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?

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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.

Russia, Crimea and the Eastern Orthodox Church Lead Way To War

The Crimea region of Ukraine is now under de facto Russian control. It is a simple fact on the ground. The rights and wrongs of this are for others to discuss, I’m more interested in the reasons why and the possible consequences.

As I was going through various news sources over the weekend, what else can I do after a knee operation, I saw a picture that stopped me in my tracks. It shouldn’t surprise me, the role of religion in politics is hardly new. The image I saw, link here, was of Eastern Orthodox priests blessing Russian troops as they take control of Crimea. I have been thinking about this image and what it means.

Outside the Orthodox community many people don’t realize just how powerful the Orthodox church is and how much power and influence it has in Russian politics. Its Patriarch, Kirill Gundyaev and Vladimir Putin have been forging strong links for more than a decade, even though there is an official separation of Church and State in the Russian Constitution. Kirill is a Russian nationalist through and through, believing that Russia should play a major role, even a dominant one, in world affairs as part of his belief in  ‘Russian Civilization’, coincidentally when Putin was campaigning to become Russian President in 2012 he put the idea of ‘Russian Civilization’ at the heart of his campaign, something he was influenced to do by Patriarch Kirill perhaps? Why not, the two men have been close for years and Kirill is very good at influencing political thinking.

As a result, the Orthodox church has tremendous power, so when events erupted in Ukraine one can imagine that Kirill with his very strong nationalistic tendencies would have been eager to use the opportunity to encourage Putin to take back control of the Crimea, historically a part of Russia. Add to this the long term disputes between the Orthodox church and the Vatican over property and influence in Ukraine and you begin to realize how the current situation is playing into the hands of the Orthodox. For a thousand years the Church and State have been different sides of the same coin. Only during the Soviet period was the link broken but after the collapse of The Soviet Union actions were quickly taken to rebuild the power and influence of the Church. Although never proven, as any inquiry has always been blocked, there is strong circumstantial evidence that Patriarch Kirill had very close links to the KGB and Politburo in the days when the Church was heavily controlled. Kirill is known as an astute politician and diplomat, as a very worldly man he knows how to use difficult circumstances to his advantage. The strategic thinking of the Orthodox Church would have had them urgently looking at ways to take advantage of the unrest in Ukraine.

While good for the Orthodox church, the risks to Putin are high. This is one of the clever games of Kirill, influence a leader to take action and if it goes wrong he can come out of the situation looking relatively innocent with the knowledge that a political backlash against him would be difficult to implement because of the Church’s influence over the majority of the Russian population. If on the other hand things go wrong for Putin and his government in their approach to Ukraine then the Russian economy is going to suffer, it will be trusted even less than before and the Cold War could easily return. Putin’s pride would also take a very personal hit as the country would blame him directly if things go wrong.

The situation in Ukraine is still developing, as of time of writing no shots have yet been fired. While Russia has moved troops into the Crimea region there are many questions about overall Russian military readiness, it has an extremely top heavy command structure and the numbers of soldiers ready to fight is less than many suspect. Add to the fact that a lot of Russian military hardware is less than reliable and you begin to understand the gamble that Putin is taking. There is a part of me that wonders if maybe he was encouraged to act against his better judgement by the Orthodox church which supplies him with so much of his popular support through their preaching from the pulpit. Looking at the situation now it would seem that Russia would like to provoke Ukraine into firing the first shot, but whoever fires the first shot the consequences for the Ruble will be dramatic. Ukraine on the other hand is also on the verge of bankruptcy, its options are limited unless the promise of funds made by the West come to fruition. Don’t under estimate the Ukrainians, they have been developing a reputation as an arms exporter. When the Soviet Union collapsed they inherited a lot of factories that make military hardware. A lot of these were closed but what they have done is improved on the designs of Soviet era hardware and then selling it, their quality control is recognized as being better than that of Russia, hence one of the reasons why they have been able to successfully develop their exports. Ukrainians also have a strong backbone and will not give up without a fight if that is what they feel they must do.

The situation is still very fluid, the stakes on both sides are extremely high and the Orthodox Church in Russia is influencing the situation more than most people realize. The next 24-48 hours are going to be interesting.

Situation Ukraine, potential consequence Syria

The situation that is unfolding in Ukraine has unfortunately a very strong chance of becoming a real war, leading to the suffering of many innocent people. If that happens then Russia will be deeply involved. Here is a thought, for Russia, the Ukraine is much more important than Syria. If Russia needs to commit huge military and financial resources into keeping its control of Ukraine then it will not have enough resources to be able to also support the Syrian Regime. Russia is the biggest holder of Ukraine debt and the unfolding situation has had the effect of devaluing the Russian Rouble. If the USA agrees with Russia that it can do as it wants in Ukraine, then the situation will become very interesting. However the fact remains that Russia simply does not have the resources to take on two major situations at the same time. I am saying this with the awareness that I could be totally wrong but could what is happening in Ukraine have been provoked at this time as a way of weakening Russia’s ability to support Bashar al Assad?

Russia is not stupid, she should also realize what is happening, that she is being given the choice between maintaining her gas distribution network in Ukraine that supplies Europe or supporting Bashar al Assad.

Watch this space.