Tag Archives: Democracy

Britain, Economic, European Union, Financial Markets, Government, Politics, Russia, Society, Ukraine, United States

What will happen next following the crisis in Ukraine?

ECONOMIC REALITIES

Intro: Economic havoc and a global slump could materialise from the crisis in the Crimea

So far, financial markets in the West have remained remarkably undisturbed in the face of the crisis unfolding in Ukraine. Following Crimea’s referendum at the weekend, which effectively sealed Vladimir Putin’s grip of the Ukrainian peninsula, sanctions were always likely to follow. Whilst, then, we may anticipate just how long the sanguine calm will continue, Western leaders should also be careful of supplanting diplomacy with threats to Russia that they are unwilling or unable to back up. The decision by the European Union and United States to impose sanctions on several Russian officials is a limited response to the breach of international law that has taken place in Crimea. The measures include travel bans and the freezing of assets against individuals who were deemed to have played a major role in the referendum – a vote, officials say, in which 97 per cent of voters backed a breakaway from Ukraine and, instead, opted to join the Russian Federation.

In the years since the dissolution of the Soviet Union, Russia has steadily become more integrated into the global economy. We know that many rich Russians have shifted their gains (ill-gotten or otherwise) into more stable and secure environments, such as investing on the London Stock Exchange or by diversifying their stocks in the UK property market. In actual fact, more money has flowed into Russia than out. According to data from the Bank for International Settlements, foreign owned banks have lent the country at least $260 billion. That is nearly double the value of its estimated assets in the West. As a consequence, Russia’s bilateral trade has risen to more than $100 billion annually. Almost a third of Europe’s gas, coal and oil imports come from Russia, and there has been a huge upsurge in direct investment by foreign firms.

Rhetoric used by the international community implied that there would be consequences if the referendum went ahead while the peninsula was still occupied by Russian troops. No doubt, Mr Putin will have considered the penalty a price worth paying. The question now, though, is what will happen next. Washington insists the screw will be tightened if the situation were to escalate in Ukraine – a distinct possibility that could happen fairly swiftly since the aim of the Crimean separatists is to secede from Ukraine within a month. They also aspire to adopt the rouble and by joining the Russian time-zone.

Whilst a military response to Russian aggression has already been ruled out by Western leaders, meaningful sanctions are not really much of an option, either. A full-blown trade-war would inflict serious damage on both sides. However, capital flows between Russia and the West are already in a parlous state in anticipation of lesser action, including assets freezes and travel restrictions already imposed. In order to defend the rouble, Russians are withdrawing billions from Western banks and selling off US Treasury Bonds. Mr Putin also raised interest rates to 7 per cent; a move that will discourage capital outflights from Russia to the West, a rate of interest that will be far more attractive for Russians to invest at home. The West seems certain to reciprocate by dumping Russian assets.

Yet, this all comes at a particularly delicate time for the world economy. Emerging markets, including China, have rapidly slowed down; the Eurozone is expecting a period of deflation to start anytime soon; and, America’s economy has started to inflict severe withdrawal symptoms to many countries around the world following its tapering of quantitative easing. The global economy may be just one sharp shock away from lurching into another recession.

A standoff with Russia over Crimea’s breakaway is the last thing the world needs. Economic considerations cannot surpass the higher purpose of defending international law, and as such must be secondary to it. Nonetheless, the interplay between politics and economics is what is making this situation so dangerous and destabilising. All concerned should be aware of just how very much more disruptive this crisis could yet become.

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Economic, European Union, Government, History, Russia, Society, Ukraine, United States

An outcome in Crimea must be fair…

CRIMEA

Intro: The current situation in Ukraine has been described as the biggest crisis in Europe since the turn of the 21st century

Russian troops are now controlling Crimea in the south-east of the country. The chaos in the former Soviet state is the most troubling development on European soil since the turn of the millennium. The crisis has all the hallmarks of a 20th century conflict; one that resembles the days of the Cold War, or even beyond it. The American missile destroyer USS Truxton has arrived in the Black Sea and will permitted to stay there for a period of only 21 days under the Montreux Convention, an international agreement that allows a warship of any non-Black Sea country to be in its waters.

Whilst European leaders have spoken about ramping up tough diplomatic measures against Russia, Vladimir Putin is unperturbed and so far seems untroubled by the prospect of their disapproval. Mr Putin is determined to see the Crimean peninsula become part of his wider Russian Federation, particularly given the economic advantages to the Russian economy of its offshore gas fields. There also remains a strong pro-Russian element in the Crimea, a factor that Mr Putin will wish to capitalise upon. It was, after all, fierce disagreement over whether Ukraine should forge closer links with the European Union or Putin’s Russia which brought about the crisis in the first place. The very idea that former Soviet states be integrated into the European Union is an anathema to Mr Putin as he seeks, instead, to build a Russian dominated Eurasia Union.

The American missile destroyer USS Truxton has arrived in the Black Sea and will permitted to stay there for a period of only 21 days under the Montreux Convention.

The American missile destroyer USS Truxton has arrived in the Black Sea and will permitted to stay there for a period of only 21 days under the Montreux Convention.

But with European measures to find a solution reaping little success, the arrival of a US destroyer in the region seems likely only to exacerbate the situation. Russia has a strong naval presence in the Crimean port of Sevastopol, the deployment of US gunboat diplomacy surely misreads the temperature in the Ukraine and the temperament of the Russian president. The Americans insist that Truxton is merely participating in a ‘planned exercise’, but the timing of its arrival will be more suspicious to those who doubt such an announcement.

Observers and analysts have turned to the 20th century to draw parallels with the actions that led to both world wars. It is not unthinkable that the crisis in Ukraine could be allowed to escalate with similar consequences.

On 16 March, the people of Crimea will be offered two choices in a referendum – they can either vote to become subjects of the Russian Federation or by favouring the restoration of the 1992 Crimean constitution (which would be a declaration of independence from Ukraine). Transparent democracy seems the only hope for a peaceful solution.

Crucially, however, this referendum doesn’t offer citizens the choice to remain with the status quo, with Crimea as an autonomous republic within Ukraine. The options on offer are either to join with Russia or declare independence, then join with Russia soon after.

The referendum has no credibility. How can it be when the outcomes it promises amount to no more than a stitch-up? The West should be concerned that the people will be asked to make a decision while their homeland has effectively been seized by Russian forces. Putin may tell the world that his troops are there to protect Russian speaking people, but that argument ran out the very moment Russian soldiers displayed their intention to protect by pointing their threatening weapons in the direction of their Ukrainian counterparts.

Mr Putin’s troubling empire-building is at the heart of the issue. It may well be that a majority of the people of Crimea will choose to enter the Russian fold. We would have no concerns if such a transition took place openly and democratically, and in full view of the world. A vote is needed that is open, honest and fair, and a plebiscite that is carried out without Russian soldiers prowling the streets.

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Government, Intelligence, Military, National Security, United States

Bradley Manning and the US court-martial verdict…

BRADLEY MANNING

The US military court ruling on finding the WikiLeaks whistleblower Bradley Manning guilty of espionage (but not of aiding the enemy) shows a proportionate sense of perspective after one of the most turbulent episodes in recent US judicial history.

In a highly emotive summing up by the prosecutor, Major Ashden Fein, claimed that Manning was ‘a determined soldier with the ability, knowledge and desire to harm the United States.’ He was not a whistleblower, but a traitor… and Manning had, said Major Fein, ‘general evil intent.’

Nobody ever suggested that this young and disillusioned soldier had deliberately sent military secrets to Al-Qaeda, but the court-martial ruling has proved ‘beyond a reasonable doubt’ that his voluntary actions to disclose more than 700,000 documents would ‘lead to them being in the hands of the enemy.’

Manning was responsible for the largest leaking of classified information in US history. His actions sent shockwaves through America’s military and political establishments, but undoubtedly their response to his actions was part of the US mindset that materialised after 9/11 in policies such as extraordinary rendition, waterboarding and events that have transpired since at Guantanamo Bay.

The presiding judge over Bradley Manning’s court-martial, Judge Colonel Denise Lind, struck a very different note saying that the policies of the George W Bush presidency which were responsible have been reversed. Whilst that does hold some credence, the malign consequences linger on, including the compulsion in the United States to silence those, like Manning, who discovered that the exercise of American power on the ground in Iraq and Afghanistan was significantly different from the way it was advertised back home.

In many ways a dichotomy has been exposed. American claims of fostering a culture of free information have often been inflated, and its media have certainly failed to take full advantage of those freedoms they did possess. But the high collision of President Bush’s ‘war on terror’ with the explosion of information released by the internet – which WikiLeaks came to symbolise – created in America a national mood of paranoia reminiscent of Stalinism. President Obama’s attempts to cool that feverish atmosphere is slowly being achieved with the winding down of military operations in Iraq and Afghanistan, and Washington’s refusal so far to countenance any large-scale involvement in Syria or Iran.

While both Bradley Manning and the WikiLeaks founder Julian Assange were guilty of recklessly flooding media outlets with secret and classified information with little concern for what has subsequently happened to the people who had been named, their underhand dealings enabled many to learn about atrocities committed by the US military which otherwise would have been covered up for ever.

Governments and their military establishments are known in wanting to keep their dirty secrets to themselves, but we should also know they must not be allowed to. Freedom of information is one of the cornerstones of democracy, and whistleblowers just happen to be a vital component to the functioning of societies that aspire to be free. Reconciling that to the authority of their rulers will always throw up issues perfectly witnessed in the court-martial of Bradley Manning.

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