Natylie Baldwin's Blog, page 93

The Bell: Russia’s wartime wealth redistribution

The Bell, 4/5/24

Nationalizations in Russia begin to hit smaller firms

Since the full-scale invasion of Ukraine, there have been a wave of high-profile nationalizations in Russia, mainly affecting big business people and powerful officials. Now, however, there are more and more cases of the state seizing relatively minor assets from low-level tycoons, and even those without any significant personal wealth.

Significant incidents involving the state seizure of assets from wealthy Russians amid the war in Ukraine include auto trader  Rolf  (owned by former opposition parliamentary deputy Sergei Petrov) and chemical company  Metafrax . In January, Russian prosecutors even ordered 13 plots of land along Moscow region’s prestigious Rublyovskoye Shosse be seized by the state (Rublyovka has long been regarded as Russia’s Millionaire’s Row). In a significant legal dispute over the nationalization of a magnesium factory in the central Russian city of Solikamsk, prosecutors Wednesday  stated  that they do not believe the apparently legal acquisition by minority shareholders of a stake in the plant on the Moscow Exchange was made in good conscience. This is a major case, which appears to be setting a precedent for further seizures.   The most recent target for nationalization is Russia’s biggest pasta company: Makfa. At the end of last month,  it emerged  that prosecutors had filed a lawsuit for the state to seize Makfa, and dozens of related companies. They estimated the combined value of the companies at about $500 million.The lawsuit names businessmen Mikhail Yurevich and Vadim Belousov as Makfa’s beneficiaries. In the 1990s, the two men privatized pasta and flour plants in the Ural mountains Chelyabinsk Region. Like many other such  business people, Makfa’s owners went on to enter politics. Yurevich became mayor of Chelyabinsk, a city of 1.2 million people, then governor of the region. Belousov was a parliamentary deputy from 2011 to 2023. The justification for nationalizing Makfa is that, after the two were elected to government roles, they continued to do business. But this seems a very thin excuse – hundreds of other Russian entrepreneurs followed a similar path.  Nationalizations have even begun to affect ordinary homeowners. Russian-installed officials in the occupied Ukrainian region of Zaporizhzhia this week announced their intention to pass a law to nationalize “abandoned” Ukrainian houses. While details are unclear, it seems that anyone who leaves the area could potentially lose their property. The authorities are promising to transfer nationalized housing to doctors, teachers and construction workers. Why the world should care

Russia appears to be undergoing its greatest redistribution of wealth in three decades. The idea of 1990s privatization was to create a new capitalist class that would help prevent a return to Communism. Now, asset transfers appear designed to boost loyalty to the Kremlin.

Russia’s ballooning budget deficit

Russia’s budget deficit has almost reached its planned annual limit (1.6 trillion rubles) in the first two months of this year, according to Finance Ministry figures. At the end of February the deficit stood at 1.5 trillion rubles. At the same time, spending in January and February hit 6.5 trillion rubles – up 17.2% on the same period a year ago.

How significant is this? Last year’s deficit  came to  3 trillion rubles ($32 billion), and economists  expect  Russia to surpass that this year. However, Russia’s budget deficit isn’t big by global standards. In 2023, the deficit  amounted to  1.9% of GDP, in 2022 it was 2.1%. That’s lower than the European maximum,  established  in 1992 with the creation of the European Union. Russia also has low levels of debt. Amid the war in Ukraine, the main source of funds to plug the deficit has been Russia’s rainy day fund, the National Welfare Fund (NWF). The cost of supporting Russia’s economy has almost  halved  the fund’s liquid assets from 8.9 trillion rubles before the invasion of Ukraine to 5 trillion rubles at the beginning of this month.Such a drop, however, is not critical,  according  to economist Dmitry Polevoy. The remaining liquid part of the NWF amounts to about 3.3% of GDP, which is better than the 2019 minimum of 2.1 trillion rubles (1.5% of GDP).The NWF is usually topped up with windfall oil revenues. But this year its liquid assets are likely to  dwindle further . Finance Minister Anton Siluanov  said  late in 2023 that liquid NWF funds could be exhausted this year if oil prices plunge. The average price for Russian oil would have to fall to $48 a barrel for this to happen (if spending remained as planned), an economist at one of Russia’s leading investment banks calculated for The Bell.Why the world should care

The extent of Russia’s budget deficit does not tell you very much about the country’s financial stability – it’s more important to look at where the money is coming from to pay for it. The fact is that, as long as oil prices remain relatively high, Russia will have plenty of cash to continue running deficits of this size.

Riley Waggaman: Is Putin Going to Sack Shoigu?

By Riley Waggaman, Substack, 4/26/24

The arrest of Deputy Defense Minister Timur Ivanov, who is accused of accepting a large bribe, has sparked a great deal of speculation on the Russian Internet. And with good reason.

Ivanov is Shoigu’s man. He served as deputy governor during Shoigu’s brief stint as head of Moscow Oblast before following his patron to the Defense Ministry. (If you’re looking for more background info on Ivanov, Rurik has a fun writeup.)

Also, everyone knew that Timur had been embezzling gazillions of rubles and pocketing gargantuan bribes for a long time. So why cuff him now, just a few weeks before Putin will pick a new cabinet?

It is these two things—the fact that Ivanov is part of Team Shoigu, and the timing of his arrest—which suggest that Ivanov might not be the only high-ranking official to get the boot. This is what patriotic, pro-SMO Russian media outlets are saying, at least.

Here’s a comment from a political scientist published by Nakanune:

It is clear that the official wording of the charge—a bribe of a million rubles—is only the beginning of the process, other charges will be added. Ivanov’s case had been in the works for a long time, the dossier was plump, the president personally issued the order for the arrest warrant and, probably, it is no coincidence that this happened right now, because after May 7, after the inauguration of the president, nominations for the main positions will be made—and this, of course, a signal that our Department of Defense may be about to change.

We need to look at the appointments that will be made; the whole logic of the process suggests that our Minister of Defense may also change.

Read full post here.

Here is further reporting from Reuters.

Arrest of Russian defence minister’s deputy may be strike by rival ‘clan’

By Andrew Osborn, Reuters, 4/26/24

LONDON, April 26 (Reuters) – Sergei Shoigu, Russia’s defence minister, has tried to send a “business as usual” message since his deputy was arrested on a bribery charge. But the widening scandal looks bad for him too, and is seen as a push by a rival clan to dilute his power.

On the surface, the timing of the detention on Tuesday of Timur Ivanov, one of Shoigu’s 12 deputy ministers, was unexpected, coming when Russia is waging war in Ukraine and the authorities have made discrediting the army a jailable offence.

Allegations of graft funding a lifestyle way beyond his means made against 48-year-old Ivanov by the late opposition politician Alexei Navalny’s anti-corruption foundation had been in the public domain for more than a year with no apparent fallout.

Yet this week state TV suddenly showed Russians a perplexed-looking Ivanov – who denies wrongdoing – dressed in full military uniform, standing in a clear plastic courtroom cage of the type that so many Kremlin foes have occupied before him.

His arrest, say Russian political analysts including some former insiders, shows how the war is shaping infighting between the “clans” that jostle for wealth and influence in Russia’s sharp-elbowed political system.

The clans – alliances of like-minded officials or business people – centre around the military, the intelligence and law enforcement agencies, the military-industrial complex and also include a group of people from President Vladimir Putin’s native St Petersburg who have known him personally for many years.

“Someone in the elite didn’t like the fact that Shoigu had grown stronger,” Tatiana Stanovaya, a senior fellow at the Carnegie Russia Eurasia Center, told Reuters.

“This doesn’t comes from Putin, but from people who are close to Putin who think that Shoigu has overplayed his hand. It’s simply a battle against someone and a ministry that has got too powerful and an attempt to balance the situation.”

Abbas Gallyamov, a former Kremlin speechwriter who is now designated as a “foreign agent” by the authorities, said he too saw the arrest as an attack on Shoigu that would weaken him.

“Ivanov is one of the closest people to Shoigu. His arrest on the eve of the appointment of a new government suggests that the current minister’s chances of staying in his chair are sharply declining,” he said.

Ivanov was arrested as a result of an investigation by the counterintelligence arm of the FSB security service, according to Russian state media.

LUCRATIVE MILITARY CONTRACTS

Ivanov’s is the highest-profile corruption case since Putin sent troops into Ukraine in 2022. State media have reported that Shoigu has removed Ivanov from his post.

The scandal comes just two weeks before Putin is inaugurated for a fifth presidential term and before a government reshuffle expected next month at which Shoigu’s job will, in theory, be up for grabs.

Ivanov was in charge of lucrative army construction and procurement contracts and is accused of taking huge bribes in the form of services worth, according to Russian media reports, at least 1 billion roubles ($10.8 million) in return for handing out defence ministry contracts to certain companies.

While few are willing to bet Shoigu will lose his job because of the scandal, given his loyalty to Putin, Ivanov’s arrest is seen as a reversal for his boss, who’s influence and access to the Kremlin chief has been elevated by his key role in the Ukraine war.

The Moscow Times cited a senior government official as calling the arrest a serious blow to Shoigu’s camp and cited a source close to the defence ministry as saying that the arrest was more about politics and “Sergei Shoigu’s weakening position” than about Ivanov.

Shoigu and the top army brass have at times been the focus of vicious criticism from Russian war bloggers and nationalists who have accused him, particularly after a string of retreats in 2022, of incompetence.

Shoigu survived an abortive coup led by Wagner mercenary leader Yevgeny Prigozhin, since killed in a plane crash, who in June last year orchestrated a march on Moscow to try to topple him, but his authority was damaged. Putin said the events could have plunged Russia into civil war.

‘FEASTING IN A TIME OF PLAGUE’

Shoigu had since managed to win back Putin’s trust, but the arrest of his deputy is a renewed setback.

“It indirectly damages Shoigu. Questions arise. How is it that a person who was close to him and who he brought on managed to steal so much under Shoigu’s own nose?” said Carnegie’s Stanovaya.

Sergei Markov, a former Kremlin adviser, has forecast that Shoigu, in post since 2012, will keep his job regardless.

“Everyone is wondering – could this be a signal to Shoigu that he will not be in the next government after 7 May?” Markov wrote on his official blog.

“Calm down. He will be. Shoigu has created a new army since the disastrous year of 2022 which repelled the offensive of the Ukrainian army in 2023. And in 2024, the army is already advancing.”

There is much about the background to Ivanov’s arrest that remains unknown. Multiple theories are circulating in Moscow about whether the bribery accusation is the whole story, with unconfirmed media reports that he may also be accused of state treason, something his lawyer has denied.

Some have suggested that it was perhaps his love of a Western lifestyle at a time when Putin says Russia is engaged in an existential struggle with the West that may have been his downfall.

Others believe his family’s fondness for luxury European holidays, yacht rentals, Rolls-Royce cars and opulent parties was fine before the war but was now seen as “feasting at a time of plague”, a Russian literary reference.

Shoigu has remained silent on the scandal, inspecting a space launch facility this week as if nothing had happened.

The Kremlin has told journalists to rely solely on official sources and has said that the often vast construction projects which Ivanov oversaw – such as the reconstruction of the Ukrainian port city of Mariupol – will not be affected. ($1 = 92.2705 roubles)

Jack Rasmus: Ukraine War Funding and Failed Russian Sanctions. Is the US Empire Shooting Itself in the Foot?

By Jack Rasmus, Global Research, 4/24/24

This past weekend, April 20, 2024 the US House of Representatives passed a bill to provide Ukraine with another $61 billion in aid. The measure will quickly pass the Senate and be signed into law by Biden within days.

The funds, however, will make little difference to the outcome of the war on the ground as it appears most of the military hardware funded by the $61 billion has already been produced and much of it already shipped. Perhaps no more than $10 billion in additional new weapons and equipment will result from the latest $61 billion passed by Congress.

Subject to revision, initial reports of the composition of the $61 billion indicate $23.2 billion of it will go to pay US arms producers for weapons that have already been produced and delivered to Ukraine. Another $13.8 billion is earmarked to replace weapons from US military stocks that have been produced and are in the process of being shipped—but haven’t as yet—or are additional weapons still to be produced. The breakdown of this latter $13.8 amount is not yet clear in the initial reports. One might generously guess perhaps $10 billion at most represents weapons not yet produced, while $25-$30 billion represents weapons already shipped to Ukraine or in the current shipment pipeline.

In total, therefore, weapons already delivered to Ukraine, awaiting shipment, or yet to be produced amount to approximately $37 billion.

The remainder of the $61 billion includes $7.8 billion for financial assistance to Ukraine to pay for salaries of government employees through 2024. An additional $11.3 billion to finance current Pentagon operations in Ukraine—which sounds suspiciously like pay for US advisors, mercenaries, special ops, and US forces operating equipment like radars, advanced Patriot missile systems, etc. on the ground. Another $4.7 billion is for miscellaneous expenses, whatever that is.

In other words, only $13.8 billion of the $61 billion is for weapons Ukraine doesn’t already have!

And that $13.8 billion is all Ukraine will likely get in new weapons funding for the rest of 2024! Like the $23 billion already in theater, that will likely be burned up in a couple of weeks this summer once Russia’s coming major offensive—its largest of the war—is launched in late May or early June. So what does the US do in order to continue to fund Ukraine’s economy, government and military efforts this fall and thereafter?

In other words, what’s the Biden/NATO strategy for aiding Ukraine, militarily and economically, after the $37 billion is expended by late this summer? Where’s the money to come from?

To understand how the US/NATO plan to fund subsequent weapons production for Ukraine in late 2024 and early 2025, one must consider not only the $61 billion bill but a second bill also passed by Congress this past weekend that hasn’t been given much attention in the mainstream media.

That second bill may potentially provide up to $300 billion for Ukraine from USA and its G7 allies, especially NATO allies in Europe where reportedly $260 of the $300 billion resides in Eurozone banks.

Biden/US Short Term Strategy 2024

The $61 billion is clearly only a stopgap measure to try to get the Ukraine army and government funded through the summer. Beyond that, the broader Biden strategy is to keep Ukraine afloat until after the US November elections. In addition to the $61 billion—which the US hopes will get Ukraine through the US November election (but likely won’t)—US strategy includes getting the Russians to agree to begin some kind of negotiations. The US will then use the discussions to raise a demand to freeze military operations on both sides while negotiations are underway. But Biden’s ‘freeze and negotiate’ strategy is dead on arrival, since it is abundantly clear to the Russians it is basically about US and NATO ‘buying time’ and Russia has already been played by that one. As the popular US saying goes: “fool me once shame on you; fool me twice shame on me”.

The Russians already fell for that ‘let’s suspend fighting and negotiation ploy’ with the Minsk II treaty back in 2015-16. It agreed to halt military operations in the Donbass back then but NATO and the Ukraine government used the Minsk agreement as cover to re-build Ukraine’s military force which it thereafter used to attack the Donbass provinces. European leaders Angela Merkel of Germany and Francois Hollande of France thereafter publicly admitted in 2022 that Minsk II was just to ‘buy time’.

The Russian’s were again similarly snookered at the Istanbul peace discussions held in April 2022. They were asked by NATO to show good faith in negotiations by withdrawing their forces from around Kiev, which they did. Negotiations were then broken off by Zelensky, on NATO’s strong recommendation, and Ukraine launched an offensive chasing the withdrawing Russians all the way back to the Donbass borders.

Russia is therefore extremely unlikely to fall a third time for a Biden/NATO request to ‘freeze’ military operations and negotiate again.

Biden may want to ‘buy time’ once more, but that hand’s been played twice already and the West will be (is being) told by Russia they aren’t interested in buying anything from the West and its ‘money’ no longer has any value.

Speaker Johnson’s Volte Face

The passage of the stop-gap $61 billion for Ukraine by the US House of Representatives was the result of House Speaker, Johnson, doing an about face and allowing the vote on the House floor after saying he wouldn’t for weeks. There’s been much speculation in the US mainstream media as to why Johnson reversed his position and allowed the Ukraine aid bill to the House floor for a vote. However, it’s not difficult to understand why he did reverse his view.

In recent weeks there was intense lobbying behind the scenes by US weapons companies with key Republican committee chairmen in the House. After all, at least $37 billion in payments for weapons—both already delivered and to be delivered—was involved. Not a minor sum even for super-profitable companies like Lockheed, Raytheon and the like. Rumors are that corporate lobbying had its desired effect on Republican committee chairs in the House, who then in turn pressured Johnson to allow the vote on the floor. The final vote in the House was 310 to 111 with 210 Democrats joining 100 Republicans to pass the measure—revealing that the core support for the US Military Industrial Complex in the House of Representatives is at least three-fourths (the US Senate likely even higher).

Read also: Russia’s Red Lines, Weaponizing Ukraine for War

So the vote was the result of a ‘parliamentary maneuver’ in which all the Democrats crossed over to support the Republican Speaker of the House (who de facto switched parties for the moment). A minority of Republicans joined him. A slim majority of Republicans opposed the measure. Their opposition remains. Thus it is highly unlikely Congress will appropriate more funding for Ukraine for the rest of this year—even when the $61 billion for weapons and Ukraine’s government run out by this late summer.

So what happens if and when the $61 billion is exhausted well before the November elections?

A possible answer to that question lies in the passage of a second Ukraine funding measure this past weekend.

The $61 billion was not the most important legislative action in the US House. While most of the media commentary has been on that Ukraine aid bill, hardly anything has been said in the mainstream media about another bill that the US House also passed over the weekend. This second measure has greater strategic implications for US global interests than the $37 billion in actual weapons shipments for Ukraine. This second measure is HR 8038, a 184 page bill misnamed the ‘21st Century Peace Through Strength Act’ which amounted to yet another package (the 16th?) of US sanctions.

Transferring Russia’s $300 Billion Assets to Ukraine

The first section of the bill arranges a procedure for the US to force the sale of the China company, Tik Tok, to a consortium of US financial investors, reportedly led by former US Treasury Secretary under Trump, Steve Mnuchin. This is part of the expanding list of sanctions on China. Also sanctioned are China purchases of Iranian oil, as well as a host of additional sanctions on Iran itself. However the most significant measure related to sanctions on Russia.

The 21st Century Peace Through Strength Act calls for the US to transfer its $5 billion share of Russia’s $300 billion of seized assets in Western banks that were frozen in 2022 at the outset of the Ukraine war. It provides a procedure to hand over the $5 billion to Ukraine to further finance its war efforts! This move has been rumored and debated in the USA and Europe since the assets were seized two years ago. But now the process of actually transferring the seized funds to Ukraine has begun with the passage of this second bill by the US House.

The USA’s $5 billion share in US banks is just a drop in the bucket of the $300 billion. Russia could probably care less about it, i.e. a mere ‘rounding error’ in its total revenue from sale of oil, gas and other commodities. But Europe holds $260 of the $300 billion, according to European Central Bank chair, Christine Lagarde. A tidy sum which Russia has threatened to retaliate against Europe should the EU follow the US/Biden lead and also begin to transfer its $260 billion to Ukraine.

The US bill is very clear that the transfer of the US’s $5 billion is imminent. The bill requires the Biden administration to establish a ‘Ukraine Defense Fund’ into which the US’s $5 billion will be deposited. If parts of the $5 billion are not in liquid asset form, the US president is further authorized by the bill to liquidate those assets and deposit the proceeds in the fund as well. So the seizure and transfer of the $5 billion to Ukraine is a done deal. And when it happens a legal precedent will be made that Europe may use to follow and transfer its $260 billion.

One can expect the US to pressure Europe strongly to do so. Biden is further authorized by the bill to ‘negotiate’ with Europe and other G7 partners to convince them to do the same—i.e. seize their share of the $300 billion, liquidate and then transfer the cash assets into the US ‘Ukraine Defense Fund’. And to date the US has been able to ‘convince’ Europe—via its control of NATO and influence over Europe’s economy and its umbrella political elites in the European Commission and European Parliament—to follow US policy without too much resistance.

Europe is fast becoming an economic satrapy and political dependency of the USA in recent decades, more than willing to bend in whatever policy direction the USA wants.

It is clear the seizure & redistribution to Ukraine of the $300 billion via the Ukraine Defense Fund is the means by which the US/NATO plan longer term to continue to finance the Ukraine war after the $61 billion runs out sometime in 2024; and certainly in 2025 and beyond. For the US has no intention of ending its NATO led proxy war in Ukraine anytime soon. It is just seeking to ‘buy time’ in the interim before its November elections.

For a majority of both parties in the US—Democrat and Republican—are united on continuing the war. It will matter little who wins the presidency or which party has majorities in Congress after November. Political elites on both sides of the aisle in Congress are united in pursuing the war in Ukraine—just as they are united in continuing to fund Israel as well as to continue the US’s steadily expanding economic war with China. In just the past week it is obvious more US sanctions on China are also coming soon, including possibly an announcements of financial sanctions on China for the first time after US Secretary of State, Blinken’s, most recent visit.

Failed Russian Sanctions: Past and Future

The geopolitical objectives of the US and its commitment to continuing its three wars are resulting in unintended, negative effects on the economies of the US and its G7 allies, especially Germany. But those same sanctions have had little to no negative impact on Russia’s economy.

The recently passed US transfer of its $5 billion share of Russia’s $300 billion will accelerate the negative consequences especially for Europe should the latter follow the US lead and distribute its $260 billion share to Ukraine, which it eventually will.

As EBC chairperson, Lagarde, put it referring to the US plan and legislation: “It needs to be carefully considered”. UK political leaders are already on record advocating the confiscation and transferring of Europe’s $260 billion holdings of Russian assets to Ukraine. Europe in recent years has a strong history of capitulating to US economic policies and demands. It will be no different this time.

Should Europe join the USA in transferring its $260 billion share of Russian assets in European banks (most of which is in Belgium), it’s almost certain that Russia will reply similarly and seize at least an equal amount of European assets still in Russia. The Russian Parliament has officially recently said as much.

Part of the G7/NATO sanctions to date included forcing Western businesses in Russia to liquidate and leave Russia. Some have done so. But many have not. Russia’s response has been to arrange the transfer of those EU companies’ assets that have left to Russian companies. This has actually stimulated the Russian economy. It resulted in Russian government subsidies—and thus government spending—to Russian companies assuming the assets, as well as additional investment by those companies after their acquisition of the departed EU companies’ assets.

In short, Western sanctions measure pressuring Western companies to leave Russia has backfired in its predicted result of reducing Russian government spending and business investment.

In contrast, the US/NATO’s 15 or so sanctions packages to date have had little, if any, impact on Russia’s economy since the commencing of the war in February 2022. To cite just a few of the performance of Russia’s key economic indicators under the sanctions regime: see this (note: all following data is from the US global research source).

Russia’s GDP in the latest six months has risen between 4.9% (3rd quarter 2023) and 5.5% (4th quarter). Russia’s PMI statistics show robust expansion for both manufacturing and services during the same period while in most of the major European economies both PMI indicators are contracting. Wage growth in Russia over the six months has averaged 8.5% for both quarters (whereas in the US is it less than half that and in Germany less than 1%).

Russian government revenues rose from roughly 5 trillion rubles in the third quarter to 8.7 trillion in the 4th. Military expenditures are up from $69.5 billion (dollars) to $86.3 billion. Consumer spending is at record levels in the latest quarter. Russian household debt as a percent of GDP remains steady at around 22% (whereas in the USA it is 62.5%). Crude oil production and general exports continue to steadily rise. Gasoline remains at 60 cents a liter (whereas in US five-six times that and in Europe more than ten times). And the unemployment rate in Russia remains steady at 2.9% (whereas in the US and Europe it’s a quarter to a half higher). Interest rates and inflation are higher in Russia but that represents an economy firing on all economic cylinders and is not necessarily a negative.

In short, it’s hard to find a single statistic that shows the Russian economy has been negatively impacted by the US/NATO sanctions regime over the past two years. Indeed, an argument can even be made the sanctions have stimulated the Russian economy not undermined it.

The latest sanction in the form of the US and G7 transfer of the $300 billion in seized Russian assets in western banks will almost for certain have a similar effect on Russia’s economy. Namely, distributing the $300 billion will result in Russian government seizure of at least an equivalent of European companies’ assets still in Russia. And that will provide funding for still further government subsidy spending benefiting Russian companies followed by more private investment.

Is the US Empire Shooting Itself in the Foot?

But there is an even greater consequence to follow the US and Europe’s desperate act of transferring Russia’s $300 billion in assets in Western banks to Ukraine.

Western bankers, economic policymakers, and many economists alike have warned against the seizure and transfer of the $300 billion. Heads of US and other central banks, CEOs of large commercial banks, and even mainstream economists like Shiller at Yale have continually warned publicly that transferring the assets will seriously undermine faith in the US dollar system which is the lynchpin of the US global economic empire.

What countries in the global South will now want to put (or leave) their assets in Western banks, especially in Europe, if they think the assets could be seized should they disagree on policies promoted by the empire? It’s clear the US has now begun to impose ‘secondary’ sanctions on countries that don’t abide by its primary sanctions on Russia. Will the US also seize the assets of these ‘secondary’ countries now in Western banks if they don’t go along with refusing to trade with Russia? And what about China, as the US has now begun to expand its sanctions—primary and secondary—on that country as well? Watch for unprecedented financial sanctions on China that may be forthcoming following Blinken’s visit to China this week.

The US does not realize this is not the 1980s. The global south has developed massively in recent decades. They are insisting on more independence and more say in the rules of the empire—without which they will simply leave now that an alternative is beginning to appear in the expansion of the BRICS countries.

Recently expanded to 10 members (all of which in the middle east and heavily oil producers), no fewer than 34 more countries have now petitioned to join the BRICS. Furthermore, it is reported that at the BRICS next conference in late 2024 an ‘alternative global financial framework’ will be announced! That will likely include some alternative currency arrangement as well as an alternative international payments system to replace the US SWIFT system (by which the USA via its banks can see who is violating its sanctions). Likely forthcoming will be something to replace the US-run IMF in order to ensure currency stability and an expansion of China’s Belt & Road as an alternative to the US run World Bank. (Perhaps that is the real topic of Blinken’s forthcoming China visit?)

In short, the US global economic empire is entering its most unstable period. And yet US policy is to accelerate alternatives to it by seizing and transferring funds to Ukraine to continue the war! The blowback from the seizure and transfer will prove significant, both to US and European interests. It will render past resistance to US sanctions pale in comparison.

How to Crash an Empire! 

History will show that US geopolitical objectives and strategies in the 21st century were the single greatest cause of the decline of US global economic hegemony over the last quarter century. Much of those objectives and strategies have been the work of the most economically ignorant foreign policy team in US history, who are generally referred to as the Neocons.

The seizure and transfer of the $300 billion may provide a way to continue funding Ukraine in the US/NATO proxy war against Russia through 2024 and beyond. But the timing could not be worse for US/Europe imperial interests, coming on the eve of the historic BRICS conference later this year. The desperate act of seizure and transfer will only convince more countries of the global South to seek another more independent alternative by joining the BRICS, or increasingly trade with that bloc.

History shows empires rest ultimately on economic foundations. And they collapse when those underlying economic foundations fracture and then crumble.

The longer run consequence of the $300 billion transfer and the exiting of the global South from the US empire can only be the decline in the use of the US dollar in global transactions and as a reserve currency. That sets in motion a series of events that in turn undermine the US domestic economy in turn: Less demand for the dollar results in a fall in the dollar’s value. That means less recycling of dollars back to the US, resulting in less purchases of US Treasuries from the Federal Reserve, which in turn will require the Fed to raise long term interest rates for years to come in order to cover rising US budget deficits. All this will happen to an intensifying fiscal crisis of the US state rapidly deteriorating already.

In other words, blowback on the US economy from declining US global hegemony—exacerbated by sanctions in general and seizure of countries like Russia’s assets in particular—is almost certain in the longer run, just as it will be for Europe’s economy in the even more immediate term.

But such is the economic myopia of the US neocons and the incompetent political elite leadership in both parties in the USA in recent years. As that other American saying goes: ‘We have found the enemy and they are us!’

*

Note to readers: Please click the share button above. Follow us on Instagram and Twitter and subscribe to our Telegram Channel. Feel free to repost and share widely Global Research articles.

This article was originally published on the author’s website, Jack Rasmus.

Dr. Rasmus is author of the books, ‘Central Bankers at the End of Their Ropes’, Clarity Press, 2017 and ‘Alexander Hamilton and the Origins of the Fed’, Lexington Books, 2020. Follow his commentary on the emerging banking crisis on his blog, https://jackrasmus.com; on twitter daily @drjackrasmus; and his weekly radio show, Alternative Visions on the Progressive Radio Network every Friday at 2pm eastern and at https://alternativevisions.podbean.com.

Neutrality Studies: Destroying Peace Since 1949. NATO: Anatomy of a Bad Idea – A Discussion with Anatol Lieven, Jack Matlock & John Mearsheimer

YouTube link here.

Tarik Cyril Amar: Ukraine’s military is losing the fight not only against Russia but also against a gambling addiction epidemic.

By Tarik Cyril Amar, Website, 3/30/24

Ukraine is now on the verge of a catastrophic defeat. On the ground, recent Russian advances – especially since the fall of the key town (really, fortress) of Avdeevka – may not (yet) look rapid, but they are steady and have become highly predictable. Russia has the initiative, and it is a matter of Moscow’s decisions how fast the Ukrainian crumbling will be exploited. Once the Russian military commits its reserves (no, they have not yet entered the scene), the map could change with the kind of speed that will shock out of their dreams even the most propagandized victims of Western information warfare. This may happen very soon or a little bit later. But this war is now very unlikely to last into 2025.

We are also seeing clear signs of panic in the West and Kyiv/Kiev: Talk about the possibility of defeat has reached mainstream media and conformist “experts” – such as the German Christian Mölling – who have spent the last two years as relentless war boosters are rushing for the rhetorical exits. The blame game almost starts among those who have most to be ashamed of.

Ukraine’s president Volodymyr Zelensky, meanwhile, has told the public that he can imagine a peace based on the territorial status quo before the escalation into all-out-war of February 2022. For that, it is, of course, far too late. That solution – highly favorable to Ukraine, as its own then chief-negotiator has recently admitted – was on the table in the spring of 2022. But Kyiv/Kiev chose to be misled by the West which urged it to continue the war. As recent statements by the Russian leadership – all the way up to President Vladimir Putin – have made clear, such an offer will not be made again. This war will now end on terms much worse for Ukraine.  

Against this dismal backdrop, Strana.ua, one of Ukraine’s most important and popular news websites, is reporting that the Ukrainian military is struggling with an online gambling “epidemic.” And make no mistake, this is not a “scourge,” as Strana.ua puts it, restricted to those serving in the rear. According to prominent Ukrainian lawmaker Oleksy Honcharenko, 90 percent of those on the “frontlines” are gambling and betting so badly that they lose enough to go into debt. He believes that the problem is pervasive and severe enough to “destroy the morale” of the troops. Their return into civilian life – if they are lucky enough to return, of course – is marred by having “nothing,” and they’ll be “ideal targets for the world of crime.” So Honcharenko. [https://strana.news/news/461179-kak-ihromanija-stala-bichom-ukrainskoj-armii.html]

An army of men and women abused for a Western proxy war, indoctrinated and also often enough brutally cajoled by a regime that has sold out Ukraine’s interests and hundreds of thousands of lives to the (still) neocon strategies of Washington – and all that for what?

To be admitted into NATO? But that will not happen and was never a good idea to begin with. To defend democracy and “civil society”? But Ukraine has no democracy; it is a regime every bit as personal as that of Russia, and, if anything, more corrupt. “Civil society”? A label for those with decent English and good connections to Westerners. It means nothing for the many others churned up in a meatgrinder of a war. To join “the West”? Wait for the backlash once this war is over – probably soon – and Ukrainians will have to process the fact that the West has used them and then dropped them.

In short, there is nothing really surprising about the fact that Ukrainian soldiers have found a destructive form of escapism. As one of them puts it, “the longer the war is lasting, the more you want to distract yourself from the things going on around you, just forget about everything.” Soviet troops in Afghanistan and American ones in Vietnam used drugs for the same purpose. And yet, there is something almost too symbolic about the Ukrainians’ choice of self-ruin: Gambling and betting. They are imitating the sins of their leaders, as if in a collective gesture of despair as well as what is left of defiance. And, of course, having an addiction that eats up everything you may want if you survive, is a way of saying that you don’t much believe in your surviving, or – perhaps even worse – that you have stopped caring.

Ukrainians do not deserve their government of shortsighted gamblers – and losers. They do not deserve to have become dispensable chips in a geopolitical game that the West has bet on – and is losing. They deserve a rapid end to this war and a return to a life in peace that they enjoy enough not to want to gamble it away.

Kim Iversen: Poland to Put Nukes “On Putin’s Doorstep”, Ukraine to Forcibly Conscript Ukrainian Men Overseas

YouTube link here.

James Carden: The New Cold War’s Second Wind

By James Carden, Landmarks Magazine (Substack), 4/3/24

[Editor’s note: this is the third installment of the Simone Weil Center’s Symposium on ‘Containment 2.0.’ The first two installments can be read here and here]

The specter of Trump II haunts the dreams of those  who look back on the first Cold War and see not the terror of the Cuba Missile Crisis; the bloodletting of Vietnam; the move to DEFCON III in 1973; or the nuclear false alarms of the Carter and Reagan eras. Rather, they see a halcyon era wherein the US, led by a wise bipartisan establishment, weathered the storm thanks to the wise and patient application of the containment doctrine. 

To their barely concealed dismay, they realize that the years-long 100 billion dollar plus effort at propping up an authoritarian kleptocracy centered in Kiev is indeed flailing: The money is running out, and popular (as well as political)  support for the venture is on a downward trend. They see in Trump (wrongly, I happen to think) an existential threat to America’s proxy war in Ukraine and so, the administration and the US establishment are desperately trying to create a renewed sense of urgency regarding the Ukrainian war effort. Their project now needs, above all, a second wind, and reinvigoration requires invention. 

Once upon a time Secretary of State Dean Acheson, whose ideological progeny now stalk the corridors of power in Joe Biden’s Washington, advised President Truman that the public case for the Truman Doctrine had to be “clearer than truth,” or, put another way, not true at all.

Having been debased by the decade-long editorship of Gideon Rose, the once august journal Foreign Affairs staggers along – a zombie from another time. But it maintains its uses to the established order. And one of its principle uses is to provide intellectual justification for the unjustifiable. It wouldn’t be the first time. By the late 1940s, the American people were exhausted and war weary. A second wind was needed and the threat of  a monolithic Communist threat provided the oxygen. George F. Kennan’s 1947 “X” article in the same journal served a similar purpose for the first Cold War, not dissimilar to Winston Churchill’s anti-communist clarion call in Fulton, Missouri the year before.

Kennan was brilliant, but he was also occasionally hysterical. And cooler heads, such as Walter Lippmann, realized that the “X” strategy condemned us to an unnecessarily drawn out and dangerous Cold War. As Lippmann biographer Ronald Steele points out,

…To confront the Soviets at “every point where they show signs of encroaching” was, Lippmann charged, a “strategic monstrosity” doomed to fail. It could be attempted only by “recruiting, subsidizing, and supporting a heterogeneous array of satellites, clients, dependents, and puppets.” Propping up anticommunist regimes around the periphery of the Soviet Union would require unending American intervention.”

To Kennan’s great credit he soon came to realize that containment abetted militarization and presented militarists in government like Acheson, Paul Nitze, Frank Wisner, Allen and John Foster Dulles and many others besides, an intellectual and strategic framework to do their worst. Which they did.

The March 2024 issues of Foreign Affairs is once again playing its part – and while the dramatis personae are different, the story remains much the same. Which brings us, alas, to the article in question: “America’s New Twilight Struggle With Russia” by Max Bergmann, Michael Kimmage, Jeffrey Mankoff, and Maria Snegovaya. The first tip-off that the article’s purpose is to propagandize rather than inform is the presence of Bergmann on the byline. Bergmann, before ascending to his current perch at CSIS, worked under the shameless Clinton partisan Neera Tanden at John Podesta’s Center for American Progress where he directed a Neo-McCarthyite “Moscow Project,” one of the more unhinged products of an unhinged time. 

The four (!) authors argue for the broadest possible application of the containment doctrine in the most alarmist terms (“clearer than truth”).  “Kennan’s vision of containment focused primarily on Europe,” they write. “Today, post-Soviet Eurasia and the rest of the world will be more central.” [Emphasis mine]. 

We are further  told, “Ukraine’s defense is crucial for European stability and for preventing the spread of Russian power globally.” And still more, “Containing Russia in Ukraine means keeping the line of contact as close to the Russian border as possible, constraining Russia’s expansionist tendencies.” In other words, we are supposed to believe that a carve-out of Novorossiya presages an attempt by Russia to expand globally? The authors fail to note that Russia’s 2024 defense budget, at $109 billion, is roughly ten times less than US defense expenditures and ten times less than NATO defense spending. Where are they going to expand to?Transnistria? 

In the authors’ telling, Containment 2.0 will differ from the original through its steady application of American power throughout Asia. As they put it, “Any strategy for containing Russia must account for resource commitments to the Indo-Pacific and for the impact of U.S. policy on the Chinese-Russian relationship.” What they fail to acknowledge is that this has already been tried before – and the results did not redound to the benefit of the United States. The original iteration of containment, along with Paul Nitze’s militarization of it (though his authorship, in 1950, of NSC-68) set the stage for the ‘Domino theory’ which in turn begat Vietnam. I can confidently assume that at least two of the four authors are fully aware of this, but the purpose of the exercise, as I said, is propaganda not elucidation.

Withal, it never seems to occur to the authors that the war and its continuation hinge on one issue and one issue alone: NATO: No NATO, no war. Ukrainian neutrality was and remains the key to unravelling the Gordian knot. But recognizing this would require the authors to surrender their collective dream of a new Cold War in which they can play the part of architect, of grand strategist, of hero. 

In the end, the New Cold War needed a second wind and Foreign Affairs answered the call. 

Just like old times.

Wyatt Reed: UK insurers refuse to pay Nord Stream because blasts were ‘government’ backed

By Wyatt Reed, The Grayzone, 4/17/24

The legal team representing high-powered insurers Lloyd’s and Arch says that since the Nord Stream explosions were “more likely than not to have been inflicted by… a government,” they have no responsibility to pay for damages to the pipelines. To succeed with that defense, the companies will presumably be compelled to prove, in court, who carried out those attacks. 

British insurers are arguing that they have no obligation to honor their coverage of the Nord Stream pipelines, which were blown up in September 2022, because the unprecedented act of industrial sabotage was likely carried out by a national government.

The insurers’ filing contradicts reports the Washington Post and other legacy media publications asserting that a private Ukrainian team was responsible for the massive act of industrial sabotage.

A legal brief filed on behalf of UK-based firms Lloyd’s Insurance Company and Arch Insurance states that the “defendants will rely on, inter alia, the fact that the explosion Damage could only have (or, at least, was more likely than not to have) been inflicted by or under the order of a government.”

As a result, they argue, “the Explosion Damage was “directly or indirectly occasioned by, happening through, or in consequence of” the conflict between Russia and Ukraine” and falls under an exclusion relating to military conflicts.

The brief comes a month after Switzerland-based Nord Stream AG filed a lawsuit against the insurers for their refusal to compensate the company. Nord Stream, which estimated the cost incurred by the attack at between €1.2 billion and €1.35 billion, is seeking to recoup over €400 million in damages.

Swedish engineer Erik Andersson, who led the first private investigative expedition to the blast sites of the Nord Stream pipelines, describes the insurers’ legal strategy as a desperate attempt to find an excuse to avoid honoring their indemnity obligations.

“If it’s an act of war and ordered by a government, that’s the only way they can escape their responsibility to pay,” Andersson told The Grayzone.

Following a report by Pulitzer Prize-winning journalist Seymour Hersh which alleged that the US government was responsible for the Nord Stream explosion, Western governments quickly spun out a narrative placing blame on a team of rogue Ukrainian operatives. Given the lack of conclusive evidence, however, proving that the explosions were “inflicted by or under the order of a government” would be a major challenge for defense lawyers.

Even if the plaintiffs in the case are able to wrest back the funds in court, they are likely to face other serious hurdles. Later in the brief, lawyers for Lloyd’s and Arch suggest that even if they were required to pay up, anti-Russian sanctions would leave their hands tied.

“In the event that the Defendants are found to be liable to pay an indemnity and/or damages to the Claimant,” the brief states, “the Defendants reserve their position as to whether any such payment would be prohibited by any applicable economic sanctions that may be in force at the time any such payment is required to be made.”

After they were threatened with sanctions by the US government, in 2021 Lloyd’s and Arch both withdrew from their agreement to cover damages to the second of the pipelines, Nord Stream 2. But though they remain on the hook for damages to the first line, the language used by the insurers’ lawyers seems to be alluding to a possible future sanctions package that would release them from their financial obligations. “Nord Stream 1 was not affected by those sanctions, but apparently sanctions might work retroactively to the benefit of insurers,” observes Andersson.

The plaintiffs may face an uphill battle at the British High Court in London, the city where Lloyd’s has been headquartered since its creation in 1689. As former State Department cybersecurity official Mike Benz observed, “Lloyd’s of London is the prize of the London banking establishment,” and “London is the driving force behind the transatlantic side of the Blob’s “Seize Eurasia” designs on Russia.”

But if their arguments are enough to convince a court in London, a decision in favor of the insurers would likely be a double-edged sword. Following Lloyd’s submission to US sanctions and its refusal to insure ships carrying Iranian oil, Western insurance underwriters (like their colleagues in the banking sector) are increasingly in danger of losing their global reputation for relative independence from the state. Should the West ultimately lose its grip on the global insurance market — or its reputation as a safe haven for foreign assets — €400 million will be unlikely to buy it back.

Paul Robinson: If History is any Guide, ‘Containment 2.0’ May Become Another Bloody Debacle for the West

By Paul Robinson, Landmarks Magazine (Substack), 4/2/24

[Editor’s note: this is the second installment of the Simone Weil Center’s Symposium on ‘Containment 2.0.’ The first installment can be read here.]

There is an interesting line in Bergman, Kimmage, Mankoff, and Snegovaya’s article ‘America’s New Twilight Struggle with Russia,’ in which the authors talk of ‘checking Russian influence in Central Asia and Africa.’ The distance between the United States and Kazakhstan is about 6,500 miles. The distance between Russia and Kazakhstan is zero, as the two are neighbours. Yet for some strange reason, it is considered quite natural that the United States should seek to dominate a region 6,500 miles from its shores, whereas ‘Russian influence’ right on its own borders is deemed a threat that must somehow be contained.

This example aptly illustrates what one might consider the extreme self-centeredness of the call for a new policy of containment. The idea that other states might have legitimate interests, even next to their homes, is entirely absent, while the interests of the United States are deemed to span the entire globe. Moreover, it is taken for granted that American assistance is something that all people desire, that it is for the good of all, and moreover that it will inevitably produce positive outcomes for all concerned, other, of course, than a few malign actors. The fact that others might have different ideas, or that American assistance might actually be harmful rather than helpful is not considered. What is good for us is good for them.

The experience of containment in the Cold War tells a rather different story. Containment sounds like a relatively benign, peaceful strategy compared with ‘rollback,’ the alternative of the time that envisioned actively pushing communism back from its existing boundaries. In reality, containment was an extremely bloody affair. The war in Vietnam was possibly the most extreme example, but bloodshed followed containment almost everywhere outside Europe. The massacres in Indonesia in 1965-66, for instance, probably claimed the lives of about half a million people. Proxy wars backed by the United States in countries like Angola, Mozambique, and Afghanistan claimed the lives of hundreds of thousands (perhaps even millions) more. It is hardly an experience that one would wish to repeat.

To be fair, Bergmann et al. do admit that containment came with ‘abuses.’ They argue that outside of Europe, Containment 2.0 should rely not on military intervention but on economic and political assistance. But it is clear that the impetus for their proposal comes from the war in Ukraine and that in that instance their focus is, in fact, military. As they write: ‘that strategy should retain Ukrainian victory as a long-term goal. Forcing Russia to abandon all or most of the territory it has occupied there will push the Russian threat further from Europe’s borders … a Ukrainian military victory will require larger and more sustained Western military assistance.’

Interestingly, the stated aim here is not actually containment but rollback – ‘forcing Russian to abandon all or most of the territory it has occupied.’ This is an extremely ambitious program, and even if were achievable it could not be achieved without a very long war that would cost the lives of an extremely large number of people (including, of course, Ukrainians), as well as the wholesale destruction of Ukrainian infrastructure. Containment 2.0 is a recipe for prolonged and bloody war.

It’s also unlikely to succeed. War is full of uncertainty, so one can never tell for sure, but as things stand, the prospects of Ukraine recapturing most, or all, of its lost territory seem very low. Pursuing that goal will lead not merely to death and destruction, but to futile death and destruction.

This doesn’t seem to bother the new Cold Warriors. Convinced that they are ‘helping’ Ukraine, they lead it further into the abyss, just as their predecessors led Vietnamese, Afghans, Angolans, and others into the abyss in decades past.

Looking at this from a philosophical point of view, one might complain that the issue here is a failure to follow Kant’s categorical imperative and to view people as ends in themselves rather than a means to an end. The end is weakening Russia and China, and if others suffer in the process, we shrug our shoulders and consider it a price worth paying, knowing full well that it is not us but others who are paying the price.

I think, though, that this complaint is not entirely accurate because the architects of these policies strike me not so much as cynics who know full well what they are doing but as true believers, who really imagine that their ‘help’ is in fact help, that the United States is a force for good in the world, and that spreading its influence and undermining that of others is thus for the benefit of all humanity.

This comes through in the talk of ‘support for governance reform and trade’ and of countering ‘Russian influence outside Europe primarily through development assistance, trade, and investment.’

The first thing to note about this is that it is not nearly as new as the authors would like readers to think it is. Development assistance, trade, and investment were key aspects of Cold War-era containment. From the mid-1950s, for instance, the United States invested heavily in southern Afghanistan, through projects such as the Helmand Valley Authority. Other developing countries were similar recipients of American aid. This built on modernization theory, developed by the likes of Eugene Staley and Walt Rostow, who imagined that one could export the experience of the American New Deal to Africa and Central Asia, enable local economies to ‘take off,’ build a liberal civil society, and at the end of it all save the recipients of US aid from communism.

It generally didn’t end well. US-backed irrigation projects in the Helmand Valley, for instance, left it not a blooming garden but a salty desert (I exaggerate a bit, but it is generally agreed that the results were not very positive). Similar outcomes appeared elsewhere.

Unfortunately, the world is littered with failed development assistance projects. If Bergmann et al., imagine that the United State has gotten better at this since the Cold War, they should read the reports of the U.S. Special Inspector General for Afghanistan Reconstruction, which provide excruciating details of billions of dollars squandered on failed, and often counterproductive, aid projects in the years between 2001 and 2021. The U.S. and its allies imagined that they were helping Afghanistan, but their aid just made things worse. It is a recurring pattern. If I truly believed that the U.S. and its allies really knew what they were doing when it came to development assistance, support for good governance, and the like, I might support it. But the evidence suggests rather the opposite.

Beyond this, one gets no sense from Bergmann et al. that people outside Europe might not want American assistance or might not regard American models of development as appropriate for their circumstances. Their article speaks of the ‘brutality and corruption of Russian-backed juntas,’ by which one imagines they have in mind the military governments that have recently taken over countries such as Niger. But there is a reason why these ‘juntas’ seized power and seem to enjoy some popular support, and that is that their predecessors were themselves corrupt and incompetent. And if the Russians also enjoy some popular support in parts of Africa (as seems to be the case), it is because the Western backers of the previous regimes had become thoroughly disliked.

If Africans in some instances choose to prefer Russia over America, France, or Britain (a choice possibly partly determined by memories of colonialism and the Soviet Union’s support of national liberation struggles), who are we to tell them that they must do otherwise? There is, it seems to me, a profound arrogance to this approach, as well as unwillingness to consider that others might legitimately view things differently and have a right to go their own way.

At this point, it is perhaps necessary also to express what some might consider a somewhat cynical view about the expressed intent to promote U.S. interests by ‘supporting locally led initiatives to foster civil society.’ Superficially, it sounds totally benign. Dig a bit deeper, though, and there are grounds for concern.

In its broadest definition, civil society includes any organization operating outside the purview of the state, from the local knitting club upwards. In the meaning more often used by Western politicians, in the context of countries they do not like, civil society is a much narrower concept. It is more strictly a Westernizing, liberal civil society. The term civil society thus refers to that segment of society that is politically opposed to the ruling regime, wishes to advance Western understandings of democracy and human rights, align its country more closely politically with the West, and more generally Westernize that country’s institutions and values. As such it is often at odds with much of the surrounding population. Western support for it can prove deeply destabilizing, particularly when civil society of such a sort succeeds in taking power against the wishes of important segments of the population, leading to a backlash and in the worst circumstances civil war. This is more or less what happened in Ukraine in 2014. Beyond that, overt Western support for this kind of civil society may have the effect of tainting it in the eyes of the authorities, resulting in its suppression. This can be seen in Russia, where the association of liberal civil society with the West has arguably had the effect of persuading the state that it is a fifth column being promoted by the West to undermine the state from within. By promoting democracy and liberal values in such a way, Western states can inadvertently undermine it.

The repeated failures not only of military intervention but also of development assistance, democracy promotion, and the like, never seems to stop Western liberal internationalists from wanting to do the same thing all over again. This reveals another serious deficiency – a lack of self-awareness. Such is our certainty that we are the ‘good guys’ that we seem all too often to be incapable of understanding that our record does not match our expressed intention and that others might therefore have very good reason to view us as a danger. When, for instance, Russians say that they view NATO expansion as a threat, they are dismissed as talking nonsense. In our minds, we know that NATO is purely defensive. If others think something different, they are wrong, and should therefore be ignored. But it doesn’t actually matter if they are wrong. If that is how they will think, it will affect their behaviour, and it must therefore be taken into consideration.

Take, for instance, the article under discussion. How do the authors imagine it will be received in Moscow or Beijing? Do they imagine that people there will somehow reconsider their actions? Or is it more likely that on reading it, even sceptics will conclude that their leaders are right, that the West is out to get them, and that they must therefore resist? I suspect that the latter answer is more likely. If so, Containment 2.0 is likely to prove deeply counterproductive.

Volodymyr Ishchenko: “Foreign Affairs Published a Very Well-Researched Article…”

By Volodymyr Ishchenko, Facebook, 4/16/24

Ishchenko is a left-wing Ukrainian sociologist and a Research Fellow at Alameda Institute and works at Research Associate at Osteuropa-Institut Berlin and is a member at PONARS Eurasia.

Foreign Affairs published a very well researched article by Samuel Charap and Sergey Radchenko on the Istanbul talks based on previously unpublished drafts of the peace agreement. It argues against a number of myths and misconceptions about why the talks failed and also why the war started.

https://www.foreignaffairs.com/ukraine/talks-could-have-ended-war-ukraine

In particular, they argue against the explanation that the talks failed because it was allegedly impossible to continue negotiations with Russia after the discovery of the war crimes in Bucha.

“Still, the behind-the-scenes work on the draft treaty continued and even intensified in the days and weeks after the discovery of Russia’s war crimes, suggesting that the atrocities at Bucha and Irpin were a secondary factor in Kyiv’s decision-making.”

Unfortunately, the authors did not mention that the most systematic evidence we have shows that the public opinion in Ukraine was favorable to the negotiations with Russia to end the war even after Bucha. A poll commissioned by NDI in May 2022 showed that 59% of Ukrainians supported negotiations with Russia.

Since then, that number has plummeted, reflecting overheated expectations of Ukraine’s victory, fueled in particular by the West. P. 20 here:

Click to access May%202023_wartime%20survey_Public%20version_%20Eng.pdf

Considering all the methodological issues and biases with war-time polling in Ukraine, 59% was an indication of a strong majority for negotiations. Just after the loss of Bakhmut, support for negotiations began to rise, despite more war crimes and bombing of energy infrastructure. What may be relevant here is the possible pressure of a better organized, mobilized, and armed minority camp against a fragmented, disorganized, and disarticulated majority. The same class and political asymmetry that contributed to the stagnation of Minsk agreements.

https://brill.com/view/journals/rupo/8/2/article-p127_2.xml

The article also challenges the ethnonationalist explanation of the war. Its defenders would have to argue that the very “identity” issues that the negotiating parties considered least important for a peace agreement were supposedly the most important reasons for starting the war

“Putin’s blitzkrieg had failed; that was clear by early March. Perhaps he was now willing to cut his losses if he got his longest-standing demand: that Ukraine renounce its NATO aspirations and never host NATO forces on its territory. If he could not control the entire country, at least he could ensure his most basic security interests, stem the hemorrhaging of Russia’s economy, and restore the country’s international reputation.

Second, the drafts contain several articles that were added to the treaty at Russia’s insistence but were not part of the communiqué and related to matters that Ukraine refused to discuss. These require Ukraine to ban “fascism, Nazism, neo-Nazism, and aggressive nationalism”—and, to that end, to repeal six Ukrainian laws (fully or in part) that dealt, broadly, with contentious aspects of Soviet-era history, in particular the role of Ukrainian nationalists during World War II.

It is easy to see why Ukraine would resist letting Russia determine its policies on historical memory, particularly in the context of a treaty on security guarantees. And the Russians knew these provisions would make it more difficult for the Ukrainians to accept the rest of the treaty. They might, therefore, be seen as poison pills.

It is also possible, however, that the provisions were intended to allow Putin to save face. For example, by forcing Ukraine to repeal statutes that condemned the Soviet past and cast the Ukrainian nationalists who fought the Red Army during World War II as freedom fighters, the Kremlin could argue that it had achieved its stated goal of “denazification,” even though the original meaning of that phrase may well have been the replacement of Zelensky’s government.

In the end, it remains unclear whether these provisions would have been a deal-breaker. The lead Ukrainian negotiator, Arakhamia, later downplayed their importance.”

The evidence is still consistent with the class conflict explanation. Putin could have agreed to the compromise (and may now be genuinely sending negotiating signals) precisely because he had already achieved his main transformative goals for Russia.

Last but not least. Although the authors reject the cartoonish argument that the West “forced” Zelenskyi to abandon the deal, they do not deny the “agency” of Boris Johnson and the US elite and their share of responsibility for the failure of the talks.

“[I]nstead of embracing the Istanbul communiqué and the subsequent diplomatic process, the West ramped up military aid to Kyiv and increased the pressure on Russia, including through an ever-tightening sanctions regime.

Notwithstanding Putin’s manipulative spin, Arakhamia was pointing to a real problem: the communiqué described a multilateral framework that would require Western willingness to engage diplomatically with Russia and consider a genuine security guarantee for Ukraine. Neither was a priority for the United States and its allies at the time.

In their public remarks, the Americans were never quite so dismissive of diplomacy as Johnson had been. But they did not appear to consider it central to their response to Russia’s invasion. Secretary of State Antony Blinken and Secretary of Defense Lloyd Austin visited Kyiv two weeks after Johnson, mostly to coordinate greater military support. As Blinken put it at a press conference afterward, “The strategy that we’ve put in place—massive support for Ukraine, massive pressure against Russia, solidarity with more than 30 countries engaged in these efforts—is having real results.”

The Western officials who dissuaded Zelenskyi from the peace deal and instead fueled exaggerated expectations of Ukraine’s victory with promises of support “for as long as it takes” surely understood the consequences and who will pay most of the price. The authors attribute it to the risk aversion to commit to the war with Russia. Ironically, we ended up in a situation where the risk of a world war with Russia has only become higher than it was in 2022, not to speak of hundreds of thousands of lost lives and urban destruction.

Was it just a mistake to underestimate Russia? As with Putin’s decision to launch the invasion, it was probably a combination of mistake and rational interest. As I feared back in March 2022, if the West ONLY sends weapons and escalates sanctions without pursuing a diplomatic path, it means that at least a part of the Western elites was actually interested in this war.

https://www.rosalux.de/en/news/id/46153/stopping-the-war-is-the-absolute-priority