Thursday, September 4, 2014

The Ukraine Crisis Continues To Evolve

While NATO is contemplating its existential purpose in a world where the Cold War has suddenly come back with a vengeance, and the military alliance has found itself woefully unprepared to deal with a Russia which no longer accepts the supremacy of the west (appropriately enough NATO is doing this on a golf course) Russia is also strategizing, only instead of issuing "sharply-worded catchphrases" and hashtags, a Russian general has called for Russia to revamp its military doctrine, last updated in 2010, to clearly identify the U.S. and its NATO allies as Moscow's enemy number one. That in itself is not disturbing: we reported as much yesterdayand is merely more rhetorical posturing. Where things, however, get very problematic is that the general demands that Russia spell out the conditions under which the country would launch a preemptive nuclear strike against the 28-member military alliance. 

That however is the soundbite for politically correct media purposes. Because within the Defense Ministry there are voices calling for different priorities.
"First and foremost, the likely enemy of Russia should be clearly identified in this strategic document, something absent from the 2010 military doctrine. In my view, our primary enemy is the U.S. and the North Atlantic bloc," General Yury Yakubov, a senior Defense Ministry official, was quoted as saying by Interfax.
At the basis of this dramatic escalation is none other than Russia's stated response to what it perceives as a clear expansionary NATO threat.

And the punchline: the general added that special attention should be paid to integrating the functions of the newly created Air and Space Defense Forces with Russia's land, sea and air based nuclear forces. "In addition, it is necessary to hash out the conditions under which Russia could carry out a preemptive strike with the Russian Strategic Rocket Forces," he said.
One can be certain that this is precisely what Russia will do.
So what happens next?

Moscow reiterated on Tuesday it may deploy Iskander theater ballistic missiles in the Baltic exclave of Kaliningrad that will be capable of effectively engaging elements of the U.S. missile defense system in Poland.

Think massive Russian Iskander ICBM systems planted on the border with Poland, Ukraine, the Baltics and all across Russia Western border, and the furious screamfest this would waterfall into.
We can't wait to see how algos will spin such pre-emptive steps to a very mushroom cloudy World War III...

NATO has pledged some 15 million euros to Ukraine, with several of the bloc’s member states pledging separate bilateral support and military cooperation, involving medical supplies as well as lethal and nonlethal military equipment.
NATO Secretary General Anders Fogh Rasmussen announced a"comprehensive and tailored package of measures" including the donation of 15 million euros “through NATO” at a joint news conference with the Ukrainian president on Thursday on the first day of the NATO summit in Wales.
He said that this would be in addition to other measures such as advising Ukraine on defense reforms and further bilateral aid.
“This is about improvement of logistics, the improvement of command and control, the improvement of communications, and cyber defense,” Ukrainian President Petro Poroshenko said.
He added that bilateral aid would include the provision of “high precision weapons” as well as medical equipment.
Poroshenko made careful statements regarding Ukraine’s potential induction into NATO, saying that membership criteria need to be met first.
“The new parliamentary election will help us a lot to accelerate the reform process,” Poroshenko said, adding that the most significant reforms to be made would be to the economy, and ensuring the rule of law and anti-corruption.

"The West is afraid of a major war and Putin is exploiting that," says one former Kremlin adviser, adding that "his end goal is a Ukraine that is a buffer state between Russia and the West." After the recent rebel offensive, it's now militarily possible to gain full control of Donetsk and Luhansk and to create a 'land bridge' to Crimea, and "without help, Russian troops can roll ever-deeper into Ukraine." As Bloomberg reports, Vladimir Putin will continue his shadow war until he's created quasi statelets in Ukraine’s easternmost regions with veto power over the country’s future, five current and former Russian officials and advisers said.

[He] won’t settle for less than broad autonomy for Ukraine’s mainly Russian-speaking regions of Donetsk and Luhansk,including the right to reject key decisions at the national level such as joining NATO, according to the people.

Putin is willing to wait until November, after Ukraine elects a new parliament and the heating season starts, to ensure his goals are met, in part by extending a natural gas cutoff to force a compromise if needed, one official said on condition of anonymity after speaking with Putin last week.

Last week, Putin warned against any “aggression” toward Russia, noting the country remains “one of the world’s biggest nuclear powers.”

“A cease-fire is an important victory for Russia,” Trenin said by phone. “If it actually goes through, Russia will be bargaining from a position of strength. Putin’s strategy is evolving. His end goal is a Ukraine that is a buffer state between Russia and the West.”

At first glance, Vladimir Putin’s strongman status was confirmed by the release of a seven point peace plan yesterday that reputedly had him call for Ukrainian troops to withdraw from areas of their own country. Such a demand followed Putin’s demand over the weekend that Kiev begin independence talks for southeastern Ukraine. These are the new realities that NATO leaders must chew over during a summit that starts today and is being billed as the most significant in 25 years. However, we would demur at the notion of a new leviathan in the Kremlin. In reality, Putin’s hugely risky escalation in eastern Ukraine was driven by a realization that his proxies had failed and Russian prestige was set for a battering.

Flushed with the glow of easy success in Crimea, Putin openly backed separatist rebels who were both militarily incompetent and enjoyed scant sympathy among most of eastern Ukraine’s population. His biggest mistake was concluding that Ukraine would cease to operate as a unitary state and so lack the will to fight. All this explains why the separatist rebels were on the brink of defeat ten days ago, resulting in a hastily arranged Russian invasion. Having cast himself as defender of the greater Russian Volk, defeat in Ukraine would have fatally weakened Putin’s credibility.

Putin may have staved off an immediate defeat, but the stakes have undoubtedly been hugely raised. As we see it there are three broad scenarios that could play out in the next few months:

Scenario #1: Moscow and Kiev reach a comprehensive peace agreement that provides autonomy for eastern Ukraine and protection for Russian speaking citizens, while at the same time allowing the country to pursue a closer economic relationship with the European Union. Membership of the North Atlantic Treaty Organization would be explicitly ruled out.

Scenario #2: The status quo holds and Russian soldiers advance no further. A frozen conflict develops akin to the situation in South Ossetia or Transnistria. Small scale fighting aimed at consolidating Russian gains may flare up, but this does not escalate into a larger conflict.

Scenario #3: A full invasion of Ukraine by Russia with the army operating openly to establish, at a minimum, an independent buffer region.

For the moment, Scenario #1 seems highly unlikely. Both sides would need to make major concessions and with Ukrainian parliamentary elections being held on October 26, President Petro Poroshenko will face intense pressure not to give an inch to the separatists. It is also unlikely that Putin would countenance deeper economic integration with Europe as this would frustrate his Eurasian Customs Union.

Scenario #3 also seems unlikely, for despite bellicose talk of taking Kiev in two weeks a full scale Russian invasion would be ruinously costly in blood and treasure. Despite Moscow’s claim that international sanctions will be ineffective in swaying domestic opinion, it should be remembered that Putin’s popularity has been built on rising living standards and sound economic management which followed the chaotic Yeltsin years. For all the talk of becoming a “war time” president, we doubt that Putin will abandon the promise of a Russian dream of rising middle class prosperity.

The most likely outcome is an inconclusive Scenario #2 with the emergence of an unstable buffer region in eastern Ukraine, blighted by low intensity conflict. To be sure, this is a more difficult conflict to contain than others in the Caucasus since Kiev has more capability to project force and the frontline is not contiguous or divided neatly by terrain features. However, the deterrent effect of huge costs for both sides in the event of a full-scale conflict should be enough to avoid Armageddon.

Longer term, the situation looks worse for Putin. Russia may have already lost the Ukrainian people; as recently as 2011 84% of the population held a favorable view of Russia with only 11% holding a negative one. As of a few months ago, 60% of Ukrainians viewed Russia badly with only 35% having a positive view. Considering that Ukraine is the birthplace of Russian civilization, Putin looks to have lost the PR war.

Russia may also face a resurgent NATO.Already NATO has said it will open bases in former Warsaw pact countries. A greater risk is that Russia’s actions in Ukraine finally shakes Europe out of its defense lethargy and induces rearmament. Despite the eurozone’s malaise, this may trigger realization that liberal states cannot rely on the US defense shield forever.

Most damagingly for Russia, its ‘special’ relationship with Germany may have ended.Since the Berlin Wall fell the integration of Russia into western economic, political and social norms has been a cornerstone of German politics. Now, however, Berlin is taking the tougher line over Ukraine, even while other European states vacillate over the economic fallout. Angela Merkel seems to have decided that a long-term stand on values is more important than short-term economic pain caused by sanctions. The German-Russian relationship seems to have ruptured and the impact on Russia’s economic modernization will be high.

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