Some Ukrainian Background.

The first “Russian” state was Kievan Rus, created by conquering Vikings.[1]  In the 13th Century the Mongols showed up and put a stop to that.  “Independent” Russia came to mean a small territory around Moscow.  Over the following centuries, Ukraine became a contested ground between empires: the “Golden Horde” of the Mongols, the Polish-Lithuanian Commonwealth, the rising Austrian Empire, and an expanding Romanov Russia.  By the end of the 18th Century, the Austrians held Galicia, while the rest of the Ukraine belonged to Russia.

As was the case elsewhere in Eastern Europe in the second half of the 19th Century, local nationalism began to burn.  Tsarist Russia repressed this just as it did every other form of non-Russian nationalism.  Still, Ukrainian nationalism survived.  When the First World War wrecked the Austrian and Russian Empires, Ukraine declared its independence (1917).

Tragedy followed for Ukrainians: the territory and its people were savaged by Poles with an expansive definition of “historical” Poland; and by “Whites,” “Reds,” and a variety of crazy people like the Anarchist anti-semite Nestor Makhno during the Russian Civil War and the Russo-Polish War.  Then Ukraine fell under the hammer during Josef Stalin’s collectivization of agriculture in the 1930s.  About 3.5 million Ukrainians were starved to death during this “Harvest of Sorrow.”[2]

During the drive for industrialization that followed close on the heels of the “terror famine,” Stalin moved in millions of Russians to eastern Ukraine.  Their descendants still form a large part of the population of Ukraine.  Then the Second World War brought both massive suffering and deep divisions, as Ukrainians fought on both side.

In 1954, possibly trying to make amends to the Ukraine for the whole unfortunate “terror famine” thing, the Soviet Union transferred Crimea from Russia to Ukraine.  This remained something of a sore spot for the ethnic Russians of Crimea.

When the Soviet Union collapsed in 1991, Ukraine held a referendum on independence.  Overall, 90 percent of those who voted supported independence.   However, voter participation varied a good deal throughout Ukraine.  The Russians weren’t happy with this secession, but there wasn’t much they could do about it because Russia itself was in massive turmoil.

The post-independence history of Ukraine has not been a happy one.[3]  Corruption is endemic.  Mismanagement is widespread.  Bureaucracy is pervasive and stifling.  Investment in productive capacity fell far short of needs.  Where banks did lend, they often made bad loans.  Business law and an incompetent (or corrupt) judiciary make property insecure.  Investors don’t want to risk their capital.  By 2014, Ukrainians were among Europe’s poorest people.

In 2004, Viktor Yanukovych won election as president amidst charges of massive fraud and interference by the Soviet Union.  An “Orange Revolution” turned him out of office.  His “Orange” successors then mismanaged things on a grand scale.  Eventually, in 2010, Yanukovych managed to win election as president without charges of massive fraud.  In late 2013 he suddenly rejected a long-prepared economic agreement with the European Union.  This act sparked a new round of demonstrations that ended with Yanukovych chased from office once again (February 2014).

After that, things got even worse.  By 2015, the conflict with Russia cut Ukrainian-Russian trade by half.  Inflation and unemployment both rose.  Foreign-exchanges reserves at the central bank sank to their lowest point in a decade.  Experts estimated that the country would need $40 billion in financial assistance over the next four years.  In early February 2015, the International Monetary Fund granted Ukraine a $17.5 billion credit.

It was against this background that the Obama administration, the European Union, and the International Monetary Fund began pressuring Ukraine to root out corruption and address a host of other problems.

[1] “In Russia’s shadow,” The Week, 14 March 2014, p. 11.

[2] Robert Conquest, The Harvest of Sorrow: Soviet Collectivization and the Terror-Famine (1986); Anne Applebaum, Red Famine: Stalin’s War on the Ukraine (2017).

[3] David M. Herszenhorn, “Economic Woes Will Test Kiev, Even if Truce Holds,” NYT, 14 February 2015

A tale of two occupied cities.

Recently, the Wall Street Journal ran two stories in one day on the problems of “occupied territories” in two wars. The stories cast some light on possible future developments.

Since seizing Mosul in June 2014, ISIS has provided a sort of good government to the captured city of 1-1.5 million people.[1] Roads have been repaired and are well-maintained. The street lights are working far better than they did under the old regime. Theft of electricity through improvised wiring has ended. You can walk down the street without navigating around kiosks and barrows. Littering has come to a stop. All men wear beards and all women are fully covered. You don’t feel offended all the time by people scrolling through their Smart phones because the cell towers and Internet have been turned off.[2] ISIS drove out the Christian minority from the city. Now churches host garage sales. ISIS blew up the Shi’ite shrines that once dotted the city. One way to ensure compliance with government orders is to kill anyone who violates them.

The recapture of Mosul has been a loudly-proclaimed goal of the American—I mean Iraqi—strategy against ISIS. So far, most of the heavy lifting has been done by the Kurds, who have made advances around the western, northern, and eastern flanks of the city. However, the fall of Ramadi in Anbar province has put a spoke in the wheel of that strategy for the moment.

The Sunni majority in the city fears both the reconquest by the Shi’ite-dominated government and what might follow at the hands of the “liberators.”

It isn’t at all clear that Petro Poroshenko’s Ukraine government expects—or even wants—to recover the rebel territories in eastern Ukraine.[3] A cease-fire worked out in February 2015 has greatly reduced casualties among civilians. However, Poroshenko’s government has been tightening controls on movement between the two parts of Ukraine. One estimate is that trade across the cease-fire line has fallen by perhaps 70 percent since the cease-fire was implemented.[4] The Poroshenko government argues that the economic and political integration clauses of the cease-fire agreement have to wait on the military aspect of the cease-fire being “fully ensured.” The distinction seems intended to punish the residents of the eastern zone. Delays at the Kiev government’s check-points have extended a round-trip between Donetsk and neighboring towns in Ukraine proper from two hours to twelve hours. Furthermore, the Ukrainian border guards regularly demand hefty bribes—in effect a government tax on exports—from truckers. Food and medical supplies from Ukraine have begun to dwindle as the border guards refuse to allow their passage. The Kiev government has begun denying pension benefits to anyone living permanently in the rebel-held regions. The Russians have not taken up the slack. Yet. This policy runs the risk of driving many people in eastern Ukraine who do not support “independence” under the Russian thumb into the arms of the rebels. One frustrated traveler said “”Give me the opportunity to work and live peacefully and I don’t care who is in power.”

Clearly, conditions in Mosul are far worse than in eastern Ukraine. The occupation of Mosul by ISIS seems likely to end in a horrific fashion, while Ukraine will be partitioned.

[1] Nour Malas, “Year of Islamic State Rule Transforms Mosul,” WSJ, 10 June 2015.

[2] That doesn’t mean that no news reaches the city. Residents seem well aware of the reports of very destructive fighting, looting, and retribution killings by Shi’ite militias in the re-capture of Tikrit.

[3] Laura Mills, “In Ukraine, Anger Grows as Border Tightens,” WSJ, 10 June 2015.

[4] That is, much more trade took place while the fighting was still going on at a high pitch.

Ukraine1.

I’ve been reluctant to write about the Ukraine. I find myself totally out of step with opinion. I don’t like Vladimir Putin[1], but I think that someone should try to make a fair case for understanding his actions.[2]

For one thing, if you look at maps of Ukraine, you see that Crimea and the two eastern “oblasts” (administrative districts) of Donetsk and Luhansk are predominantly Russian-speaking: 77.0%, 74.9%, and 68.8%. In the referendum on independence from the Soviet Union the south-eastern “oblasts” all voted for independence like the rest of Ukraine, but the opposition vote was much higher than elsewhere and so was the abstention rate. In the 2006 and 2007 parliamentary elections, Viktor Yanukovich’s Russian-oriented “Party of Regions” carried a huge swath of south-eastern Ukraine. The Yulia Timoshenko bloc had carried a huge swath of western and central Ukraine. In the presidential elections of 2010, Yanukovich narrowly defeated Yulia Timoshenko by mobilizing the same pro-Russian electoral base in the south-east.

The opposition to the Yanukovich government’s decision to halt the process of integration with the European Community (EU) centered in the west and center of the country. These regions had voted for Timoshenko in the 2010. In contrast, there were few demonstrations or protests in the southeast. Only five protests were identified for the two eastern “oblasts” and Crimea combined. In contrast, there were large pro-Russian protests in the two eastern “oblasts,” Crimea, and elsewhere in the southeast. Finally, supporters of the “Euro-Maidan” protests seized control of local governments in western and central Ukraine, but never even made a stab at it in Crimea or the two eastern “oblasts.”

According to “polling data by [the German polling agency] GfK taken from 4-18 March [2014] in all regions of Ukraine (including Crimea), 48% of Ukrainians support[ed] the change in power while 34% oppose[ed]. In the Eastern and Southern regions the revolution is supported by 20% of the population, whereas 57% or more of the population in the rest of the country supports the change in government. Also, only 2% of those polled said they fully or partially trusted former president Viktor Yanukovych.”[3] So, while Yanukovich was widely unpopular, a clear majority of people in the southeast opposed the revolution in Kiev.

Crimea has been annexed to Russia; the continuing “insurgency” in eastern Ukraine is limited to the two eastern “oblasts” where real opposition to the Kiev revolution was very strong for ethno-cultural reasons.

Is it possible that Vladimir Putin is doggedly[4] pursuing very limited aims with regard to Ukraine? His aims at the moment appear to be to take control of the two eastern-most “oblasts.” Will he desire to push beyond this to open a land bridge to Crimea? Would he wish to take all of the territory that voted for pro-Russian parties? Would he settle for a Ukraine “neutralized” as was Austria[5] during the Cold War? It’s hard to know unless someone asks him.

[1] As Joseph Joffe said on NPR: “he’s a nasty son-of-a-bitch.”

[2] “I have no special regard for Satan; but I can at least claim that I have no prejudice against him. It may even be that I lean a little his way, on account of his not having a fair show. All religions issue bibles against him, and say the most injurious things about him, but we never hear his side. We have none but evidence for the prosecution and yet we have rendered the verdict. To my mind, this is irregular. It is un-English. It is un-American; it is French.”—Mark Twain, “About the Jews.”

[3] Wikipedia. Reference misplaced.

[4] Putin isn’t much inclined to turn loose of something once he has engaged with it. Russians are still fighting in Chechnya in an insurgency that has gone on in fits and starts since 1994.

[5] See: http://en.wikipedia.org/wiki/Austrian_State_Treaty

Thoughts for the New Year.

I don’t know anything. So, here are my thoughts on a couple of issues.

Climate change is a grave reality. However, I doubt that people can entirely hold back (let alone turn back) global warming. Carbon-burning is central to the industrialization of developing-economies. There aren’t a lot of cheap and ready-to-use alternatives. Instead, there is going to be a long period of adaptation to worsened conditions. It is going to make environmentalists, intellectuals, and other “progressive” people very angry that there will turn out to be market-driven profit opportunities when statist restrictions might have provided more desirable outcomes.

In terms of foreign policy, Vladimir Putin is considerably more of an adult than are American leaders. Balance-of-power politics and spheres of influence are realities in world politics. Power and influence are not the single and permanent prerogative of the United States. For one thing, Ukraine is to Russia as Mexico is to the United States. (“Pity poor Mexico. So far from God, so near the United States.”) For another thing, Putin has tried to help the US out of a couple of ditches into which American leaders have driven it. Syrian chemical weapons and a possible solution to the Iranian nuclear problem are the key examples. All the while he has been vilified because he isn’t a democrat at home and he’s resisting the onward march of Western power around the borders of Russia.

In the Middle East we are witnessing a re-writing the Sykes-Picot Agreement. Iraq is fragmenting into Shi’ite, Sunni, and Kurdish enclaves. This fragmentation is being papered-over during the current emergency. The Shi’ites will never be able to repair their behavior during the Maliki period. Syria is going to fragment into Alawite, Sunni, and Kurdish enclaves. A Kurdish state will emerge. This new country will have trouble with both Turkey and Iran. Will Jordan or Saudi Arabia absorb the unstable and impoverished new Sunni micro-state in western Iraq?

The “two-state solution” to the Israel-Palestine conflict isn’t. Israel cannot afford to have a Palestinian state created. That state would be implacably revanchist, regardless of whatever professions its spokesmen might make in order to obtain sovereignty. Over the centuries, many people have felt that the problems of the world could be resolved if only the Jews would die and stop bothering people. Well, the Israelis aren’t buying this line.

The United States gets much less from the US-Israel alliance than does Israel.

ISIS isn’t a serious problem. The enthusiasm for “jihad” among many Muslims is a serious problem. It is likely to be around for a long time. I’m not sure that it can be de-legitimized by Western propaganda. I’m not sure that playing military whack-a-mole with every new outbreak will solve the problem.

Much as I agree with the objectives being pursued by President Obama on some key issues, I don’t believe that he has the authority for some of his actions. The Supreme Court is likely to overturn the authority-grab carried out by the EPA. The immigration problem wasn’t/isn’t a crisis. It’s just a stick with which to beat the Republicans and an effort to keep Hispanic-American voters on the side of the Democrats. American liberals are going to rue the day that they celebrated his unilateral actions on coal-burning energy generation and immigration. One day, a Republican president will invoke the Obama example.

Buyer’s Remorse: Russia and Ukraine.

Russian is a big exporter of natural gas to Western and Central Europe. During the life of the Soviet Union, the USSR had supplied natural gas to both the Ukraine region within the USSR and to Western Europe. The price charged Western European purchasers was below world market rate. Two of the USSR’s natural gas pipelines to Western Europe ran through Ukraine and carry 80 percent of Russia’s natural gas exports. After the Soviet Union broke up and Ukraine voted to secede, the Russians negotiated a natural gas agreement with Ukraine. The agreement provided that Ukraine would receive 17 billion cubic metres of natural gas per year as a fee for the pipelines that crossed Ukraine. This agreement also sold 8 billion cubic metres of natural gas to Ukraine at the prevailing world market price.

During the 1990s the Russians claimed that the Ukrainians had not paid for much of the gas that they received. They stopped deliveries of natural gas to Ukraine until they were paid, while continuing to ship gas through the pipelines across Ukraine. The Ukrainians then diverted some of the gas bound for Western Europe to make up for the suspended gas deliveries. (The government of Ukraine later admitted that they had done this.) The two countries finally settled this dispute in an agreement in October 2001.

Negotiations for a new agreement began in 2005. In the process, it was revealed that the Ukrainians had “misplaced” almost 8 billion cubic metres of gas that the Russian energy company Gazprom had stored in Ukrainian facilities in 2004-2005. When Ukraine balked at some of the Russian terms, the Russians cut down on gas deliveries in January 2006. Ukraine soon gave in. However, the Russians repeatedly claimed that the Ukraine of the “Orange Revolution” failed to pay for natural gas deliveries. Growing weary of Ukraine’s repeated “I will gladly pay you Tuesday for a hamburger today” approach, in early 2008 the Russkies said Ukraine had to pay the whole 2008 bill up-front or no more gas starting immediately. Ukraine’s government, headed by Yulia Timoshenko, rejected that deal.

In late 2008 Ukraine caved-in and paid what they owed the Russians. Negotiations for a 2009 agreement immediately broke down. The Ukrainians wanted a subsidized price, the Russians wanted the market rate; the Russians insisted on payment up front. The Russians turned off the tap in gas supplies to Ukraine, so Ukraine resorted to a number of under-handed practices in response: the pressure dropped in the pipelines to Western Europe (indicating siphoning by Ukraine); the government called on the EU to involve itself; and the Ukrainian court voided Ukraine’s agreement to trans-ship Russian gas to Western Europe. The Stockholm Tribunal of Arbitration soon smashed Ukraine’s pretensions. Moreover, this was costing everyone a lot of money. Eventually, in late January 2009, the two countries negotiated an agreement to cover the period to 2019.

Later in 2009 the Russians agreed to revise the contract in light of the recession in Ukraine. Then in 2010, they agreed to cut the price of gas to Ukraine by thirty percent in exchange for an extension of the lease on the naval base at Sebastopol to 2042.

In late 2013, Russia offered Ukraine a further big cut in price if it would not sign the Association Agreement with the EU. The overthrow of the Yanukovych government put an end to this discount. The Russian seizure of Crimea put an end to the discount for an extended lease on the Russian naval base there. Why pay rent for what you now own?

So, the stuff in the news about an “80 percent price increase” isn’t fully accurate.

Also, Ukraine tends to cheat. The Russians already know this. The US soon will.

See: http://en.wikipedia.org/wiki/Russia%E2%80%93Ukraine_gas_disputes