The Ukraine War

Ukrainian President Zelensky says his country will file an expedited application to join NATO immediately. “’De facto, we have already proven interoperability with the Alliance’s standards, they are real for Ukraine — real on the battlefield and in all aspects of our interaction,’ Zelensky said. ‘Today, Ukraine is applying to make it de jure.”  “Zelensky says Ukraine filing expedited application to join NATO”  This reverses Zelensky’s statements he made in March of his willingness to stay out of NATO.

NATO members should just say no.  Hell no! After successfully serving to protect the West from the USSR, post-Soviet NATO has become a liability. After breaking our promise not to expand NATO further east in exchange for Russia’s agreement to the reunification of Germany, NATO has done nothing but cause problems.

In December 2021, Russia released an eight-point draft treaty to prevent its invasion of Ukraine. At the top of its list was no NATO membership for Ukraine. Soon after Russia’s invasion, President Zelensky offered to give up seeking NATO membership and agreed to much of what Russia demanded. The status of the largely Russian Donetsk and Lugansk was the largest sticking point. For reasons I totally fail to understand, the United States and its NATO allies refused to remove Ukraine’s NATO membership from the table while stating that membership was not a near term prospect. “Ukraine-Russia-NATO”

In March, following Russia’s stalled Feb 23 attack on Kyiv, representatives of Russia and Ukraine met at Belovezhskaya Pushcha, on the border of Poland and Belarus, for initial ceasefire talks.

Putin made six key demands:

  1. No NATO membership and a neutral position.
  2. Russian should be the second official language of Ukraine, with laws prohibiting it abolished.
  3. Recognize Crimea as Russian territory.
  4. Recognize the independence of Donetsk and Lugansk.
  5. Demilitarization of Ukraine and abandonment of weapons that could be a threat to the Kremlin.
  6. Banning of ultra-nationalist parties and organizations in Ukraine.

Of these, only #4 would be difficult for Ukraine to accept, but no agreement was reached, and the fighting continued with more and more Western support.  “Ukraine’s and Russia’s war”  The U.S. and NATO can bring Ukraine to the peace table anytime they want (by threatening to end their military and financial support).  No compromise agreement was reached in December, February, March or beyond. And NATO keeps expanding. Why? Why is the U.S. and NATO not pushing to make a peace agreement happen? If Russia still thinks it can come out ahead, China, India and others should convince it otherwise.

In a recent column in the Washington Post former chairman of the Joint Chiefs of Staff Mike Mullen, former U.S. senator Sam Nunn (D-Ga.) and former U.S. energy secretary Ernest J. Moniz, all of whom serve on the Nuclear Threat Initiative’s board of directors urged China to step forward:

“The most sensible policy choice for China is to wield its unique position of influence to encourage more “rational” decision-making by Putin. In particular, President Xi must make clear to Putin that nuclear use is a line he must not cross and that nuclear saber-rattling itself threatens the global nuclear order….  The United States and China can — and must — now work together with Europe and other nations to help end this war on the “just terms” called for by Biden in his speech to the United Nations.” “Xi Putin Ukraine nuclear arms”  

Every few months, I have urged us to stop this destructive war now. As winter approaches Europe with mounting energy shortages, I say it again. Stop it now.   “End the war in Ukraine”

Nancy Pelosi in Taiwan

Nancy Pelosi, the Speaker of the U.S. House of Representatives, just arrived in Taiwan. Why is this a big deal? Shouldn’t anyone be able to visit any country that has opened their doors to them? It depends on the context and purpose.

The civil war for control of China was won by the Chinese Communists lead by Mao Zedong in 1949. The opposition, led by General Chiang Kai-shek, fled to Taiwan and reestablished the Republic of China (POC) there. The civil war was fought on and off between 1927 and 1949 when the victorious Mao established the Peoples Republic of China (PRC) and designated Taiwan as its 23rd province. Both the PRC and POC claimed to be the legitimate governments of all of China.

Following President Richard Nixon’s historic visit to China in 1972, “the United States moved to recognize the People’s Republic of China (PRC) and de-recognize the Republic of China (ROC) in 1979, [and] the United States stated that the government of the People’s Republic of China was ‘the sole legal Government of China.’ Sole, meaning the PRC was and is the only China, with no consideration of the ROC as a separate sovereign entity.

“The United States did not, however, give in to Chinese demands that it recognize Chinese sovereignty over Taiwan (which is the name preferred by the United States since it opted to de-recognize the ROC). Instead, Washington acknowledged the Chinese position that Taiwan was part of China. To this day, the U.S. ‘one China’ position stands: the United States recognizes the PRC as the sole legal government of China but only acknowledges the Chinese position that Taiwan is part of China.

“Congress passed the Taiwan Relations Act in 1979 to protect the significant U.S. security and commercial interest in Taiwan. The TRA provided a framework for continued relations in the absence of official diplomatic ties….  The TRA sets forth the American Institute in Taiwan as the corporate entity dealing with U.S. relations with the island; makes clear that the U.S. decision to establish diplomatic relations with the People’s Republic of China rests upon the expectation that the future of Taiwan will be determined by peaceful means;… mandates that the United States make available defensive arms to Taiwan; and requires that the United States maintain the capacity to resist any resort to force or other forms of coercion that would jeopardize the security, or the social or economic system, of the people on Taiwan.”

“What is US one China policy and why does it matter?”

All American Presidents have affirmed this one China commitment while maintaining its “strategic ambiguity”. “U.S. Secretary of State Rex Tillerson said [that] the Trump administration is committed to the long-standing ‘One China’ policy as it reviews U.S. policy toward China, but also intends to keep all of its commitments to Taiwan.” June 13, 2017. “USA China-Tillerson committed to one China policy”

More recently: “Joe Biden made a potentially dangerous statement on Monday. In Tokyo, he gave a flat ‘yes’ to a reporter’s question of whether he was willing to ‘get involved militarily to defend Taiwan’. ‘That’s the commitment we made,’ the president claimed. In fact, the United States scrapped its formal commitment to defend Taiwan in 1979…. This is the third time in less than a year that Biden has publicly declared that the United States would use force to keep Beijing from seizing the island.  “Biden defend Taiwan-China invasion”

Pat Buchanan asks: “But if the U.S. went to war to defend Taiwan, what would it mean? We would be risking our own security and possible survival to prevent from being imposed on the island of Taiwan the same regime lately imposed on Hong Kong without any U.S. military resistance.”  “Is Taiwan’s independence worth war?”

What is Pelosi’s objective in going to Taiwan? What does she hope to accomplish with her poke in the Chinese eye? Our interest should be to promote the integration of Taiwan with the rest of China “by peaceful means.” Our diplomacy should be deployed to that end. President Biden’s repeated slips and Nancy Pelosi’s Taiwan visit do not provide the tone nor context for such diplomacy. I believe that her visit to Taiwan is a dangerous mistake. While we would be hard pressed from thousands of miles away to win a war with China, China would suffer enormously as well and probably has better sense than to start such a war. But what is the purpose of such a challenge?

End the war in Ukraine

With regard to Russia’s war in Ukraine, are you in the “peace camp” or the “Justice camp”? Do you want a peace agreement to end the war or do you want to punish Russia for the terrible things it has done no matter how long it takes?  “The Economist on Ukraine” It is rarely wise to take strategic decisions when enraged by someone’s behavior. It is currently hard not to want to flatten Russia for its illegal and brutal war with Ukraine (the Justice camp) but it would not be in our or the world’s interest to do so (Peace camp).  “The Russian war in Ukraine”

Everyone will suffer from continuing the war even without escalation. The world will suffer serious food shortages, oil and gas shortages, disruption and reorganization of the global trading system, and Ukraine and its economy will be in ruins.  And no one should forget that Russia is a nuclear power, in fact it has the largest nuclear arsenal in the world.

Ukraine President Zelensky said that he is willing to keep Ukraine neutral and out of NATO (but in the EU). He also demanded that Russia withdraw to the territories it occupied on February 23, 2022, which included the Crimea and parts of the largely Russian speaking Donbas. In a face-to-face interview with the managing editor of the Economist magazine on March 27 and as quoted in my blog above, Zelensky stated that: “Victory is being able to save as many lives as possible…because without this nothing would make sense. Our land is important, yes, but ultimately, it’s just territory.”

But on April 17, “President Volodymyr Zelensky told CNN that Ukraine is not willing to give up territory in the eastern part of the country to end the war with Russia.”   “Zelensky Russia war tapper interview-cnn-tv”  

Speaking at the Davos World Economic Forum last week, Henry Kissinger stated that “it’s time to think about a diplomatic settlement to end the war, and that settlement will have to include territorial concessions to Russia. ‘Ideally, the dividing line should be a return to the status quo ante,’ referring to the pre-war lines in which Russia controlled the Crimean Peninsula and approximately a third of territory in the Donbas. ‘Pursuing the war beyond that point would not be about the freedom of Ukraine, but a new war against Russia itself.’” “Does Henry Kissinger have a point?”

It is politically very difficult for either Ukraine or Russia to give up territory they hold or aspire to.  Edward Luttwak, a strategist and author of “The Logic of War and Peace” among many other books, has proposed a solution to this political dilemma, which like all political compromises should be acceptable to both sides without being fully satisfactory to either.  He proposes to settle the territorial issues via an internationally supervised plebiscite for determining the fate of each Oblast:

“That leaves the disposition of the Donetsk and Luhansk oblasts, substantial territories that Zelensky does not have the authority to give up, and without which Putin cannot leave the table where he has gambled and lost so much. While Putin cannot be given the two regions he demanded before starting the war, he can be provided with something that he can portray as a victory: plebiscites in both regions where properly certified residents, including returning refugees, would be allowed to vote on whether their oblast should remain Ukrainian or join Russia.

“Upon acceptance of the plebiscites in principle, a cease-fire would come into immediate effect, with Russia’s respect of their terms guaranteed by the ease of reimposing sanctions just lifted.”  “How the Ukraine war must end”  Allowing the residents of each region to determine their own affiliation can hardly be objectionable to the rest of us.

The Justice Camp and the military industry that cheers it on should yield to the Peace Camp in the interest of all of us.  “Ukraine’s and Russia’s war”

Ukraine’s and Russia’s War

Russia’s attack on Ukraine is horrifying, unjustified and illegal. We can’t help admiring the courage of the Ukrainian people in attempting to defend their country nor being enraged at Russia’s brutality.

In a recent article in Foreign Affairs, Alexander Vindman argued that: “America Must Embrace the Goal of Ukrainian Victory  It’s Time to Move Past Washington’s Cautious Approach” “Will America embrace Ukraine victory goal?”  Vindman, best known to us as Lieutenant Colonel Vindman, was born in Ukraine. It is understandable, but not excusable, that Vindman puts Ukraine’s interests above those of the United States.

As a naturalized American, Vindman proved his patriotism by testifying on October 29, 2019, before the U.S. House of Representatives’ impeachment inquiry against Donald Trump, for whom he worked as a member of the White House’s National Security Council. But when determining our role in Ukraine’s war with Russia, we should give primacy to America’s best interests in both the short and long term.

Historian and military expert Edward Luttwak tweeted recently that “Friends complain that my suggested war aim of restoring the Feb 23, 2022, status quo ante is too modest; some want the expulsion of all Russian forces from all parts of Ukraine incl Crimea, with others emphasizing the need to drive Putin from office. But both mean much more war…”  “Luttwak on war in Ukraine”

It is hard not to sympathize with the desire to punish Russia for what Putin has done and is doing—i.e., to demand justice. Many aspects of the world are not to our liking or of our making, even here at home. But we must deal rationally with the world that exists in the hopes of moving it bit by bit toward a better place.

In today’s Washington Post Brendan Rittenhouse Green and Catlin Talmadge wrote an oped titled: “The U.S. is expanding its goals in Ukraine. That’s dangerous. Comments by political and military leaders suggest the goal is no longer to drive Russia to the negotiating table but to seek a total defeat of Russian forces. That increases the odds of catastrophe.”

 “Talk of total victory aligns well with another recently floated objective: an extended bloodletting of the Russian army. Defense Secretary Lloyd Austin asserted on April 25 that the United States wants ‘to see Russia weakened to the degree that it can’t do the kinds of things that it has done in invading Ukraine.’ Yet crippling Russia’s military or expelling Russia from Ukraine are significantly more dangerous aims than preventing the further loss of Ukrainian territory or, through limited offensive operations, gaining some of it back. Unfortunately, if Russian President Vladimir Putin begins to think that his back is against the wall, he may lash out by directly confronting NATO, intensifying the conventional war in the east, or even using nuclear weapons.” “Ukraine war expansion risks nuclear”

Mr. Vindman wants us to make Russia a permanent enemy. That is never a good objective. Over the last half year both Presidents Zelenskyy and Putin have offered peace conditions that represented reasonable starting points for serious negotiations. Why haven’t we pressed them both to the negotiating table?

Vindman stated that: “A Ukrainian victory against Russia will be defined, first and foremost, by the Ukrainians themselves.” But then he also says that the US should give Ukraine more and better weapons. I am not sure that he sees the disconnect here. We should not push Putin into feeling he must escalate or lose. We should exert maximum pressure to bring this war to an end that is acceptable to both Ukrainian and Russian people and in a way that opens the door to a more peaceful Russia in the future. “Ukraine-France playing good cop with Putin”

Aside from the strong emotional desire to punish Russia for what it is doing, several of the usual suspects are dangerously prolonging this war. Billions of dollars are pouring into our defense industries, which, as always, have a profit incentive to keep things going. Though we are confronted with horrifying pictures of mangled buildings and bodies, they are “over there” somewhere. For most Americans the assumed horrors of war are academic, while in fact they are all too real for those involved. The huge cost of war in lives lost, human suffering, and economic and property damage are rarely given the weight they deserve as we cheer on the brave Ukrainians fighting to the last Ukrainian. Those very well-meaning Americans thanking our soldiers for their service rarely have any idea what we have asked of them to go and fight in other people’s wars.

So our emotions cry out to smash and punish the Russians. But how it ends will have a large impact on conditions in the world ten or twenty years from now. Our standard of living and the degree of security and cooperation in the world—particularly with Russia—will depend on when and how this war ends. We need to temper our emotions and engage our minds.

Our wars in Afghanistan and Iraq, for example, looked quite different at the end than they did as we undertook them. Ukraine is ranked only slightly less corrupt than Russia. “Transparency International” It is much more difficult doing business there than in Russia (Ease of doing business ranking lists New Zealand at the top, Russia 29 and Ukraine 64). “World Bank Ease of Doing Business index”  Thus it is a small wonder that John Hudson wrote in today’s Washington Post that: “Flood of weapons to Ukraine raises fear of arms smuggling Vague U.S. assurances spark concern about lost military equipment in Ukraine, a longtime hub of arms trafficking.” “Ukraine weapons trafficking”

It is too late to point fingers and ask why we did not press Ukraine and Russia to the bargaining table six months ago or four months ago. It is in our self-interest and the interest of Europe and the world to do so now.

Ukraine: How should we help?

It is impossible not to admire the bravery of the people of Ukraine as they fight for their independence and freedom. Without help, Russian troops are almost certain to capture Kyiv and other key cities. The EU and many other countries have pulled together as never before to impose serious sanctions and provide military and humanitarian supplies. See: “Sanctions”  Putin’s failure to prepare the Russian people for a military attack on their fellow Russians and cousins in Ukraine is provoking protests in Russia against this war.  But these may not be enough to save Ukraine and it is tempting to think we should provide boots on the ground to insure a Russian defeat. President Biden is right to believe that this would be a grave mistake.

Military interventions always look more compelling at the start, while going through the front door. Sure, our army can squash whoever. Years later, as we leave or are pushed out the back door (Vietnam, Afghanistan, Iraq, Libya, etc.), they are revealed as foolish endeavors from the beginning. While Vietnam has prospered after our withdrawal and Iraq’s development is promising, they might well have reached these achievements sooner if we had stayed out. Why is this so? Why can’t we just take over countries under attack and make them better?

Generally, the countries we attack are engaged in civil wars (Vietnam, Afghanistan, Libya). Even Russia’s attack on Ukraine has elements of a civil war. We almost never understand the nuances of such battles nor have sufficient military and diplomatic officials who speak their languages and know their histories as they rotate in for two years then out. We can never be sure which side or sides we should support.

Putting aside that we don’t really have the resources to fully police the world, we have rarely achieved our objectives in the wars we have undertaken since WWII even if those objectives seemed reasonable at the outset. Iraq is an example where we did not have a good reason (or any reason at all except feeding our military industrial complex) to begin with. Part of the reason is that we have never invested in the training needed to be successful imperialists. We are bad at running other countries. You can read some of my firsthand experiences with just how bad we were at running Iraq in my book: “My travels to Baghdad”

If we send in the American Army to defend Ukraine against Russia, even if no escalation in fighting results (which is by no means certain), we will be forced to remain there for X number of years to keep the peace. Which factions would we support or favor? Why do we imagine that it would be different than our experiences in Afghanistan or Iraq? While it is emotionally hard not to walk through that front door with our troops, we must remember what the back door feels like, not to mention the X years in between. President Biden is right not to do so. “Reflections from the netherworld”

Most Americans are good hearted and want to help those in need. However, I am hard pressed to think of a time when we successfully did so with our Army.

Sanctions

About 5 days ago, on February 24, Russia illegally and without provocation and cause attacked the sovereign country of Ukraine. It is in everyone’s interest (with the exception of the military industrial complex) to end the fighting and establish a sustainable peace as quickly as possible. I explored options in my blog Saturday.  “Ukraine-Russia-NATO”  

Sanctions are being piled on as the main counter weapon of choice around the globe, along with supplying Ukraine with military equipment. But which sanctions of what activities (use of SWIFT, banning access of Russian airlines, banning any travel across Russian borders, banning trade in military products, banning all trade, etc.) should be imposed? If all or almost all countries joined together to shut down all trade, travel, and financial flows between Russia and the rest of the world until Russia ends this war and fully withdraws it troops, the impact on Russia (and hopefully to a lesser extent the rest of the world) would be devastating. While it is hard to predict whether the Russian people would primarily blame the U.S. and the West or Putin’s government for the hardships imposed—it is unlikely that Russia would withstand such isolation for long. Russia seems well on its way to such isolation.

While sanctions have historically not been a very effective tool for changing a country’s behavior, such total isolation, if it can be achieved, would almost certainly be more effective than the more limited sanctions normally imposed. “A new history of sanctions has unsettling lessons for today”  Putin will have to back down or escalate. Putin would indeed be boxed into a very difficult position and there is no knowing how he might react. It is hard to imagine Russian military escalation beyond Ukraine’s borders, but it is possible, especially in the ambiguous ways often favored by Moscow (e.g., cyber-attacks). If Putin is squeezed too hard, the risk of nuclear war could no longer be ignored. This is a dangerous period.  “Just short of nuclear–the latest financial sanctions will cripple Russia’s economy” Such comprehensive sanctions should be largely removed as soon as Russian troops are withdrawn from Ukraine territory.

But while it is foolish (i.e., contrary to American interests) to keep Russia as an enemy in the long run, and it was foolish to have made it one in the first place, the Kremlin should pay a price for its attack on Ukraine.

Sanctions impose a cost on their target but also on those imposing the sanctions. If, for example, Russia is denied access to western products, the sellers are also denied the sales. Moreover, for many if not most economic sanctions, the people of the sanctioned country tend to suffer more than the government that is the real target. For post conflict sanctions, thought should be given to the most effective ways to sanction Putin and his friends specifically with minimal damage to the Russian economy. The borders and trade should be reopened to all but a small list of Kremlin officials including Putin. Putin’s properties and other assets abroad should be frozen or confiscated to contribute to Russian reparations for damage now being inflicted on Ukraine. “Russia’s military attack on Ukraine will have consequences for Putin”

Yesterday (2/27.22 6:37 PM), Edward Luttwak tweeted: “Putin’s agreement to talks with Zelensky’s reps is an abject surrender: by now the Russians should have been in control in Kiev and across the Ukraine with Zelensky dead or exiled. Frantic to divert attention, Putin has placed Russia’s nuclear forces on high alert. Meaning: zero”

Let’s hope that he is correct.

Every action should be carefully measured against is costs and benefits both short term and long term. Another protracted cold war would be a costly mistake for everyone. All measures should ultimately contribute to peaceful and secure relations between all countries.  Greenwald–War propaganda about Ukraine

Ukraine–Russia–NATO

Russia has surprised most of us with an all-out attack on Ukraine. What should the U.S., NATO, and Ukraine do now? Each possible answer implies different possible consequences. We would be wise to understand them as well as possible. We should try to evaluate the probable long-term effects as well as the immediate ones.

The fact of the matter is that that we made serious errors since the disbanding of the Soviet Union (the expansion of NATO, establishing Aegis Ashore missiles in Romania and Poland, etc.) that began on Christmas 1991. The effect was that Russia walked away from NATO rather than becoming a member. While all of this is very regrettable, it is nonetheless history. We are where we are now because this history has inevitably influenced the present and thereafter the future of Russian relations with the rest of the world.

While Ukrainian resistance appears stronger than Putin expected, Russia may well take control of parts of Kyiv and other western Ukrainian cities within days or weeks. However, following earlier examples of Russian incursions and given the inadequate size of its forces, it is likely to quickly withdraw after flexing its now stronger muscles in negotiating an agreement with the U.S., NATO and Ukraine.

According to Edward Luttwak tweeting on the afternoon of Feb 24 “Air strikes can reach any target but Russian troops are much too few to achieve a coup de main, the single act that both starts and ends a war. Yes, they control airfields & some city centers. Beyond them individual soldiers & volunteers will start killing Russian soldiers w/o end. They had a missile strike plan viz Ukraine air force, very weak in any case. Russian troops too few to control the country beyond airfields, central Kiev, Odessa, etc., nothing for hostile W Ukraine. Ukrainian soldiers & volunteers will fire & kill Russians. Final result: the end of Putin.”

President Biden has wisely stated that the U.S. will not send troops into Ukraine, which is not a NATO member. While he has rightly condemned Russia’s illegal attack, and together with our European allies has significantly increased economic sanctions on Russian banks, businesses, and officials, though still with significant carveouts, he has correctly, in my judgement, concluded that the cost to our already overstretched budget to fight a war over Ukraine is not in America’s interests.  We care about many people and things in the world for which it is not justified to spend our financial and human resources rather than focusing them initially on our own domestic needs. Some among us may want to rule the world but we can’t afford it either financially or morally. Our military industrial complex, which profits from wars, probably disagrees.

Luttwak claims that “close[ing] the road and rail connections between Germany and Russia… would be the most powerful of all sanctions.” This could be done unilaterally by Poland or the Polish people. “Polish peace demonstrators [could] stop the unceasing traffic of trucks delivering Western European exports to Russia.  German cars, Dutch vegetables, French luxury exports.  That very powerful sanction does not require NATO or EU approval, just some people who care. ‘No bypass’”

More generally, sanctions have historically not been a very effective tool. “A new history of sanctions has unsettling lessons for today” Trade is win win. Both sides benefit. Thus, blocking trade is loss loss. Both sides suffer. Moreover, it is very difficult to design sanctions that hurt the target government more than its people. “Econ 101-How to help Afghans”

Ukraine is more important and relevant to European security than to ours (though one may argue that if Ukraine falls and the democracy in Europe suffers and crumbles, this affects the United States in the long run as well). In addition to financial and military aid to Ukraine, one or more European countries could, outside of the NATO context, send their troops to help defend the existing government of Ukraine.

It is very unlikely that Putin would escalate the fighting further, though it is not clear how rational Putin is these days and Russia has nuclear weapons. He was close to crazy to have launched the war now underway in Ukraine. Such European military intervention would likely save the Zelensky government and the negotiated peace (which should have been negotiated a month or two ago on the basis of Putin’s eight demands last December) would still need to mutually satisfy the interests of Russia, Europe and Ukraine.

If Ukraine receives no military help, it might still hold off the Russian army from toppling the Zelensky government. Russia might then be forced to be satisfied to hold the eastern, Russian dominated piece of the pie. The final settlement might take a bit longer in this case, but it might contain similar provisions. As Luttwak has argued above, a full Russian victory is unlikely and is expected not to last for long and would be a huge drain on Russian resources. Russia will surely pay a very high price for (presumably) gaining a government subservient to Moscow.

The longer run (five to ten or more years) consequence of one or another of the above scenarios is, of course, hard to predict but it should be taken into account. If the Zelensky government survives largely on the basis of its own efforts, it might be hoped that Zelensky’s far from complete efforts to clean up and reform his government will continue and be strengthened. A Russian victory (replacing Zelensky–dead or alive–with a Moscow puppet) would surely perpetuate and strengthen the corruption Ukraine has suffered for decades. Putin’s original eight demands would still have to be resolved and agreed in a mutually acceptable way. Doing so in January, of course, would have saved everyone a lot of lives and treasure, but discussions of these issues were hard to find in the American press.  

How this war is settled will also have consequences for American, EU, and Russian assessments of each other’s strengths and interests and thus how to deal with one another in the future. Will Russia revert to an enemy in which we keep our defense industry happy with another cold war or will we undo the NATO inflicted damage of the last twenty years that turned a potential friend to a costly enemy? China has decided to stay out of the fray neither supporting the US-Europe alliance nor the Russians which is a wise decision on their part.

The initial reactions in Russia have not favored Putin. The Russian population was not prepared to shift from seeing Ukraine as part of the family to an enemy that its sons and daughters were dying to overturn. A Russian defeat or even stalemate “victory” could be the end of Putin.  I am predisposed to believe in happy endings, which is perhaps why no one pays me for my forecasts.

We must never lose sight of the fact that Russia is more than Putin, Ukraine is more than Zelensky, and NATO is more than Secretary General Jens Stoltenberg. If I had said Biden (or Trump) you would have understood instantly. And among the population are many factions. The U.S. seems rarely to take such domestic realities into account when it decides to march into and take over countries.

In an email February 26, Chas Freeman said: “Regrettably, the place of Ukraine in Europe, which might have been decided through negotiations between Moscow and Washington in consultation with Kyiv, will now be decided through interactions by Russian dictation to Ukrainians without reference to either the United States or NATO.  Russia’s coercive diplomacy failed to elicit an offer to address its longstanding, oft-expressed concerns about the possibility that Ukraine might become part of an American sphere of influence on its border under circumstances in which the United States has officially designated Russia as an adversary.  So, Moscow made good on its ultimatum, and used force.  As it did so, it moved the goalposts.  Now Russia appears to seek the subordination of Ukraine to its domination rather than simply its denial to the United States. This is a tragedy that might have been avoided.  Now we are left to hope for a resurrection of diplomacy when there is no clear path to it.”

On February 25, Pavel K Baev stated that: “Now we know that Putin’s obsession with Ukraine — which constitutes a threat to his regime not because of hypothetic NATO missiles, but because of its choice for democracy and closer ties with Europe — prevailed over common political sense and strategic risk assessments.” “Implications of Russia’s invasion of Ukraine–Brookings Brief”

But the almost last word should go to Edward Luttwak who tweeted on Feb 26: “Having invaded with too few troops to pull off a fait accompli, with many Russian troops killed because of incautious tactics that presumed no real resistance, Putin has also closed the door to talks with Pres Zelensky: ‘I will not talk with drug addicts and neo-Nazis’. Sanctions.   Not too late to send large numbers of small arms and point & shoot anti-tank weapons to Ukraine via Poland or Slovakia. There are warehouses full of both (+ their ammo) across NATO because of the drastic reduction in force-levels. Ukrainians are resisting bravely and deserve help”

And the final word goes to Thomas Pickering (former US Ambassador to the Russian Federation and other places): “The end result must be respectful, fair, and balanced for the people of Russia and for all other parties. It will take wisdom, time, sacrifice, and persistence. To get there, the U.S. must lead, help to finance, and participate extensively in an international coalition — through the United Nations if possible, outside it if necessary — and listen to all like-minded states.” “Implications of Russia’s invasion of Ukraine–Brookings Brief”

Diplomacy

What does the press coverage of the Canadian trucker strike and Russia’s threatened attack on Ukraine have in common?  Matt Taibbi’s column on the “The Great International Convoy Fiasco” will tell you. For good measure, he added that “On February 4th, 2004, the Wall Street Journal published, ‘A Historian’s Take on Islam Steers U.S. in Terrorism Fight’, about the influence of a Princeton Scholar named Bernard Lewis on George W. Bush’s Iraq policy. The ‘Lewis Doctrine’ was simple. The good professor believed there was no point to asking, Why do they hate us?”

For many weeks the American press (I apologize for lumping our somewhat diverse collection of newspapers into one camp) have been shouting that Russia might invade Ukraine any day now. Volodymyr Zelensky, the President of Ukraine, says that that is nonsense and to please stop saying it. I am inclined to believe him over our newspapers.

Something similar is going on with the striking Canadian truck drivers. The message in both cases is that we need to be tough. Arrest them and remove their trucks that are blocking the border with the U.S. Beef up our troops in Europe and tell Putin all the nasty things we will do to him if Russian troops cross the border. The mindset that reacts in these ways is not in our national interest.

Why are the truckers striking and why is Putin demanding a rethink of European defense architecture? While Putin has told us explicitly what he wants, to my knowledge no meetings have occurred between the Canadian truckers and the Canadian government. We may or may not sympathize with some of the Trucker’s concerns, but the proper (dare I say adult) starting point is to sit down with them and understand what they want.  At least the Biden administration is talking with the Russians, but it would be healthier if more were said in the Press about these talks and the issues that Russia has raised, and less about the potential for, if not eminence of, war. Such discussion of the pros and cons of mutually acceptable options are out there, but you need to search for them.

The role of diplomacy (the first intergovernmental tool of civilized nations) is to understand the concerns and desires of the other side. That is the essential first step in seeking out areas of common ground that each side can live with. War is (or should be) a last resort.  I am sure that Lockheed Martin, Raytheon Technologies, General Dynamics, Northrop Grumman, etc. can figure out other uses for their manufacturing and technical capabilities. “National Defense”

Econ 101:  How to help Afghans?

The world is rightly looking for ways to help Afghans without helping the Taliban (until or unless the Taliban forms a government the world is willing to recognize). Washington Post: “How to help Afghans without aiding Taliban”  In this Post article Anthony Faiola states that “The biggest problem isn’t a lack of food. Rather, it’s the disappearance of what had been the lifeblood of the Afghan economy — Western cash.” This mischaracterizes the problems of Afghans thus confusing our understanding. In this note I attempt to clarify the “cash” aspect of Afghanistan’s problems.

But first there is no escaping the fact that the cut back of foreign aid is reducing the income (and the goods that income buys) available to Afghans. Mention is often made of the approximately 10 billion US dollars of the Afghan government’s funds frozen in deposits abroad. These funds cannot be used until a new Afghan government is recognized with the authority to claim them. But these funds are not part of the lost revenue to the Afghan government. They are the wealth–the previous income saved–of the government (whoever that will turn out to be). The savings that we accumulate from our incomes for retirement or whatever is our wealth not our current income (though it can be drawn on to augment current income).

In recent years (prior to the Taliban take over) the Afghan government’s operating expenditures were 16 to 18% of Afghanistan’s GDP while its domestic revenue was 12 to 14% of GDP. The balance of its financing plus all development expenditures were from donors. The hope is that squeezing the Taliban “government” financially will add to the incentives for them to quickly form an inclusive government meeting international norms of human rights. Unfortunately, it is not possible to shut off the flow of funds to the government without also starving the Afghan people.

While the Ghani government has been replaced (temporarily) by Taliban leaders, the institutions (ministries and agencies) of government remain, but with new management. Of the government’s operating expenditures roughly 80% was for wages and salaries. Thus, the government could more or less finance its wage and salary expenses from its own domestic revenue without donor support. Indeed, all salaries have been and continue to be paid in the central bank (Da Afghanistan Bank — DAB) and presumably in the other government ministries as well, albeit with delays. However, the real value of these incomes is being reduced because of increased inflation (an indirect form of taxation). DAB and other government agencies have largely stopped providing economic and financial data since the Taliban take over.  IMF First-Review-Under-the-Under-the-Extended-Credit-Facility

None the less, freezing Afghanistan’s deposits abroad (DAB’s foreign exchange reserves held abroad) has created monetary problems within Afghanistan because of the inability to import the cash (dollar banknotes) on which the economy depends. Afghanistan remains a largely cash economy. Most payments are made in cash. Though inflation has been low in recent years (generally 2-4%), inflation in earlier decades was relatively high and thus Afghans held and transacted in US dollars quite extensively. Around 70% of bank deposits are in dollars. The availability of USD banknotes for local payments is thus very important. These were mostly supplied by the New York Federal Reserve Bank from the dollar deposits that DAB maintains there (and now frozen).

Prior to the Taliban takeover, the normal operation of DAB’s monetary policy consisted of receiving US dollars from the government (largely from donor grants) and depositing the equivalent value of Afghani in the government’s accounts. The government disbursed these Afghani to its employees in wage and salary payments (generally by electronic deposits to employee bank accounts). Without offset, the resulting creation and injection of these Afghani would be inflationary. DAB drains (buys back) this excess base money by auctioning some of the dollars it received from the government (sufficient to stabilize the dollar exchange rate) and capital notes of DAB. The government’s deposits of dollars with DAB took the form of credits to DAB’s dollar account with the New York Fed. From these deposits DAB pays the Federal Reserve to fly USD banknotes to Kabul as needed for DAB’s dollar auctions.

In mid-April 2021, when the U.S. announced its intention to withdraw the rest of its military personnel by September, an increased outflow of dollars by Afghans wanting to protect their wealth put the Afghani exchange rate under pressure. Acting DAB Governor Ajmal Ahmady (his appointment was never approved by Parliament) increased dollar auctions to stabilize the exchange rate. “Afghan central bank drained dollar stockpile before Kabul fell” As the amount of dollars in its vaults ran down, it used USD banknotes that it held on behalf of banks (approximately $700 million USD). The delivery of additional cash from New York expected in July never arrived and DAB’s balances at the New York Fed are now frozen until a new government is recognized so that no more dollar cash can be purchased from the Federal Reserve by DAB.

As an aside, I was surprised during a 2009 visit to Zimbabwe—as part of an IMF team following Zimbabwe’s dramatic hyperinflation during which it dollarized—to learn that there was an active private market in dollar banknotes supplying Zimbabwe from South Africa:  “Hyperinflation in Zimbabwe”

In the days just before and after the American evacuation in August 2021 public demands to withdraw dollar cash intensified but DAB had largely used up the dollars in its vaults (both its own and those held for banks). In response, on August 14 DAB imposed limits on the amounts that could be withdrawn each day. This fed public concern that their banks were running out of dollar banknotes and triggered runs on the banks. DAB was even running low on Afghani banknotes, which might have replaced dollars. Without access to its deposits abroad DAB is unable to purchase additional dollar cash nor pay for printing additional Afghani. For a largely cash and heavily dollarized economy this drying up of cash liquidity is very disruptive and the basis of the statement that people can’t buy the food that might be available.

In addition to the cash shortage, Afghans are also lining up to withdraw their deposits out of concern for a possible bank failure. Aid cut offs and civil strife have damaged many firms resulting in arrears on their bank loan payments. This threatens to push bank illiquidity into insolvency. Even if DAB had USD and AFN cash to lend or sell to banks with fully performing loans, DAB is currently unable to buy or lend against these illiquid bank assets. Moreover, the Office of Foreign Assets Control (OFAC) of the U.S. Treasury has sanctioned payments to many Afghan entities and activities blocking many payments to and from abroad by Afghan banks and uncertainly about the application of the sanctions regime has made banks overly cautious about executing payments for their customers.

UN and other aid organizations have experience in other countries with delivering wages and other payments to targeted recipiences (teachers, healthcare workers and potentially even government employees) without the funds passing through the government’s hands. This approach is needed and is being developed for use in Afghanistan. OFAC sanctions are being modestly relaxed and UN and other aid agencies have begun funding the importation of dollar cash for humanitarian assistance projects. The use of digital mobile phone payments, such as M-Paisa and HesabPay, should be promoted and exploitation to the extent possible.  “Use of mobile phone payments” The United States needs to and has been gradually relaxing its payment restrictions to make this possible.

The Taliban leadership needs to take urgent steps to establish a new inclusive government that can and will be recognized internationally thus unfreezing Afghanistan’s (and DAB’s) deposits abroad and eliminating its cash shortage and restoring development assistance. In the meantime, in addition to the urgent need for humanitarian assistance that bypasses the Taliban, the New York Federal Reserve, or any other doners, should consider a loan to DAB to finance immediate shipments of dollar banknotes to Kabul. Da Afghanistan Bank Law adequately protects the central bank from government interference in its conduct of monetary policy and bank supervision. As a condition for restoring USD currency shipments to DAB, the Federal Reserve (and the UN) should obtain an agreement from the Taliban government to fully respect that law and appoint qualified people to its Supreme Council and Executive Board.

Until Afghanistan has a proper government, and its economic development can resume, Afghans, many of whom are very poor to begin with, will suffer unnecessarily depressed incomes. The lack of cash is adding a further, tragic, and quite unnecessary disruption to the lives of a long-suffering people. This can be and should be fixed urgently. Any such assistance will somewhat reduce the financial pressure on the Taliban, but a total financial squeeze on the government will fall on the people of Afghanistan as well.

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I worked in Afghanistan as a member of the IMF program and technical assistant teams from January 2002 until mid 2015. I am grateful to Syed Ishaq Alavi for his insights and comments on this article. Mr. Alavi was Advisor to the governor of DAB from 2010 to early 2013, Director General Monetary Policy Department of DAB from early 2013 to mid 2018, and advisor to the Executive Director of the International Monetary Fund for Afghanistan, Algeria, Ghana, Iran, Libya, Morocco, Pakistan, and Tunisia from June 2018 to August 2020. For the sake of their security, I am not naming those who helped me with this article who remain in Afghanistan.

American policy on Taiwan

Following President Richard Nixon’s famous visit to China in 1979 the so called One-China policy was first stated in the Shanghai Communiqué of 1972: “the United States acknowledges that Chinese on either side of the Taiwan Strait maintain there is but one China and that Taiwan is a part of China. The United States does not challenge that position.” “One China policy – U.S. policy”  However, in the Taiwan Relations Act (April 10, 1979), the U.S. stressed its opposition to any effort by the People’s Republic of China (PRC) to change conditions in Taiwan by force. Just how that opposition might be expressed has remained ambiguous ever since.

The United States has no treaty obligation to help defend the Republic of China (ROC–Taiwan) against a military attack by the PRC. It is doubtful that the U.S., located thousands of miles from Taiwan, could win an encounter with the PRC only 100 miles away. In recent simulated war games with China the U.S. has lost. “As the US and China continue to posture the key will be Taiwan” A military intervention by the U.S. would create a significant risk of escalation into nuclear war. 

China experts such as Chas Freeman have argued that since Washington long ago agreed that ‘there is only one China and that Taiwan is part of it,’ any mainland invasion would simply be a civil war in which America has no right to intervene.” Moreover, risking nuclear war to defend Taiwan would not be in America’s or anyone else’s interest.

Until quite recently, Taiwan’s efforts to build its capacity to defend itself from a mainland attack rested heavily on the presumption that its defense would come from the U.S. “Taiwan’s military has closely mirrored its U.S. counterpart in miniature for years…. The problem with copying the American approach to warfare is that the U.S. military’s doctrine is to project power over great distances and to maximize mobility and networks to take the fight to the enemy with overwhelming superiority. Taiwan, on the other hand, needs the opposite: short-range and defensive systems that can survive an initial bombardment from a larger adversary and that are suitable for deployment close to home in defense of the island should it come under blockade or attack.” “Winning the fight Taiwan cannot afford to lose”

Taiwan’s almost $17 billion-dollar annual defense expenditures keep American weapon’s companies happy but didn’t contribute seriously to Taiwan’s defense. “Taiwanese military analysts have criticized the island for spending too little on defense, and for spending money on eye-catching purchases such as F-16 fighter jets rather than less-flashy weapons systems that would better enable Taiwan to wage asymmetric warfare against the PLA’s superior strength.” “Concerns about Taiwan put focus on islands defensive weakness” This has begun to change in the last few years toward weapons more appropriate to defending Taiwan against a ground assault.

While it is in America’s interest for Taiwan, as well as every other country in the world, to be peaceful, democratic, and prosperous, that interest is not sufficient to risk going to war–not even close. We should hope that the relations between Taiwan and the Peoples Republic of China remain peaceful and consensual whatever form they ultimately take. But should China attempt to “change conditions in Taiwan by force,” how should the U.S. express its opposition.  It is a very sad commentary on the state of American international policy that so many American policy makers routinely conceive of expressing American opposition militarily. We have done so too often to the detriment of American interests.

On the other hand, a Chinese military attack on Taiwan would be a violation of its commitment not “to change conditions in Taiwan by force.” In such an event the U.S. should oppose such actions vigorously with coordinated diplomatic measures. A U.S. China war would certainly stop all trade with China. This would badly hurt both of us. But even without war, if a total trade embargo by the U.S. were joined by the EU, Australia, Japan, Korea, Canada, UK, and most other UN members it would be devastating to China. China could be expelled from all the international organizations it has so proudly joined in recent years. Its global ambitions would be destroyed. Such prospects would surely be as powerful a deterrent to China’s invasion of Taiwan as would the prospect of U.S. military intervention in defense of Taiwan.

American interests are better served by being the best that we can be, i.e., by strengthening our own economy and political system (which is in a dangerous mess at the moment). It would also be helpful if Ted Cruz would stop blocking President Biden’s State Department appointments so that we can strengthening our use of diplomacy and return our military from its foreign adventures to the defense of our homeland.

See Jon Schwarz’s interesting review:  WE’VE ALL PRETENDED ABOUT TAIWAN FOR 72 YEARS. IT MAY NOT WORK ANY LONGER   “Taiwan, China, nuclear weapons”