Ukraine and Putin: the aggressor’s bad luck

Putin

 

2014/12/05 • Politics

Vladimir Putin managed to accomplish everything before December 1, 2014. Since the moment of Crimea’s annexation in March, which began the conflict in the East, and which has not been seen since the end of the Cold War, Moscow had asymmetric advantages: it was ready to use force to achieve its goals in Ukraine and, possibly, not only there. However, the West was not prepared for it.

This week it turned out that Russia’s short-term advantages were overshadowed by the weaknesses in its structure.

Numerous things point to that.

First, the ruble. The Russian currency is suffering double pressure: the sanctions and the fall in fuel prices. On December 1 it went through the biggest single-day fall since 1998, having first crossed the psychological barrier of 50 rubles per dollar.

Second, oil. The price on the product which is the basis of the Russian economy fell 25% since the summer. The decision not to decrease oil extraction approved by the OPEC on December 1 led to a fall in Brent oil prices to less than 70 USD per barrel. It is expected that even this price, the lowest in five years, will continue to decrease.

Jokers ask what the ruble, oil and Putin have in common, saying that all of them will reach the number 63 next year.

And, of course, the South Stream case. After talking to Turkish Prime Minister Recep Erdogan on December 1, Putin announced that Russia would not build the South Stream gas pipeline which, according to the Kremlin’s plans, was supposed to circumvent Ukraine and allow Moscow to have even more control over the south of Europe. Russia was unable to satisfy the demands of the EU that gas extraction and transportation cannot be monopolized by a single company.

No South Stream: Putin’s diplomatic failure

New York Times observer Andrew Roth wrote that not building the South Stream became Putin’s “rare diplomatic defeat,” and “seemed to be a rare victory for the European Union and the Obama administration, which have appeared largely impotent this year as Mr. Putin annexed Crimea and stirred rebellion in eastern Ukraine.”

These troubles coincided in time for the Russian President, but they were absolutely predictable. Just like those which will emerge in the nearest future.

Russia’s main source was its integration into the world economy, and it was regarded as a respectable member of the global community, while it disregarded the general rules.

Putin’s Russia took advantage of its position in the G8 in order to corrupt Western elites, gradually buy European energy companies, which constituted the energy infrastructure, and openly ignored European anti-monopoly legislation.

Sometimes Russia behaved like a ‘criminal country,’ when it occupied part of Georgia’s territory in August 2008, for which it only got a slap on the wrist.

Russia became a problem which has to be solved

However, Russia outdid itself in Ukraine. By annexing Crimea, it created the first post-war precedent of violent border change in Europe. In Donbas, by arming the local pro-Moscow mercenaries, it practically invaded Ukraine.

After this, and especially after these armed groups downed the Malaysian Airlines plant, the West was unable to pretend that Russia is a respectable member of the global community. It was impossible to claim that Russia is a parter with whom it is possible to cooperate. Russia became a problem which has to be solved.

Since Russia became a pariah country, its power started to melt

Wester sanctions are Russia’s gradual isolation from the global economy are possibly insufficient to contain Moscow in the long-term perspective. However, together with the fall in oil prices, they may seriously damage the Russian economy in the long term.

The long term has already begun.

On December 2, the Russian government announced that decline is expected in the Russian economy. According to the government, the GDP will fall by 0,8%, and independent economists think that the decrease will constitute no less than 2%. Revenues will fall by 2,8%, inflation will grow by 9%, capital outflow will constitute no less than $128 billion. In addition, Russian banks owe Western loan-givers $700 billion, and having been cut off from the Western banking system, they are unable to borrow more money to refinance the debt.

The economic difficulties will become a ‘new reality’ for Putin, says Russian economist Sergey Guryev, who was forced to leave Russia last year. In an interview to the New York Time he said that Putin had always been lucky, but his luck had run out.

While this year Putin managed to save his ally, Syrian dictator Bashar al-Assad, from U.S. bombs and destroy the plans for European integration in Armenia and Ukraine, his lucky year is coming to an end.

The next year will be much more difficult for Putin.

Translated by: Mariya Shcherbinina
Source: Radio Liberty

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  • sandy miller

    I’m puzzled that you don’t say that Russian army has invaded eastern Ukraine…because it’s been proven that they are in Ukraine…why not say that?

    • Arctic_Slicer

      Exactly, Russia invaded Ukraine on February 26th and has been there ever since.

    • Dean Venture

      I had the exact same thought 😀

  • Roger Mikael Klang

    “…that Putin had always been lucky, but his luck had run out.”
    Only a fool would call Putin’s fortune “luck”. Only the skillful and those who know what they are doing get lucky. That is the bad news for you people. But Brains and skill can only take you so far. One cannot fool God. That is the good news.

    • Milton Devonair

      Well it is his luck that the USA is ran by a liberal/progressive–aka communist lite.
      If a conservative had been president, they’d be arming Ukraine….amongst others, but then again, bullies act out only when they are pretty sure they can get away with it. So he probably would have stayed at home in his cesspool called ‘russia’.

      What’s going to be interesting is how his oligarch friends will manage the risk vlady has put their wealth in. The kgb can’t do business, so they need the oligarchs.

  • Michel Cloarec

    I have a feeling that putin is maybe a good tactician but a bad strategist !
    In french ” he puts his finger in the eye untill the elbow”
    In latin ” forgive them they don´t know what they are doing”

  • Michel Cloarec

    Putin will do everything to stop acess to Internet, Google,Facebook, Twetter. But I am sure that it is possible for russians to have acess yet ! So we must keep on with infos.

    Exhibition in Kiew is widely spread on newspapers also.

    Today :

    Russian army. Photo: tsn.ua

    For the first 2 days of December, 300 Russian soldiers were killed in the attacks on the Donetsk airport alone, activists of the Russia-based “Cargo 200 from Ukraine to Russia” NGO say, TCH reports Dec. 3. [‘Cargo 200’ is code name for a dead soldier, ‘cargo 300’ for a wounded one – Ed.].

    “Total losses of the Russian army at the Donetsk airport stand at 299 killed and 190 wounded, of these 96 seriously wounded,” NGO’s head Elena Vasilieva said.

    According to the NGO, the total losses of the Russian army since the beginning of the war in Donbas are 4,672 killed, 970 wounded and 2,560 missing in action

  • Dean Venture

    I wonder if Putin is doing this intentionally – letting the economy tank. When economic times are difficult, conditions seem to favour extremists and totalitarians. Putin lets the economy crumble, claims it is due to economic warfare from the West, and uses it as an excuse to enact wartime measures.

    Economic chaos in Weimar Germany set the stage for Hitler. More recently, look at how well the far right did in Greece during the bond crisis.

  • Rods

    “Vladimir Putin managed to accomplish everything before December 1, 2014”

    I have to disagree with this.

    Has he stopped the EU Association Agreement, no he has managed to postpone the part which is more difficult for Ukraine to achieve with a 1 year postponement, thats it! The EU deal is signed and is in the process of being ratified by all of the EU countries, with Ukraine now setting the goal of 2020 for full membership.

    Has he stopped Ukraine joining NATO? No, this is more popular with the Ukrainian population, than it has ever been, with preparation between now and 2020 and then a referendum on membership.

    Has he now got Ukraine back into the Soviet orbit? No, the people are more united on moving towards the West than they have ever been with the Kremlin stooge Yanukovych president and government replaced, with the most united post-Western government that has ever been elected.

    Has he managed to continue and extend the Russian gangster, oligarhi, high corruption political model in Ukraine, no it is under more pressure than ever before, with lustration, foreign people being brought in to reform government institutions and a determination to transform from this system into a modern western style country and now with enough elected reform minded politicians to make this more likely than ever before.

    Has he created a viable new country in the East with is invasion? I don’t think so, there is no popular local support for his troops and mercenaries. There is much talk on this being a sore to Ukraine, but the opposite is also true, where Russia will have to continue funding the mercenaries, supplying armour, ammunition, fuel and proper humanitarian aid to stop a winter of 2014/15 Holodomor. With all of the weapons in East Ukraine and a porous border, how many will end up back in Chechnya and other parts of Russia, creating instability there?

    The only thing that could possibly be considered a victory is the annexation of Crimea, but this story has much further to run in term of economic and political costs and with how the area is being run, possible political instability.

    On the energy front, he had managed to alienate his captive premium customers in Western Europe, who are now looking to have multiple gas suppliers, so at best in a few years, he will be one of several having to compter of terms and price. His replacement customer is a country, China, who know how to drive a high bargain so they get gas at ‘economy class’ prices.

    Putin has managed in the course of 12 months to turn Russia from a trading partner, to what they really are; a rather nasty totalitarian, expansionist, gangster state, a sponsor of international terrorism and who are now viewed internationally as a non-aligned pariah state. Putin is personally considered a lost cause.

    Yet, this year may go down in history as one of Putin’s better ones, compared with what is to follow over the next few years with sanctions, oil and gas prices tumbling on the back of a glut, a prolonged recession and a rouble sinking faster than a lump of lead in water!