Posted on 03/25/2014 11:16:45 AM PDT by 1rudeboy
After three months of mass street demonstrations, the Ukrainian people succeeded in ousting their corrupt and incompetent president, the Kremlin-backed Viktor Yanukovych. On February 22, the Ukrainian parliament acted in favor of the people it represents by granting amnesty to all political prisoners, bringing back the constitution of 2004 (which reduces the powers of the president), and announcing an early presidential election in May.[1]
This was more than Russian President Vladimir Putin was willing to tolerate. On February 28, Russian troops, aided by pro-Russian local militia, violated Ukraine’s territorial integrity by occupying important sites across the Crimean Peninsula under the pretext of “protecting Russian people.” Soon after Russia’s invasion, an illegitimate referendum took place on March 16 to allow the people of Crimea a vote to determine whether they wanted to join the Russian Federation. This illegal referendum was denounced by the countries of the G-7 as well as the member states of NATO and the European Union (EU). Furthermore, it took place without international monitors and under armed occupation.
The outcome of this dubious referendum was obvious from the start. Over 96 percent of voters backed Crimea’s leaving Ukraine and joining Russia. Keeping in mind that this referendum took place under the watchful eye of thousands of Russian troops in Crimea, the outcome was not a surprise to many.[2]
On March 17, Putin signed a decree recognizing Crimea as a “sovereign and independent state…taking into account the will expressed by the people of Crimea.”[3] Two days later, Russian troops took control of Ukraine’s naval headquarters at a base in Sevastopol, raising the Russian flag. On March 20, the Russian Duma (lower house) voted 455 to 1 to approve a treaty incorporating Crimea into the Russian Federation. On March 21, the Russian Federation Council (upper house) approved the treaty by a vote of 155 to 0.[4] Later that day, Putin signed the treaty into law, formally making Crimea part of Russia as far as Russia is concerned.
Pro-Russian protests continue in Ukraine’s eastern Oblasts. The Russian media are starting to refer to a broad belt of land in southern Ukraine as Novorossiya, or New Russia, the Tsarist-era name for the region.[5] It appears that Russia may well have further designs on Ukraine.
Regrettably, the Obama Administration has attached little importance to transatlantic relations, and Europe has barely figured in the Administration’s foreign policy. Europeans are left questioning America’s commitment to transatlantic relations.
Almost from the beginning, President Barack Obama’s foreign policy has been an empty shell masking a spectacular lack of American leadership on the world stage. This flawed approach, with a fundamental rejection of the notion of American exceptionalism, is amply on display in the Ukrainian crisis, where America’s voice has barely been heard. As the latest developments over Crimea have shown, the Russian reset has backfired spectacularly, resulting in staggering complacency in Washington over Moscow’s ambitions.
The Obama Doctrine has been a monumental failure because it fails to protect and advance U.S. interests. It is the antithesis of Ronald Reagan’s bold approach, which was based on powerful American leadership on the world stage, including a willingness to stand up firmly to America’s adversaries. Perhaps even worse, many of America’s traditional allies are questioning America’s resolve with respect to transatlantic relations and NATO’s security guarantee.
It is becoming clearer that the West in general and the Obama Administration in particular face the current situation with Russia in part thanks to several false assumptions about 21st century geopolitics. Specifically, it is erroneously assumed that:
As recent events have demonstrated all too clearly, these false assumptions have translated into policy choices on both sides of the Atlantic that have encouraged Russia’s current behavior. These choices and their consequences include:
Nothing indicates that Russia is on a path to reform. Democratic freedoms are in retreat, corruption is endemic, and the future is bleak. The same failings of the Soviet Union a quarter of a century ago are starting to reappear in Putin’s Russia today.
While the Russian economy is still growing, it continues to rely on the export of hydrocarbons, other raw materials, and weapons. Russia’s population is declining due to aging, rampant alcoholism and drug addiction, widespread disease, and low fertility rates. Expressions of ultranationalism are on the rise, fortifying the government’s quest for a new sphere of influence. The collapse of the Soviet Union and the fall of the Berlin Wall caught many by surprise. Western leaders should not allow a resurgent Russia or the instability deriving from a degenerate Russia to catch them by surprise as well.
What the West is witnessing today is not a resurgent Cold War Russia, as commentators frequently claim, but an Imperial Russia. Putin’s behavior is like that of the Russian Tsars who built the Imperial Russian Empire nation by nation, khanate by khanate, and kingdom by kingdom.
In the eyes of Russians at the time, the 17th and 18th century territorial gains that in part defined Imperial Russia were regarded not as “annexations” but as taking what was already theirs. At the time, Russia’s imperial conquests were popularly characterized as acts of liberation of fellow Orthodox Christians from Polish Catholic rule.[7] Take out the religious dimension and replace it with the need to protect—to paraphrase Vladimir Putin—Moscow’s fraternal ties with ethnic Russians and we have a similar situation.
Today. just as in the 19th century, Russia’s leaders see themselves as taking what is already theirs. Whether it is Transnistria, South Ossetia, Abkhazia, Crimea, the creation of the proposed Eurasian Union, the Customs Union with Belarus and Kazakhstan, or what amounts to the suzerainty of Armenia in all but name, the empire is being rebuilt.
Russia’s anachronistic irredentist behavior is unacceptable. Understandably, Moscow’s behavior has made many NATO partners nervous. Ukraine does not enjoy the security guarantees afforded to America’s NATO allies, nor should the U.S. give any impression that it does. However, there are steps that can be taken to keep America’s NATO allies safe while demonstrating to Russia that its behavior is unacceptable.
While U.S. relations with the countries of Central and Eastern Europe may seem healthy to some, many NATO allies in the region have concerns about the future of the transatlantic relationship. There is a general view among officials in the region that the U.S. is relegating its relations with Europe to a lower priority. That this concern is not unfounded is demonstrated by:
It is also time for Europe to get united on how best to deal with Russia. President Obama should use his current trip to Europe to get the West on the same sheet of music when dealing with Russia.
On March 17, the European Union sanctioned 21 Russian and Crimean officials linked to the Russian invasion of Ukraine. The EU’s initial sanctions targeted members of the Russian parliament and military members, imposing travel bans and asset freezes on their accounts. The initial EU sanctions targeted lower-level officials than U.S. sanctions did and were a fairly weak response to Russia’s armed invasion of Ukraine. On March 21, the EU imposed a new second round of sanctions that targeted more senior Russian officials. A total of 12 additional individuals were sanctioned, but there is still a gap between the U.S. and EU sanctions.
It was a challenge for the EU to reach an agreement on how strong the sanctions should be. This is a result of the EU’s lowest-common-denominator approach to foreign policy making, which required all 28 member states to find a consensus. This presented obvious problems when dealing with Russia. For example, it has been reported that Germany, Italy, the United Kingdom, and Cyprus are too concerned about their close economic or energy ties to Russia to back any really effective sanctions.[11] Since the EU receives 30 percent of its natural gas from Russia, any sanctions that hurt the Russian state-owned Gazprom’s bottom line would result in adverse economic effects in the EU.
Looking at it from a NATO point of view, Moscow can also see fractured Europe sending inconsistent messages. On one hand, the NATO Secretary General says that the situation in Crimea is “the greatest threat to European security since the end of the Cold War.”[12] On the other, France is committed to selling the two amphibious assault ships for use by the Russian navy.[13] (In a twist of geopolitical irony, one of the two ships has already been named the Sevastopol.) Furthermore, Spain allows the Russian navy to use its bases in North Africa.[14] On a positive note, the U.K. announced that it was suspending its military cooperation with Russia.[15]
While there are many tools at America’s disposal when dealing with Russia and its invasion of Ukraine, one must not discount the impact that free markets and free trade can ultimately have on the situation. Much of Russia’s power in the region is the result of its control of energy supplies and distribution systems. Diminishing Russia’s economic leverage in the region should be a key component of America’s response. This could be accomplished to a large extent simply by liberalizing global energy markets. The U.S. has antiquated and unnecessary restrictions on exporting liquefied natural gas (LNG) and crude oil, and Congress should make lifting these restrictions a priority.
Ukraine understands that energy diversification is a key to its own future. In 2013, the Ukrainian government reached agreements with Royal Dutch Shell and Chevron to explore and develop the country’s two large shale gas fields in Yuzivska and Olesska. Chevron’s 50-year contract consists of a $350 million exploratory phase that could result in $10 billion in investment. Shell’s investment is of similar size, and both would yield significant natural gas supplies in a few years’ time.[16] Abundant shale reserves also exist in Estonia, the United Kingdom, Poland, and other parts of Europe. As the private sector explores ways to develop these resources,[17] the increased production could fundamentally alter the energy landscape in Russia.
To truly diminish the power that a nation garners from its control of energy markets and supplies, however, the U.S. needs to lead broad liberalization of global energy markets. This means not only encouraging private-sector development around the world, but also allowing for market-driven increases in production in the U.S.
The U.S. could maximize its influence by increasing opportunities for exports. To some extent, this is already occurring as the U.S. is now a net exporter of refined petroleum products, doubling its exports to Europe from 2007 to 2012.[18]
Given the five to seven years that approving, engineering, permitting, and constructing a new LNG terminal takes, lifting gas export restrictions might not have a direct impact on the Ukraine crisis in he near term,[19] but it would send an important signal to Russia and the rest of the world. It would show any leader from any country that derives power from controlling energy interests that such strategies will no longer be effective.
Despite the lengthy time needed to permit and build an export facility, an import terminal in the United States is being retrofitted to serve as a bi-directional export terminal and will likely be online by the end of 2015. The exporting company, Cheniere, has already entered into long-term contracts with Spain and the United Kingdom. Along with exports from countries like Qatar, Australia, Indonesia, and others, international markets will put pressure on Russia and reduce its ability to use energy as a political bargaining chip.
Opening markets would provide a diversity of suppliers and greater energy supplies for the global market. This would likely result in lower prices and would certainly mean more choice for countries like Ukraine in the not so distant future. Ultimately, providing that choice would be what diminishes Russian power. Establishing free-market reforms now and increasing energy supplies would help to prevent future incidents and price shocks not just in Ukraine, but across the globe.
A critical component of opening markets is keeping domestic production in America open. The Obama Administration has failed to open up federal lands and waters to exploration and development of natural gas, is implementing federal regulations on hydraulic fracturing when the states have already regulated it effectively, and is significantly limiting the ability to mine and use the abundance of coal under America’s soil under the premise of fighting climate change.
Secretary of State John Kerry called climate change “another weapon of mass destruction” and one of the world’s biggest security threats in a recent speech in Indonesia. Evidence shows, however, that the Earth is not heading toward catastrophic climate change, and we have not seen more frequent and intense extreme weather events. Further, any changes in the climate will occur gradually over decades, and there will be ample time to adjust national security and humanitarian assistance instruments to accommodate future demands. The reality is that poverty is a much greater threat to security than is climate change, and the Administration’s climate policies will drive up energy prices and do more to worsen poverty than they will to mitigate global temperatures.
Increasing domestic energy production and lifting bans on energy exports would help both the U.S. economy and Ukraine. By increasing energy supplies to the global market and diversifying global supplies, these reforms also would diminish the ability of any nation, including Russia, to use energy as a weapon to impose its will in the future. For these reasons, Congress should open access to America’s energy resources and allow for the free trade of energy resources.
The Obama Administration is insisting that before Congress can support the Ukrainians, it must first reduce the power of the United States at the International Monetary Fund (IMF).[20] The White House wants Congress to attach its approval of an IMF governance “reform package,” which has been pending for three years, to any legislation providing urgently needed U.S. financial assistance to Ukraine. That certainly gives a new and strange meaning to the concept of “IMF conditionality.”
As Heritage reported in January,[21] there are significant “moral hazard” issues in the 2010 IMF reform package that must be considered on their own merits. Decisions about the reform package should not be taken in the crisis atmosphere surrounding the situation in Ukraine. Congress should insist that the Obama Administration remove the unnecessary linkage between adoption of urgently needed IMF assistance to Ukraine and the larger questions raised by the IMF reform package.
At the root of the problems in Ukraine are the lingering effects of the corrupt and inefficient post-Soviet economic systems in the heavily industrialized eastern, Russian-speaking areas and throughout the country. Despite repeated urgings, many of these problems in Ukraine have never been seriously addressed, nor have enough necessary reforms been adopted in the 20-plus years since the fall of the Soviet Union.
These failures can be seen in Ukraine’s score in The Heritage Foundation/Wall Street Journal 2014 Index of Economic Freedom: 49.3.[22] That means its economy remains in the bottom Index category (“repressed”)—even lower than Russia. Ukraine is the 155th freest out of 178 countries ranked in 2014 worldwide; it is last among the 43 countries measured in the European region. After former Ukrainian President Viktor Yanukovych took office in 2010, the country registered steadily deteriorating scores on property rights, corruption, financial freedom, and investment freedom.
An IMF program for Ukraine could use these Index of Economic Freedom categories as a guide to shape the many reforms and conditions that will be needed to help put the Ukrainian economy on a sustainable path to recovery. For example, the Ukrainian currency (the hryvnia) should be permitted to float to avoid further depletion of the nation’s foreign currency reserves. Another huge drain on resources can be plugged by phasing out the unsustainable and wasteful system of state energy subsidies, which amount to more than 7 percent of Ukraine’s gross domestic product.
In 2010, the IMF board, with support from the Obama Administration, proposed a series of reforms that would increase the voting power of certain emerging-market nations and double the amount of member countries’ national “quota” contributions, which are the primary source of funding for IMF loans.[23] The U.S. has the largest quota of any country in the world and also the largest single-nation voting share (16.75 percent). It has been the only country with veto power at the IMF. Due to the constitutional role of Congress and U.S. veto power, this IMF reform package must therefore be approved by Congress before it can go into effect.[24]
The reform package would change the rules for election of the IMF executive board, and the U.S. would lose the right it has heretofore enjoyed to appoint its own representative to the executive board—and that is where all the power is at the IMF.[25] The reform package would also reduce U.S. control of certain “supplementary” IMF funds that can be tapped when demand for IMF resources is particularly strong, such as during major financial crises. There are two supplementary funds: the New Arrangements to Borrow (NAB) and the General Arrangements to Borrow. The U.S. currently funds the largest portion of the NAB—about $103 billion, or about 18 percent.[26]
It is clear that the U.S. has benefitted—and will continue to benefit—from the existence of the IMF. In fact, Ukraine is almost a textbook example of a nation that needs a lender of last resort, the sort of situation for which the IMF was created more than 70 years ago.
On the other hand, many conservatives have rightly pointed to the IMF as an enabler of moral hazard. They are concerned that American tax dollars are being used for IMF programs that bail out other governments that follow reckless fiscal and monetary policies (e.g., the flawed policies that Ukraine pursued under Yanukovych until 2011 when the IMF ended its previous program for the country).
The IMF has been functioning effectively for the three years since the IMF governance reforms were proposed in late 2010. There is no reason why the U.S. government cannot immediately put together an emergency aid program of loans, grants, and technical assistance for Ukraine using existing congressional development assistance appropriations without Congress first having to adopt the IMF reform package.
Currently, the Administration’s policy is not to affect the “strategic balance” with Russia in terms of ballistic missiles.[27] In reality, there is no strategic balance between the two countries. Given Russia’s demonstrated willingness to use force to alter nations’ boundaries and act against U.S. interests, it is clear that the U.S. should expand its ballistic missile defense to protect itself and its allies from Russia’s ballistic missiles.
Russia is currently engaged in the largest nuclear weapons buildup since the end of the Cold War. It is planning to spend over $55 billion on its missile and air defense systems in the next six years, compared to about $8 billion a year that the U.S. spends on its missile defense programs.[28]
Russia has over 1,400 nuclear warheads deployed on long-range ballistic missiles. These missiles can reach the U.S. within 33 minutes. It is also engaged in ballistic missile modernization and is reportedly developing intermediate-range ballistic missiles that are prohibited under the Intermediate-Range Nuclear Forces Treaty with the U.S.[29] These missiles are most threatening to allies in the European theater.
In 2009, the Obama Administration canceled President George W. Bush’s plan to deploy two-stage ground-based midcourse defense (GMD) interceptors to Poland and highly capable X-band radar to the Czech Republic while also launching a “reset” policy in an effort to placate Moscow. To replace Bush’s missile defense plan for Europe, the Obama Administration proposed a four-phased missile defense plan, the European Phased Adaptive Approach (EPAA), consisting of two missile defense sites in Poland and Romania and forward-deployed radars. Phase Four—deployment of SM-3 Block IIB interceptors capable of shooting down medium-, intermediate-, and intercontinental-range ballistic missiles—would likely provide the U.S. and allies with better capability than the 10 GMD interceptors that were supposed to be deployed to Poland under the Bush Administration’s missile defense plan, but the Administration unwisely canceled Phase Four of the EPAA last year.
At this time, it would be unwise to cancel the EPAA. U.S. allies in Poland and Romania are already politically invested in missile defense sites on their territories, and Poland has already been snubbed by the Obama Administration’s surprising change in U.S. missile defense policy. It is also likely that costs and timelines involved in returning to the original plan would be high.
Rather, the geopolitical realities of the Russian aggression in Ukraine present an opportunity to assess how the current missile defense plan can be improved and where it would be suitable to add capabilities to it. An X-band radar in Europe would massively improve U.S. tracking capability, which would benefit both European allies and the U.S. homeland.
Russia’s actions also underscore the importance of maintaining U.S. missile defense resources. Currently, the budget of the Missile Defense Agency (MDA), which is responsible for developing and acquiring U.S. missile defense architecture, is less than 1.5 percent of the Pentagon’s overall budget. These investments are highly cost-efficient, especially considering that a successful ballistic missile attack would cost the U.S. significantly more in lives and treasure. The value of what is being defended matters, as do the costs of escalation after the attacked nation is compelled to defend itself by other means.
Russia’s willingness to challenge the status quo and its disregard for its arms control obligations have important implications for U.S. nuclear weapons policy. There are many steps that the U.S. can take to improve and strengthen its overall nuclear posture, regardless of Russian actions in Ukraine.
The Administration has made many concessions to improve relations with Russia.[30] Some of the most significant of these concessions are in the New Strategic Arms Reductions Treaty (New START). Among them are the absence of a strong verification regime, limits on U.S. missile defense options, and mandates that require the U.S. to shoulder a majority of the nuclear weapons reductions. These conditions have resulted in a treaty that is grossly lopsided in Russia’s favor.
In addition, Russian violations of the Intermediate-Range Nuclear Forces (INF) Treaty have been widely reported.[31] Russian violations and circumventions of the INF Treaty pose a threat to U.S. allies in Europe due to the undeniable fact that they fall within the range of these systems. It would be unwise to ignore the danger these missiles pose to the North Atlantic Treaty Organization.
Current U.S. nuclear weapons policy is based on the notion that Russia is no longer an adversary. Russia has invaded two countries in the past six years and just this month has illegitimately changed Ukraine’s borders. It is violating its arms control obligations, increasing the role of nuclear weapons in its national security, and extensively modernizing its nuclear forces, including building new nuclear weapons.
The U.S. remains the only nuclear weapons state that is not modernizing its nuclear forces. The U.S. should reassess its nuclear weapons posture to deal more effectively with the realities of the 21st century.
The difference between Russia and the West right now is that Russia has a strategy that it is willing to follow and the West is hoping the problem disappears.
Recent events have confirmed what many already knew: The so-called Russian reset is dead. Crimea is under the control of Moscow, and it does not appear that Russian troops will be leaving anytime soon. Russia has used the illegal referendum as a way to justify its imperial annexation of part of a neighboring country. Russia’s behavior is a direct violation of Ukraine’s sovereignty and territorial integrity.
However, a number of steps can be taken to keep America’s NATO allies safe while demonstrating to Russia that its behavior is unacceptable. The United States should:
Open domestic production and reduce onerous regulations on energy in America. The government should open up leasing, exploration, and production in more areas in the Gulf of Mexico, the Atlantic and Pacific coasts, and the Alaskan Coastal Plain, which includes the Arctic National Wildlife Refuge. It should also reduce onerous regulations that drive up the cost of energy for little environmental impact.
The Environmental Protection Agency has proposed regulations for carbon dioxide and other greenhouse gas emissions for future power plants and plans to finalize standards for existing plants by the summer of 2015. These regulations would significantly reduce the use of coal as a power-generating source in America. As more coal generation is taken offline, the marketplace must find a way to make up for that lost supply, which would largely be done through a combination of decreasing energy use as an adjustment to higher prices and increased power generation from other sources, most notably natural gas.[34] As the U.S. experiences a renaissance in energy-intensive industries and builds export capacity as a result of the shale revolution, the Administration’s war on coal could adversely affect America’s competitive advantage.
Recent events have confirmed what many already knew: The so-called Russian reset is dead. Furthermore, it is looking increasingly likely that part of Ukraine is now under de facto Russian control.
Russia’s behavior in Crimea was made possible by the failure of the Russian “reset,” the disarming of Europe by European politicians, and the reduction and disengagement of U.S. military forces in Europe. Russians respect strength and consistency, neither of which has been displayed by President Obama or his European counterparts.
For many, the annexation of Crimea will be seen as a game changer in international norms. The annexation of a neighboring country by force is unprecedented in the 21st century. The last time it happened was when Saddam Hussein annexed Kuwait in 1990 to make it Iraq’s 19th province.
With strength and consistency, Russia’s recent actions could have been prevented or at least mitigated. It might be too late for Crimea, but the U.S. cannot allow the contagion to spread.
oops . . . omitted
But...but our great leader gave Putin a “Time Out”.
Putin gave Obama a dunce hat.
I am more worried about Obama nuking Manhattan. He vacations a lot.
Sorry, but I’m not buying this piece. Way, way too simplistic.
But Kerry would (attempt to) have the word `Lunch?’ embossed in Russian on the button, and it would translate as `Launch!’ leaving the Russians even more flibbergibbeted about Amerikan leadership.
there’s a much simpler solution.
Trade Detroit for the Ukraine! It already looks like a post-war ruin. The Russians could seriously relate to the dilapidation. They’d think it was a holiday resort, complete with moving targets for firearms practice!
Detroit gets to be Roosky and the Ukraine becomes a US state.
Huh.
Check photos of Ukraine countryside, its gorgeous. And there’s a lot of knockout, drop dead beautiful broads there too!
Your not going to find that in Detroit!
Thanks for posting; it’s a great article despite being too cerebral for knee jerk Putinistas.
Thank you for making the most incomprehensible post in FR history.
You forgot to include mad barking dogs and tampons clogging toilets.
Yeah, I know . . . big words.
“Yeah, I know . . . big words.”
I love big words. See if you can dig one up.
Heritage.
Heritage. Good one. Try this on for size.
A Polish soldier is standing guard and a Nazi charges from one side and Russian charges from the other side. Which one should the Pole shoot first? He answers: I shoot the Nazi first. Why? Business before pleasure.
It’s a joke. Hope you get it.
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