Russian Strategy vs Western Tactics

Once again Vladimir Putin has outmaneuvered the West regarding Ukraine. I’m no fan of his but Putin’s emphasis on strategy rather than tactics seems to be paying off. The USA/Europe seem to only use tactical thinking rather than have a clear strategy in mind. Maybe they should start learning how to play chess.

obama_putinWhat has struck me recently is the similarity between ex Soviet leader Nikita Khrushchev and Putin. Khrushchev could be a bit of a blunt instrument at times but he was also a strategic thinker. He understood how to restrict the movement of his enemy, in this case the USA. Neither he or President Kennedy wanted war, even at the height of the Cuban Missile Crisis in 1962 but he understood how to keep tension at its maximum without spilling over into full blown war which would have been a disaster for everybody. If you pour water into a glass until it reaches the top, this is tension, if the water spills over the side then it becomes war. Keep the glass full so your enemy can not add his own water to the glass without it spilling over the sides and you make him powerless.

Looking at the situation in Ukraine and it would seem that Putin is using the same strategy. Determined to weaken Ukraine, Russia has been sending large amounts of weapons and soldiers to help the separatists of eastern Ukraine. What can the West do? To be honest not much, if the USA were to send weapons to support the government of Ukraine the glass would be overfilled with water and open direct conflict would surely be a result, something neither side wants, so Russia has been increasing the tension from its side, giving very little room for movement to the USA or Europe. Now with the agreed ceasefire starting on Saturday 14th of February, Putin has been able to make an agreement very much on his own terms, the separatists will keep the land they control and if the ceasefire holds it will become a frozen conflict that the West can do nothing about. But there is more to this I think than meets the eye.

Although Russia is trying to hide its involvment in Ukraine, supporting the separatists with heavy weapons and support is expensive. Sanctions and low oil and gas prices have hit the Russian economy hard and war costs a lot of money. A frozen conflict in Ukraine that gives favourable conditions to the separatists will allow Russia to use its resources elsewhere. Where could that be? Considering Russia’s very close relationship with Iran and Bashar al Assad of Syria the answer has to be the Middle East as it joins “the war on terror” against Islamic State. Why do I say this? Iran has until the summer to agree to stop its nuclear development program, if it does not then the USA will pull back in certain area of Iraq and permit Islamic State to enter Baghdad and slaughter the Shia Muslim population which Iran, being Shia, is sworn to protect. It would be a very costly exercise for Iran to defend them as the low price of oil has also hit its cash reserves hard too. It is conceivable that Russia will give support to Iran through weapons and support. It is a very strong indication that Iran is not prepared to give up its nuclear development program come the deadline and is preparing for all possible outcomes, with Russia its ally, supporting it. The other reason would be to more directly support Bashar al Assad against Islamic State in Syria and maybe more importantly against the Sunni rebels in southern Syria, who are not only receiving strong support from the USA/UK but also Jordan, Saudi Arabia and Israel. With a real possibility that southern Syria will become autonomous, like eastern Ukraine, Assad needs all the help he can get and Russia needs to maintain as much influence in the Middle East as possible.

By freezing the conflict in Ukraine on his own terms, Putin now has the resources to help his buddies in the Middle East, This time last year he could afford to support many different battle fronts, now with the low price of oil and gas, he can not.

Putin is thinking strategically, whereas it would seem the USA puts more emphasis on tactics, it reacts to situations rather than having a long term plan of what it wants to do and how to get there. 2015 is going to be a very interesting year. As always, international politics and those with a thirst for power, Islamic State included, could not care less about the lives of ordinary people. They never have enough power, one day the glass will truly be overfilled.

This article is cross-posted to DigitalJournal.com

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What next for Ukraine?

With a rather shaky ceasefire in place in eastern Ukraine, there are still small pockets of fighting, and the withdrawal of the majority of Russian forces the question has to be, what happens next?

The situation is far from resolved, the separatists control large parts of Donbass region which includes the cities Donetsk and Luhansk, on the other hand they haven’t been able to yet take control of Mariupol which would put them well on the way to creating a land corridor between Crimea and Russia. Crimea has no physical link to Russia and there are now talks of constructing a bridge across the Kerch Strait between the two. Since Crimea’s annexation, Ukraine has severely restricted drinking water supplies to Crimea and the only options left for the time being are a polluted unused reservoir and a river which is also polluted. Not a good situation for the inhabitants to be in.

Apart from a frozen conflict there are other dangers facing Ukraine. A lot of the fighting against the Russian separatists has been done not only by the regular Ukrainian military but also far right Neo-Nazi groups, in particular the Azov Battalion. In fact Azov have often been at the forefront of the fighting and have proven themselves to be a tough bunch, more so than the regular army. Russia has always portrayed the new Ukrainian leadership of having a Nazi element and the fact that Ukraine has allowed Azov to fight and supplied them with weapons adds to this. This recent article in The Guardian touches on this also.

As Russia no longer has any political influence over Ukraine since the overthrow of President Victor Yanukovych, the rights and wrongs of which I don’t get involved in, Russia has been seeking to destabilize Ukraine. Understanding the growth of the far right Neo-Nazi movement in Ukraine is I believe, a part of Russia’s strategy to weaken its neighbour. Azov and other far right militia groups see the current government in Kiev as useless and have the attitude that Ukraine needs to have a strong dictatorship to control the country. By freezing the conflict now, Russia understands that these far right militia, who are well armed and battle hardened, can seriously destabilize the rest of Ukraine, in particular the capital Kiev. It hasn’t happened yet but the probability is high. Foreign Neo- Nazis have travelled to Ukraine to join them, not many yet but I can see the numbers increasing, in particular from Germany where there has been huge growth in far right organizations who are looking for a fight.

Ukraine fell into the trap of arming these groups and now Russia is backing away, it knows it can now sit back and watch as instability spreads. I don’t know if this was Russia’s plan from the start but it sees the benefits of taking advantage of the situation by freezing the conflict so all these militia can direct their anger towards Kiev. It is bound to happen over time, they pretty much admit it themselves in the article I linked to.

So what is Russia’s strategy here? It has been wanting to complete its South Stream gas pipeline for some time and hence avoid supplying gas to Europe via Ukraine but the EU has been holding things up for fear of becoming over dependent on Russia for energy. This pipeline bypasses Ukraine, coming through the Black Sea, entering Europe via Bulgaria, well that’s the plan but the EU hasn’t given permission for the final stage to be built yet. Russia seeing that these far right militia groups have the real potential to destabilize Ukraine and possibly the energy supply which Europe depends on, could be used as a strong pressure point to allow completion of the South Stream pipeline. Europe’s distaste for Russian actions in Ukraine may well have to be swallowed if Ukraine becomes unstable and the supply of gas with it. It simply needs the energy too much.

With European and American sanctions against Russia being increased it has become a game of chicken, who blinks first, Russia is totally reliant on the income from its gas exports to Europe and Europe is trying to put Vladimir Putin back in his box. Who has the greater will to win?

The risk associated with sanctions on Russia

First the USA imposed sanctions on Russia for its actions in Ukraine and now Europe is on the verge of agreeing a package of sanctions to match. I am no fan of Vladimir Putin but the more I think about the probable effects of sanctions against Russia’s energy, banking, defense and technology sectors the more I see problems ahead.

This article is not about the rights or wrongs of sanctions or who is guilty of what in the current conflict in Ukraine. This article is simply about looking ahead at potential consequences.

I want to start by considering the frame of mind of Vladimir Putin. This is a man who has been in power for a long time now, over time he has become increasingly isolated in the sense of having little direct contact with the Russian people, but also with the majority of politicians in Russia, he avoids going to the Duma or congress as much as possible. Instead his main contact is through a small court of those he feels he can trust. The members of this court depend on keeping the status quo in Russia as their fortunes depend on it as much as Putin’s. Finally, Putin is also very close to Patriarch Kirill of the Orthodox church who is responsible to singing the praise of Putin from the pulpit to the common Russian people and keeping their support.

It is quite interesting when you watch Putin give interviews or when he is seen in public, to study his body language, not only this but also his micro expressions. These are facial expressions that last only a small fraction of a second and we have no control over them. I make a habit of watching politicians on TV with the sound off, it is more interesting to study their body language and facial expressions. Watching Putin, it has become clear over time that while he likes to give the impression of being the the ‘big man’ there comes across a real sense that he is on his own and he feels it, not only this but he is not always secure in himself. He compensates for this by putting on the macho act. Deep down he comes across as an injured and actually very sensitive person who tries to hide this about himself and so compensates by being aloof and hard. In Russian culture, leaders must always be strong and never show any sign of human weakness. However, it takes a lot of mental and emotional energy to keep the facade in place, particularly when there is a lot of external pressure. It can lead a fundamentally insecure person to become more erratic over time and possibly snap given enough pressure.

I will come back to Vladimir Putin’s state of mind in a moment. Now it is time to look at what the direct effect of sanctions could be in the next weeks and months. Russia is financially quite fragile, huge amounts of money are being taken out of the Russian economy and placed in other countries for safe keeping. I’m not talking about dirty money but businesses that don’t trust the Russian economy. This is creating liquidity problems and at the moment the price of oil is not high enough for the Russian central bank to be able to top up its cash reserves. Russia’s main banks are also facing their own liquidity problems. Then there is the fact that many companies have to refinance their debt over the short and medium term, to the tune of some $200billion if memory serves me correctly. Add to this the fine of $50 Billion that Russia has been ordered to pay by the Hague Court for its actions over the Yukos energy company and you begin to get an idea of how potentially unstable Russia really is. Sanctions will add a lot of pressure to this situation. While the intention is for sanctions to modify Putin’s behaviour in Ukraine, there is a very real risk that they will lead to a collapse of the entire Russian economy and all the related instability which would accompany the collapse.

What keeps playing through my mind is what Putin might do if he is really pushed into a corner. He isn’t the sort of person to back down even if he knows he is wrong, that would be showing weakness, as I said before it is likely that as the pressure increases he will become more erratic and possibly more dangerous. Imagine a wounded bear that has been cornered, this is the situation we are potentially looking at.

When one man has absolute power and he only allows a small group of those he trusts to be close to him, such a person will react very aggressively if he feels his power is being threatened. Sanctions, for good or bad, could have many unintended consequences, not only for Russia but also the wider international community.

Ukraine: War has started

You should mark today, 2nd May 2014. This is the day that the Ukraine/Russia crisis escalated into inevitable war.

I have been writing about this situation for a while now as you can see in a previous article I wrote here. Today in the Eastern Ukrainian city of Slavyansk, the Ukrainians have been on a major operation to take back control of key city buildings from pro Russian supporters. There are early reports of many of these Russian supporters being killed or captured. I’m not here to talk about the rights or wrongs of the situation, I’m simply going to talk about what is going to happen next and some of the wider implications.

Now that pro Russian supporters have been pushed back in some areas, they are either Russian military or trained by Russian military. Considering some of the heavy weapons they have been using today, ordinary civilians they most definitely are not. The next step will be for them to integrate into the civilian population from where they will attack the regular Ukrainian army, provoking them to shoot back. This will give the appearance that the Ukrainian army is attacking unarmed civilians and the final excuse Russia needs to intervene. I have always felt this is the Russian objective, the armed Russian separatists are being used by Russia as little more than a provocation to test Ukrainian resolve, the next aim is to make it look like civilians are being attacked. When this happens, things are going to get quite loud.

What is happening is as much about the USA wanting this situation to develop as a way to make Vladimir Putin pay for his support of Iran and Bashar al Assad of Syria and stymy their power. The USA is not free of guilt when it comes to how the situation in Ukraine has developed. The Russian economy is very fragile, as I have written before, its banking system is on the verge of collapse as it is being drained of liquidity, the price of oil has fallen so the income from that is not enough to support Putin with the money he needs to pay the people closest to him and maintain him in power. We are looking at an explosive situation. A war with Ukraine is a useful tool for Putin to fan the fires of Russian nationalism and keep the minds of the general population away from the real reasons why their country is about to hit very severe problems. The Russia/Ukraine situation is as much about Geo-politics as it is about domestic politics. This is part of the game that goes back to the cold war, Russia and the USA can’t help but antagonize each other but this time things will not settle into a cold war. The world has changed and the nature of war with it. Ukraine is being used as a proxy in order for both of these enormous countries to challenge each other.

It is the same situation in Syria, which became a proxy war a while ago. On the one hand there is Russia and Iran who support Bashar al Assad and on the other there is the USA and Saudi Arabia and even more importantly in the near future, Turkey. I wrote about how Turkey is going to start a war with Syria here You can be sure that Turkey is waiting for the Ukraine crisis to escalate even further before going in, the way things are going it will be soon. It already has a heavily armoured brigade inside Syria, supposedly to simply secure the tomb of Suleyman Shah the grandfather of Osman 1, the founder of the Ottoman empire. Their real objective is to take over northern territories of Syria and create a Sunni-Shia Muslim wedge but you will have to read my article I linked to, I don’t see any point in covering the same ground, in depth, twice.

As an aside and I wrote about this before, the Orthodox church under Patriarch Kirill is deeply nationalistic and keen to see ‘Holy Russia’ have Ukraine fully re-integrated with Russia. The Russian Orthodox church and Putin are like peas in a pod, they are so close in their ambitions. Putin and Kirill are long standing friends. I wrote about it here. I think you will find it interesting.

The point is this. What is happening between Ukraine and Russia is linked to so many other things. There will be global implications to this crisis. There are so many things I have yet to show you but the time is not yet right. Watch this space.

Please take some time to read the articles I have linked to, they will give you a deeper insight when taken into consideration with this article.

 

 

Ukraine: War is coming, part 2

Maybe I should have called this post ‘How wars start by accident’

In my last post I made the Afghanistan comparison to show that in the face of a smaller less well equipped enemy the Russians could not win a decisive war. The same for Chechnya, they basically had to destroy the country and even then the Chechen militia were not finished off, in the end the Russians had to change their strategy from direct military intervention in order to bring some form of order to that country.

Ukraine is different, yes her fighting force is smaller but ironically, in many ways is better equipped than their Russian counterparts, Ukraine was until recently an exporter of arms to Russia, but they stopped exports due to the current crisis, in fact it is one of the global leaders of arms exports as its quality control and engineering is seen as being of higher quality that of the same systems which are made in Russia. You can read part 3 of this series here.

I don’t believe Russia really wants to see war in Ukraine and I don’t think the Ukrainians want war either but both sides are playing a game of Chicken, to see who will blink first, the problem with that is the mentality that one can never back down, they are going to stumble into a war that neither side really wants to have. The USA and EU are also partly to blame, they are trying to push Russia into a corner over the situation in Ukraine and that will simply make the situation worse, Putin will feel he has no choice but to come out fighting. I am no fan of Putin but I don’t believe he wants to have a war but he feels that the options left open to him are becoming fewer by the day. This is going to become an accidental war.

Consideration should also be given to the economic consequences of any war between Russia and Ukraine. Ukraine is effectively broke and is only being kept going by foreign loans. How they will ever be paid back is anybodies guess. More dramatically, Russia might also get into serious trouble. There is a huge amount of capital flight, money being withdrawn from Russia, by businesses and individuals alike. Something I heard today that was very interesting is that companies have been using their shares as collateral for bank loans. I hadn’t realized this but apparently it is common practice. The problem is that the value of shares in Russian companies are plummeting due to a lack of business confidence and uncertainty about the future related to the situation between Russia and Ukraine. The banks have made loans against the value of shares and are now well into negative equity territory. The Russian banking sector is now trying to call in these loans but the cash isn’t there as much of it has already been deposited outside the country. Russia is potentially facing a full on banking crisis to rival that of the USA in 2008. Their central bank has been using its huge cash reserve to maintain liquidity in the system but the money is being used up fast. The longer uncertainty and instability continues between Russia and Ukraine, the worse the situation will become. Even if war between the 2 countries is brief, the long term consequences will be felt for a long time. The Russian banking system could effectively be bankrupted. Even without a war between Russia and Ukraine things could be about to become very difficult in the Russian banking system. If that were to happen, what would the political consequences be for Putin? You can read part 3 of this series here.