Posted on 12/24/2014 5:11:32 PM PST by Nachum
December 2014 is the month Putins Russia was plunged into undeniable crisis. Between the dramatic drop in oil prices and the collapse of the ruble, under Western sanctions pressure, Russians are going into the new year in a dramatically different, and lessened, economic situation than the one they enjoyed at the beginning of the year now ending.
This will bring myriad hardships to Russians, particularly because even Moscow is admitting that low oil prices may be the new normal until the 2030s. Caveats abound here. The vast majority of Russians dont travel abroad, much less have vacation properties in Europe, nor do they have hard-currency mortgages (the ruble now having returned to its Soviet-era pariah status). Moreover, the average Russian has a physical and mental toughness about getting by in tough times it is an unmistakable point of national pride that Westerners cannot really fathom. In no case now does Russia face the sort of complete economic collapse that it endured in the 1990s, when the Soviet implosion pushed poor Russians to the edge of survival (were not so many Russians but one generation removed from the farm, and therefore had access to their own food supply, famine might well have happened under Yeltsin). Life in Yeltsins Russia, particularly beyond the bright lights of Moscow and St. Petersburg, where few Westerners visit, was harsh and frankly dismal.
Nevertheless, the economic undoing of Putinism over the last weeks, brought about by Western sanctions in response to Moscows aggression against Ukraine which began in early 2014, heralds major changes for the Kremlin, and not just in its domestic affairs. While Russia has far deeper hard currency reserves than it possessed in 1998, the last time the rubles bottom fell out, and its clear that Moscow will try to prevent banks from failing, there should be little optimism among Putins inner circle. Russia now faces a protracted and serious financial-cum-economic crisis that will get much worse before it gets better. Since much of Putins popularity has derived from the impressive economic growth his fifteen years in the Kremlin have brought, a rise in living standards that has benefited average Russians as well as oligarchs, the political implications of this collapse for Russias president are grave.
But are they enough to get Putin to cease his aggression and, in the long run, perhaps even leave office? Western politicians, eager to avoid armed confrontation with Russia, have assumed that enough sanctions-related pain will force Putins hand and get him to back off in Ukraine and elsewhere. This was always a questionable assumption. In the first place, sanctions tend to work as intended mostly against countries that strongly dislike being a global pariah, like apartheid-era South Africa, whose English-speaking white elites hated how they suddenly were no longer welcome in the posh parts of London. There is no evidence that Putin and most average Russians find being despised by the West particularly objectionable; on the contrary, many seem to revel in it.
Then there is the touchy fact that sanctions sometimes work not at all as intended. Using economic warfare to break a countrys will, which entails real hardship for average citizens, can cause more aggression rather than cease it. The classic example is Imperial Japan, which faced grim economic realities once U.S.-led oil sanctions took effect in retaliation for Tokyos aggressive and nasty war in China. Lacking indigenous petroleum, Japan was wholly dependent on imports that Washington, DC, blocked with sanctions. These placed Japan on what strategists would term death ground, since without imported oil its economy and its military could not function. Moreover, the sanctions were seen correctly by Tokyo as a sign that the United States and its allies did not want Japan to dominate the Western Pacific region, which constituted an intolerable affront to Japanese pride. The closest place to get the oil Japan needed was the Dutch East Indies, todays Indonesia, and Tokyo resolved to seize the oil there by force. To do that, Japan first had to drive the Royal Navy out of Singapore and the U.S. Navy out of the Philippines, and to enable that they had to disable Americas Pacific Fleet, which was ported in Pearl Harbor and the rest of the story you know.
Japan in 1941 believed it was already facing defeat through oppressive sanctions, so engaging in actual war seemed like a logical choice. The total defeat of the Japanese Empire in 1945 indicates that Tokyos decision to bomb Pearl Harbor was madcap, but had things worked out differently at, say, Midway in June 1942, such choices might look very different to historians today. When sitting on promotion boards for battle-tried colonels hoping for selection to general in his army, something he enjoyed, Napoleon liked to ask of a candidate, pointedly: Yes, but is he lucky? Japan was not at all lucky in the war it started in December 1941, but its defeat was hardly preordained, and the salient point is that Tokyo felt that the Americans really started that war with their harsh sanctions.
Might Putin do the same and decide that since Russia is facing defeat at the hands of Western sanctions, which represent a kind of war, why not opt for actual war, in which Moscow at least has a chance of victory? Its too early to determine that, but 2015 will be the year such grave decisions are made. To date, there are no indications that Putin intends to back down in Ukraine, or anywhere, thanks to Western sanctions. Its important to note that Putins narrative, which he has elaborated on several occasions and is accepted by most Russians, is straightforward: He has done nothing illegal in Crimea and eastern Ukraine, he is only protecting Russia and ethnic Russians, which is a legitimate national interest. Moreover, it is the height of cheek for the Americans, who after all invade countries all over the world in the name of freedom, to call Moscows legitimate actions on Russias borders aggression. Russia will defend itself against this rancid hypocrisy and will resist the Wests warlike sanctions, which are intended to punish Russia for defending itself and its rightful interests.
Putins public statements this month make clear that backing down now is not in the cards. At a press conference last week, he pointedly blamed the financial crisis on the West (The current situation was obviously provoked primarily by external factors.) while promising the economy will eventually improve. (Close observers will note that Putin cited The main achievement of the year in the social sphere is of course positive demographics.) The usual KGB-style tough talk, however, was on display, as a British journalist explained:
He brooked no compromise on the annexation of Crimea, and renewed his lambasting of the Wests policies since the fall of the Berlin Wall, accusing it of putting up new virtual walls and wanting to chain the Russian bear. He said that even if the bear were to sit tight supping berries and honey and abandon its hunting instincts, the West would still seek to chain us then rip out our teeth and claws. The bear, he said, had no intention of being turned into a soft toy. It would defend its sovereignty.
On the weekend, specifically on 20 December, a holiday that honors Russias special services this was the day in 1917 that the Cheka, the Bolshevik secret police, was founded by Iron Feliks Dzierżyński; in a normal country this would be a day of national mourning not celebration Putin addressed Russias security posture, noting this years spike in espionage against the country. He proudly asserted that Russian counterintelligence, Putins former employers, had uncovered 230 foreign spies operating in the country during 2014. He minced no words about this threat:
Frank statements are being made to the effect that Russia should pay dearly for its independent stance, for its support for its compatriots, for Crimea and Sevastopol for merely existing, it sometimes seems. Clearly, no one has ever succeeded in scaring, suppressing or isolating Russia and never will. Such attempts have been made regularly, over the centuries, as I have said publicly on numerous occasions, and in the 20th century it happened several times: in the 1920s, the 1940s and later. It did not work then and it will not work now. Meanwhile, we have to be prepared to experience certain difficulties and always rebuff any threats to our sovereignty, stability and the unity of our society.
This is not a man who is about to back down; doubling-down seems decidedly more likely. To be fair to Putin, Russia is a democracy of sorts, and popular opinion matters. He has dangerously stoked nationalist fires throughout the year now ending, regularly citing alleged Ukrainian Nazis eager to commit genocide against innocent Russians, so its difficult to see how he can turn those passions off with a switch, not least because beating the nationalist drum, while making the diplomatic equivalent of obscene gestures at the West, is popular with the Russian masses.
Neither does Western behavior always help matters. It seems not to have occurred to many Western politicians that gleeful public statements about how sanctions will cripple Russia might make Russians view these devastating acts as tantamount to war waged against them. President Obama, too, has not always been wise in his comments. In the first place he has not explained why a half-century of sanctions on tiny and impoverished Cuba failed to work hence his opening to Havana last week but sanctions on vast and largely self-sufficient Russia should be expected to deliver as advertised. Last weekend, Obamas comments on his adversary in the Kremlin took a strange turn:
There was a spate of stories about how he is the chess master and outmaneuvering the West and outmaneuvering Mr. Obama and this and that and the other. And right now, hes presiding over the collapse of his currency, a major financial crisis and a huge economic contraction. That doesnt sound like somebody who has rolled me or the United States of America.
Obamas offensive defensiveness here speaks volumes the self-reference in the third person is revealing and will be read in Moscow as weakness mingled with taunting. If this is what prep school Ivy League lawyers think passes for tough talk in Chicago, the Chekists in the Kremlin, who are actual hard men with much blood on their hands, will be happy to give lessons to faux-macho poseurs in the West Wing, and in 2015 they will.
I dont know if there will be war real war between Russia and the West in the new year. Surely such a possibility cannot be ruled out, not least because NATO has signally failed to implement the modest deterrence posture in Eastern Europe that I recommended six months ago, eschewing actual defense in favor of some showy yet small-scale exercises without strategic impact. Its not surprising that some NATO frontline states are planning for possible invasion and occupation by Russia, since their faith in the staying power of the Atlantic Alliance, particularly in Obamas resolve, is increasingly in doubt.
It is unlikely that Putin will soon choose overt aggression against a NATO country with the intent of causing major war, but such a conflict may result anyway in 2015. Rising Kremlin military and espionage operations in Northern Europe are a cause for concern, while Kremlin provocations against Estonia, that tiny country being a particular bugbear for Putin, indicate where the next Russian microaggression here meaning an engineered misunderstanding at a border town to test Alliance resolve may perhaps fall. Its a tricky game deciding where Obamas redlines are, particularly because the president himself seems not to know in Syria, Ukraine, or anywhere, so its dangerously easy to envision a scenario where the angry gamblers in Moscow roll the dice one time too many, forcing NATOs hand, without realizing it until its too late. War can happen by a kind of accident, with a risky Kremlin operational game gone wrong, and since NATO is not seriously prepared to resist Russian aggression on its eastern frontier, in 2015 it just might.
What I am absolutely certain of, however, is that the new year will bring the West more of what Ive termed Special War emanating from the East. Moscow is far from ready to wage sustained conventional war against NATO, not least because the oil-plus-ruble collapse will delay its long-overdue military modernization program, but it is eminently prepared to engage in the witches brew of espionage, subversion, and terrorism that makes up Special War. Here the West must be vigilant, since Kremlin Special War can do real damage, and represents something that NATO is poorly conditioned to recognize, much less defeat and deter.
First, espionage, which is a long-standing Russian core competency. Kremlin intelligence operations against the West are not only rising in number and intensity even the media has belatedly noticed that Moscows special services are as active against us as they ever were during the Cold War but in aggressiveness as well. Putin takes a deep and personal interest in the activities of Russias intelligence agencies, which formed his unmistakably Chekist personality, and he has given them wide latitude to get tough. Just as in Israel, though not at all in the United States, Russian spies know that the top has their back if an operation goes wrong, as some inevitably will; Moscow prefers a bias for action, not inaction, in its huge espionage arm. Moreover, the persistent inability of Westerners to see Russian espionage as the serious threat to our secrets and safety that it is here the blindness of even some NATO governments to the painful reality of the Snowden Operation does not encourage gives the Kremlin a latitude to wage Special War against the West that it does not deserve.
Which leads to the matter of subversion, a term which has fallen out of favor since the Cold War but which needs a rebirth as soon as possible. Russian intelligence and its helpers have a sophisticated doctrine, honed over decades, to wage what we would term Political Warfare against their enemies. To further the Kremlins aims, they cultivate Western politicos, activists and journalists to disseminate pro-Russian views on a wide range of issues; much of this is now conducted online. These Western partners range from being full-fledged agents of the Russian special services to mere pro-Putin influencers, not always entirely wittingly. Nevertheless, this Kremlin brand of espionage-based psychological operations the proper term is Active Measures, which has no doctrinal NATO equivalent can achieve devastating results through lies, half-truths, and forgeries. Russia takes advantage of Western gullibility, niceness, and unwillingness to accept just how dishonest the enemy is, sometimes to strategic effect. Subversion is back, with online disinformation as its main weapon, and the sooner we accept this the West can begin to counter Russian agitprop that aims to psychologically and politically disarm and divide NATO without fighting.
On the political front, Putin holds quite a few European cards. The Kremlin has successfully established important, multilayered agent-of-influence networks in NATO countries, as Ive explained previously, and the current political ferment in Europe offers Putin an inroads there that Russia has not enjoyed since the early years of the Cold War. Moscow has long supported far Left parties and activists in the West, but in recent years they have made major inroads on the far Right as well, whose star is ascendant in many European Union states, thanks to hot-tempered debates about immigration and national identity. Simply put, if the EU fails to deal with such issues in an effective way, and soon, it will surrender them to the far Right, i.e. Putins allies, in a manner that will have strategic results that will benefit Moscow in important ways.
Last, theres terrorism. In the 21st century this takes many forms, from blowing up bombs to raiding computer networks. Its remarkable how few Westerners seem to notice that the sudden and devastating cyber-vandalism (to cite Obama) against Sony hits the presses just as Russias economy buckles under sanctions. Russian acumen at cyber-terrorism is not exactly news just ask Georgia and Estonia but it has yet to be employed against major NATO countries in a strategic fashion. Yet this should be anticipated as an ancillary to other warlike secret Russian operations against NATO and the EU. Moreover, the difficulty of establishing firm attribution in cyber-espionage and cyber-terrorism means that many acts that remain officially unresolved meaning what Western governments are willing to say publicly actually have the fingerprint of Russian intelligence on them. And more is coming.
The notion that an angry Russia would employ actual terrorism, meaning killers and bombers, against the West sounds fanciful to some but it ought not, given decades of Russian activities in this arena. The Soviet intelligence services engaged a wide range of foreign terrorist groups beginning in the 1960s, and terrorists as diverse as the Red Brigades, the Red Army Faction, and the PLO, among many others, obtained aid and training from the KGB and GRU, the Kremlins military intelligence arm, as well as from East Bloc sister services. Among major transnational terrorist groups in the late Cold War, only the PFLP-GC was a wholly-owned subsidiary of the Kremlin, while the Soviets were content to give aid, comfort, and cover to the PLO and let it kill innocents as it pleased, as long as the KGBs fingerprint remained difficult to detect. (As a senior KGB officer who dealt with the PLO in the 1970s replied, when I asked him why the Kremlin never told Arafats Fatah terrorists what to attack, Why give them orders? Everything they do is good!) It should be noted that the idea the KGB and its East Bloc partners gave assistance to terrorists in the 1970s and 1980s was derided at the time as a conspiracy theory by nearly all Western terrorism experts, yet turned out to be entirely true, we learned, after the fall of the Soviet Union and the Warsaw Pact. Hence Moscows present-day murky links to international terrorism, even al-Qaida, merit close examination.
Moscow need not employ cut-outs and false-flags to conduct terrorism abroad, it has plenty of in-house talent in those areas, which fall under the rubric of what Russian spies term wetwork. In recent years, Putin has not been shy about wetwork abroad, even when the Kremlins footprint is obvious. The 2006 London murder of the defector Sasha Litvinenko, the infamous radioactive tea assassination, was transparently the work of the Federal Security Service (FSB), Russias biggest intelligence agency and Putins power-base. Two years earlier, GRU assassins blew up Zelimkhan Yandarbiyev, exiled leader of the Chechen resistance, with a bomb placed in his vehicle; the device exploded on the streets of Doha, Qatar, killing Yandarbiyev and two of his bodyguards. GRU was sloppy, however, and Qatari authorities quickly arrested the two bombers. At trial, they admitted Moscow had sent them to Doha to assassinate the Chechen leader, yet they were returned to Russian custody in early 2005 amid promises they would serve their jail sentence for murder in Russia. In best Putin fashion, the GRU officers served not a day in a Russian jail, instead getting a heroes welcome home, including decorations for their good work abroad, then disappeared from public view.
Contrary to myth, the Cold War KGB and GRU were decidedly cautious about wetwork in the West. Assassinations of state enemies abroad were commonplace in Stalins time, but they waned in the 1950s after several embarrassing missteps, including the defection of one would-be KGB assassin to the Americans. The 1959 assassination of Stepan Bandera, the top Ukrainian nationalist, in Munich with cyanide was the last operation of its kind, as the KGBs footprint on the crime was obvious and embarrassing to the Kremlin. After that, the Chekists became notably cautious about wetwork in the West, not least because such an operation gone wrong would lead to the expulsion of many undercover Soviet intelligence officers, undoing years of hard espionage work.
While KGB and GRU maintained significant wetwork capabilities, they were used very sparingly down to the end of the Cold War. Yuri Andropov, who headed the KGB from 1967 to 1982, was notably cautious in such matters, quashing numerous proposals to assassinate defectors and dissidents in the West. When the Bulgarian DS, a close partner agency, asked for Soviet help to murder a troublesome defector, Andropov told the KGB to help but to steer very clear of the killing itself. The Soviets gave the Bulgarians a special new weapon, an umbrella that fired a micro-pellet filled with highly toxic ricin, which the DS used to assassinate Georgi Markov in London in October 1978 a crime that British investigators correctly pinned on the DS, though the case, never prosecuted, officially remains open. Yet the Soviets had nothing to do with the killing itself, per Andropovs orders.
In contrast, Putin shows none of Andropovs caution. He has been willing to send Russian spies abroad to kill people that the Kremlin does not like, and as Russia finds itself increasingly in a corner and willing to lash out at the West, this ought to concern all Western governments. Increased espionage and subversion against NATO and the EU, directed by Russian special services, should be considered a given. The West would also be wise to anticipate Russian terrorism, the ugly side of the Kremlins Special War, as Putin seeks ways to punish the people whom he blames for his increasingly dire politico-economic predicament.
Everything from cyber-attacks to bombings to assassinations of prominent Westerners should be considered eminently possible. The good news is that vigilant Western counterintelligence, employed in a joint and strategic fashion, can blunt Russias well-honed Special War acumen and will prevent terrorism by the Kremlin and its friends and various false-flags. By blunting espionage, you also cut short things much worse. The bad news is that NATO and the EU remain seriously deficient in counterintelligence, beyond the merely tactical realm, and are not yet ready to take on the Russians in this most important game. Money, motivation and cultural change inside U.S. and Western security services are needed urgently to develop serious counterintelligence vision and competence.
The new year will be filled with many Kremlin operational games of various kinds. Expect regular media reports of unattributed cyber attacks, unexplained acts of sabotage, unresolved online scandals, and mysterious terrorist incidents across the West. This can be stopped, and must be; there is little time to waste. I will be spending 2015 doing my part to assist the West as it learns to wage Special War against the number-one-ranked team in the game. I used to be a player, now Im just a consultant. If you would like to contact me about how to fight smart, feel free to do so.
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Find it (the article) quite strange ... saudis and opec receive no blame. putin and his minions aren’t very intelligent, according to this article.
Better to stop this KGB nut while he is weak, and show a strong front and try to steer Russia into the 21st century, rather than to start undoing all that Reagan accomplished, and move the world back into darkness and always on the brink of total annihilation.
The world is already on its way back to darkness. At this point, Putin is a minor player.
It would be smart politics to make a limited deal with Russia — we don’t need them as enemies at this point. Crimea means nothing to us, let them have it. Most of the people there are in favour. Make it clear that we won’t take the same position on the Baltic states or the rest of the Ukraine, but that we want good relations and a common front against Islam. Re-assess who we back in Syria, we got that wrong and Putin got it right.
Then move on. We have common enemies and common challenges. Anyone in the west who thinks we have any spare time or energy to bring more freedom to Russia is wasting their time. We need to bring more freedom to our own countries.
Having the academic orthodoxy death wish creeping out into mainstream society is far more dangerous than a few Russian threats that amount to nothing but whistling past the graveyard. The problem is becoming this — we ARE the graveyard.
If you remember the Russia before 1992, surely no one wants to allow a recreation of that, especially as darkness descends on the world, Putin is a part of the forces that are bringing darkness on the world, and God forbid that he succeed in becoming the monster that he hopes to become.
The sanctions are working.
Putin can starve.
it’s not the sanctions ... it’s America’s significantly increased oil production impacting the global markets ... very bad for soviet Russia ...
Why would you blame the Saudis for Russia's troubles. The Saudi's have done nothing to Russia. Literally.
And the Saudis are pumping lots if oil.
saudis and opec control the market price for oil. 2 + 2 = 4
The Saudis are pumping less oil in 2014 than they did in 2013.
Russia produces more oil than the Saudis.
true
No. Read my post #13.
Very interesting and detailed article.
are you saying russia controls the price of oil?
You make a good point in post 6. I wonder, though, if it isn’t too late for that given the economic situation Russia is in. Too many mindless war-mongers are gleefully celebrating and consequently raising the anger level in Russia. There is a point conflicts get to where revenge becomes the number one motive.
I'm saying that SA hasn't contributed to oil price decreases. If anything their production is slightly off in 2014 from 2013.
I'm saying why should SA cut oil production further to help Russia when Russia produces more oil than SA.
one more question ... Does the U.S. of A. set the price of oil?
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