidy

Yglesias has a new post up on the package of sanctions the EU is preparing for Russia, and one in particular seems interesting, an EU embargo on Russian arms:

While the EU exports €300 million a year in weapons to Russia, EU countries import about €3.2 billion in Russian-made equipment. Those imports mostly go to former Warsaw Pact countries such as Poland, whose militaries have a legacy of using Russian arms. This is an appealing target because Eastern and Central European countries are also, in general, the countries most eager to see the EU take a more anti-Russian tilt.

Yglesias mentions one reason this is practical, that the brunt of this would be borne by the most militantly anti-Russian countries.  France and Italy don’t operate MiGs – Poland and Latvia do, and this embargo would cut them off from replacement parts.  If they’re interested in taking this step, there’s no visible main impediment. And it might actually make an impression. While 3.2 billion Euro comprises a whopping 0.2% of the Russian economy (by my back of the envelope estimate), it’s a fairly significant sector of the economy dominated by interests close to the state.

One thing Yglesias doesn’t mention: on this issue, the political economy lines up beautifully.    The 3.2 billion Euros won’t be lost, especially since the bulk of those imports are to Eastern European countries that are currently getting quaky and plowing money into their military.  Poland will keep buying fighter jets, but it won’t be buying MiGs – they’ll be buying Eurofighters, Saabs, and F-16s.  This embargo could function as a de facto subsidy to the big European military contractors that are mostly located in Western Europe.  I imagine that Airbus and BAE are leaning hard on their friends in the EU as we speak.

I can’t speak for the rest of the package, but this seems likely to happen.

The Consequences of MH17 for Ukraine (and Russia)

In the latest escalation in Ukraine, today a civilian airliner was shot down with a surface-to-air missile over Donetsk, killing all 295 people aboard.  It’s not clear yet what happened, but the explanation seems obvious – Russia gave jumpy, poorly-trained separatists heavy anti-aircraft systems (along with, probably, some trained operators, because you can’t exactly pick those things up and figure it out).  These separatists see a blip on the radar and fire enthusiastically without realizing it’s a civilian plane.  As the narrative is pieced together, I would be very surprised if we discover otherwise.

The crisis in Ukraine has officially spiraled completely out of control.  Over the past few weeks or so, Russian involvement has become more and more overt – yesterday evidence emerged of a Russian jet shooting down a Ukrainian plane, and Russian artillery shelling the Ukrainian army.  The two countries are very close to a de facto state of war, and a de jure state of war might not be far off.  I agree with Julia Ioffe – this incident is clearly a game changer, but it’s not immediately clear how.  However, the crisis has obviously entered a more volatile and less predictable phase that should worry everyone.

Americans should reevaluate the reputation of Vladimir Putin as an evil genius; for the last six months his behavior has been reactive and panicky. First, he lost his client state in Ukraine by pushing too hard against EU association.  He successfully claimed Crimea, but seems to have cemented the dominance of the pro-Western faction in Ukraine for the foreseeable future.  Vladimir Putin might have thought his backing of separatist rebels was a clever low-cost way to encourage the new Ukrainian government to fall into line, but as fighting escalated he has lost any control he might have had over the situation.  This incident was a shocking blow to his position; meaningful EU sanctions are much more likely than yesterday.  This is all a bad thing – the combination of reactive, panicky, and backed into a corner is terrifyingly unpredictable.

In my view, this incident substantially increases the chance of an overt Russian invasion of Eastern Ukraine.  Putin has completely lost control of the irregulars he has armed, and crucially has now done so very publicly.  He must be considering whether it is possible to disarm the rebels before they do something else that will so drastically compromise Russia’s international position, the economy, and potentially even his grip on power.  Unfortunately for him, a “peacekeeping operation” will now be even more vilified internationally than if he had launched one yesterday.  He’s in a very tight spot, which should frighten everyone involved.

Also, incidentally, try and extrapolate from this incident to policy for the US.  Putin was transferring arms to well-known actors immediately on the other side of his border, with defined objectives, trained fighters, and Russian intelligence handlers heavily involved.  Do you think we will have substantially more control or influence over Syrian rebels?

Ukraine’s Bonding Bonds

I’m normally pretty skeptical of claims of “economic warfare” – of which the Holy Grail has to be the claims that China could “call in our debt” and render America prostrate.  However, this definitely doesn’t apply when one party is much larger and wealthier than the other, like with Russia and Ukraine.  Felix Salmon relates the strange tale of Russia’s exotic loan to Ukraine, which given current hostilities Ukraine is quite unlikely to ever pay back.  What’s so strange about it?

“The loan was not, technically, a bilateral loan from Russia to Ukraine. Instead, it was structured as a private-sector eurobond.

There are a lot of other Ukrainian eurobonds out there that look similar to the ones Russia is holding, so not paying the ones Russia is holding will have larger implications for all of Ukraine’s debt, causing prices to fall and interest rates to rise. What’s more, Russia could sell its bonds to the market… That may make a court less likely to invalidate the debt, and Ukraine less willing to do so, if it is held by a private investor, especially a non-Russian one.

Russia has structured this loan as a poison pill – it can wreck Ukraine’s fiscal situation pretty handily by forcing it into default. Unfortunately for Ukraine, principled neutrality between the West and Russia doesn’t seem like it’s in the cards.   Ukraine isn’t on the verge of government default today but it’s pretty darn close.  Russia moving to market-based gas prices will destroy government finances, and probably the economy as well.  Ukraine will need huge amounts of money, and no matter what it will come with serious strings attached.  If the money comes from Russia, that means a new regime.  If the money comes from the West, that means wrenching structural change and continuing hostility with Russia.

But the Ukrainian government simply has to go hat in hand to new masters.  And the West better be very cautious, because there is no way to get just a little involved.

Why This Isn’t 1914

I’m currently working my way through Christopher Clark’s Sleepwalkers, which is about the conditions leading up to World War I and a very thorough delve into the tick-tock of the July Crisis that launched the war.  It has been lambasted as an apologia for the Central Powers, which I don’t think is particularly fair.  Most of the high-level decisionmakers are portrayed as rather hapless and confused, particularly the German Kaiser who comes off as a childish idiot.  However, he does seem to place the blame rather squarely on the bellicose French and Russians, particularly the Russian decision for general mobilization.  It’s been interesting to read this book against the background of the past few weeks, as a frightening international crisis looms.  This time the blame can unequivocally be laid at the foot of the Russians’ decision to take advantage of Ukrainian disorder to seize the Crimea.

Sometimes it truly seems that we have learned from history.  The Russians’ move was an obvious provocation, and provocation continues with the standoffs happening right now across Crimea.  Yet the discipline of the Ukrainian troops under siege has been incredibly impressive – presumably each are aware that a single stray bullet could cause a war.  Similarly, while the Ukrainian government has called up its reserves and is moving to a war footing, it has been careful to avoid any possible provocations of Russian forces.  And NATO has been very careful about over-committing to anything that might challenge its credibility.  As the Russian exchange rate and stock market start to crumble, it’s becoming increasingly clear that the cost of holding onto Crimea might not be worth it.  It’s not just economic – the cost of the peninsula is a permanently hostile Ukraine.

The shadow of WWI is hanging over this crisis, and the Western allies are acting with incredible caution and restraint.  The statesmen of 1914 were giddy with glee over finally getting the chance to go to war and work out their problems on the battlefield.  Today the leaders of the Western nations clearly view the prospect of war with unalloyed dread.  It may be too early to be hopeful about this crisis, as things could easily take a nasty turn.  And if Russia decides to open a wider conflict by invading eastern Ukraine, then the scenario could become very ugly very quickly.  But I can’t help feeling that the specter of 1914 is keeping this situation more under control than it might be otherwise.

Cyberwarfare and Public Accountability

One of the reasons that American presidents go to war – not a good reason, mind you – is known as the “Rally Around the Flag” effect.  When America gets involved in an armed conflict, whether as defender or aggressor, the president becomes more popular and more highly-approved, and often the conflict itself is accompanied by a burst of legislation unrelated to the war.  There’s a lot of debate over precisely how strong the effect is and what drives it, but the existence of the effect itself is one of the best-known findings of political science.

This could be relevant for the decision to embrace cyberwarfare.  Today the NYT reveals that the Obama adminstration was deeply divided over the question of whether to use cyberweapons to attack the Syrian government.  The NYT reveals the deep discussion over the strategic benefits and risks – but one that does not appear there is the potential effect on American public opinion.  Cyberwarfare is still visible to affected foreign players (and possibly friendly/neutral ones too) and America is strategically accountable for its actions in this sphere, but it can be plausibly denied in a way that bombers and paratroopers can’t.  If Obama had decided to go forward with attacks on Syria, he would have had to deal with the fallout from Syria and Russia, but it likely would have remained secret until the next Edward Snowden leaked it.

If cyberwarfare is normalized, more acts of national aggression will take place out of the public eye.  As a positive question – a question of facts – public opinion is a significant constraint on executive action.  As a normative question, people differ a lot on whether this constraint is a good or bad thing.  Perhaps the people stop wise Presidents from taking the actions necessary to protect the country; perhaps the people’s reluctance to go to war stops foolhardy Presidents from making dangerous leaps into conflict.

The growth of cyberwarfare will be a neat and potentially worrying test of who is right.

Escalation in Ukraine: 2/19/14

After the streets in Kiev erupted yesterday (February 18th), more bad news from Ukraine.  President Yanukovich has sacked the army chief and replaced him with one more loyal to him personally.  This is generally a prelude to his probable next move – deploying the army to stop the protests.  Most likely this was either a pre-emptive move, or a response to the former army chief refusing.  Right now it’s 9 PM in Kiev on February 19th, and I would be surprised if the army isn’t sent out within the next three to thirty hours.  Without necessarily taking the side of the protesters, more violent escalation is unequivocally a bad thing.

This incident is being criminally underreported in America, I must say.  I think that the attention being paid to the Olympics has displaced a lot of the appetite for serious and depressing foreign news, which is scant in the first place.  But the situation in Ukraine is extremely volatile, especially now that the President is preparing for a more direct exercise of authority.  Protestors in Lviv (western Ukraine) have declared autonomy or independence and are likely attempting to marshal support among the conscripts in the army and security forces.  Some, like Poland’s Prime Minister Tusk, are warning of a civil war.

The geopolitical situation could get very hairy very quickly.  If Western Ukraine moves towards secession, they are very likely to look to Europe and potentially NATO for support.  Yanukovich could decide to let them go, or to send the army to lock down central control on the region.  While Yanukovich and his party are strongly pro-Russia, it would still probably be over the line of political acceptability for him to ask for an armed Russian intervention to bolster his forces.  But it might not be.  The situation in Ukraine is deeply divided and complex, and it has the misfortune of sitting right between the Western alliance and Vladimir Putin.

Fun fact: “Ukraine” is Russian for “borderland”.  This isn’t the first time it’s been in this situation.

The bright side of this underreporting is that it hasn’t yet become a political issue in America.  If and when it does, certain American politicians are likely to reflexively take an aggressive anti-Russia, anti-Yanukovich line.  As long as the Ukraine protests and disturbances fly under the radar, the United States may yet hope to play a productive role in resolving the crisis.  If it becomes politicized, President Obama may find himself forced into a series of escalating actions that could have horrible consequences.  This crisis is just too complex and ugly and boiling it down to a good-guys-bad-guys narrative will lead America horribly astray.