This analytical essay deals with two news items. One is good news, that the end of the world is not nigh. To all appearances, the storm has blown over and the risk of uncontrolled escalation of the East-West confrontation sparked by the coup d’état in Ukraine and the annexation of Crimea by Moscow has subsided substantially. The bad news is that we are well into the New Cold War. Read on
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Barack Obama’s Speech in Bozar: Is there a New Cold War?
by Gilbert Doctorow, Ph.D.
The crisis sparked by the coup d’état in Ukraine and annexation of Crimea by Russia has subsided substantially. At present it is highly unlikely there will be a move by the U.S. or EU to progress to ‘phase 3,’ meaning going from symbolic sanctions to real economic warfare. Military action against Russia has been taken off the table completely by President Obama in the statements he made in The Hague and Brussels.
In the meantime, the IMF has formulated a tentative proposal to extend loans of between $14 and 18 billion to Ukraine, roughly what Russia had committed to lend back in December and this will stabilize the fragile macroeconomic situation there, a precondition for any political normalization. Equally important, there is reason to believe that behind the scenes the US government is using its muscle to facilitate the suppression of the fascist fringe that controlled the Maidan in its final assault on the Yanukovich government and appeared to dictate terms to the provisional government which followed.
Two days ago one of the most violent criminals who had led the street fighting on Maidan, Oleksandr Musychko of the Right Sector, was killed by police fire when resisting arrest. Subsequent threats against the police and the Ministry of Internal Affairs were met by counter threats from Minister Arsen Avakov, who said his forces would go after all illegally armed extremists, including those in the Fatherland Party of acting prime minister Yatsenyuk. It is inconceivable he could take such a stand without protection from the regime’s Western sponsors.
And on the sidelines of the nuclear security conference in the Hague on Monday, Russian Foreign Secretary Sergei Lavrov made a small but nonetheless noteworthy gesture of accommodation to Western demands by holding talks with his Ukrainian counterpart, the representative of a government his country does not recognize as legitimate.
That is the good news. The bad news is that notwithstanding Barack Obama’s denial that we are facing a New Cold War, during the main speech of his European trip this week, his appearance at the Bozar auditorium on Wednesday, his entire mission of shoring up the Atlantic alliance for a lengthy contest of wills with the Kremlin speaks to the reality of ‘containment’ and Cold War Redux.
In his Bozar speech, President Obama said that this is not the time for ‘bluster’ but for straight talk. And yet in both this prepared speech and in his offhand remarks the day before at a press conference in the Hague concluding a nuclear security conference, it is precisely bluster that predominates. This is also evidenced throughout the materials released to the press following a summit with EU leaders. The White House propaganda machine is working overtime.
Regrettably from a look at today’s Western European media accounts, it appears that the editorial boards have allowed their publications to reprint uncritically what they have been hand fed by the news managers from Washington, D.C. Even The Guardian, a British paper which is widely viewed in the States and, possibly on the Continent, as a champion of free speech and media power due to its position in support of Edward Snowden turns off its thinking cap when the topic in question is Russia, as we see in its lead article on Obama at Bozar.
In what follows, I will first refute Obama’s arguments on why the present situation does not resemble the Cold War. And then we can delve into the absurdities of some of the pervasive statements in the mass media on how Europe and the USA will stand up to Russia by isolating it and crippling it economically, particularly in the energy sector, Russia’s principal export component and contributor to the state budget.
At the press conference in The Hague, Obama went out of his way to poke the Kremlin in the eye while making his argument that the present standoff cannot be compared to the days of the Cold War. Russia is no superpower, said Obama, just a regional power that bullies its neighbors. Unlike the days of the Cold War, Russia has no global bloc in its thrall and is isolated from the world community as it pursues its chosen path of Crimean annexation.
The vote in the UN General Assembly yesterday on the validity of the Crimean referendum to secede from Ukraine gives the lie to Obama’s assertion on Russia’s isolation. Yes, the United States, got the majority it sought condemning the referendum, but as Bloomberg news aptly reported, there was barely a majority of countries in favor. Out of the 193 members, 100 voted in favor, 11 voted against and 58 abstained, while 24 members were absent. And this Pyrrhic victory was on a watered down motion which made no mention of a Russian invasion of Crimea or the annexation which followed. So much for a condemnation of Russia by the entire world community, as Washington would have it.
To be sure, Russia today does not command a bloc as the Soviet Union once did, but its soft power and a number of key formal and informal alliances do ensure its position as a global leader and not a mere regional hegemon. First worthy of mention is Russian membership in BRICS, which, given the combination of population heft and economic dynamics, is a sort of counterweight to the United States and Europe on the world stage. BRICS might reasonably be considered a leadership core of what once was called the non-aligned nations. That, in turn, gives Russia considerable leverage within the G-20, which nowadays performs the role of the world’s board of directors that once was held by the G-8.
Next there is Russia’s de facto co-stewardship with China of the Shanghai Cooperation Organization which is focused on managing relations with Central Asia but has ramifications extending to the Indian subcontinent and further afield given the observer status of Afghanistan, India, Iran, Mongolia and Pakistan. Finally there are Russia’s bilateral relations with countries in key areas such as South America and particularly in the Middle East, where it has very productive and mutually beneficial relations with Turkey, Israel and, in the immediate prospect, Egypt, not to mention its strategic commitments with Syria.
All of these diplomatic realities explain how Russia was able to call in IOUs to achieve its respectable showing yesterday at the UN General Assembly in the face of all possible huffing and puffing by the United States and its European allies. In short, isolation of Russia is no more achievable by this Democratic administration than it was achievable by George W. Bush in 2008.
In the terms of the 21st century, Russia is a truly global power even without having military bases outside its borders. Moreover, as we heard loud and clear from Vladimir Putin’s annual speech on the State of the Nation in December 2013, in addition to confrontation with the United States over its national security interests, Russia challenges American and Western pretentions as sole arbiters of human rights, democracy and cultural values worldwide. It promotes a socially conservative ideology.
Before all the latest events surrounding Ukraine, we already had an intense information war between Russia and the West. Anyone doubting that reality need only look over US and European mainstream media sources in the run-up to the Sochi Olympics, with their trash Putin, trash Russia slant.
In summary, we today have a bipolar world. We have flash points and charges of aggression and land grab over Crimea. What was missing to demonstrate a new Cold War was the delineation of a Western policy of containment as a substitute for the military option manqué set in a long timeline to match the Mister X essay of George Kennan. Barack Obama kindly filled in that blank by his intemperate words and deeds on his European visit this past week.
As we now turn to the issue of sanctions, let us start with the remarks of President Obama at The Hague when he loftily assured Europe that the United States is prepared to release into export all of the natural (shale) gas required for the Old Continent’s daily use. In the context, he meant that the U.S. could replace Russian sourced gas, which in 2013 amounted to 30% of all of Europe’s gas consumption or 150 billion cubic meters. It should be noted that 2013 marked a high point in Russian gas sales and the trend line has been pointing upwards due to cutbacks in Norwegian supplies and an uptick in consumption with the phase-out of nuclear power.
Obama’s assurances were the quintessence of empty bluster. Whatever his personal disposition and that of the American Congress, reality lies elsewhere. The first American LNG station for exports will only be operational in 2016 and its capacity has already been sold out to Asian customers. Others will, of course, come on line as U.S. production capacity also rises substantially towards 2020, however, it is hard to see how an infrastructure, including, of course, hugely expensive LNG carriers, can be put in place to cover the vast quantities of gas Europe would need to replace Russian sources. Moreover, it is hard to see how such exports could take place without an enormous impact on American domestic prices, which are presently up to four times below world market prices for LNG.
However, we are now in 2014 and American threats to impose Iran type sanctions on the Russian energy and financial sectors, which Obama would like us to believe are still on the table should Russia continue to misbehave, would result only in Europe going dark.
We were treated this week to further bluster coming out of Obama’s summit meeting with Messrs. Barroso and Van Rompuy of the EU Commission and European Council. One key issue was reverse flows of gas from Europe to Ukraine to protect our new friends from a potential cutoff of supplies already threatened a couple of weeks ago with reference to Ukraine’s 2 billion euros in unpaid bills for earlier deliveries. The presentation of the entire issue has been a case study in U.S.-EU propaganda which does not stand up to any scrutiny. Of course, there has been little chance of exposure, since our newspapers have hardly exercised any critical faculties.
The only seeming flaw in the arrangement which made it onto Euronews was the resistance of little Slovakia to providing a missing link in the reverse flow strategy. We were told that the link would cost 20 million euros and Slovakia refused to put up the money, shooting the puck back over to Brussels. But this is really just a cavil. The fundamental issue is that the entire project has been misrepresented. It is all about assuring European energy security, not the Ukraine’s.
The threat to Europe’s gas supplies comes from the potential disputes between Ukraine and Russia spilling over to operation of the transit lines which carry more than 70% of Russian gas to Western Europe. This is exactly what happened already in 2009.
The scheme of reverse flow would ensure that there will be no pretexts for a Russian cut-off because the invoices for gas supplied to Ukraine would effectively be written on West European customers of Gazprom who will re-invoice to Naftogaz in Ukraine and look after payment themselves. For the Russians, this is an optimal solution since it ensures payments and eliminates the need to deal with the Ukrainian authorities whom they do not recognize as legitimate.
However, this solution does nothing to protect gas supplies to Ukraine in case of sanctions being applied on Russian in a ‘phase 3’ scenario. If the gas stops flowing to Western Europe, then there is no gas for reverse flow to Ukraine.
I will stop here and not strain your patience, dear Reader. We may be sure that Washington will not desist in its feverish search for pressure points to apply against Russia as it works on the new containment policy for the New Cold War. All of which is rather sad, because the creativity being diverted into this futile task could be so much better applied to finding a way to jointly govern this newly bipolar world for the prosperity and peace of all.
©Gilbert Doctorow, 2014
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G. Doctorow is an occasional guest lecturer at St. Petersburg State University and Research Fellow of the American University in Moscow. His latest book, Stepping Out of Line: Collected (Nonconformist) Essays on Russian-American Relations, 2008-12, is available in paperback and e-book from Amazon.com and affiliated websites worldwide. Also on sale in Sterling and Waterstone’s booksellers, Brussels.