10-3-22
Dear Partners in Thought,
Given the rapidly unfolding situation in Ukraine and the world reaction we see, I thought it was useful to do a wrap-up at this stage, while stressing key points and lessons to be learned from this tragedy. This note is admittedly longer than usual dealing with a story that is fast-evolving, bringing in new developments every day.
Two weeks into the unprovoked invasion of Ukraine that was denied for weeks, Putin’s move is now a case study for the ages in what leaderships of declining powers gain by using obsolete strategic and military recipes in the global 21st century. All the more so in Europe.
Putin’s invasion rationale reflected a mix of “official” drivers such as: i) reuniting as a “liberator” Ukraine with Russia as Ukrainians and Russians were part of the same forcibly separated family and Kiev (or Kyiv) was the historical cradle of Russia; ii) putting a stop to NATO’s eastward expansion which had been promised would never happen by the George H.W. Bush administration; iii) rescuing the Russian-leaning populations of Eastern Ukraine, that were already separatist enclaves since the mid-2010s, from Ukrainian persecution; iv) responding to Ukraine’s military provocations and border attacks; v) fighting the “drug addicts” and “neo Nazis” represented by the Kyiv government, all while vi) effectively rebuilding an historical empire that might even transcend past Russian ideologies in power (thus creating concerns for the integrity of the EU itself). The fact that Ukraine and NATO never had any offensive plans against Russia, never provoked Russia or that Ukraine agreed to surrender its nuclear weapon capabilities in 1994 to secure its independence from both the West and especially Russia were non-issues.
Putin has now strategically achieved making Russia the world pariah state in little time. Most developments seen today in Ukraine and the world have run contrary to his earlier plans of a swift, unequivocal and accepted victory and reunification of what he saw as the historical “Russian family” and, more deeply, the avoidance of a gradually thriving and democratic Ukraine at his doorstep.
The lessons to be learned and key facts to focus on are indeed many:
- The return of history. This is the first war in Europe in 77 years at a time when such event was relegated to history books for all Europeans, especially after the end of the Cold War. American political scientist Francis Fukuyama, who famously predicted “The End of History”, triggering much disbelief, at the end of the Cold War, is definitely proven wrong and admits it today.
- A real Ukraine arising. A strengthened Ukrainian national identity arose, ensuring that most if not all Ukrainians do not want to go back to Soviet days, apart from eastern separatists who would likely regret the mover later on when no longer useful to Russia.
- A weak Russian military. While blitzkrieg never was a Russian word, we have seen slower advance than expected by vastly superior Russian forces linked to low morale, poor training and general inefficiency, as Russia has traditionally relied on overwhelming numbers and equipment, involving heavy irrelevant casualties, rather than military excellence and leadership on the battlefield in modern history – this combined with a reluctance from some soldiers (most troops are conscripts) to fight against what should be cultural “brothers”. This slow Russian military progress has taken away the earlier Western impression that Moscow possessed an efficient war machine, while it may drive Putin to double down and worsen how the terrible conflict is already conducted.
- From bad to worse. The second week of the invasion showed Moscow stepping up its attacks by targeting residential areas and starting bombing cities like Mariupol, creating a heavy human toll, including at a children’s and maternity hospital. Deals to evacuate civilians from Mariupol were agreed and twice cancelled by Russia, while safe passage via “humanitarian corridors” from large cities only offered passage to Russia and Belarus, and a humanitarian convoy shelled by invading forces. Mercenaries from the Wagner Group (usually ex-Russian special forces having operated in Syria or now Mali) with little official restraints in the conduct of war are reported stepping in to stop the failure of regular army troops. The Kremlin would now want to also involve Syrian mercenaries while chemical weapons might be used.
- A shattered delusion. An idealistic, Putin so-called “Russian world” destroyed with Ukrainian cities constantly pounded by Russian artillery and missiles inflicting massive damages to civilians and infrastructure, furthering the case for resistance and independence at all costs. And making Putin’s two-way street reunification “dream” totally delusional, even if it had any serious basis in the first place. A delusion costing Russia USD 20bn a day.
- A vigorous popular resistance. While suffering an onslaught from another age, a rare Ukrainian civilian courage erupted in stopping Russian convoys while unarmed (like the famed 40 mile-long one that kept stalling) or by taking up arms against the invader at times with limited weaponry and only (how fitting) Molotov cocktails. Even Ukrainian hackers are now focusing on Russian targets. President Zelensky, who encouraged Ukrainians to fight, fast embodied both leadership and independence at acute personal risk, joining the small group of leaders who made European democratic history in WW2.
- A united West. A much stronger and united Western – and indeed world – response happened after years of “looking away” at the Putin reality and weeks of “appeasement” when diplomacy was naturally aimed at preventing the worst. This combined with particularly direct early US and UK intelligence messages on the real intent of a soon to be invading Russia (notably focused on “false flag” operations creating the need for a Russian response to so-called Ukrainian provocations) that eventually proved to be right, and was a tactical hindrance for the latter, making its invasion harder to “prepare” and later “promote” due to its official rationale, multiple denials and sensitive implementation.
- A stronger NATO. The invasion created in little time a much stronger NATO, stressing, if it were necessary, that the West is first and foremost the key solidarity-based transatlantic alliance based on the defence of both democracy and liberalism in Europe, while never focused on offence. NATO is indeed strengthened – with Finland to join soon, with Sweden still hesitating in spite of a majority of Swedes now for it, combined with more troops and equipment in Europe from the US and in Russian border states. And as the key NATO and Western development, a real Germany military arising (EUR 100bn in defence/2%+ of GDP and no more “practical” WW2 guilt at play) while the key Nord Stream 2 gas pipeline was finally dropped by Berlin, showing the extreme times Europe is going through. A stronger NATO does not necessarily translate into unanimity, as seen with the US refusal for Polish MIG fighter jets being transferred from its Rammstein air force bases in Germany to Ukraine, given the actual war signs this move from NATO would mean to Russia at this point.
- An unexpected EU unity. A rarely-united EU, where its 27 members now generally speak in one voice and relatively fast against the invasion, while working together to inflict sanctions against Russia. Even a Putin-friendly Orban in Hungary decided, also for electoral purposes even if “1956” should have been enough, to condemn the invasion. A changing EU that agreed to fund weapons purchases for third party Ukraine for the first time in its history as it made sense for the preservation of the EU and its spirit. These unusual times for the European project, itself initially based on economic integration to avoid war, make us go back to founding father Jean Monnet who had stated that Europe, whatever its acronym, “would be forged in crises.”
- Neutrals vanishing. A Switzerland unexpectedly dropped its legendary neutrality in spite of private banks enjoying many Russian clients (this making William Tell doubtless very happy), leaving India oddly the only leading country in the world, doing a balancing act between its historical Russian military equipment provider and a new flourishing partnership with the US, not to condemn Moscow (some Middle Eastern states still strangely sitting on the fence), all while China seeming to be going through a gradual and pragmatic reassessment process, even if still ambiguous today. Switzerland even froze crypto-assets linked to Moscow at a time when Western crypto exchanges were still wondering what to do with their Russian investors, much in need at times of sanctions (and while the Russian central bank was a known opponent of cryptocurrency).
- A clear world condemnation. A United Nations vote nearly unanimously condemned the Russian invasion but for well-known bad world actors like Belarus, North Korea and Eritrea, themselves pariah states to a great degree. The Russian ambassador was at great pains to defend his country’s position, notably Putin’s assertion that the noble fight was against “neo-Nazis” even if led by a Jewish and native Russian speaking President, who is now perceived rightfully more as a new Winston Churchill or Charles de Gaulle (also very apt at using the media of our times), having found the best role that his past acting career could never have given him.
- The other economic war. Crippling financial and economic sanctions, seen by Putin as “a declaration of war,” that could harm Russia considerably, were quickly triggered with direct consequences for Russia’s full access to its USD 643bn reserves or indeed “war chest.” Other prime targets being the oligarchs (more than 50% Russian wealth is held outside Russia as seen with yachts and real estate seized in Europe and the US, or pre-emptive withdrawals from their longstanding businesses from locally well-accepted figures involved with the Chelsea Football Club or Letter One in London or “London-grad”) but also Russian banks (e.g. via ejection from the SWIFT banking payments system), Russian investment projects and partners globally and most importantly societally, in a sad but automatic way, its population in their daily lives. Virtually all major Western companies across sectors like Ikea, Apple or Nike have now taken the decision to pull out from operating in and with Russia. Even the emblematic Red Square 1990 pioneering McDonald’s and its 850 outlets is withdrawing. EY leads the Big4 auditors’ exodus. BP and Shell want to divest from their Russian oil joint-ventures, like nearly all Western investors and operators in Russia, Total and Raiffeisen Bank being notable exceptions to date. UniCredit, Société Générale and Citibank face major losses from the sanctions, while the former two have a large and challenging presence in Russia. Key Sovereign Wealth Funds are also withdrawing, like in Norway. The Rouble was down 30% in one day, and the Moscow Stock Exchange in a free fall in the first week of the invasion while JP Morgan predicts that Russia’s GDP will be down by 35% in the second quarter of 2022.
- The hybrid sanctions. Sanctions involved not simply economic and financial measures, but also targeting culture, sports and travel, as a different form of hybrid warfare that Moscow and its “platforms” practised with cyberattacks and disinformation in recent years, have been swift – and further isolate Russia. Artists or opera conductors, known to be sympathetic to Putin, have already been fired like at the Munich Symphonic Orchestra or at the MET in New York with performances cancelled. FIFA, the international football organisation, has already excluded Russia while its world tennis and Formula One racing equivalents have cancelled key tournaments and races in Russia. Aeroflot flights are no longer operating in Europe and is struggling to fly due to spare parts shortage. Even the International Cat Federation has banned Russian cats from participating in contests and sadly an Italian university would have banned, unfairly, Dostoevsky. Russia is becoming totally isolated.
- The ultimate sanctions. Sanctions are not primarily designed to hurt the Russian people, many of whom being appalled by the invasion of Ukraine and some of the barbaric methods at play. They are to finally stop the ability of the Russian regime to fund a war of another age in the heart of Europe. As such, the next step of the sanctions taken by the US and UK are targeting the Russian oil and gas industry, which are a very last non-military strike, and not universal given the dependence of some Western countries on Russian gas (Germany: 40% but Italy and Australia: 100%). This ultimate sanction focus will deliver a lethal blow to the funding of Putin’s war plans. In parallel the US will likely replace Russia as an oil provider to the world, including Europe, while trade and energy relations with unsavoury but less dangerous countries like Venezuela, a major oil provider, would as a result likely resume, sadly for the local opposition. Another oil provider could be Iran if the nuclear deal was finally closed as it could, if Russia does not block the signing as it has threatened via Lavrov. On a less positive and related note, Saudi Arabia and the UAE, both having stated their neutrality at the UN, refused to discuss ways to ease the oil price surge resulting from the crisis with the Biden administration.
- The West and the world to also suffer. While not militarily engaged in the conflict for now, the West will suffer through a likely worsened post-pandemic stagflation (rising inflation + lower consumer demand) resulting from the conflict combined with a commodity crisis affecting the global food supply given the breadbasket nature of Ukraine’s arable lands. Russia is also a major neon gas and palladium exporter while Belarus, which is a key supplier of potash, will likely be under sanctions for acting as the subservient and barely independent partner of Putin’s Russia. Oil prices rose to USD 120 in nine days, which should for a while worsen world energy demand, especially if sanctions finally target Russian oil and gas exports (that a further unhinged Putin may also decide to stop, as he has now stated, to retaliate against Western sanctions, even if Russia would need these to fund its costly war in Ukraine). The price to preserve democracy and defeat Putin’s Russia is worth the economic costs – even if some EU members, like a new Germany, are still resisting for now restricting trade of “essential importance.”
- The Kremlin in a parallel world. While increasing repression and ensuring bad news never reach the Russian population, Moscow is responding to the Western sanctions as if it was business as usual by simply drawing by decree a very long list of “unfriendly countries” that would need their companies and citizens to seek authorisation with the Commission for Control over Foreign Investments to engage in business with and in Russia – as if any Western entities or individuals would today. Similarly, Russia instructed their regions and municipalities they could now settle their foreign exchange obligations with foreign creditors in Rouble as a mere technicality. While the Ukrainian onslaught goes on, Russia tries to still behave as a normal citizen of the world, like in its dealings with Western powers on the Iran Nuclear Accord, all in a surrealistic way.
- An early Westernised Ukraine. Ukraine is now possibly acceding EU membership or, if not yet, at least closer to it (given the complex process and need for internal accession reforms and other candidates), this being driven by a number of Eastern European EU members including the Baltic states that share a poor experience of relationships with and proximity to Russia. Once again, Putin made this EU membership scenario, now supported by the EU leadership (“Ukrainians belong to us” as stated by Commission President Ursula von der Leyen) far more possible than in the past if Ukraine stayed free or in a winning Russian scenario for now, became independent again in the post-Putin future if the latter ever happened which it would eventually.
- An eventually pragmatic China. Even if the Taiwan copycat could always be pursued and current moans about an Indo-Pacific NATO in the making, a still clearly ambiguous China is gradually distancing itself from Russia and the Moscow-Beijing axis desired by Putin, first by being a mediator, all driven by a focus on the (still global, even for a currently more inward-looking Beijing) economy and “saving civilian lives” (implicitly stressing the barbaric side of Russia). The Asian Infrastructure Investment Bank, whose leading shareholder is China, already suspended all operations with Russia and Belarus one week into the invasion. It is also clear that the US and the West will reset its relations with Beijing to ensure the dark axis is no longer viable, a move that is likely going to be welcome by a practical and economic growth-focused and globalised China that could also be key in ultimately influencing Russia if ever possible given the nature of its current leadership.
- Other geopolitical changes in the making. A one-time friendly Turkey is turning gradually against Russia while blocking the passage of one of its frigates, perhaps also as a way to “change” following economic woes and do a reset of its relationships with the West and the EU. Ankara’s mediator role at the end of the second week is a subtle sign that there is no axis with Moscow as the latter could have expected. This small event in the scope of the crisis may indicate a key geopolitical move in Eurasia. Venezuela, probably the biggest winner of all, could not have hoped for a better crisis in order to get back in the world as President Maduro confirmed productive talks with the US on oil supply.
- Crossing the lines. The strike on and seizure of the Zaporizhia nuclear facility, one of 15 such plants and the largest in the world, by Russian forces on 4th March is constituting a universally-recognised barbaric act, if not war crime – even if no Chernobyl-like radiations were noticed afterwards. Russia, officially putting the blame at the UN for the plant fire on a Ukrainian sabotage group, indirectly stressed that nuclear facilities were fair game, triggering a major threat for Ukrainians (and ironically Russia itself, this also pointing to potential military mismanagement) as well as EU member states, like France, that rely on nuclear energy infrastructures for their energy needs. Statements about radiation leaks at the Chernobyl nuclear plant were made by Ukraine following a conflict-induced power cut in the second week of the invasion.
- More refugees for Europe. The invasion triggered the most massive refugee influx into Europe since WW2 (especially Poland, Hungary, Romania, Slovakia and Moldova for now), dwarfing the 2015 waves from the Middle East and Africa and requiring intense coordination among EU member states. Two million only in the first 12 days (mostly women and children, men under 60 required to stay behind to fight) and rising with an 8 million forecast by UN agencies. So far, the populations of neighbouring EU member states have been very welcoming to these refugees, but it is early days and long-term solutions will have to be found, including a return to the homeland whenever the situation allows it at all levels. The European management of the refugee crisis has been so far very good at the EU level, with Poland managing to welcome 1.2 million Ukrainians across the border while the UK, no longer in the EU, has only so far managed to issue 500 visas due to its own non-EU procedures, lack of paperwork from applicants, and a confused Home Office dealing with a critical matter that had also helped define Brexit and influenced the outcome of the June 2016 Referendum.
- Problems for Russian expatriates. The conflict created an uneasy status or situation for Russian expatriates (happening privately to be pro- or against Putin and/or the invasion) especially in the EU and US, accompanied by visa reviews and restrictions going forward, unless they already have secured political asylum or permanent residence. Being Russian clearly does not mean supporting Putin’s reckless move, even if 58% vs. only 23% of those “independently” polled in late February by phone in Russia would support the invasion (the now famous “Z” rallying letter also appearing, especially among the young), actually a lower number than on similar occasions, also knowing the likely responses obtained in autocracies. However, the sheer invasion may create very uncomfortable situations for expatriates in their day-to-day lives and interactions. It is worth noting that many well-integrated Russian communities abroad, like in Brighton Beach, New York, have shown strong solidarity with Ukraine. The Russian diaspora, many with links with Ukraine (almost stressing Putin’s key point) is actually gradually up in arms against the Russian leader.
- Russians who have already “spoken”. Some Russians have already decided to leave their own country on the first day of the invasion and when they could do so, foreseeing the worst for their country and themselves, though not sure whether they could eventually arrange permanent residence status in their new country of choice, which may also not be that welcoming. These departures underlined that not only Ukraine and Europe were under attack, but also the soft Russian autocracy disguised as a democracy in words only, that was suddenly shifting to a state of hard autocracy with mass arrests of war protesters and total state control of the media. It is reported that many “intellectuals” and tech workers have already left Moscow and St. Petersburg for the West.
- The European populists are lost. Many European populist or extreme right party leaders like those of the Rassemblement National in France, The Northern League in Italy and AfD in Germany kept praising Putin for years for his strong leadership, linked to a popular defence of national identity – especially after the 2015 refugee crisis. While Hungary’s Orban became expediently critical of Russia, Matteo Salvini (NL) is fast shredding his Putin t-shirts in Poland, Marine le Pen (RN) is struggling to destroy leaflets showing her shaking hands with Putin (her 2017 presidential campaign was partly financed by a Prague-based outpost of a Russian bank) while Eric Zemmour, the populist French media personality seeking the presidency is at a loss for words. The Ukraine invasion dented populists’ appeal across Europe while Macron, like other competent mainstream politicians, who is seeking a second mandate in April, is now reasonably certain today to close his deal for and with France in style.
- The risk of total war. While Russia and NATO do not want to fight each other “now”, the risk of escalation and tactical errors such as Russian military aircraft straying into NATO airspace is real, something that Russian nuclear forces being put on high alert for no military reasons other than strategic and tactical bullying does not help. Much attention is devoted by NATO to avoiding such tragic mistakes, hence the de facto no-fly zone for their own aircraft over Ukraine. The only reason for the West not to intervene militarily now is Putin’s unclear behaviour and his literally presiding over the largest nuclear forces in the world (itself another demonstration that the West was asleep for years, tolerating too much, essentially focused on the economy and naively believing in the End of History).
- The key Western issue going forward. The key lesson for the West and the world is clear. Resisting forcefully Putin’s Russia’s unprovoked aggression to defend Ukraine, Europe, democracy and liberalism while trying not to corner the increasingly unstable-looking Russian leader, given his clear lose-lose scenario in the making, and give him an irrational nuclear escape into common oblivion.
Perhaps the only solution to stop the disaster?
As many pundits have kept noting, these Russia-adverse developments may further unhinge an already unstable Putin, the once young thug from St Petersburg, which is always a risk. While Putin created a combined or osmosed KBG-oligarchic state system or scheme, gradually taking back or hijacking Russia in the 2000s (as the West conveniently slept) while softly taking on the world (via London-grad and other key helpful locations and service providers), he did so methodically and rationally, something that the invasion of Ukraine drastically stopped. Hence the rationale (for some, the only way to stop this) and so indeed need for a coup in the Kremlin or a revolution in Russia, two scenarios that seem unlikely given the grip Putin has on power, and especially the risk aversion of the Russian elite, even if such power architecture really hinges upon one man being around. Any change at the top would require some individuals in Putin’s political, military or oligarch inner circle to realise the severe long-term damages to Russia and act soon and decisively. The few early statements made by Western-friendly Russian officials though deeply-tied to Putin – like “sanctioned” former President Dmitry Medvedev or Foreign Minister Sergey Lavrov – were not encouraging in relation to a possible regime change, though they may not have had any room for manoeuvre at the time. As many experts have rightly stressed, failed wars have already played a role in bringing regime change in Russia, a feature that may add to wealth and way of life preservation.
How will the Russian people react to more autocracy and privations at home?
As for the Russian population that historically invariably supports Putin (80% support after the 2014 “little green men”) – in spite of the many arrests of brave protesters we saw – they still are given the propaganda Kool-Aid that this “special operation” (never an invasion) was all “to save the pro-Russian Eastern Ukrainians from persecution” and might not like the impact of the sanctions. As for the news from the “front,” Russian official media carefully omit any views of cities and civilians being bombed while criticism of the “special operation” by local and foreign media in Russia is now criminalised by law with independent platforms having been shut down and persistent rumours that Russia will cut itself off from the global internet. Side question: Will the Russian population eventually wake up as the sanctions are felt or conveniently blame the West and the world? Will there be enough of them to start disbelieving the official narrative?
Why did Putin really invade? (or the question with no answer)
Why Putin finally invaded beyond his official reasons will be a subject matter for generations of historians to come. Was it for his legacy? Was it out of frustrations of seeing a Russia, an average economic power mainly defined by its military spending and natural resources continually falling back in the pecking order of nations? Is it as China was now the US adversary? Was it Russia’s gradual irrelevance? Was he indeed unhinged as widely reported? Did he become too isolated in the pandemic era, with no inner circle able to make him see other options and the harm done to Russia by his reckless actions? Did he see democracy and liberalism, with all the faults we know, making Russian autocracy unworkable going forward? What are his real war aims, as he sticks to extreme objectives in ongoing “negotiations” with Ukraine? The list of questions is endless, going back to how Russia has been different from the rest of the developed world throughout the last century, and might not have changed much at its core since the end of the Soviet Union – as shown by Putin. It is clearer now through the Ukrainian invasion – or another conflict of that type – that opposing the West was, to Russia, always lurking in its essence ¬– this regardless of Putin’s clear unawareness of its cost-benefits for Russia and himself. It was also always a foregone conclusion, in spite of the many denials, as likely shown with the several thousand Putin-friendly Wagner mercenaries reported quietly dispatched to Ukraine in January (400 of whom to Kyiv in hiding mode, some tasked with assassinating President Zelensky, which they would have tried on three occasions in the first week of the invasion).
A fast-changing situation at all levels with no positive outcome for Russia
It is really amazing how things moved fast from a Munich 2.0 in the West as the invasion started and implicitly a Putin victory to the stark opposite in a manner of days, even if Putin eventually (and likely) won on the ground, this “whatever happens” in his own stark words to President Macron. This approach is actually delusional as military victory is always possible for Russia, however clumsy and highly challenging, but post-war is truly unmanageable given the local Ukrainian opposition and the massive need for Russian soldiers on the ground to ensure control (US military experts, puzzled by the Russian military inefficiency, put the number at a one million Russian occupation force to control the Western part of that great and loving “Russian family”). And then Russia would remain the top pariah state in the world while returning behind a stronger version of the old Iron Curtain.
Western determination is key and not easy
The West and the world should keep supporting Ukraine forcefully, with the clear focus on stopping the Russian invasion, preserving Ukrainian independence and avoiding a broader conflict of a WW3 type – this without surrendering to the strategy and tactics displayed by a Russian leadership lost in another age. All while Europe will need reshaping durably its energy strategies. Not an easy and risk-free task, all the more so as it is highly challenging to see, in a most positive scenario, how the West and the world could ever restore any working relationships with a Putin-led Russia.
What the invasion of Ukraine really is and has brought
Let’s never forget that the attack on Ukraine, even if not a NATO or EU member state, was also an attack on democracy, especially European democracy, however imperfect in the live fighting case of a Ukraine in constant transition. Many also rightly view it as an attack on liberalism by the champion of historical authoritarianism in existential crisis. Putin’s end achievement, while having no sustainable political endgame now (hence the key world risk), is having both harmed and transformed Russia into a North Korea 2.0 in a very efficient if distorted way. In many respects, the Russian invasion was a wake-up call on what really matters.
A useful if tough reminder and wake-up call
One of the benefits, though too positive a word given the context, of the Ukraine invasion is to remind our younger generations, especially but not only in the West, that nothing, like a peaceful world, is guaranteed and that there are other things to focus on than social media, video games and oneself, even if the former can also help fighting the devil in such crises.
The main lesson for Europe and the world
The main lesson of Putin’s invasion of Ukraine for Europeans is that the Transatlantic Alliance, born on the ashes of WW2 and the seeds of the Cold War, is more critical and relevant than ever – this on both sides of the ocean. This key partnership will now evolve with Europeans, via the EU, naturally taking a more responsible and direct commitment to their defence, a strategic sovereignty mantra long pushed by President Macron and now demonstrated by a new Germany, itself one of the major developments arising from the ongoing Ukrainian tragedy.
Warmest regards from a Prague that remembers 1968,
Serge
Desperate Measures 