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http://news.yahoo.com/4-reasons-putin-already-losing-ukraine-211452971.html?vp=1
1) The Kremlin’s own pollster released a survey on Monday that showed 73% of Russians reject it. In phrasing its question to 1600 respondents across the country, the state-funded sociologists at WCIOM were clearly trying to get as much support for the intervention as possible: “Should Russia react to the overthrow of the legally elected authorities in Ukraine?” they asked. Only 15% said yes – hardly a national consensus.
2) When markets opened on Monday morning, investors got their first chance to react to the Russian intervention in Ukraine over the weekend, and as a result, the key Russian stock indexes tanked by more than 10%. That amounts to almost $60 billion in stock value wiped out in the course of a day, more than Russia spent preparing for last month’s Winter Olympic Games in Sochi. The state-controlled natural gas monopoly Gazprom, which accounts for roughly a quarter of Russian tax revenues, lost $15 billion in market value in one day – incidentally the same amount of money Russia promised to the teetering regime in Ukraine in December and then revoked in January as the revolution took hold.
The value of the Russian currency meanwhile dropped against the dollar to its lowest point on record, and the Russian central bank spent $10 billion on the foreign exchange markets trying to prop it up. “This has to fundamentally change the way investors and ratings agencies view Russia,” said Timothy Ash, head of emerging market research at Standard Bank. At a time when Russia’s economic growth was already stagnating, “This latest military adventure will increase capital flight, weaken Russian asset prices, slow investment and economic activity and growth. Western financial sanctions on Russia will hurt further,” Ash told the Wall Street Journal.
3) The oil-rich state of Kazakhstan, the most important member of every regional alliance Russia has going in the former Soviet space, put out a damning statement on Monday, marking the first time its leaders have ever turned against Russia on such a major strategic issue: “Kazakhstan expresses deep concern over the developments in Ukraine,” the Foreign Ministry said. “Kazakhstan calls on all sides to stop the use of force in the resolution of this situation.”
What likely worries Russia’s neighbors most is the statement the Kremlin made on March 2, after Putin spoke on the phone with U.N. Secretary General Ban Ki-moon. “Vladimir Putin noted that in case of any escalation of violence against the Russian-speaking population of the eastern regions of Ukraine and Crimea, Russia would not be able to stay away and would resort to whatever measures are necessary in compliance with international law.” This sets a horrifying precedent for all of Russia’s neighbors.
Every single state in the former Soviet Union, from Central Asia to the Baltics, has a large Russian-speaking population, and this statement means that Russia reserves the right to invade when it feels that population is threatened. The natural reaction of any Russian ally in the region would be to seek security guarantees against becoming the next Ukraine. For countries in Eastern Europe and the Caucasus, including Armenia, a stanch Russian ally, that would likely stir desires for a closer alliance with NATO and the European Union. For the countries of Central Asia, Russia’s traditional stomping ground on the geopolitical map of the world, that would mean strengthening ties with nearby China, including military ones.
China, which has long been Russia’s silent partner on all issues of global security from Syria to Iran, has also issued cautious statements regarding Russia’s actions in Ukraine. “It is China’s long-standing position not to interfere in others’ internal affairs,” the Foreign Ministry reportedly said in a statement on Sunday. “We respect the independence, sovereignty and territorial integrity of Ukraine.”
So in the course of one weekend, Putin has spooked all of the countries he wanted to include in his grand Eurasian Union, the bloc of nations he hoped would make Russia a regional power again. The only gung-ho participants in that alliance so far have been Kazakhstan (see above) and Belarus, which is known as Europe’s last dictatorship. Its leader, Alexander Lukashenko, has so far remained silent on the Russian intervention in Ukraine. But last week, Belarus recognized the legitimacy of the new revolutionary government in Kiev, marking a major break from Russia, which has condemned Ukraine’s new leaders as extremists and radicals. The Belarusian ambassador in Kiev even congratulated Ukraine’s new Foreign Minister on taking office and said he looks forward to working with him.
As for the impoverished nation of Armenia, a late-comer to Russia’s fledgling Eurasian alliance, it has also recognized the new government in Kiev while stopping short of any official condemnation of Putin’s intervention in Ukraine so far. But on Saturday, prominent politicians led an anti-Putin demonstration in the Armenia capital. “We are not against Russia,” said the country’s former Minister of National Security David Shakhnazaryan. “We are against the imperial policies of Putin and the Kremlin.”
4) In June, Putin was planning to welcome the leaders of the G8, a club of western powers (plus Japan), in the Russian resort city of Sochi. But on Sunday, all of them announced they had halted their preparations for attending the summit in protest at Russia’s intervention in Ukraine. So much for Putin’s hard-fought seat at the table with the leaders of the western world.
In recent years, one of Russia’s greatest points of contention with the West has been over NATO’s plans to build of a missile shield in Europe. Russia has seen this as a major threat to its security, as the shield could wipe out Russia’s ability to launch nuclear missiles at the West. The long-standing nuclear deterrent that has protected Russia from Western attacks for generations – the Cold War doctrine of mutually assured destruction, or MAD – could thus be negated, Russia’s generals have warned. But after Russia decided to unilaterally invade its neighbor to the west this weekend, any remaining resistance to the missile shield project would be pushed aside by the renewed security concerns of various NATO members, primarily those in Eastern Europe and the Baltics. Whatever hopes Russia had of forestalling the construction of the missile shield through diplomacy are now most likely lost.
No less worrying for Putin would be the economic sanctions the West is preparing in answer to Russia’s intervention in Ukraine. Depending on their intensity, those could cut off the ability of Russian companies and businessmen in getting western loans and trading with most of the world’s largest economies. Putin’s allies could also find it a lot more difficult to send their children to study in the West or to keep their assets in Western banks, as they now almost universally do. All of that raises the risk for Putin of a split in his inner circle and, potentially, even of a palace coup. There is hardly anything more important to Russia’s political elite than the security of their foreign assets, certainly not their loyalty to a leader who seems willing to put all of that at risk.
And what about the upside for Putin? There doesn’t seem to be much of it, at least not compared to the damage he stands to inflict on Russia and himself. But he does look set to accomplish a few things. For one, he demonstrates to the world that his red lines, unlike those of the White House, cannot be crossed.
If Ukraine’s revolutionary government moves ahead with their planned integration into the E.U. and possibly NATO, the military alliance that Russia sees as its main strategic threat would move right up to Russia’s western borders and, in Crimea, it would surround the Russian Black Sea fleet. That is a major red line for Putin and his generals.
By sending troops into Crimea and, potentially, into eastern Ukraine, Russia could secure a buffer around Russia’s strategic naval fleet and at its western border. For the military brass in Moscow, those are vital priorities, and their achievement is worth a great deal of sacrifice. Over the weekend, Putin’s actions showed that he is listening carefully to his generals. At the same time, he seems to be ignoring the outrage coming from pretty much everyone else.
1) The Kremlin’s own pollster released a survey on Monday that showed 73% of Russians reject it. In phrasing its question to 1600 respondents across the country, the state-funded sociologists at WCIOM were clearly trying to get as much support for the intervention as possible: “Should Russia react to the overthrow of the legally elected authorities in Ukraine?” they asked. Only 15% said yes – hardly a national consensus.
2) When markets opened on Monday morning, investors got their first chance to react to the Russian intervention in Ukraine over the weekend, and as a result, the key Russian stock indexes tanked by more than 10%. That amounts to almost $60 billion in stock value wiped out in the course of a day, more than Russia spent preparing for last month’s Winter Olympic Games in Sochi. The state-controlled natural gas monopoly Gazprom, which accounts for roughly a quarter of Russian tax revenues, lost $15 billion in market value in one day – incidentally the same amount of money Russia promised to the teetering regime in Ukraine in December and then revoked in January as the revolution took hold.
The value of the Russian currency meanwhile dropped against the dollar to its lowest point on record, and the Russian central bank spent $10 billion on the foreign exchange markets trying to prop it up. “This has to fundamentally change the way investors and ratings agencies view Russia,” said Timothy Ash, head of emerging market research at Standard Bank. At a time when Russia’s economic growth was already stagnating, “This latest military adventure will increase capital flight, weaken Russian asset prices, slow investment and economic activity and growth. Western financial sanctions on Russia will hurt further,” Ash told the Wall Street Journal.
3) The oil-rich state of Kazakhstan, the most important member of every regional alliance Russia has going in the former Soviet space, put out a damning statement on Monday, marking the first time its leaders have ever turned against Russia on such a major strategic issue: “Kazakhstan expresses deep concern over the developments in Ukraine,” the Foreign Ministry said. “Kazakhstan calls on all sides to stop the use of force in the resolution of this situation.”
What likely worries Russia’s neighbors most is the statement the Kremlin made on March 2, after Putin spoke on the phone with U.N. Secretary General Ban Ki-moon. “Vladimir Putin noted that in case of any escalation of violence against the Russian-speaking population of the eastern regions of Ukraine and Crimea, Russia would not be able to stay away and would resort to whatever measures are necessary in compliance with international law.” This sets a horrifying precedent for all of Russia’s neighbors.
Every single state in the former Soviet Union, from Central Asia to the Baltics, has a large Russian-speaking population, and this statement means that Russia reserves the right to invade when it feels that population is threatened. The natural reaction of any Russian ally in the region would be to seek security guarantees against becoming the next Ukraine. For countries in Eastern Europe and the Caucasus, including Armenia, a stanch Russian ally, that would likely stir desires for a closer alliance with NATO and the European Union. For the countries of Central Asia, Russia’s traditional stomping ground on the geopolitical map of the world, that would mean strengthening ties with nearby China, including military ones.
China, which has long been Russia’s silent partner on all issues of global security from Syria to Iran, has also issued cautious statements regarding Russia’s actions in Ukraine. “It is China’s long-standing position not to interfere in others’ internal affairs,” the Foreign Ministry reportedly said in a statement on Sunday. “We respect the independence, sovereignty and territorial integrity of Ukraine.”
So in the course of one weekend, Putin has spooked all of the countries he wanted to include in his grand Eurasian Union, the bloc of nations he hoped would make Russia a regional power again. The only gung-ho participants in that alliance so far have been Kazakhstan (see above) and Belarus, which is known as Europe’s last dictatorship. Its leader, Alexander Lukashenko, has so far remained silent on the Russian intervention in Ukraine. But last week, Belarus recognized the legitimacy of the new revolutionary government in Kiev, marking a major break from Russia, which has condemned Ukraine’s new leaders as extremists and radicals. The Belarusian ambassador in Kiev even congratulated Ukraine’s new Foreign Minister on taking office and said he looks forward to working with him.
As for the impoverished nation of Armenia, a late-comer to Russia’s fledgling Eurasian alliance, it has also recognized the new government in Kiev while stopping short of any official condemnation of Putin’s intervention in Ukraine so far. But on Saturday, prominent politicians led an anti-Putin demonstration in the Armenia capital. “We are not against Russia,” said the country’s former Minister of National Security David Shakhnazaryan. “We are against the imperial policies of Putin and the Kremlin.”
4) In June, Putin was planning to welcome the leaders of the G8, a club of western powers (plus Japan), in the Russian resort city of Sochi. But on Sunday, all of them announced they had halted their preparations for attending the summit in protest at Russia’s intervention in Ukraine. So much for Putin’s hard-fought seat at the table with the leaders of the western world.
In recent years, one of Russia’s greatest points of contention with the West has been over NATO’s plans to build of a missile shield in Europe. Russia has seen this as a major threat to its security, as the shield could wipe out Russia’s ability to launch nuclear missiles at the West. The long-standing nuclear deterrent that has protected Russia from Western attacks for generations – the Cold War doctrine of mutually assured destruction, or MAD – could thus be negated, Russia’s generals have warned. But after Russia decided to unilaterally invade its neighbor to the west this weekend, any remaining resistance to the missile shield project would be pushed aside by the renewed security concerns of various NATO members, primarily those in Eastern Europe and the Baltics. Whatever hopes Russia had of forestalling the construction of the missile shield through diplomacy are now most likely lost.
No less worrying for Putin would be the economic sanctions the West is preparing in answer to Russia’s intervention in Ukraine. Depending on their intensity, those could cut off the ability of Russian companies and businessmen in getting western loans and trading with most of the world’s largest economies. Putin’s allies could also find it a lot more difficult to send their children to study in the West or to keep their assets in Western banks, as they now almost universally do. All of that raises the risk for Putin of a split in his inner circle and, potentially, even of a palace coup. There is hardly anything more important to Russia’s political elite than the security of their foreign assets, certainly not their loyalty to a leader who seems willing to put all of that at risk.
And what about the upside for Putin? There doesn’t seem to be much of it, at least not compared to the damage he stands to inflict on Russia and himself. But he does look set to accomplish a few things. For one, he demonstrates to the world that his red lines, unlike those of the White House, cannot be crossed.
If Ukraine’s revolutionary government moves ahead with their planned integration into the E.U. and possibly NATO, the military alliance that Russia sees as its main strategic threat would move right up to Russia’s western borders and, in Crimea, it would surround the Russian Black Sea fleet. That is a major red line for Putin and his generals.
By sending troops into Crimea and, potentially, into eastern Ukraine, Russia could secure a buffer around Russia’s strategic naval fleet and at its western border. For the military brass in Moscow, those are vital priorities, and their achievement is worth a great deal of sacrifice. Over the weekend, Putin’s actions showed that he is listening carefully to his generals. At the same time, he seems to be ignoring the outrage coming from pretty much everyone else.
