20 March 2014

Thoughts on Russia, Ukraine, Money, Politics and Future

I just finished reading Mr. Putin’s 18 March address: http://eng.kremlin.ru/news/6889

His cold-bloodedness is remarkable and he (and his team) appears as pretty skilful in speeches, while: arguing that the referendum in Crimea on March 16 was in full compliance with democratic procedures and international norm (which is hard to believe to say the least – given that Russian troops were there), effectively making use of the historical ties between Russia and Crimea/Ukraine, highlighting the West’s wrongdoings in the past, addressing “external opposition”, thanking everyone who could possibly support Russia’s interests (e.g. Chinese leaders – even though I haven’t noticed anyone of them saying anything definite about the current case of Crimea/Ukraine), and overall, presenting Russia (probably in his person) as a “good dad” who is supporting people’s fundamental interests, democracy, norms of the international law etc.

That sounds great, except for the facts that: antiwar protests are being held in Moscow, pro-reform, pro-democracy opposition Russians are being jailed or put under house arrest, social situation in Russia is worsening rapidly, comment sections of the media outlets are being shut down (Forbes.ru is one example that recently announced hiding and closing all the comments at least for a while), the invasion of Ukraine has polarized members of Russia’s elite etc.

Here is an interesting read by Alexey A. Navalny, a Russian opposition leader (whether or not one agrees with his views): http://www.nytimes.com/2014/03/20/opinion/how-to-punish-putin.html

The story line of current events and Russia’s ambitions

There is another nice piece about the Russia’s permanent interests by Louis-Vincent Gave, posted in John Mauldin’s Outside the Box:

When combined with various other sources of information, the “story line” about the current events in Ukraine runs as follows.

Russian leaders (as leaders everywhere) are aiming for power, but over the past few decades they have been losing it.

The textbooks used for teaching future diplomats in Russia are still pretty much of what they used to be about 100 years ago, at least when it comes to geopolitics: centred on Eurasianist tradition and – to more extreme – arguing for Greater Russia aspirations (renaissance of Russian empire in the borders of the former Soviet Union), and defining Russia’s territories and zones of interest.

Yet when one looks at a map of the world today, there is only one empire that continues to “gobble up” territory all along its borders: the European Union. While the European Union’s enlargement on its own could be presented as primarily an economic enterprise, the EU project is defined as being first political, then economic. Worse yet in Russian eyes, the combination of the EU and NATO expansion is a very different proposition, for there is nothing economic about NATO enlargement. Add to this confiscation of Russian assets in Cyprus...

The particular bone for Russia in this fight is oil: high oil price equates to a strong Russia, and vice-versa. Should oil price decline below US$70/barrel, Russia were broke financially. On the other hand should oil price rise above US$200/barrel, it would be a terrific outcome for Russia in both financial terms and geo-political terms. (Europe, as well as China and Japan, would become even more dependent on Russian energy exports.)

With oil production in the US re-accelerating, with Iran potentially foregoing its membership in the “Axis of Evil,” with GDP growth slowing dramatically in emerging markets, with either Libya or Iraq potentially coming back on stream at some point in the future, with Japan set to restart its nukes... the logical destination for oil prices would be to follow most other commodities and head lower.

That’s not a desirable direction for Russian policy makers, but Mr. Putin and his supporters have found a way to change the trend: influencing events in the Middle East more than Russia has done in the past, this by selling and delivering weapons to the relevant parties in the Sunni-Shia conflict. And for that, one needs ships and a port. Ergo, the importance of Sevastopol (Crimea), and the importance of Russia’s Syrian port (Tartus, sitting pretty much across from Cyprus).

Hence, the Crimean annexation may announce the next gap higher in oil prices. If that’s so, Russia doesn’t need to invade other territories right now; it makes sense to grow stronger financially before pursuing further geo-political aims, whatever these might be.


The question is: what does have an “ordinary citizen” to do with the power games and mutual smearing of policy makers, corporates and oligarchs, except of being the target of “mass manipulations” (were the tools flattering or threatening, debt slavery or something else) and except that our lives are being affected if not directly threatened by the ambitious plans of someone else? There are really no good ways for distinguishing between true information and propaganda, facts and subjective opinions – were these from the East or from the West. The unfortunate position of Ukraine right now seems to be that due to the economic troubles, the votes of many Ukrainian may be for sale to the higher bidder (I’m referring to the stories about paid protesters).

I wonder when all these political and money games will be dismissed by the majority, and the existing world order based on nationalities and geographies replaced by the value based communities, spanning over all nations and geographies. Chances are that this will happen by 2050 if not earlier. After all, new community-based economies with monetary systems built from scratch would be a way for dealing with today’s massive debt problems and inequalities.

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