Putin plays for history as Eurasia stamps the flames

Military parade, Red Square with Kremlin in the background, May 2020.  Once upon a time photos just like this were essential for any discussion of Russian military risk.  After a hiatus, they are back.

The Backdrop – January 2022

The world has stepped back in time.  It is 1970s all over again.  Last week in Geneva there were talks between Russian and US representatives, followed by more with the OSCE and NATO, after a video chat between Presidents Biden (U.S.) and Putin (Russia).  The net result was a round of US State Department warnings on the weekend that Russia was ‘laying the groundwork’ for an attack on Ukraine, and suggestions out of Moscow that maybe some Latin American states would like Russian military support, and ominous warnings all round amidst the comments that Europe was closer to war than its been in generations.  US President Joe Biden thinks Russia will ‘move in’ to Ukraine but says there will be a ‘heavy price‘ for that, amidst questions about whether everyone is on the same page.

To help set the scene, and remind everyone of what is in play, all major nations with scope for doing so jointly declared last week that a nuclear war should only be fought in self defence, and would be preferably avoided altogether.  Just to throw a curve ball into the mix, Kazakhstan descended into the type of anarchy all of the region’s leaders abhor, and Russian (and other CIS) troops were sent in to help the Kazakh government tone things down. The presence of Russian troops was questioned by the US, even though it was only  5 days, as though Kazakhstan has a range of alternatives when asking friends in to support the government.  Imagine the howls of protest if they had asked the Chinese for help.

That’s right. China is also a factor in all this.  The same China winging flights over Taiwan will be pretty interested in how the EU and US play Russia in Ukraine, and maybe even impressed by the way Russia got Crimea back inside its borders.  And Ukraine is just one of a number of issues – including Belarus, Armenia-Azerbaijan, Georgia, Abkhazia and Ossetia, Belarus, TransDnistria, now Kazakhstan, and the ever febrile Ferghana Valley regions of Central Asia – which could blow up at any moment if everyone isn’t careful. But right here in late January 2022 it is Ukraine and Russia that the US State Department is issuing warnings about, with those warnings being carried across the media of the English speaking world.

Russia wants agreement on a few issues and is rattling the cage with, depending on who you ask, more than 100 thousand troops poised to invade Ukraine.  The Russian bear is on the loose and the people of Ukraine had better look out.

That may be the case.  But it is far more likely Vladimir Putin is shaping his position before going to the Russian Presidential elections in 2024, and firming up his position with Russians who will vote in that election and beyond.  Bombs going off in the Moscow Metro or body bags bringing Russians home from action elsewhere are unlikely to cement that already strong electoral support.  What will, is bringing home the bacon on some issues ordinary Russians think is right, while making sure the neighbourhood doesn’t go up in flames.

If Putin can pull this off then he will become arguably the Greatest Russian of all.  If he can’t then there may well be some military action, almost certainly something firmer than Ukrainians wearing yellow and blue clothing on their trips to Red Square, but likely a more strategic parting between Russia and the ‘West’ and a firmer turn to China.  There is a lot of global implication here.

History’s Greatest Russian leaders

The pantheon of Russian leaders has Peter the Great at the very top.

An initially shaky Tsar who forced Russia to modernise, learned from the nations to Russia’s west about what that entailed, crafted the jewel of St Petersburg on lands which had historically been only marginally Russian, fought and won wars with traditional enemies, and set the path to Eastward expansion which ended beyond the Pacific.  He decided that Russia needed production and technologies, and that Russians needed educations, science, systems of communication, and armies which could poke chests.  He made it happen.  He died of a gangrenous bladder at the age of 52, having had a 25 year shot at making Russia run his way.

‘Peter the Great’, Jean-Marc Nattie, 1717, Hermitage Museum, St Petersburg

After him comes Iosif Vissarionovich Stalin – Joseph to much of the world.

It wasn’t pretty, and he wasn’t Russian.  But Stalin took control of a revolution which ceased being global and became all about making the revolution work in one country, and the country was Russia.  He was paranoid, but he took the chaos which had seized power in Russia, and consolidated it into something workable, and which could run a nation state.  It was he who decided the Soviet Union (Russia) needed technology, science, systems and armies, all over again.  He murdered millions of Russians but he hung in there to not only withstand, but ultimately prevail against Hitler, and subjugate Eastern Europe under firm Moscow control.  Stalin laid the the basis for a system of government the rest of the world loathed continuing for 35 years after his demise – in a pool of his own urine, following a stroke after a drinking binge in the early 1950s, at the age of 74 – after just under 30 years calling the shots.

Joseph Stalin circa 1950

The only reason the above is worth mentioning in 2022 is because Vladimir Vladimirovich Putin has a vision, and VVP is the current President of Russia.

VVP has been running Russia for 22 years, and will soon be 69.  He will win the 2024 Russian Presidential election  in a canter at the age of 71, and have another 6 years as President, which will take him through to being President at 77 Years of age.  That is disturbingly old for a nation where the average male is lucky if they make it to their late 60s.  He will hand over in that term provided the right person is there to hand over to.  VVP wants every person in Russia drinking a toast to his bequest and Russian history books slotting him in just above Peter the Great and Iosif Vissarionovich Stalin in terms of delivering memorable outcomes for the Russian people:  VVP wants to be the ‘Greatest Russian’.

The only reason any of the above is worth mentioning is because he is highly likely to do precisely that, and that, when all is said and done, is what all the troops, and current talk of war, and the gas price surges in Europe, is all about. VVP  is going to make himself a legend with the Russian people by telling the United States and European Union where to get off on heavying Russia, and impose an ‘agreement’ on them which recognises Russia’s ‘rights’.

And all that brings us to the here and now along the Russia-Ukraine border, and the price of gas at the height of the European winter.


VVP – Vladimir Vladimirovich Putin

What Russians think of the world they see about them

A lot of quite liberal, tolerant and rational Russians tend to the view the ‘West’ is keen to make sure the ‘West’ can shoot at Russia without Russia shooting anything back, the moment Russia looks like being a hassle for the European Union or the United States.   This thought has grown and become more obvious to Russians since the 1990s.  And a lot of Russians aren’t very comfortable with that concept.

In the years after promises were supposedly given to Mikhail Gorbachev and Boris Yeltsin about NATO not expanding any closer to Russia, quite a lot of Russians – including plenty who dislike Putin quite intensely – would observe that the North Atlantic Treaty Organization is almost solely about having the ability to muscle the Russians. VVP has made a great play of beefing up Russia’s military capability to address what plenty of Russians identify is a ‘threat’ to them stemming from NATO missile placements in particular.  In this he is easily able to capitalise on the historical observation that when Russia is military weak, then some of its neighbors get ‘ideas’.  For the sizeable numbers of Russians who like a nationalist feel to their politics this is perfectly obvious.  When VVP calls this out there will be plenty of fist pumps, of complete agreement, in Mother Russia.  When he proposes doing something about it he is building bridges with Russian voters.


A lot of Russians tend to see the world in a similar way to that depicted in this diagram, with a lot of NATO hardware aimed at them.  That is, a lot more hardware aimed at them than they aim anywhere.

Ukraine as a factor in the thought processes of Russians

When Russians think about how the rest of the world, which is aiming a lot of military hardware at them, would like Russia to be, they think a lot about Ukraine.

Ukraine is a lot like what Russia might have become if VVP hadn’t been slotted into power by a batch of Oligarchs who thought him beholden to them, and then subsequently made Russia do things his way, rather than theirs.  A nation so corrupted by the 1% that nothing in their parliament ever really works for Ukrainians all that well, and where the bureaucracy is equally compromised by corruption, and where every last large business is either owned by an oligarch or being shaken down on a monthly basis by an oligarch.  Where journalists are murdered, just for who they inconvenience with their reporting, along with plenty of others looking for change.  Where the entire economy is immersed in debt, where investment is feeble, and where an eminently capable people are held captive in relative poverty, ransomed to the miasma and corruption which shapes their strategic hopes.  It doesn’t actually matter if much of the preceding few sentences may be true of Russia when seen from London, New York, or even Melbourne, most Russians think it more true of Ukraine.  The national debt greater, the investment feebler, the bureaucracy more corrupt, more journalists whacked, more corruption, more poverty, the polity more subordinate to the interests of the Oligarchs – the 1% who generally get a wonderful reception in Europe and the US, buying mansions, football clubs, basketball teams and driving around in nice cars with models on their arms en-route to Monaco or their super yachts.

A large number of Russians think they have had a better deal.  When VVP or the Russian administration refer to Ukraine, they are playing for a home audience, where they can point to the scoreboard, first and foremost, and rightly claim that Russia has delivered results where Ukraine hasn’t.   Even if those results don’t appear to be all that much to people elsewhere, or the process by which they’ve been achieved a touch dodgy, VVP, the Putin administration, a probable majority of Russians, and even a probable majority of Ukrainians would be thinking they are ‘results’.  Very large numbers of people in Russia and Ukraine tend to think that quality of life for ordinary people is better in Russia than it is in Ukraine.

When VVP refers to Ukraine he is, for Russians, reminding them of that they might have been.

The major issues fueling tensions between Russia and Ukraine

There are four major issues between Russia and Ukraine where every mention of the issue firms up VVP’s relationship with the Russian people.  They are:-

  • Crimea,
  • Eastern Ukraine,
  • Gas, and
  • NATO expansion and the prospect of having missiles aimed at Russia positioned in Ukraine.

Crimea, Donetsk and Lugansk.  Festering sores of the Russia-Ukraine relationship, all once comfortably run within the Soviet Union


The first of these is by far the easiest to explain.

Crimea was a stronghold of the Ottoman empire (Turkey) up until the mid 1700s.  It was the Russian forces of Peter the Great and his successors who pushed the Turks (and their Crimean Tatar vassals) back into Crimea in the mid 1700s -from where they had historically controlled the Black Sea and inland to the North – leading to the incorporation of Crimea into the Russian empire in 1783.  It remained in Russian control for the rest of the Russian empire and became part of Russia in the Soviet Union.  It was the Russians who fought the British French and Turks there during the Crimean War, the Russian Whites held out here with British and French support against the Bolsheviks during the Russian civil war, and it was the scene of epic defensive campaigns by both the Soviets and the Germans yet again during World War 2.  It has been the home of the Russian Black Sea Fleet since the late 1700s, with the  Naval Base at Sevastopol the largest employer in the region.

In 1954 Nikita Khrushchev, the Soviet Leader after Stalin, transferred the Peninsula from the Russian Soviet Federative Socialist Republic to the Ukraine Soviet Socialist Republic – a transfer from Russia to Ukraine within the Soviet Union.  Nobody has ever articulated the rationale for doing so.  When the Soviet Union  disintegrated, 35 years later, into Russia and Ukraine, Crimea was with the latter, but there were plenty on all sides asking if it should be.  Those doubts continued with a pair of votes suggesting the Crimeans weren’t all that keen on continuing as part of Ukraine and were keen on being part of Russia.  That unsettled situation continued right through to the Ukraine Maidan demonstrations of 2014 which booted out former Ukraine President Yanukovych, when, certainly egged on by Russia and Putin, and certainly helped along by Russian troops who shouldn’t have been there, the Crimeans decided they had had enough and voted first for independence from Ukraine and then for annexation by a welcoming Russia.

Most Russians, and most Crimeans, think this is right.

That annexation by/return to Russia has never been recognised by the global community.  This became the basis for financial sanctions against Russian entities which continue to this day.

Eastern Ukraine and the Russians therein

The estimated Russian speaking population of Ukraine, 2001.  There isnt much difference between the two languages but this map also represents a good guide to the political divide of Ukraine as well – with the North and West of Ukraine more hostile towards Russia than the East and South. 

The next major avenue for disharmony between the Ukrainians and Russians are the peoples of particularly the far East of Ukraine, but more generally the very large numbers of people in Ukraine who still consider themselves, in a range of ways, Russian.

The differences and links between Russians and Ukrainians are the subject of whole libraries.  As an outsider quite familiar with the peoples and the countries I would observe there is a bit of language – though Russians and Ukrainians tend to understand each other perfectly – and a bit of religion – though working through differences in Orthodox church dogma does get abstruse when applied to real life – and after that it is all economics and politics.  The lived experience of most people – from the grimy Krushchevka  apartment blocks many live in, to the trains and cars they move about in, the Soviet era infrastructure and public buildings they both share, the trees in the parks, the painted guttering, the foods they eat, the things they drink – is not radically different.  With the caveat that the better quality, with better price and more reliable access is probably on the Russian side.

In addition to that are the vast  numbers of Ukrainians and Russians who have close contacts on the other side of the border.  There are millions of Russians with Ukrainian relatives and friends, the same as there are millions of Ukrainians with Russian relatives and friends.  For a bit of historical reference, Mikhail Gorbachev, Leonid Brezhnev and Nikita Krushchev (Soviet leaders from 1954 to 1991) all had one parent from, were born in, or lived in Ukraine for large parts of their lives. Data from September 2021 suggest that the same linguistic map shown above is still in play, with more Ukrainians posting in Russian than in Ukrainian.

The obvious reason for this is the circumstances in which the Ottomans were pushed out of the steppes to the North of the Black Sea.  For hundreds of years the Ottomans would send large mobile military forces into the steppes, from Crimea, to round up any villagers.  The men would be killed or sold off as slaves, the children would be sent off to become Janissaries, and the women (by far the most valuable loot) entered the households of the more influential or were otherwise sold off as slaves.  There are villages in Africa and the Middle East with significant genetic traces of Russia, testament to the practice.  This meant that the steppes to the North of Crimea were lightly inhabited until one moved further out of range of the Turks by the Black Sea and in Crimea.

‘Reply of the Zaporozhian Cossacks’ Ilya Repin, State Russian Museum, St Petersburg, 1891

At this time Ukraine was largely a ‘no mans land’ between the Turks on the Black Sea, the Poles, Swedes and Austrians to the North West closer to the Baltic, and the Russians, further away to the North East, closer to the upper Volga.  It was essentially run as a series of Cossack ‘hosts’ located along the Dnepr River and to the West who would effectively take runaways from any of the powers around them and had a rugged individualism which liked giving the fingers to the Ottoman Sultan, though both the Russians and the Poles laid claim to some sort of suzerainty.  In the late 1600s a treaty between the Russian rulers and the Cossack Hetman linked them more formally, and in the 1680s a treaty between Russia and Poland handed Russia everything East of the Dnepr (current Eastern Ukraine). To the Turks facing them the Ukrainians and Russians spoke the same language, and were generally allied. In the 1700s it was the Russians moving in from the North East who displaced the Turks on the coast, to the South of those Ukrainians, as well as in Crimea.   As the risk of Turkish slaving raids diminished Russian settlers moved in.  This is seen in the linguistic map of those who see themselves as Russian speakers – notwithstanding the difference between Russian and Ukrainian is roughly akin to someone from Brisbane speaking English to someone from Glasgow or Milwaukee – with the process helped along by Stalin’s inclination for moving populations he was suspicious of to Central Asia or Siberia, and his reservations about the non Russian inhabitants of Crimea.  Those seeing themselves as Russian were heaviest in the East, and spread South West along the coast of the Black Sea. Another gift from Iosif Stalin is the borders of Western Ukraine which include peoples and regions which not that long ago were part of, inter alia, Poland and the Austro-Hungarian empires, which tends to give them a closer affinity to the peoples to their West, and underpins a fiercer dislike of Russia and Russians.

The further East one travels in Ukraine, the more overtly pro-Russian it becomes.  In the wake of the Maidan inspired disintegration of the Ukraine State in 2014 two cities – Lugansk and Donetsk – and their surrounding regions took their autonomy into their own hands, and took up arms against whoever was running the show in Kiev.  Of course they have been heavily backed with Russian military and financial support.  Very large numbers of people in Eastern Ukraine have Russian, as opposed to Ukrainian, passports.  Most Russians think supporting people just like them and speaking their language, living lives like theirs, are well worthy of support.   VVP is playing a parochial home crowd in supporting Eastern Ukraine and its ongoing dispute with the Ukraine government in Kiev.

The support for the Eastern Ukraine cities by Russia anchors in support for the financial sanctions Russia faces, and is a key part – mainly courtesy of the 2014 shooting down of MH17, a Malaysian airliner en-route from Holland to Malaysia (with a large number of Australians on board) by Russian forces using advanced missile technology – of the effective pariah status Russia has.


An older map of gas pipelines from Russia to Europe. Ukraine had a stranglehold. 

In the 1960s and 1970s, when the Soviet Union discovered it had gas and oil, policymakers rapidly concluded the game plan was to be able to get the gas (in particular) to consumers in Europe, and laid out a pipeline network to make that happen.  To the intense chagrin of their Russian descendants that pipeline system sent more than 90% of the gas going into Europe from Russia through Ukraine.

The idea was presumably that Russia and Ukraine were that close that sending all the gas through Ukraine was a safer bet for the Soviet era.  Unfortunately as soon as the Soviet Union ended it started to come apart, as the historical bequest to Ukraine from the Soviets was one of the least energy efficient economies on the planet, dependent on Russian gas. Recognising this, Russia and Germany commenced constuction of the Yamal-Europe pipeline in the 1990s to bring gas through Belarus and into Europe through Poland, also historically strongly anti-Russian.  Then after the election of Viktor Yushchenko as Ukrainian President in 2004 it all went bad.  Over the next ten years there were tense midwinter gas shutdowns nearly every winter, which trashed Russia’s reputation as a supplier in Europe – its largest customer – and has subsequently seen Russia spend billions on building new gas pathways into Europe around Ukraine and Poland – notably the Nord Stream 1 & 2 pipelines directly across the Baltic from Russia to Germany.  The politics of getting Nord Stream 1 operational in the face of opposition from a number of European states who liked having a pipeline threat to deal with Russia, was an achievement in itself.

A 2019 diagram showing the magnitude of Russia’s gas importance to Europe, and the importance placed by Russia on not being held to ransom by gas transit across Ukraine.  Worth noting that while the EU is dependent on the gas, Russia would certainly notice the revenue cut if it stops.

The essential issue in all this was (and is) that the most lucrative pie to have their fingers in for Ukraine’s Oligarch set is anything to do with either the shipment of Russian gas across Ukraine into Europe, and the attendant ability to influence gas prices and consumption, or ensure supply, in Ukraine.  And one fuel type, gas, in one pipeline network, going to two different customers, Ukraine and Europe, with two different prices, opened up some superb arbitrage opportunities. This fuels corruption in Ukraine and provided, and provides still, some mighty fine revenues for the uber rich of Ukraine.

The real issue is that the process of de-USSRing Ukraine was even more rapacious than in Russia, and gave rise to a very select group of Oligarchs who essentially control every last field of economic endeavour and who are legendarily corrupt.  There are pro Russian ones and pro Europe ones, but the one factor uniting them is their obvious prioritisation of their own greed first, holding an entire nation to ransom to enable their greed, and their regular use of violence and corruption to maintain their rentier positions over the Ukraine economy.  That discourages investment from outside, stifles small business and any form of entrepreneurialism, and keeps Ukrainians poor – poorer than their Russian counterparts.

Ukraine was bequeathed a well developed economy from the Soviet system, with well watered arable land, mineral resources and a solid industrial sector, and a well educated population.  But Ukraine came out of the Soviet Union as the second largest independent economy, and proceeded to go backwards for a decade, with weaker post USSR economic growth than anywhere other than Tajikistan.  It is the Oligarch infested politics of the place which makes it almost uninvestable.  This alone underpins the disenchantment a number of Ukrainians have with their own politicians, and it makes the inclination, by Crimea and the regions of Eastern Ukraine, to look at a different road more explicable.

In the course of trying to resolve a generations worth of gas supply issues to Europe which were inextricably bound to gas consumption in Ukraine a regular refrain from observers was that with two historically close states with two state owned gas companies calling the shots ‘why isnt there a simple government deal?’.  The simple answer was the epic level of corruption, involving a range of players in Ukraine close to politics, combined with more open corruption within Naftogaz of Ukraine (the state owned gas transmission system operator).  While nobody should think for a second there wasn’t Russian involvement, Russia had a national interest in trying to ensure supply across Ukraine to consumers in Europe.  That failed on repeated occasions over the years from 2004-2015, leading ultimately to a cessation of Russian gas going through Ukraine, mired in claims of who owes who for past supply, bogged down in a range of European courts, involving a range of colourful Ukraine political, business, and criminal identities.  This provides the backdrop for Russia Ukraine relations in the early 2000s.

Russia has spent billions creating pipelines to get gas to Europe which cant be held to ransom by hostile nations between the source and the end user.  The business case for building the Nord Stream pipeline directly between Russia and Germany was underlined – to the point where a second Nord Stream has recently been completed, which takes Ukraine off the table as a factor in the supply of Russian gas to Europe, and potentially makes any imbroglio between Ukraine, Russia and Gas solely now about Ukraine consumption – a far lesser issue.

At this point the entire issue of Russia supplying gas to Europe comes into question because gas is a fossil fuel, it does have carbon implications, and Europe is looking to get out.  Although that would once have been painful for Russia, it is far less of an issue if Russia can supply China.  The pipelines to supply China are already being built, some completed already, and they will be big and China will be buying plenty.  That places VVP and Russia in a position of being able to think ‘If the Europeans don’t want it, just send it to China.’  This is what Russia is now essentially doing.  If Europe does still want Russian gas then it can still easily be supplied, via two very large pipelines through the Baltic, and Russia will almost certainly supply gas contracted by Europe.  But the nub is that Russia doesn’t have to supply Europe.

But the experience of trying to organise a national level agreement on the handling of gas transit to Europe has left its mark on Ukraine-Russia relations, which is magnified with the last major issue between the two nations, as well as replicated in many former Soviet and Warsaw Pact nations now inside NATO and the European Union.  It boils down to trust – They don’t particularly trust the Russians, and the Russians don’t particularly trust them.  And if Russia cant come to a deal with a state to whom it was closely allied not long ago, and Russians cannot strike a deal with peoples with whom they share a range of cultural and social ties, over an issue as straightforward as making sure Europe gets its gas, then can Russia come to a deal with the nations to its West about anything – especially military engagements and the deployment of military assets – and have confidence in the deal?

NATO Expansion and the prospect of Missiles being sited in Ukraine aimed at Russia

The fourth major issue involving Ukraine and Russia is the proposed expansion of NATO to include Ukraine and Georgia.

Whether or not there ever was an agreement not to expand NATO into Eastern Europe is up for considerable current debate.  But there wasn’t much doubt about the historical debate: the then Soviet Leader, Mikhail Gorbachev was given a guarantee that NATO would move ‘Not one inch eastward’ by then US Secretary of State, James Baker, and that other European Leaders and the US President were all aware of both the importance of the issue, and the line they were putting to the Soviets:

Not once, but three times, Baker tried out the “not one inch eastward” formula with Gorbachev in the February 9, 1990, meeting. He agreed with Gorbachev’s statement in response to the assurances that “NATO expansion is unacceptable.” Baker assured Gorbachev that “neither the President nor I intend to extract any unilateral advantages from the processes that are taking place,” and that the Americans understood that “not only for the Soviet Union but for other European countries as well it is important to have guarantees that if the United States keeps its presence in Germany within the framework of NATO, not an inch of NATO’s present military jurisdiction will spread in an eastern direction.” (See Document 6) 

Declassified documents show security assurances against NATO expansion to Soviet leaders from Baker, Bush, Genscher, Kohl, Gates, Mitterrand, Thatcher, Hurd, Major, and Woerner.

National Security Archive: Published December 12, 2017

But regardless of whatever there was, and whatever words are deployed to get away from the fact, NATO has incontrovertibly expanded Eastwards towards Russia.  That expansion has included nations such as Estonia, Latvia, Lithuania, and Poland, which have tragic memories of Russian domination in the Soviet Union, and 50 years subjugation with a heavy military and security state.  The Baltic states also have large Russian speaking populations.


NATO expansion since the early 1990s.  Russians see the large number of new states closer to them who have joined since the late 1990s as a source of risk to them.

Obviously a range of East European states have concerns about Russian military capacity, and want to be organised with like thinking states about that possibility.  Equally obviously, Russia has concern about a number of states on its borders, with which it has a thorny history, having the ability to militarily trouble Russia.  Ukraine and Georgia have expressed interested in also joining both the EU and NATO.  VVP and Russia have rejected both prospects out of hand.

Complicating the military angle is the number of ‘frozen’ conflicts Russia is connected with. Ossetia and Abkhazia in Georgia, Donetsk and Lugansk in Ukraine, TransDnistria between Moldova and Ukraine, and the recently ‘resolved’ Nagorno-Karabakh dispute involving Armenia and Azerbaijan.  All involve Russia forces stationed outside Russia, ostensibly to minimise the risk of local players resorting to arms to resolve local disputes, or are in support of ‘Russians’ outside Russia.

A number of frozen conflicts pervade the NATO Russia border if Ukraine and Georgia join NATO, and as can be seen from the above map, Ukrainian accession to NATO would likely bring military assets significantly closer to Moscow.  Many Russians would see this as intolerably close. 

All those frozen conflicts nearby mainly just add to the urge of Eastern European NATO members to spend on arms.  With the Russian threat nice and close to these states they have taken up the cudgels of spending in line with the US commitment to defence, rather than the lighter touch common in Western Europe.  There is already a lot of weaponry positioned for prospective Russia – NATO hostility.  The push for a deal between them now is largely about whether there is going to be a load more, or not.

The newer Eastern Europe NATO members are faster to put their money where their Foreign Policy is.  The prospect of their ranks being joined by Ukraine and Georgia is particularly alarming for Russia.

VVP’s window

Right now is about the best chance that VVP will ever get to impose his line on the NATO Members to his West.

Russia probably does have the military capacity to make serious inroads into Ukraine quickly in a conventional military conflict, and would likely be able to deploy complex military formations before NATO got its act together to counter them. He has been spending on the Russian military for about a decade now – though nowhere near what the US, EU or China spend on theirs  – and Russia was able to build off considerable military design capability inherited from the Soviet Union.  The issue for Russia is whether the military could get into Ukraine, achieve any sort of strategic goal, and get out without major casualties – and that is very very questionable. It  could get in, no worries.  It might achieve some strategic goals, but the further they went in, and the achievement of any strategic goals, would come at the cost of profoundly irritating the US and EU, which might impose a lot of costs down the track.  But the real question is whether they could get in and then get out.  If they get in and can’t get out then the cost is in Russian lives, ongoing military outlays, and a return to cemented in global pariah status for future Russians to bear the cost of.

More importantly right now – winter in Europe – the potential for a major shutdown of gas exports would hurt the most.  All that closing of coal fired power plants, and the decommissioning of nuclear has come at a cost, and the cost is greater reliance for the here and now at least, on Russian gas. From right about now, no doubt aided by a European desire to get away from reliance on Russian gas, we can be sure that carbon emission minimisation will slowly but surely take gas away from Russia as a foreign policy leverage tool.

The current threat to cut off Europe from Russian gas if there isn’t some form of accommodation regarding what Russia sees as its concerns will do nothing but speed up that process.  But right now a complete gas shutdown would seriously hurt, and that potential pain is on VVP’s side.  In a Europe which has managed nearly as palsied a response to Covid as Australia, or the US, or Russia, telling the public to have some cold showers and wear an extra layer of clothing might set off some seriously destabilising thought processes.   As the head of a nation which doesn’t mind investing in very large pipelines and has a currently close relationship with China, he would be confident that any gas he doesnt sell in Europe today is likely to be bought by China at some point not far off, and the funds he has salted away in the state budget means that he can carry the time.

Similarly, destabilisation in Europe could also take another form – the prospect of large numbers of refugees or illegal migrants being facilitated by Russia, following on from the actions of Aleksandr Lukashenko’s Belarus late last year.  That could get very messy indeed, and that is before considering that a very large number of Ukrainians could easily become quite legitimate refugees, in their own right, if there were to be military conflict.  The prospect of them too arriving en masse in Europe could send a shiver down the spine of a lot of politicians in Brussels Berlin, Paris and beyond.

Mainly Middle Eastern, Central Asian and Chinese migrants trying to enter Europe through Belarus.  October 2021.  More of this type of people movement, especially if openly facilitated across nations with land borders, could destabilise nations in the EU.

Another little irritation VVP is likely to have some control over is the Russian internet.  Anyone with a website knows that the simplest way to afford them some form of protection is to geo block them being accessed from Russia or Ukraine.  Sure, of course they can be got around with a VPN, but it offers an insight into the works of the ‘the Kremlin’s’ army of trolls and nasties who are accused of having interfered with elections in the US and Europe – from the advent of President Trump in the US, to the Brexit vote in the UK – and reliably reported to hack into critical State and Corporate infrastructure software with relative ease on a regular basis, and on occasion get right up the nose of authorities in the Baltic states and further afield with denial of service spamming barrages and the odd system failure.  Who knows what sort of things might happen if a shooting war were to start?

Who also knows what sorts of information have already been discovered which may start making their way into the public domain? In a ‘Western’ world now dominated in a way it hasn’t been for a century by the 1% and mega companies making profits off data compiled on us, all sort of protest movements might come into play.  As Wikileaks, and the treatment meted out to Julian Assange or Edward Snowden (currently effectively trapped in Russia), would attest, or the irregular releases of data dumps of global funds movements and tax payments, like the ‘Panama Papers’ would suggest, there are some difficult to explain exploitation factors about the world around us which might get quite an airing if relations between VVP and NATO get colder.  Was anyone taking photos or keeping records of who when and where the late Jeffrey Epstein was sending underage girls to for sexual gratification purposes?  There could be a bit more dirt there.

Just who was getting massages from girls supplied by Jeffrey and Ghislaine, and who might have a record?  Would a hostile Russia see an advantage in bringing that to the global public?

For sure the Americans, the UK and the Europeans in particular would be likely to have their own scope to create havoc in the Russian software and internet space too.  As the ‘Panama Papers’ also rightly noted, the Russian Oligarch set and some people close to VVP dont mind a little bit of money salted away and not paying tax too, and when it comes to corruption Russia is ‘big league’.  With Russia having already gone the Chinese route in clamping down on Facebook, Google, and Twitter, and created national alternatives, the risk of an electronic shutdown or eavesdropping by servers located somewhere where the ‘West’ can sniff them out, and scope for protest movements to organise themselves online, is lessened too.  The very popular Alexei Navalny videos exposing Russian corruption, and linking VVP as a direct beneficiary, and subsequently the extent of plans to poison him via his underpants, havent been able to lead to any form of major civil disturbance or even keep Navalny out of Russian prison.  Other online protests about issues as diverse as rubbish tip contents around Moscow, the dismissal of a popular regional governor, or the casualties from cinema fires in Kemerovo, have not yet morphed into something likely to destabilise the VVP administration.  Beyond all of that there would be little doubt that further antagonism involving Russia may see the EU and US become more overtly proactive in disrupting the Russian software, internet, infrastructure and communications space too.

The Russian economy is also far better insulated from the potential impact of European or US financial retribution for any military action too.  The Russian government has run a tight budget ever since the 2009 Global Financial Crisis, and major financial sector institutions have been embargoed from borrowing on global capital markets for 8 years, so VVPs financiers have a pretty good sense of funding their national economy themselves.  Russian corporate borrowings are largely within Russia too.  More importantly Russia has used the period since the GFC to firm up a range of ‘national champions’ in the retail and services sectors, as well as sectors like agriculture where significant progress has been made.  It isn’t the Soviet Union reborn, but VVP’s mantra on creating ‘National Champions’ in the business world – even if some of the business people involved also like their corruption – means Russia is that much better sheltered from financial or economic sanctions, and has a touch of the autarkic about it.  The default mindset in Moscow would almost certainly be ‘we will tough out’ any sanctions.

That said, the Russian economy for most Russians is no bed of roses.  VVP himself has acknowledged that the shrinking Russian population is his first priority, and that the major reason it is shrinking is because the lives of ordinary Russians are not so great as to inspire the urge to go and have more children. Russia’s demographics, based in the 1990s experiences which ultimately brought Putin to power, are a complete disaster, and would be a significant factor dissuading any form of military adventurism.  Incomes are low, life can be fairly hard nosed and infrastructure basic. But the VVP administration has gone to considerable length to shield ordinary Russians from the economic impacts of the post 2014 sanctions, and although running a tight budget has specifically dedicated funds to improving services and sprucing up the streets of Russian cities – notably Moscow.  Sure that is more corrupt contracts for Russian Oligarchs to syphon off state funds, but the Russian punting class is getting better roads, more metro stations, spruced up parks, nice trains and shiny new hospitals and schools.  That wouldn’t mean that Russia would be comfortable with the financial cost of any sort of serious military action, which would be very serious for Russia’s economy.  And it wouldn’t mean Russians would be anything other than unhappy if their soldiers  – remembering the Russian army is still largely conscript – were to start coming home in body bags.  But it does mean Russians would generally be of the view the government (and VVP personally) is interested in doing something to help out, even if it isn’t much, even if it is inefficiently provided, and even if it is ludicrously expensive.

The ‘West’

Both the EU and the United States would have some regrets about the way they  have handled Russia in the post Soviet era.  It didn’t have to be this way.  They could have tried to pull Russia closer to the EU economically, they could have put more effort than they did into helping smooth Russia’s path from a centrally planned economy to something more market based.  They could have tried to craft a closer engagement between NATO and the Russian military. They could have been a lot more discrete about giving shelter or asylum to obvious corruption beneficiaries.  They could have been a touch more subtle about imposing an ideological agenda revolving around the dismantling of the Soviet Union, which gave Russians a collapsing economy for a decade, a series of bank crashes to wipe out savings, and went within a hairs breadth of making Russia too a plaything of Oligarchs.  They could have sat everyone around the table to get a deal on gas.  They could have cut some sort of strategic deal with VVP at a number of points since the early 2000s when he first started pointing out some of the themes ordinary Russians see – like NATO is aimed at them.

But they haven’t.  In the here and now they face a strategic opponent who is largely shielded from further economic and financial sanctions, and has shown great resilience in weathering the ones already in place.  That opponent supplies them with a commodity they need – gas – and has an alternative for that market (China).  That opponent has pushed the envelope in terms of facilitating those internet trolls.  That opponent has taken control of Crimea, which only ten years ago was part of Ukraine, and openly supports with money and equipment the breakaway regions of Eastern Ukraine the same as it does a pair of breakaway regions in Georgia which also wants to join NATO and the EU.

They have an opponent headed by a populist leader espousing widespread sentiment about them – distrust.  They aren’t believed or trusted, their motives are always questioned.  When they have a US Secretary of State accusing them of pushing a ‘false narrative’ or ‘gaslighting’ their first thought is that NATO has been pushing a false narrative about them for 30 years – that they are a threat to Eastern Europe – and that every NATO expansion and every NATO military deployment which can be seen as aimed at them is the purest form of gaslighting.

Their strategic opponent, and the population he leads, thinks that NATO, the US and EU reserve a right to be able to push a military risk on Russians without Russians being able to have a similar capability to push a military risk back, and they think NATO, the EU and the US have been pushing the same line for about 30 years. A large part of VVPs popularity in Russia comes from the last sentence.  Even if they don’t necessarily like VVP, and even if they think he too is corrupt – and has a range of palaces and uber rich trappings – they have a fair bit of time for, and will support, someone who they believe is standing up for them.

For NATO, the US and EU, supporting Ukraine economically and militarily will involve supporting an administration and polity which would make that which they supported the same way in Afghanistan for two decades, before collapsing in weeks, seem to be the last word in reliability.  If they allocate funds to support Ukraine how many of those Oligarchs will be clipping their ticket, and how much would end up on the tables of Monte Carlo, the latest superyacht, or in Knightsbridge real estate?  If they use road rail or air to support the Ukraine military with equipment then whose trucks, trains and planes will be moving that around, and who will be clipping that ticket too?  If they put boots on the ground would they find themselves with uncomfortable allieslike Neo Nazi paramilitaries funded by Oligarchs? If they put troops in, in any way, how reliable are the locals likely to be?  Who would actually be on their side and who would be on VVP’s (and how would they tell them apart?).  Would their publics have much stomach for casualties?  Would their troops potentially commit atrocities in the heat of combat?  Would European their allies be reliable or would they be there for some other game plan?

Ukraine – Post Soviet plaything for the Kleptocratic elite: The Oligarchs

Now that the world is talking about the risks of military engagement with Russia, it would be worth looking at the most likely battle ground too.  Let’s take a look at Ukraine.

Ukraine is staggeringly corrupt.  It isn’t really a matter of is it more or less corrupt than Russia, though many will be comfortable in acknowledging Ukraine level corruption is worse.  Russia has at least managed to get some traction on quality of life improvements for Russians, that Ukrainians are yet to get.  Sure, most of that is purely the luck of energy revenues Russia has and Ukraine doesn’t, but there is still a discernible sense that better jobs, more goods, better prices, better quality infrastructure and better life prospects are to be had on the Russian side of the border.

There is often an assertion that the Maidan revolution in 2014 which overthrew the Yanukovych administration was about Russia, and a desire to take Ukraine to a pro EU and pro Western course.  That may well be the case, but most observers then and since have noted that the 2014 Maidan protest which turned into a revolution was inherently about corruption and that the corruption is still the core issue.

“Since 2014, much of Europe’s public debate on Ukraine has revolved around the
geopolitical contest between the West and Russia, the war in Donbas, and their
security implications for Europe. But, at its core, Ukraine’s Revolution of Dignity
was an anti-corruption uprising that only became geopolitical later. Ukrainians
longed for a government that was less corrupt, more responsive to citizens’
demands, and bound by the rule of law. They ousted a government that had denied
them their rights, fought the foreign invasion that would have reinstated a
repressive kleptocracy, and elected new political leaders. However, these new
leaders did not meet expectations – in either Ukraine or the West. Disappointment
with the slow progress of reforms, particularly a series of setbacks in the fight
against corruption, was key to the subsequent collapse in popularity of former
president Petro Poroshenko and of established political parties. Ukraine’s new
president, Volodymyr Zelensky, has promised to do better.”

Gustav Gressel, European Council on Foreign Relations, Guarding the Guardians: Ukraine’s Security and Judicial Reforms Under Zelensky, August 2019, p2

A series of charts showing the major factors shaping Foreign Investors thoughts about Ukraine.  Those thoughts embed near poverty for millions of Ukrainians.  Corruption and Oligarchs are far more central to the lived experience than Russian influence, or getting away from it. ‘Reducing Grand Corruption in Ukraine’ European Court of Auditors, September 2021.

The European Court of Auditors Report released in September 2021, ‘Reducing Grand Corruption in Ukraine’ goes to the nub of the matter less than 6 months ago.  Weak central government, powerful elites, resistance to reform, harms democratic process, costs billions.

Corruption in Ukraine

04 Ukraine has a long history of corruption, and faces both petty and grand corruption. Petty corruption is widespread, and is accepted as almost inevitable by a large part of the population. Citizens “often justify their participation in such petty corruption by noting that high-level officials and oligarchs are involved in graft on a much grander scale”. Experts have estimated that huge amounts – in the tens of billions of dollars – are lost annually as a result of corruption in Ukraine.

05 Transparency International defines grand corruption as “the abuse of high-level power that benefits the few at the expense of the many, and causes serious and widespread harm to individuals and society”. In Ukraine, it is based on informal connections between government officials, members of parliament, prosecutors, judges, law enforcement agencies (LEAs), managers of State Owned Enterprises (SOEs) and politically connected individuals/companies (see Figure 1). There are around 3 500 SOEs at central level and 11 000 at municipal level.

06 “State capture” by blocks of powerful political and economic elites that are pyramidal in structure and entrenched throughout public institutions and the economy has been seen as a specific feature of Ukraine’s corruption. Both the International Monetary Fund (IMF) and Ukraine’s government acknowledged the resistance that vested interests had shown to structural reforms. Grand corruption resulting from weak rule of law and widespread oligarchic influence runs counter to EU values, and is a major obstacle to Ukraine’s development. Grand or high-level corruption hinders competition and growth in the country, harms the democratic process, and is the basis for wide-scale petty corruption.

07 Furthermore, investigative journalists have regularly published articles about oligarchs’ illicit financial flows (including money-laundering abroad), even in the EU. A report estimates the cost of tax avoidance through offshores at least one billion euros annually.

08 From 2016 to 2020, the three major obstacles to foreign investment in Ukraine remained the same: widespread corruption, a lack of trust in the judiciary, and market monopolisation and state capture by oligarchs (see Figure 2). In recent years, foreign direct investment in Ukraine has remained below the 2016 level (see Annex I).

How the Oligarchs operate in Ukraine.  The moment any EU or US funding or military support pours into Ukraine they can be sure a tithe of that will be going to the Oligarchy. ‘Reducing Grand Corruption in Ukraine’ European Court of Auditors, September 2021.

The President’s son, the Oligarch, the political and security identities, $50 thousand a month, and a Ukraine gas company Board

Both the EU and US are acutely aware of the issues with Ukraine’s Oligarchs.  Ukraine’s Oligarchs (like Oligarchs everywhere) have been buying real estate, football clubs, companies, luxury yachts and cars, paintings and passports off them for a generation.  More to the point plenty of EU and US elite types have been joining in on the Oligarch fun in Ukraine.  To take one prominent example of many, as former US President Donald Trump asked of current US President Joe Biden ‘What was Hunter Biden doing on the Board of a Ukrainian gas producer?’

Yes, The son of the current US President was on the board of a Ukrainian gas producer, Registered in Cyprus, which has been investigated for money laundering in the UK, and accused of major corrupt practice in Ukraine, and is controlled by a former Ukraine government Minister, who now lives in Monaco.  He was on the Board of Directors with a former G.W. Bush era CIA official, Joseph Cofer Black, and an ex-Polish President, Alexander Kwasniewski, and earned 50 thousand US dollars a month, for his 5 year tenure.  Like, even if he was doing nothing more malevolent than overseeing the ESG committee and Carbon emissions or Gender balance reports you would think he may have talked about something to pass the time with his fellow Board members, and that maybe questions like ‘where does all this money come from?’ or ‘what’s your background?’ or ‘what do you make of the Russians?’ could have occurred.

Mykola Zlochevsky, former Ukraine Government Minister, who formed Burisma, a gas company, and placed Joseph Cofer Black, Alexander Kwasniewski and Hunter Biden on the board, paying the latter $50 thousand USD per month. Zlochevsky is now believed to live in Monaco. 

A screenshot of the Burisma Board of Directors in 2017. Apter is a 25 year Investment Banking veteran, Kwasniewski a 10 year Polish President, and Cofer Black an ex CIA, Blackstone and TotalIntel identity. Biden, son of the current US President, was paid $50 thousand per month over 5 years to 2019, with no relevant experience whatsoever. According to a US Senate report Biden likely blew some of that wad on prostitution.

After absorbing that it would be worth thinking that this is not an isolated phenomena.  Corruption in Ukraine pervades virtually all large business, all regulatory authorities, and much of the judiciary.  There is an entire subculture of particularly Eastern European politicians and administrative officials who find themselves embedded in nice little earners working in Ukraine.  In banks, in logistics firms and energy companies, in the media, telecoms and consulting – just to start with – all with a nice coterie group of well remunerated European and American advisors, board members, lobbyists, financiers, and media spruikers.

Are the interests of the people closer to the interests of the state or the interests of an oligarchy

Against this backdrop, much of Ukraine’s population make ends meet in near despair

Ukraine’s quest towards establishing a “just society” is in a state of purgatory. Its politics and form of governance are in a state of stasis, or middle ground – in essence, a political purgatory. It is bereft of the promise for fundamental change, hope already having been severely dissipated and becoming non-existent. The country’s psychological state is careening towards the uncertainty of growing political anger, though it has been restrained largely by the COVID epidemic and the country’s sorry economic condition. Its state of mind is bordering on frustration and despair and endemic cynicism.

The current type and form of political leadership in Ukraine remains juvenile and amateurish. This is disappointing because of both the assumption and expectation that if the country, more specifically its political component, would have “reformed” itself, then Ukraine would have gone further in its quest to become a European state.

Ukraine cannot and will not become a member of the European family of states if it does not challenge its existential and governing assumptions that still remain after decades of Communism and its legacy of a corrupt and repulsive political culture manifests itself on society like a decaying basket of apples.

This task, based on the practice since the Maidan Revolution, seems insurmountable.

……And supporters of this cesspit want to heavy Russia with lectures about ‘rule of law’, ‘markets’ and ‘democratic freedoms’.

The difference between the two states in this sense is that although both are spectacularly corrupt, Russia has an observable ‘Interest of the State’ which VVP has overtly placed above the interests of any Oligarchs, and which the Oligarchs uphold, however begrudgingly – In Ukraine it appears that the interests of the Oligarchs are the ‘Interests of the State’ and that the State is kept permanently weakened to uphold the primacy of the Oligarchs, meaning that ordinary Ukrainians looking for a better life have to either get permission from, buy out, or embed a future rentier position for some Oligarch.

Why would there be talk of war, again?

Do the EU and US wish to provoke a war with Russia to uphold this?  Do the EU and US expect to be able to embed military assets within this state and expect the state whom those assets are directed against to accept that those assets are in any way ‘controlled’ or that there is a ‘command structure’ determining how they are used?

Much has been said of Putin’s assertion in 2021 that the Russians and Ukrainians are ‘one people’ and the implication that they should be ‘one state’.  He may well have that view and there may be plenty of history to support it, but VVP would be only too aware that many of those in the West of Ukraine are certainly not ‘one people’ with Russia and that any attempt to impose that would be profoundly bloody.  If Russian forces were to set on the Western bank of the Dnepr then they could expect increasingly stiff resistance – and Russian forces would face expensive and bloody operations against a Ukrainian people who would certainly be provided arms and financial support to wage the struggle.

Equally, the EU and US, as well as the Ukraine government, would almost certainly be acutely aware that Russian forces could potentially move into parts of Eastern Ukraine and be welcomed by local residents, who have already demonstrated an armed preparedness to flout Kiev.

Pressure points

One avenue potentially able to get at Russia, to nudge VVP away from military involvement in Ukraine and potentially to a broader deal, is being able to undermine VVP’s allies.  The first cab off the rank would be Aleksandr Lukashenko in Belarus.  He is widely despised by his own impoverished people, has weathered recent widespread civil protest, is profoundly corrupt, and he does have Russian bases on his soil.  The Lithuanians and Poles certainly do support the protest movements and shelter exiles.  Any sense of the regime being truly undermined would almost certainly necessitate Russian military intervention.  VVP would be loathe to be engaged in both Belarus and Ukraine at the same time.  The only problem with that is that more than once both Lukashenko and VVP have suggested that Belarus may be better of returning to be a part of Russia, and being run from Moscow, and the idea has plausible support from the people of Belarus as well as popular support in Russia.  Any sense of that idea being dusted off again, and the people of Eastern Ukraine may start making enquiries if they can have the same deal – and that would presumably have a lot of popular support in Eastern Ukraine and be very difficult to back out of – and would start to look like the dismemberment of Ukraine.

Both the EU and the US have warned about new more substantial economic sanctions if there is any Russian military action.  As things currently stand Russian corporates cannot borrow on global capital markets, a range of Russians have sanctions against their personal finances, and many Russians would note getting visas for travel anywhere in the developed world is often inordinately difficult – though it should be noted the splashing about of Novichok to poison those outside Russia critical of the Putin administration gives that difficulty a lot of logic.

The poisonings of Sergei and Yulia Skripal in Salisbury UK, and the similar poisoning of Alexander Litvinenko in the UK, both obviously involving the Russian state, and both obviously dismissive of public safety, one involving radioactive isotopes found across Europe, have done nothing for public sentiment towards VVP’s Russia. 

Russia has been shifting its currency reserves away from US dollar holdings for the best part of ten years, and has been a major buyer of gold – and is believed to have significant amounts of gold ‘off books’.  For sure the US and EU could ban Russian exports, but these are mainly energy related, and the first major impact of banning Russian gas or oil exports would be to provide a bonus for a range of Arab states, or Iran.  They would also run the risk of making lots of Europeans cold in the coming months.  There would also be blowback in the form of presumable Russian sanctions against major EU suppliers of particularly agricultural goods – which would have some unwelcome implications for Greek, Romanian or Spanish fruit growers, French or Italian winemakers, or French cheesemakers, and the electorates they influence.

Of course the most effective way to pressure VVP and Russia would be to create a prosperous Ukraine economy, which would be the one way of delivering outcomes for Ukrainians and improving their living standards, and having them become their own best defence of their system.   But to do that the EU and US would need to dismantle the Oligarch festooned Ukraine polity that currently is, that Ukrainians aren’t that interested in, which often has them identifying better living standards over the border in Russia.  That isn’t likely to be a prospect any time soon, though it would certainly pressure Russia.

Georgia & the Caucasus

Other pressure points abound – not just for Russia or NATO or Ukraine either.  It isn’t just Ukraine that Russia is concerned about joining NATO.  It is Georgia too, and once we are thinking about Georgia we are into the Caucasus.  Unlike Ukraine, Georgia has managed to lift itself out of Oligarch riddled decision making and is a far better cultural fit for EU (if not NATO) membership – not perfect, but better than Ukraine.  Like Ukraine, Georgia has two ‘frozen conflicts’ which see regions of the country effectively running themselves, funded by Moscow as separatist states.  Georgia’s problem is geography.  Georgia isn’t really contiguous to the rest of Europe and its communications and supply – in the event of any real tension or conflict – would need to come through Turkey.  Turkey is a key NATO member, but it has been rebuffed from joining the EU, on largely cultural and ethnic grounds.  But a real issue with Georgia is that it would bring the Caucasus into NATO and the EU, and about 2 thousand years of recorded history tells us that can be ‘complex’.

The Caucasus.  If you want geopolitical complexity it has the lot.  Two frozen separatist states in Georgia, a freshly reheated dispute between Armenia and Azerbaijan, Historical Genocides, Russian arms deals, oil and gas pipelines, oligarchs, Orthodoxy & devout Christianity, Mullahs & Islamic fundamentalists, mountain passes, Iranian, Turkish and Russian jostling for a thousand years, genetics going back beyond recorded history, the worlds oldest viticulture, and cultures where nobody has ever forgotten a thing, where the Old Testament tends to underpin thoughts processes for dealing with neighbours, and where every man Jack of them will take up arms if things get out of hand, and, of course, the odd psychopath who likes torture and violence.   It offers the world’s choicest quality complex armed populace disharmony experience.  

Georgia has Abkhazia and South Ossetia as separatist states within what it and the rest of the world see as its borders – both backed by Russia.   The peoples in both see themselves as ethnically different to the people in the next region – and this is a recurring theme in the Caucasus.  Georgia is right next door to Armenia and Azerbaijan.  Armenia also has a large Russian military base on its soil.  It gets on reasonably fine with both, but they have just had another round of hostilities which saw Azerbaijan reclaim a lot of land which Armenia had taken control of in the 1990s.  The Turks and Israelis supported the Azerbaijanis, the Iranians quietly supported the Armenians, the Russians were the major arms providers for both sides, the Azerbaijanis deployed some Islamic fundamentalists brought up from Northern Iraq and Syria.  They also deployed some Turkish drones against Russian made tanks to interesting effect, well enough to find enthusiastic buyers in Ukraine.  It is a complexity rich environment.  And these people have seen off the Romans, the Persians, the Byzantines and the Abbasids, the Ottomans, the Mongols, and the Soviets, as well as a post World War 1 cameo from the British which included Australians.

The 2020 renewal of armed conflict saw Azerbaijan prevail, and get back territory they had lost in the early 1990s, after VVP had been on the line to new US President Biden, and subsequently had a chat with the Armenians and the Azerbaijanis before all sides had cobbled together a deal minimising the risk of a major conflagration.  That deal has Russian troops manning a land route between Armenia proper and Artsakh (home of ethnic Armenians surrounded by Azerbaijan).  Any military action in Eastern Ukraine may have some side effects in the heating up of issues in the Caucasus.  And if things heat up in the Caucasus there is no telling where it ends up or who may get involved.

Beyond the Caucasus

Just the other side of the Caspian sea from Azerbaijan is Turkmenistan.  Turkmenistan borders Iran, and is strongly Islamic.  It is also a very major gas supplier to China and the far end of a pipeline system which runs through Central Asia into China through Xinjiang.  Proposals have been floated for the Iranians to plug into that pipeline system which crosses Uzbekistan and then Kazakhstan.  When the Chinese stopped buying Australian LNG amidst rising tensions in 2019, it was the Turkmen they turned to for more.   Turkmenistan and Iran both border Afghanistan.  That pipeline crosses the mouth of the Fergana Valley and the Syr Darya river.  And there would be people in that region, which tends to use Russian as a lingua franca, thinking their counterparts in the Caucasus could do with some assertiveness sessions, and need to brush up on their small arms skills.  The Fergana Valley is home to a number of enclaves and exclaves of Tajiks, Uzbeks and Kyrgyz, with the border between these nations amongst the most tortured and torturous on the planet.

Once in that part of the world one finds that Tajikstan and Kyrgyzstan have had a little bit of conflict within the last year, of course, Afghanistan has been in a near permanent state of insurrection for twenty years prior to NATO forces getting out in a hurry in mid 2021, and only last week the revolt in Kazakhstan – which most Russians assure is the peaceful moderate face of Islam in the Central Asian region – saw police personnel beheaded. It isn’t that long ago that the Uzbeks and Kyrgyz had their issues.

There are a range of Russian bases across the region, and local popular opinion about the Russians is generally positive in the face of suspicions about the U.S and China.   If Russia wasn’t the local military protector of the status quo, the only plausible alternative for the locals would be China, which given the events in Xinjiang would cause global consternation.  Russia’s major concern with the region is the potential for Islamic extremism to be imported to Russia (which has numerous migrants from these nations) via young men radicalised in either Afghanistan or further afield in Pakistan or Iraq.  China is keeping an eye on precisely the same issue, while drawing increasing global condemnation for its treatment of Islamic Uyghur peoples in what it refers to as Xinjiang.

Any sort of military activity involving Russia could have unforeseen outcomes in this part of the world too.

What nobody wants

Both the EU and US would be loathe to commit troops to the ground in Ukraine to fight against Russian forces, let alone the Caucasus.  They have just come away from the chastening experience of having their morality handed to them on an expensive plate by the Taliban in Afghanistan.  Any more, to seriously commit troops would come under close examination for what exactly they were supporting and any association with Ukrainian oligarchs would not be a good look.  Possibly some of the NATO allies in Eastern Europe may look at putting small numbers of boots on the ground, but even this would be doubtful. They would be acutely aware of the odiousness of the Ukraine polity and the way that any funding would be clipped.  They would be sensitive to the refugee implications if things went awry.

That would leave them looking at providing Ukraine technology and funding a fight, and even that would be straightened by the outlays related to Covid and widespread poverty and economic precariousness in the EU and US.  But it would leave the fighting largely in the hands of the Ukrainians.  No doubt these would be brave and motivated, and the actual poverty in Ukraine would add to the impetus to join in.   The fighting in Eastern Ukraine since 2014 – notably Slavyansk and Debaltsevo  – suggests that they would stand and die, and extract a heavy toll of any military deployed against them.  But they would likely be heavily outnumbered, against a much better armed adversary.

Eastern Ukraine in particular is largely flat rolling plains.  Both the Germans and the Soviets during World War 2 found it ideal for armoured formations, and tactical airpower supporting infantry.  But both the Germans and the Soviets also discovered that it could be utter carnage.  That doesn’t bode well for Ukraine, and doesn’t bode all that well for prospects of any Russian military action either.  About the only people it does bode well for would be the arms suppliers and their agents.  Even worse, for both Ukrainians and Russians, would be the prospect of becoming bogged down in a protracted guerilla or urban warfare environment.

Completely destroyed Donetsk Airport, Eastern Ukraine.  The people on the ground – both sides – would presumably prefer their infrastructure didn’t end up like this, and that their lives could not just go back to normal, but offer scope for improved economic circumstances for themselves and their families.   The real question is whether the Russians, Ukrainians, NATO, EU and US are committed to making that happen. 

Deals anyone?

So that brings everyone back to needing a deal. Not just any deal, but a grand deal.   They dont need a deal which puts off hostilities until the expiry of the deal.  They need something to circuit break and set the scene for a better future.  Not just a deal about troops and missile locations, or gas volumes and supply, but a real deal.  One which shapes a generations worth of thinking and lightens up the mood for people in Russia and Ukraine, as well  as for plenty of people elsewhere.  Not just a deal which one side can force upon another, but a deal where both sides give themselves a bit of wiggle room, maybe even accommodate each other.  That looks profoundly optimistic but anything less will just mean a hardening of positions.

Russia has already circulated a list of demands.

  • A guarantee Ukraine doesn’t join NATO
  • Removal of NATO missiles and miltary deployments from former Warsaw Pact NATO members in Eastern Europe
  • A ban on NATO missiles within striking distance of Russia
  • Autonomy for Eastern Ukraine

Note the fairly obvious focus on Russian security.  That says a lot about what is driving events.

The EU, US and NATO haven’t circulated any lists, and would presumably be more than comfortable with the status quo of doing as they please, whenever they felt like it.  As they have done for about thirty years since the end of the USSR.  They certainly don’t want anything written down with a Russia feeling aggrieved by what wasn’t written down at the end of the USSR, and like much of the managerial and political elite the world over seems to view writing things down as being somehow inherently socialist. But they are likely to have to do just that.  Getting them to write down anything would almost be seen as a win by a lot of Russians.

The Western world needs a deal to preserve Ukraine, as a sovereign state able to determine its own fate (as opposed to being a teat for Oligarchs), and to turn the prospect of any Russian military threat off, for Ukraine and elsewhere in Eastern Europe.  Russia needs a deal to remove the risk of Ukraine, and Eastern Europe, being the base for missiles aimed at it. More than that, it needs to remove the sense that NATO, and NATO expansion, is about confronting Russia.  Because if NATO is about confronting Russia, then the only logical position Russia can adopt is to prepare to confront NATO.  And if Russia does need to confront NATO then Ukraine would be a logical place to start – there are a lot of Russians already there, the administration that is there isn’t all that credible with Ukrainians, and it is the closest threat to Russia.

Russia wants guarantees for the cities and regions of Eastern Ukraine – that is already largely agreed.  All of Ukraine could do with a deal which set it on the path of freedom from corruption – but it wont get it.  Ukraine needs a deal to avoid miring a disillusioned public in a bloody war, and to avoid becoming a battlefield testing location for the next generation of military kit.

The European Union would certainly like some sort of undertaking from Russia not to facilitate the poisoning of Russian dissidents in the EU, maybe an all embracing commitment to ease back on the use of nerve toxins or radioactive isotopes of any sort being splashed about airlines, airports and tourists venues.  There would be plausible logic on some guarantees for gas supply.  A number of Eastern European states in particular would probably like some guarantees on not hacking into critical infrastructure, which might potentially be desired by the United States also.  It would presumably be a bridge too far to expect Russia to extradite persons for judicial investigation where crime has occurred in the EU, and almost certainly expecting European or British law to send back former Russian business identities who happen to arrive in their jurisdictions with large amounts of money which is claimed to be proceeds of corruption would be a tough ask too.  Maybe they could come to a deal about the handling of illegal migrants and refugees from third countries.

Beyond that there may also be scope for some sort of acknowledgement of Crimea being back as part of Russia, or a commitment to the current border of Ukraine.  While they are at it maybe they could spend a little on sorting out the issues in TransDnistria, or maybe even come out with a ‘road map’ to sorting out the frozen conflicts in Georgia and Azerbaijan as well.  But that is all pie in the sky, and all dependent on Russia and NATO not primarily seeing each other as a threat.

The announcement of new financial sanctions announced by the US Treasury on January 20, 2022 contains reference to the possibility that there is some dealing taking place.  In the sanctioning of 4 Ukraine nationals the announcement referred to one, Vladimir Sivkovich, as:-

Sivkovich worked with a network of Russian intelligence actors to carry out influence operations that attempted to build support for Ukraine to officially cede Crimea to Russia in exchange for a drawdown of Russian-backed forces in the Donbas, where separatists continue to receive support from Russia.

That would appear to suggest that tradeoffs are being considered.

And what if there is no deal?

There is a lot of kit ready for a hitout in Eastern Europe

What happens if there is no deal?  What happens if nobody says or does anything.  If NATO or the US or EU assume that this will blow over, or that it is just another game of geopolitical chicken VVP is playing?  Or if Russia backs into quietude after having raised its issues again?

There are two real choices.  Either precisely the same issues will be back again, next month or next year or in ten years, or there is some sort of military conflict to sort out where everyone really stands.

The same issues coming back will presume that nothing substantial happens and that the NATO states which feel threatened by Russia and Russia feeling threatened by NATO will continue to generate solid increases in military outlays, which provides a useful prism through which misperceptions and falsehoods will continue to flow.  Russian gas will remain an issue.  Now that Ukraine can be marginalised as a conduit expect that more debate will be about the use of Nord Stream II.  The festering sores of Eastern Ukraine, as well as the unpicked ones in TransDnistria and Georgia will remain as they are.  In the case of Ukraine it means the intermittent shelling and snipers on both sides will continue taking lives and the blood will likely continue.  Russia will continue to see most interactions with Europe as an attempt to get one up on them, and Europeans will continue to see Russia as a threat.  Other global events will be seen as opportunities to present the other side with a fait accompli.

The military angle is a one-sided affair.  The EU, US and NATO are unlikely to spark a military engagement except in defence.  Russia has the troops, in Russia around the border of Ukraine, Russia can easily supply them.  It is VVP, on behalf of Russia, effectively saying ‘enough is enough’ and floating a threat.  It is VVP stating unambiguously that Russia feels threatened enough to countenance that.

Any Russian military action would most likely be East of the Dnepr (Dnieper) and more likely in the South than the North.

A military affair looks a relatively straightforward exercise in pressuring the remoter Eastern regions of Ukraine.  Much of the Ukraine army is held West of the Dnepr closer to Europe.  The East would be a focus, but the presence of significant Russian forces in Crimea, more Russian forces in TransDnistria, and inside Russia near where the borders of Ukraine Belarus and Russia meet would pose a very serious risk to any Ukrainian notion of sending what it can East of the Dnepr to support the East of the country.

There have been some suggestions in the Russian media that a land bridge between Donetsk and the isthmus linking Crimea to Ukraine would be a focus. The significant Azov shore city of Mariupol is believed to be very heavily defended, which could bode alarmingly for the prospect of civilian casualties and the prospect of ugly urban warfare.  Russia would presumably be keen to avoid that, as well as any strongly antipathetic locals, and probably also keen to deal with Oligarch funded private militias – believed based near Dnipropetrovsk and Zaporozhia.  The Ukrainian forces would probably have some plan to revert to guerilla warfare in the event of a Russian military incursion.   Any attempt to claim Kharkov or Sumy, in the North of Ukraine, close to the Russian border, may face very spirited public resistance – of the sort which may galvanise public opinion in the rest of the world.

Suffice it to say it could all get horribly messy for all concerned.


Any sort of military action would presumably send the price of oil and gas sky-high for some time, which may generate the inflationary pressures much of the world is looking for.  With both Russian and Ukraine significant grain producers, and particularly in Eastern Ukraine, Rye, Barley and Wheat could become volatile markets.  Markets may need to adjust to having embargoes on Russia which the developed world would be applying, which may provide an upside for China – that would be all sorts of commodities, from energy to timber, but also metals, and even diamonds.  European goods – notably cars – would probably be harder to sell in Russia, and this could swing the entire market towards China, and US and EU service providers, from Internet giants to telephony as well as FMCG would likely go the same way.   With any sort of outbreak of hostilities in Ukraine, China could also find an excuse to up the ante on Taiwan

For VVP the implication is that he gets to underline his place in Russian history.  He gets a place in history if he goes as a war leader. Presumably in circumstances where Russia could be expected to get a head start in any military engagement, and be successful in the opening hostilities.  He will also get a place in history too if he comes away from negotiations with the ‘West’ which he has brought on, with a piece of paper clarifying Russia’s role in the region and what it can expect of the region, and almost certainly – if there is to be a piece of paper – reducing the risk to Russia.

Over the longer term that implies significant potential cost to Russia and a major strategic break from Europe which would see the EU, in particular spend and focus on its own defence. Over time that would be difficult for Russia to counter, and would again simply lay the basis for another round of hostilities down the track.

Every nation party to this should be looking for a deal.

Russia may look like a military threat, and it may be.  But it shares a land border with more nations than any other, and is larger than any other, and on both a per capita and straight out basis there are bigger spenders on military kit.


  1. Nice…….shouldn’t be any war at the moment, both the US and Russia have been hit hard by the pandemic and even in the case of miscalculation an exchange of missiles would be all they are capable of until recovery. This is similar to the approaches Stalin made to the West in 1935…..only France and the Czechs took it up. It didn’t stop the war but saved a bit of time. The Russians don’t expect the US to agree but they do want something on paper……they don’t really care what because they only want it to point to later when the realpolitik starts in earnest.

    General Gerasimov had all the foreign military attaches in and told them he had clear orders to supress any and all substantive attacks on the Donbass. He doesn’t really have to invade to do this as the Tornado-S MLRS has an operational range of 120 km with thermobaric warheads. The troops in the Bryansk Triangle are there to back up threats to dismember Ukraine if NATO really gets involved instead of egging the Ukrainians on. The only threat to them is the USAF and if they do get involved it does mean war.

  2. Know IdeaMEMBER

    Good grief! Are you paid per word?

    But, more seriously, thanks for the background and insights.

  3. Huge read Gunna. That took me an hour+

    Thanks for sharing your knowledge. This is the only thing I’ve read which goes beyond NATO good and Putin bad. Whats happening makes a lot more sense after reading your post

  4. Basically as Putin said the U.S. is agreement incapable unless it gets to lord over you and yours e.g. it can’t even satisfy the contracts in signs in the past, yet will claim any action other nations take when confronting this paradigm are bad faith actors and ev’ble destroyers of liberties and freedoms.

    I mean after the Chicago boys attempted the same game plan with setting up oligarchs in the post USSR, not to mention that little bond thingy, Dimrat neocons/ Rep new American Century [Samantha et al] sorts [see Libya] are all still attempting a hostile take over of everything that does not allow unfettered international corruption to take over.

    The most absurd part is back in the day it was the libertarian gaggle that call other sheeple when if fact they were the biggest sheeple of them all …

  5. Excellent summary. Ukraine is a disaster in the making, and the EU cannot be trusted in the long-term. Russia is running out of choices…

    • The EU has been a hand bag of the U.S. for way to long and Russia is only concerned about its own patch so its not aggressive from an international back drop, neither is China.

      • Except in recent days UK, Baltic states have been supplying arms, and Turkey is now supplying seriously impactful technology, which if recent reports are to be delivered, have taken out numerous artillery positions in the contested East of the Ukraine, tipping the balance of power.

        I don’t think Russia can wait. It might wait until this summer when the mud clears and commit to a five month conquest with everything its got before the winter rains. Call all Reserves up. Total War.

        Moreover, in the invasion cannot come from the East, large marshes, even the German army had to go around it (and that is where the Russian partisans hid during the conflict) – it will come from the south and the north via Belarus in a large pincer movement, combine – then drive West. Can I also pint out, that where Russia had placed these troops, were next to these impassible spots, and anyone who has any military knowledge, knows that the Russians were merely making a point and placements were not threatening. Its akin to placing troops next to a mountain range, then driving over them…

        But the US wants a war to boost prestige, without realising they have picked the wrong time and place.

        Putin, a number of years ago, warned a NATO general (who then made the comment public) it would only take them two weeks to reach Kiev.

      • Firstly Russia is not the aggressor here … secondly it has always been measured in response to spastic western corporatist machinations hoping for a PR loaded moment like the run up to the first ME conflict.

        I mean tortured PR can only get you so far or have you forgotten Abu Ghraib prison already …

  6. I’m quite pessimistc about this. I reckon its a co-ordinated plan between china and russia. Russia will invade ukraine and as soon ad the west commits troops, china will launch its invasion of taiwan.

    But maybe i’m just paranoid

    • Doubt it, China is eying off large parts of Eastern Russia which they will not be able to keep (in the LT). It has to shore up its Western borders first. That is not to say that China won’t use the opportunity to grab Taiwan if the ballon goes up in Eastern Europe. In fact, it would down right negligent if it didn’t.

      But the Russian story is getting even more complicated, and it was total ignored above, Turkey under Recep Tayyip Erdoğan (who Steve Bannon called the most dangerous man in the world) wants to reunite all the Stans under Turkey’s leadership. Moreover, he is also cobbling together a rapid reaction force that includes Hungry, and believe it or not, the Ukraine, against Russia itself. Moreover, the Turks have supplied Ukraine with drones in the recent conflict ended in near-total victory for the Azeris. Armenia, with a bigger army, larger air force, more up-to-date anti-aircraft and anti-missile systems, and a history of Russian support, would easily triumph. But all Armenia’s expensively-acquired military “advantages” were quickly taken out in the early days of the fighting by Azerbaijan using Turkish-made drones (flown by Turkish pilots) costing roughly US$1m each. Moreover, the Russians found that in northern Syria, they couldn’t hide these tanks from modern sensors, and the drones were making them heavy paper weights with virtually no strategic presence.

      This is the big part missing from the above analysis. Russia (as per usual) is being assailed by all sides. It has a large long-term threat from China, who intends becoming a large land power again. It has Europe to the West that can never keep its word and has set the timer on the Ukraine existence. But of equal threat is revanchist Turkey, with a massive army, well trained, becoming increasingly battle hardened.

      If you go through the permutations, from the Russian perspective, the Ukraine issue has to be dealt with now. Because bigger and far more dangerous forces are coming.

      Russia has to secure its Western border. Which means it has to take the Ukraine back. In the medium term, deal with Turkey, which it cannot beat, but hopefully constrain – and somehow delay and limit its losses to the East.

      • Bullocks … Russian does not have to do anything with an already failed state supported by the U.S. no less – again and again for what -????

      • This is it, over a million chinese workers are over the russian border raping the countryside of resources while Putin does absolutely nothing. The chinese are so entrenched the local russian population usually work for chinese businessmen in their unrestrained destruction of the environment.

        Putin lusts for a cold-war era that doesn’t exist anymore, he is a relic of the cold war.

        • MerkwürdigliebeMEMBER

          My understanding was that it was a QLD company making something used by the Israelis who made a drone which was given by the Turks to the Azerbaijanis.

          I have a mate in Georgia who keeps an eye on these things

          • Yeah the murky world of Arms trade and the Export of so called “Dual use technology”
            As I’ve recently discovered, several middle sized Australian companies are profiting enormously by bypassing US export restrictions of “Dual use technology” and Military Technology. They profit by re-exporting banned / restricted items they’ve acquired from US sources. Sometimes they rebox the item adding a (Made in Australia) sticker, most times they can’t even be bothered with this step.
            Fun fun fun, and oh what nice juicy mega-sized profits.

  7. I would not confuse, Russia with VVP. Presumably the life of Russians would improve with better institutions and less corruption, so the NATO expansion threatens VVP more so than it does an average Russian citizen.

    • Russia is way better off under VVP than the western Chicago boys administration, corruption is what they attempted to instill to loot the nation and VVP showed them the door.

      • To loot himself and his boys, half of his uni class are millionaires, alongside his dzudo coach.

        • And America has 600 billionaires wrangling over its direction of social policy with their individual and collective self interests first and foremost then some will lose the plot over totalitarianism …

      • I dont doubt theyre better off today. I visited in 1996 and it was a horror story. But i covered eastern europe as an economist at Deutsche Bank for several years and have kept up with developments in that part of the world. Most of Eastern Europe is not only vastly better off today, but has actually gone a long way to converging on our living standards. Indeed, some countries such as Slovinia, east Germany, estonia, Lithuania, and czechia have achieved first world status.

        • Loved travelling the FSU back then. Some crazy times…my school, U of Auckland, not exactly a bastion of efficient market zealots…

        • MerkwürdigliebeMEMBER

          I still do work for Russian banks and corporates. If you chat with almost anyone who was around at that time they will tell you the early to mid 90s were the worst.

          My wife used to carry a plastic bag around with her (she was a student then and later a taxation planning account for a very large oil company) and reminds me sometimes that there were times she would come across a queue of people and simply ‘join the queue’ if it was for something she was after. I have actually spoken with a lot of people about the Russian privatisation ‘process’ including many who were influential or decisionmakers of some sort. Just about every man Jack of them has agreed they were fundamentally flawed, and most – even those who loathe Putin (and there are plenty) – agree that it was that mid to late 90s experience which brought Putin to power.

          • Yes, the situation back then was dire, and people knew it. Yeltsin was brave to stand on the tank and stare down the communists – that took real courage – but afterwards, he was just woefully prepared to manage Russia’s problems. He didn’t have the intellectual capacity to understand the issues, he didn’t have the physical stamina to keep going and as the pressure mounted, his drinking increased to the point where he was incapacitated. That allowed the country to be looted by the Oligarchs. I recall back in 2003-04, most bankers in the City of London weren’t at all sad to see the Oligarchs go under, and people were pretty open to Putin. A lot has changed. For mine, Russia is an inherently unstable country. It remains very poor – despite the glitz in Moscow and St Petersburg – an economy roughly the size of Australia-NZ – with a population the size of Bangladesh, spread out over a vast and largely empty landscape with hostile powers all around its periphery and very little natural pull to the centre, and a country totally reliant on oil and gas revenue and therefore hugely exposed to the conversion that’s underway in the West to renewables; and once Europe embraces Thorium reactors, their gas demand will decline. I can easily see a scenario where Putin is deposed and the country starts to disintegrate, and Im sure China would love to acquire eastern Siberia.

        • WOW a Softpanorama link on this blog ….

          When I use the term Chicago boys its a reference to the foundations which then spread through out other economic academic settings e.g. Slone school et al via funding by plutocrats.

          More so the focus on banks is misplaced because the dynamic is corporatist at the end of the day and post plaza the shadow sector is manifold the traditional financial sector but its an easy target to blame all social ills on and not the ideological philosophy that underpins it all.

          • Foundation reference? No, the Chicago boys were actually there during the 80s. The Kremlin, desperate for an economic fix, bought their recommendations. Why not, it had evidently worked in Chile? They “rationalised” industrial production, ie., they went the hole hog closing down old industries and factories in one-industry one-factory towns and cities leaving those places and people gutted with nothing to fall back on. This happened toward the end of the Era of Stagnation which began during the rule of Leonid Brezhnev (1964-1982) and continued under Yuri Andropov (1982-1984) and Konstantin Chernenko (1984-1985). This period ended when Mikhail Gorbachev, who succeeded Chernenko, introduced his policies of glasnost, perestroika, uskoreniye, and demokratizatsiya, leading to the fall of communism in 1989 and the dissolution of the Soviet Union in 1991. The Soviets got away from the classic command economy without knowing what they were doing nor where to stop, and this led to the slip ups of the government. Gorbachev inherited a dysfunctional economy, a failed state apparatus, and a broken people. He gave that to Yeltsin who passed it on in the end to Putin in yet worse condition after he had bought in Clinton’s Harvard crew to oversee much of the the plunder, rape, and pillage.

            I provided more links with a reply to your first mention further above of “the chicago boys”. That reply seems lost in moderation, so here again with a few links that’ll need to be pasted in a browser.

            It wasn’t the Chicago boys who raped Russia in the 90s. There had been originally a very different privatisation plan presented to the White House out of Columbia for fair democratic and egalitarian redistribution of wealth, but the grifter crew from Harvard greased Clinton’s palm and at the last minute before the Columbia team were to fly to Russia they had the rug pulled out from under and the Harvard crooks were sent instead.





            The New York Review of Books
            vol. 48, no. 15
            October 4, 2001
            Russia: Was There a Better Way? (Excerpt)


            …KF: And they’ve turned over from quite a stable society to one based on volatility, and oil price volatility. The after effects of the 2008 meltdown must have shocked a lot of people in the Russian government. What was the talk along those lines – what were people thinking about?

            MH: Very little because they’d already in 1991 dismantled their industry. They were told that the way to get rich was to become a raw materials exporter or what the American protectionists and the bible called “hewers of wood and drawers of water”. So Russia simply dismantled its industry. The west said, oh, you’re not competitive and what the Russians didn’t realize is that all of this was very self serving to the west. The West, especially the American planners- the Harvard boys that went over said, well, we really don’t want is for Russia ever to be a military threat. We’d like to conquer it, to break it up, let’s now just slam them at the end of the cold war.

            So without an industrial, manufacturing base there can’t really be much of a military. So the first thing they did was say – get rid of your manufacturing, get rid of your engineering, begin charging for your schooling, close down the schools – you don’t need engineers all you really need to do is make a hole in the ground.

            But none of this export revenue from the hole in the ground should really be turned over to the state – we want to make sure that you only tax labor and tax business, but don’t tax natural resources – let it all be privatized. And so Russia thought, gee this sounds like a funny way to get rich but that’s what they did. And so they followed the Harvard advice to give away the oil, the nickel companies, the mineral resources, and that’s how they got the money to begin sending it all to the west. There wasn’t any Russian money to buy these companies because the IMF and World Bank wiped out Russian savers with a hyper inflation by getting rid of all the capital controls and letting the rouble float. So it was just one bad advice after another and now the Russians realize they’ve been taken.

            And they’re trying to figure out how on earth do we get out of this mess following the West’s advice. They thought, and the Baltics thought, that they were been told how to develop in the way that the West did. Neo-liberalism is the exact opposite of how Britain and the United States, Germany, Japan, and now China, got rich by progressive taxation, and having public infrastructure provided at much lower cost than privatized infrastructure and a resource fund tax, basically a land tax which is how Europe and America – states and localities – have been financed all throughout their history.


          • I am using the term Chicago boys in reference to the ideology promoted by Friedman&Co which spread to other institutions and not the South American case specifically. Then one has to contend with all the synergy’s.

    • MerkwürdigliebeMEMBER

      I pretty much agree with you Alexey. Nothing above should suggest I dont think VVP is a corruption beneficiary heading up an entirely corrupt administration. He would for sure be threatened.

      My basic problem is that I just dont think Russia, or Ukraine, would or will ever get there when it comes to getting rid of corruption. As more than one Russian, and Ukrainian, has put it to me ‘corruption is in the soul’

      • Why is anyone focused on Russian or Chinese corruption when the GFC was a result of U.S. corruption at all levels.

  8. The biggest blind spot in all of this is Europe, Russia, China are natural trading partners way before America was on the map and its national political dramas in the U.S. now mean others will be considering options near and far …

    Seriously the U.K. and America are a mess at the moment.

  9. Thanks again Gunna, great read with really well presented information and context.
    My only caution is that our western ancestors were far from saints, military actions taken in support of the British Empire in the mid 19th century would be considered barbarous by today’s standards. Our history book paint a picture of bravery and gallantry whereas in truth there wasn’t much gallantry to be found in either the first or second Opium wars. These were wars fought for purely commercial interest (British East India company) . The Chinese accounts of the opium wars paint a horrific picture of a unbelievable carnage and savagery, all done to cement in place our rights as the drug lords of Asia. These gentleman are our oligarch ancestors.
    And it wasn’t just the British that were savage, Japanese accounts of the brutality of German forces during the Boxer Rebellion formed the foundations for the modern Imperial Army (and it’s commercial offshoot the Kwantung Army) . Japanese elders and statemen argued that they (the Japanese people) were above such base actions, emphasizing that such a military victory was without honor…but commercial interests painted a different global picture. We all know which group won the battel for public opinion Japanese phrases the equivalent to “Toughen-up Buttercup” became the cornerstone of military training…and we all know where that line of thinking led (rape of Nanjing, unit 731….)

    My only point is that world history is replete with examples of wars fought to advance the narrow commercial interests of few powerful people. It’s just what we like to do…what it really means to be human.

    • MerkwürdigliebeMEMBER

      Completely agree, our western military ancestors, and the interests which drove them, were no saints.

      But at the moment I read the UK (in particular) as being close to chaos and the US not that far off either

  10. MerkwürdigliebeMEMBER

    a whip round of todays latest news/comment

    U.S. and Russia agree to keep talking after meeting on Ukraine

    Russia Ukraine: Emergency diplomacy offers up few results

    Russia-Ukraine crisis: Can US sanctions sway Putin’s thinking?

    5 things to know about why Russia might invade Ukraine – and why the US is involved

    The West’s Weapons Won’t Make Any Difference to Ukraine

    Few market bunkers if Russia invades Ukraine

    I think the US game plan will be to keep Lavrov talking at all costs. Lavrov’s plan will be to get some form of concrete guarantee fairly quickly…

    The weather would be a factor here. In Ukraine and Russia it is the depths of winter with snow on the ground everywhere. Ukraine will warm up a few weeks earlier than Russia, but that will see a month of solid mud and puddles everywhere, before the ground dries out and then there will be a summer of good clear weather with dry ground.

    A very big side issue is global markets, particularly crude. The reuters piece above has a good chart of the safe haven commodities

  11. Interesting article.
    Very much written from the Russian perspective, ignoring the agency of Ukrainians and what they might want.
    I truly hope there will not be an invasion, since it will be a tragedy for all concerned.

  12. Some good analysis but some factual omissions make this present as Putin both good and victim of the west, i.e. especially the EU and NATO (issues for Putin, Tory & GOP Koch libertarians), which is bad aka Zero Hedge?

    Ukraine did not start a war in the Donbass, Crimea etc., ignores the GOP/Koch related grifters in Central Eastern Europe in an ecosystem including the Putin and Trump camps (according to Anne Applebaum), Russian and other oligarchs (no doubt Ukrainian too) funding the UK Tories for Brexit (esp. leaving and wanting to split the EU) more ‘Kochonomics’, while Russia relying upon trumped up charges and authoritarianism against its own citizens?

    The issue is Putin: he is cornered, Russia has stagnated both economically and demographically, while the focus is nostalgia for Orthodoxy, Authority and Nativism of the Czars but worst of all for both Russia and Ukraine, who cares about the working age and youth population who mostly want open, liberal and democratic societies with working health and pensions systems; the only choice for Russians wanting a future is emigration?

    Further, why do Russian oligarchs and ‘elites’ choose to live in the dreaded ‘west’ e.g. London, but if Russia is so wonderful and they have resources to make it better; except when they are not donating to Tories and Koch think tanks in London (supporting Brexit and break up of the EU)?

    Former CEE, Russia and Energy journalist at The Economist, Edward Lucas, has had good points to make i.e. interconnectors help to manage gas more (Nabucco would have helped but now more LNG terminals in the EU too), stop allowing Putin to frame the questions that send media in circles and finally, pull visas from say the top 500 oligarchs round Putin, including their wives and children, for staying, shopping and studying in the UK.

    In a week or two Putin and his ‘deputy’ in the EU, Hungarian PM Orban will meet to discuss nuclear plant funding, while the latter has gifted $150 million to Bosnian Serbs to cause mischief with the EU, chummy with Tony ‘shirt front’ Abbott, maybe they could cooperate (not, one is also sure Abbott also hero worships Putin and presents at Koch linked think tanks), while Orban has elections coming and is terrified of kick back from Hungarian voters, for his close relationship with Putin (EU members Hungarians, Poles, Czechs etc. do not like Putin, nor any Russian interference in their region).

    One becomes tired of this PR for Putin that is supported by too many hero worshippers in the ‘west’; if you want to believe in something, go to church or follow your football stars……