Russia in Global Affairs

The Russian media have lately been replete with articles about the future of Ukraine. They can be divided into two main categories, analyzing: 1) how events will unfold in Ukraine; and 2) how we should build a better Ukraine. For all the differences in opinions expressed in those articles, they have one thing in common: all of them hold that the position of the West (primarily that of the United States) is static, fully deterministic and cannot offer a long-term mixed strategy. But this is not so. Just as Russia has to build a peaceful life in Donetsk and Lugansk, Washington is ready to do the same in Kiev. Currently, for example, the West is using the respite in hostilities to build a “better government” in Kiev.

This situation has resulted in several seemingly unrelated events:

• the return of Ukrtransnafta and Ukrnafta under state control;
• the resignation of Igor Kolomoysky and his team, including the heads of several local government administrations in regions, and the exit of Dnepropetrovsk Region politicians from the Pyotr Poroshenko Bloc;
• the change in the role and position of Arseny Yatsenyuk as prime minister and of his party, People’s Front, as the second largest force in the ruling coalition towards his desubjectivization and subsequent replacement;
• the beginning of proceedings to prosecute some of the All-Ukrainian Union “Svoboda” leaders  who held executive positions in Ukraine in 2014;
• the withdrawal of the Donbass Battalion from Shirokino, and the proposal to disband the Right Sector’s Volunteer Ukrainian Corps. As a result of a compromise, the Corps will remain, but only as part of the Ukrainian Armed Forces. This means that after one or two rotations there will be no trace of “nationalist volunteers” left, except for the Corps’ name.

These developments indicate that the Western patrons of Kiev (above all, Washington and the Department of State as the key conductor of its  foreign policy) are also prepared for long-term “games” and have no plans to see the Ukrainian army’s surrendered. U.S. policymakers and the military are also learning lessons from the Debaltsevo debacle. Debaltsevo itself was necessary, too, for Kiev to realize at what point of free fall Ukraine is and how much it is dependent on U.S. support.

In a way, this explains Kolomoysky’s peaceful resignation as well. The Dnepropetrovsk businessman’s team realized that the U.S. position was not only about choosing Poroshenko as the best of the two oligarchs but it was also a kind of imperative intended to level off the Ukrainian political landscape. The very fact that there were two candidates for one post made the situation uncontrollable and unstable. So, the current changes in Kiev, initiated and implemented with the decisive support of Washington, have some rather  concrete applications.

THE MAIN TASK

The main task is to homogenize the political space in Ukraine. For the time being, President Poroshenko is winning the State Department’s casting, which means that all others must admit this,  cherish no illusions about their own prospects, not stand in the way of their senior partners, and take what they are offered.

The State Department understands perfectly well that the Ukrainian democracy (which is purely nominal as it is) will have to be shut down for some time. Now there is no and can be no alternative to the coalition between the Pyotr Poroshenko Bloc (the party of the whole of “new” Ukraine) and Self-Reliance (a non-radical and inclusive party of Western Ukraine). There should be no “regionalization” or strong and charismatic local leaders. Hence the constant change of governors and even heads of small district administrations lest they stay too long in their posts or amass connections at the local level.

There is one more important point to consider, namely, the financial and economic issue. In the near future, Ukraine won’t have much money. Firstly, giving money to Ukraine means having it embezzled. Secondly, there are no sources to give money. Therefore there must also be unity of command – this time without Poroshenko but directly between the IMF and Finance Minister Natalie Jaresko to prevent money from falling into the wrong hands.

According to some reports, this was the reason for the arrest of Sergei Bochkovsky, the head of Ukraine’s State Emergency Service. Washington believes that Bochkovsky had for a long time sponsored the People’s Front using state funds. The authors of the scheme say that making Interior Minister Arsen Avakov, who is close to the Front, “ditch” Bochkovsky was the acme of skill in using political technologies. There is no doubt that Avakov himself is on the list,  he knows about it and is very nervous. It is unlikely that the sword of Ukrainian law enforcement agencies, guided so subtly by foreign specialists, will touch the prime minister now – there is no need for that. Yet he will have to worry, too.

Again, it is not accidental that Minister of Economy Aivaras Abromavi?ius has suddenly begun to say that all state-owned property in Ukraine should be sold immediately solely to Western companies. Nothing can be sold dearly in Ukraine now. The situation in the country is such that the buyer sets the price, which means that property is not sold but transferred for free into someone else’s hands, bypassing Ukrainian tycoons, potential oligarchs, and high-ranking government officials. As soon as this is done (which will take a couple of years), the Ukrainian political and economic space will have been completely mopped up. While now oligarchs are deliberately degraded, no one will be able to rise at all later without the permission from senior partners.

THE SECOND TASK

The second task is to restore the combat efficiency of Ukraine’s Armed Forces but not for the purpose of making a fast thrust and defeating the self-proclaimed Lugansk and Donetsk People’s Republics after the winter campaign. There are no illusions left about the Ukrainian army’s capability. Continuous reports about U.S. plans to supply weapons to Ukraine suggest long-term strategies. They cannot give a quick effect, and even John McCain understands this. But this is changing the perspective, which can be important if we assume that the task has altered.

The State Department is already well aware that “taking Donetsk by Victory Day” would be impossible. At the same time, any unilateral escalation of hostilities by the Ukrainian army can further erode Europe’s united support for the U.S. policy. Partly, the tactic has already changed. This does not mean that the Ukrainian army and the Volunteer Ukrainian Corps will stop testing the vigilance of the “people’s republics,” conducting reconnaissance-in-force operations or trying to break through the enemy defenses. Yet these tasks are no longer viewed as a top priority.

If Kiev succeeds in provoking Lugansk and Donetsk into escalating hostilities, Russia will take all the blame for violating the agreements and face even stronger and broader sanctions. If the provocation fails, the war of nerves will continue, but the U.S. does not rely on a short-term scenario and an immediate effect.

The above is largely evident and inevitable. But this does not mean of course that Washington will succeed. The State Department does not understand the situation well enough (although better than a year ago), and Ukraine is not all peaches and cream. Now and then some local specificity crops up, but American strategists do not like specificities and very often stumble over them. The deterioration of relations between Kolomoysky and Poroshenko is a typical surprise of this kind. Although the issue had always been seen as explosive, no one had foreseen that the conflict might escalate within a day into an armed confrontation.

This kind of events can happen again. There are now too many discontented people. However, the algorithm has already been found, and a third (fourth, fifth, sixth, etc.) Maidan will only remain someone’s pipe dream. So far, the situation is under control.

The problem is of a different kind. Just like Russian scenarios erroneously assume that the U.S. actions are static, the State Department’s scenarios cannot accurately identify Russia’s priorities in the current conflict. And yet, things must be easier for the State Department as Washington understands Moscow better than vice versa, and the instruments at its disposal are incomparable with those of Moscow. However, the Kremlin has a choice, too, and the efficiency and timeliness of its response can neutralize any of the opponent’s strategy, even if it is stronger and better prepared.

For Moscow, there are three main scenarios of counteraction, with different degrees of probability. Russia has limited freedom in choosing a scenario, as the choice largely depends on the West. Washington can even mix the scenarios. Both parties are playing poker, but the West can see one or two (although not all) Russian cards, whereas Russia cannot see the game being played by the U.S. and its allies at the moment. Moscow should be ready to play all possible options, while trying to execute its own game plan. The task is very difficult, but there is no alternative to it.

OPTION ONE – COLLAPSE

Many economists in Russia, Ukraine and the West now speak about the collapse of the Ukrainian economy. For example, the agreement with the IMF requires that Ukraine restructure its foreign debt by late May. However, if Russia, as one of the creditors, says no to the restructuring, the IMF will stop the funding,  and by autumn Ukraine will have to default.

This scenario is possible but unlikely, and it does not in any way depend on Moscow. Russia may refuse to restructure Ukraine’s debt and thus complicate the situation in Ukraine. But the West, realizing that the debt issue ($3 billion plus another three to four billion dollars owned for gas supplies) may pose a serious problem, will urgently settle it, even by paying its own money. Six to seven billion dollars will hardly make the West retreat from Ukraine, especially if it has long-term plans there. Suffice it to recall German Foreign Minister Frank-Walter Steinmeier’s words that finding a political solution to the issue of eastern Ukraine may take decades.

There is another “apocalyptic” scenario. Industrial enterprises stop working; the standard of living declines rapidly; masses of ordinary Ukrainians cannot stand it any longer and take to the streets to protest; the government falls; and the state collapses.

Commenting on this scenario is even easier. The collapse of the Ukrainian economy, as we have known it over the past 15 years, has already come. Things are bad for everyone, but not so bad as to lead to mass protests.

First, there are no leaders. Some of them are on the run; many others have been neutralized; some are fighting on the side of Donetsk and Lugansk; and the others have gone deep underground and do not know what may happen in the next few months.

Second, Ukrainian people have been living very modestly all this time anyway. Actually, they have been trying hard to survive. They do not like what is happening now (see the popularity ratings of Yatsenyuk and the government), but this is an issue of election rather than protest. If a new (necessarily new) and moderate political force is given two to three months of conflict-free and well-funded promotion, it will easily top all the ratings. But this is fantasy rather than political reality.

Third, people still cherish hope – for payments or cancellation of visas, which will enable them to go abroad in search of better-paid jobs. The illusion of hope will be constantly maintained through the media, which is a good remedy against crystallization of protests. As a matter of fact, the feeling of no hope left was one of the main reasons for the fall of Victor Yanukovich. This was already evident during the 2012 elections to the Verkhovna Rada.

Any mention of “charismatic governors” can be omitted. They are changed all the time, and “charisma” is the last thing on their mind. The decentralization mechanism can start working not earlier than in a year or even later. So many things may happen over this time that there is no point in discussing it now.

The next scenario is more serious. This is a social and psychological effect of a military defeat, such as the military disaster at Debaltsevo. However, contrary to expectations and numerous assumptions, Debaltsevo did not produce the boomerang effect. Volunteer battalions did not march to Kiev to overthrow the criminal and treacherous authorities but peacefully expressed their opinion of them in social networks. The authorities, aided by advisers from Washington, behaved very professionally to forestall possible negative consequences of the military defeat. None of the national television channels gave much airtime to opponents of the authorities so as to prevent crystallization of opposition sentiment. Troops that broke out from Debaltsevo were immediately proclaimed heroes, and their surrender was described as a planned operation. And, most importantly, there were no alternative opinions in the media.

After Debaltsevo, volunteer battalions came under strong pressure, and some of them have already been recalled from the front. There is no reason to expect them to rebel against the authorities after the local military defeat. Neither Shirokino, nor Bakhmutka, nor even something bigger will have serious consequences for Kiev.

So, the collapse of Ukraine is possible but relatively unlikely. Washington believes that it controls almost everything in Ukraine. But collapses may occur all of a sudden simply because of snowballing adverse events, or because someone has failed to foresee something. Currently, the probability of loss of control can be estimated at 20 to 25 percent. Russia must be prepared for that. For example, it should have an alternative government-in-exile in this case. However, this scenario does not depend on Russia, and the latter is unable, or almost unable, to induce it.

OPTION TWO – ESCALATION

The keys to escalation are also in Washington, but it will use them very carefully. It is easy to exacerbate the situation, but the consequences of that will be unpredictable  for all. This is why the United States will keep fueling the situation in eastern Ukraine, but it will do it carefully, step by step and calculating all the consequences (if this is possible at all). It is important to understand three points here: 1) What are Washington’s objectives? 2) What tools of escalation does it have? and 3) What consequences can these actions have?

The first question is the most difficult one and it is crucial for getting answers to the other two questions and a general understanding of the situation. To answer it, we need to make a short digression. What is the U.S. policy in Europe in general and how does it differ from U.S. policies in the rest of the world? What is Barack Obama afraid of when he refuses to supply weapons to Ukraine?

Actually, the United States is not afraid of the emergence of new states. Over the last 15 years alone, there have emerged Kosovo (so far only de facto), East Timor, and South Sudan. All of them came into being not only with the U.S.’s assistance but also under its very strong pressure, including the use of force or willingness to use it. Disintegration processes are under way in Iraq, Libya, and Somalia, and in all of these countries the United States played significant roles. The United States supports the independence of Taiwan and constantly warns China about the inadmissibility of using force for its reintegration. According to the U.S. logic, Ukraine can use force against pro-Russian separatists for reintegration, but China cannot do the same against pro-American separatists.

Since World War I and President Woodrow Wilson, who liked to divide European countries into small pieces, the United States has been the most active player in European political processes. This is officially reflected in such organizations as NATO and the OSCE where America is very active even though it is located very far from Europe. The European Union, as we know it today, is also largely a result of the American vision of Europe. It is not accidental that people in many Eastern European countries like to say that their road to the EU passed via NATO. Now this phrase is often repeated in Ukraine.

The United States is interested in the European Union that exists today, which is large enough to keep many countries under control but loose enough to prevent Angela Merkel, Jean-Claude Juncker and other EU leaders from creating supranational bodies, including a joint army. In this situation, any “unplanned” fluctuations would be harmful to U.S. policy in Europe. This is why Kosovo can be independent, while Scotland and Catalonia cannot. Any change in the balance of power that is beyond U.S. control poses a threat to U.S. security. Even the strengthening of Russia per se is a clear and present danger, not to mention Crimea and Donbass.

Meanwhile, there are differences between Europe and “others.” No one in the U.S. cares about the number of victims among the local population in Africa or Asia. But a full-fledged war in the heart of Europe raises concerns. Obama did nothing to prevent armed hostilities in Ukraine, but he principally opposes bloodshed on the Russian-Ukrainian border. His opponents in the party are more pragmatic: “If there is a problem, it must be solved.”

The ruling group in Washington definitely does not intend to provoke Moscow into a nuclear war and is 90 percent unwilling to organize a massive military campaign in Ukraine. But the militaristic décor is needed to resolve solely political and geopolitical tasks.

Firstly and most importantly, Russia must pay dearly for going out of control and for its geopolitical ambitions: it must be demoralized, discredited and, possibly, desubjectivized. And then Ukraine’s Finlandization can be discussed. As Russia persists, the price must be constantly raised. One of the main points behind the idea to supply weapons to Ukraine (as seen by the Democrats) is that Russia must realize that it will gain nothing in Ukraine under any circumstances.

Secondly, this is a clear signal to Berlin and Paris: your security is in our hands; we will find a way to make you do what we want you to do. Hence the famous statement by Biden that the U.S. forced EU states to impose sanctions against Russia.

The third point is U.S. home politics. Obama has never succeeded in anything – this is a typical view of the American political community (regardless of how much this corresponds to reality). Hillary Clinton does not want to be linked in any way with a “loser” in her election campaign. Therefore her future team must demonstrate firmness and victorious pressure. At the same time, Ukraine for these people is not something that goes beyond usual political planning. They do not even need an obvious victory and, especially, a successful Ukraine. It would be enough to declare Russia a loser and give it exemplary punishment, preferably for long.

So, official arms supplies to Ukraine are not the main point. In fact, supplies have been made for quite a long time by various parties and with U.S. active participation. Without them, there would be no efficient Armed Forces in Ukraine now. The main point is the ongoing discussion in Washington on how to arm Kiev, what role the U.S. is to play in the conflict, and the degree of its possible and desirable involvement in it. In other words, the talk of arms supplies to Ukraine (and unofficial supplies per se) with direct or indirect U.S. involvement is not so much an attempt to resolve the conflict militarily as a means of escalation, which has two different goals:

• to provoke Russia, draw it into a highly limited direct conflict and give it demonstrative punishment for that;
• to keep Russia in the conflict as long as possible in order to multiply its possible losses.

Weapons are needed in both cases – but only as an element of the plan, rather than as a means to change the situation on the front. Washington’s plan may be as follows:

• Russia (Lugansk/Donetsk) will be provoked constantly;
• there will no backlash for as long as it is possible from the military point of view;
• the discussion of arms supplies, the supplies as such, the reformatting of the Ukrainian Armed Forces, and the work of American instructors will proceed in parallel;
• the Armed Forces of Lugansk/Donetsk are not capable of launching a serious offensive in their present condition, as Debaltsevo proved. Without a major reinforcement, their Armed Forces can hold only the current frontline. Even under the best case scenario, the most they can do is seize Lisichansk or cities like that. This would not be critical for Kiev;
• if the conflict escalates, the Minsk II agreements will be declared invalid; Berlin and Paris will be put in their places again; and Obama will sign a Congress resolution on direct arms supplies. He simply cannot avoid doing that as he will have to give in under the pressure of superior circumstances;
• as a result, Russia will remain where it is now; Europe will cease to stand in the way; and Washington will have new tools to escalate the conflict further and raise its price;
• the cycle will be over: Russia has lost and the U.S. has increased its capabilities, which means that everything is going well. The price for Russia will have increased significantly, and there will be only one way for it to go – to negotiate from a position of weakness.

But this plan – simple and effective, as everything drafted in Washington – has three weak points.

Mariupol. In September, Russia stopped the offensive towards Mariupol in hope for a durable and mutually acceptable peace accord in exchange. No way. While Berlin and Paris agree to a draw, Washington, which has the keys, does not. Trying to seize Mariupol again will be much more difficult. Yet, this is possible in practice, and the U.S. fears this. Why? Mariupol is now the main trading gate of Ukraine. Metal, currently the main export commodity of the country, is exported via Mariupol. So, the loss of Mariupol would significantly increase the value of the matter for Ukraine (and the whole of the West). Potential losses can be estimated at three to four billion dollars a month, which is a very serious amount. Money will have to be found somewhere and immediately wasted on supporting the Ukrainian authorities and the country’s survival.

Also, Mariupol is not Debaltsevo. Kiev will not be able to soft-pedal its loss. It will be very dangerous for the incumbent authorities. If Poroshenko’s rating starts to fall, the situation may go out of control. Kiev will have to impose martial law and tighten the reins to the maximum. From the point of view of the image used, such developments will be disadvantageous (for the United States).

Finally, some American experts describe Mariupol as a land bridge to Crimea, which will fundamentally change the geography of the conflict. The ongoing clashes at Shirokino are an indicator of danger for Mariupol. It is believed in Kiev and Washington that if the Azov Battalion, which now controls part of the town, is thrown back, this will be followed by an offensive – not by Donetsk forces but by Russia itself. Donetsk simply does not have enough resources for that.

The second weak point is the state of the Ukrainian Armed Forces. Of course, they are unable to fight Russian troops, but this is not a discrete question requiring a yes or no answer. The most important thing here is the factor of time. If (in case of escalation and direct conflict) the Russian army is stopped on the border of the Donetsk and Lugansk regions, that would be the best option. If not, then on the Dnieper. Washington officials openly say that if Russia decides to directly intervene in the conflict, then it may go as far as the Zbruch River. Everything else does not change the situation fundamentally.

The Russian army is on the territory of another country; its advance is obstructed; global sanctions have been imposed; and no one prevents the U.S. from sending NATO troops to Ukraine and maintaining the frontline for as long as possible. In fact, the West has an absolutely free hand. However:

• Washington has no reliable information about Moscow’s plans. The Ukrainian Armed Forces have to constantly violate the ceasefire agreement to figure out enemy plans and to check if the enemy has new equipment and personnel;
• it was surprising for the United States that during the January campaign there was no “northern wind” and that proof of its presence is only verbal. When enemy plans are not evident, risks always grow, together with nervousness. It is no use trying to guess what the enemy himself has no idea of yet. It is not an accepted practice in Washington to go with the flow, and this will not reduce the risk;
• the factor of time is becoming decisive. It is a big question how much time the Ukrainian Armed Forces have. Three days is not enough. A week may be enough or may be not. This is one of the reasons behind the attempt to integrate volunteer battalions into Ukraine’s regular forces. In the conditions of uncertainty, unity of command can become an essential element and give a time advantage.

Conclusion. The direct escalation scenario is dangerous for all parties. Even though the Americans have the initiative here, Moscow has the ability for tough asymmetric responses which will greatly increase the risk of an open military conflict. This is the last thing Washington would like to have. It will use this option only as a last resort. Also, just like in the event of collapse, Russia has taken a disadvantageous reactive position, that is, it is seriously preparing for what will very likely never happen. In practice, this comes to forced and unstable balancing between Minsk II and expectations of an escalation.

Washington’s tactics in the conflict in the coming months may include increasing the price for Russia, while maintaining the threat of escalation. For that, it may use not direct provocations of a new conflict but local confrontations and reconnaissance in force.

The most probable way the conflict may develop is its transition into a pseudo-frozen phase, with constant local clashes on the verge of open fighting. This will be a kind of exhausting option. It will be slow and difficult in terms of variability, unobviousness and temporary remoteness of various components. But it is here that Moscow has a chance to take the lead from the West, rather than limit itself to reactions to the other party’s actions.

OPTION THREE – RUSSIA’S WITHDRAWAL

In order to “survive” in the long game, Russia should follow its own strategy, while being ready for anything. There are several important points here:

• the basic algorithm of a long game is a sequence of relatively short escalations and longer “preparatory” truces (binary algorithm);
• within this algorithm, going beyond a long game will pose a very great risk. In other words, if Russia withdraws from the “Minsk format,” it will have to take all the risks and face all the consequences;
• the choice is only between the solution of limited tasks and a transition to a maximum win strategy, with an incredibly high risk;
• under this scenario, Russia’s influence on the situation will keep decreasing. The remaining non-economic (informational, cultural and personal) levers of influence will be destroyed with the help of the West;
• under this scenario, there will be no chances for creating a “unified pro-Russian Ukraine” or “Greater and Medium Novorossiya.” These are nothing more than artifacts;
• Ukraine does not even have to join NATO because NATO is already in Ukraine, and it is present there in the most unacceptable way for Moscow when no rules of the game exist.

Economic cooperation between Russia and Ukraine has also been sacrificed. Since 2012, their mutual trade has been steadily decreasing: from about $46 billion in 2012 to $38 billion in 2013 and to $22 billion in 2014 – that is, it has decreased by more than half over the last two years. In 2014, Ukraine’s foreign trade fell by $30 billion (down 22 percent from the previous year). Trade with Russia accounted for more than half of this amount – $16 billion. Last year, Russian exports to Ukraine were decreasing much faster than Russian imports from Ukraine. By the end of 2015, Russia will most likely cease to be the main trading partner of Ukraine.

However, it is this decline in mutual trade that offers Russia an alternative formula for influencing the developments in Ukraine. According to IMF officials who prepared the agreement with Kiev, it was the break of trade and economic relations with Moscow, rather than military actions, that was the main problem of the Ukrainian economy in 2014. They say that the price of the war is two or even 2.5 times less than the price of the rupture of ties with Russia. Military actions may be stopped, but trade will not recover by itself after that.

Estimates made by Ukraine’s Ministry of Economy show that after all trade restrictions were lifted by the European Union, Ukraine could significantly increase the export of only two commodities to Europe:  vegetable oil and wood. Most likely, Ukraine has reached the limit in vegetable oil production, as it will be unable to essentially increase sunflower plantations. Nothing of what the country lost in 2014 and will lose in 2015 can be compensated for since there are no other markets for its products but Russia. The lifting of trade restrictions by the EU does not help much, because in this case market rather than administrative mechanisms are used.

Russia can avail of this chance and use this major instrument of pressure not so much on Ukraine as on Europe which has to play the role of Kiev’s main sponsor. For the time being, the situation is maintained by remittances from Russia, which have even grown due to a sharp increase in the number of Ukrainian refugees going to Russia. More than half of the refugees in 2014 were not people from war-ravaged Donbass but young people evading mobilization.

Russia’s main goal in the long game is to shift the entire economic and financial responsibility for the situation in Ukraine onto the West as soon as possible. Not that Moscow has been sitting idle, but it is firmness and the speed of decision-making, not just intentions, that matters. The sooner Moscow introduces the entire set of administrative measures to restrict trade with Ukraine, the harder it will be for the West in the long game. In terms of money, it may be even more serious than Mariupol – up to $5 billion a month, taking into account the multiplier effect. This will amount not to $6 billion a year but to about $60 billion. The West does not have this amount of readily available funds.

As a result, Europe (above all Europe, not the U.S.) has only two options:

• to reach agreement with Russia, responsibly and on a parity basis, on all issues concerning the future of Ukraine; or
• pay and create insoluble economic problems for itself in the short and medium term.

Sentimentality and idle speculations about fraternal countries no longer matter. And one should not take close to heart the “loss of Ukraine” for Russia. First of all, no one in Ukraine now wants to have Russia back – regardless of the course of the military campaign and its outcome. Secondly, Russia has already lost Ukraine – not now but years ago, first in 1991 and then in 2004, for good or at least for long. However, it is very likely that very soon the loss of Ukraine will no longer seem very important. Indeed, an ability to find and use one’s chance is much more important than emotions over phantom losses.

World politics is quickly moving out of Europe, along with the mutual interest of Europe and Russia. So very soon the Ukrainian crisis will no longer set the political agenda for Moscow and will be remembered as just an unpleasant episode.