The Future of Ukraine

Bordering Moldova, Romania, Hungary, Slovakia, and Poland to the west, and Russia and Belarus to the East, Ukraine should be well placed to benefit from the trade opportunities in both directions. Although the 47 million population of modern (post WWII) Ukraine is overwhelmingly ethnically Ukrainian (about 78%) followed by 17% Russian (concentrated in the industrial eastern and southern areas), Ukraine’s educated citizens are almost universally bilingual in Ukrainian and Russian. Ukraine’s western half naturally leans toward Europe while its eastern half leans toward Russia. The country’s presidency has shifted between favoring one then the other. The tensions between the two are real but can easily be exaggerated.

Many of us wonder why President Putin seems to want yet another unproductive, loss-making territory added to Russia’s care, something it increasingly cannot afford. As with Transnistria, the inefficient, loss-making, industrial, secessionist, eastern part of Moldova (now largely a gangster haven), the eastern part of Ukraine is saddled with former Soviet, industrial, white elephants, which sooner or later must be dismantled. Why is Putin flirting with isolation from the world community with ultimately devastating economic costs to Russia to take over more industrial dinosaurs? Why, in short, is Russia giving up joining the “civilized” world it seemed to once aspire to?  The only tangible benefit for Putin seems to be great popularity at home. Having almost totally snuffed out significant political opposition and a free press in Russia, and then convinced the vast majority of Russians that he is defending Russia from its many enemies, his moves against Ukraine have sent his popularity soaring at home.( “Putin wins in Russia only by escalating his war rhetoric” Washington Post /2014/03/14/ )

Just as President Victor Yanukovych’s brutal repression of the Ukrainian protesters following his switch from signing the Association and Free Trade Agreements with the EU to signing a trade and financing agreement with Russia backfired, resulting in his removal from office by an overwhelming vote of the Ukrainian Parliament, Putin’s thuggish maneuvers against Ukraine seem to have backfired as well. By all accounts (except those broadcast by Russian media) almost all Ukrainians, ethnically Russian as well as Ukrainian, are uniting in their opposition to a Russian take over. Just because many Ukrainians in the eastern parts of the country are native Russians doesn’t mean they want to be annexed by Russia. It reminds me of the large number of Mexicans now living in southern California. No one would imagine that they would vote in a referendum to become part of Mexico (again). “Putin’s interference is strengthening Ukraine” Washington Post /2014/03/13/, “Russia supporters in eastern Ukraine pose challenges to pro western government” Washington Post/2014/03/14/.

I found it interesting that the Ukrainian Minister of Economy, Pavlo Sheremeta, switched from English to Russian during the “Emergency Economic Summit For Ukraine” in which I participated in Kyiv on March 12, for the benefit of the two Russian panelists to whom he was speaking. The Russians, Andrei Illarionov, former Economic Advisor to President Putin, and Kakha Bendukidze, fomer Minister of Economy of Georgia, both speak English as flawlessly as does Minister Sheremeta. The real point was to show affinity with Russia and Russian Ukrainians, while criticizing President Putin’s bullying.

Ukraine has much to do to clean up its government and to liberate the entrepreneurial energies of its economy. But such reform efforts could be interrupted if Putin moves Russian troops into Ukraine beyond the Crimea. It is certainly desirable to dissuade them from doing so if possible. The question for the U.S. and Europe is what measures should they be willing to take against Russia for violating Ukraine’s sovereign territory. The West’s objective should be to deter further Russian aggression if possible or to diminish its ability to continue to misbehave in the future if it persists in violating or threatening to violate the sovereignty of its neighbors.

Putin’s justification for its invasion of the Crimea and potentially more of Ukraine, the need to protect ethnically Russian citizens of Ukraine, is reminiscent of Hitler’s take over of the Sudetenland (the largely German-speaking western areas of Czechoslovakia). “Putin-the mask comes off but will anybody care” American Interest 2014/03/15/3.  Particularly egregious is Russia’s disregard of its commitments made on December 5, 1994 in Budapest, Hungary Budapest Memorandum on Security Assurances (also signed by the U.K. and the U.S.). In exchange for Ukraine’s giving up its nuclear weapons stockpile (then the third largest in the world) Russia and the U.S. provided assurances against the use of force against the territorial integrity or political independence of Ukraine.

Henry Kissinger has set out reasonable terms of an agreement with Russia (on the assumption that Putin is pursuing genuine Russian interests in the area) but offered no suggestions for how to encourage Russia to accept them. “To settle the Ukraine crisis start at the end” Washington Post /2014/03/05/.  The West’s strategy should be explicit and transparent and should escalate with continued Russian aggression. It should begin with measures that will command the most attention in Russia at the least cost and risk to the West. We should not make threats that we are not willing to carry out. No Obama red lines that are later ignored.

President Obama has already ordered the freezing of U.S. assets and a ban on travel into the United States of those involved in threatening the sovereignty and territorial integrity of Ukraine. No individuals have been named yet. It is a tool that can easily be expanded to a larger number of people if and when Russian intrusion expands. These measures are aimed at those in Russia with the greatest influence with Putin and would diminish the joys of their ill-gotten wealth (extravagant vacations in London, etc.). But unless the EU joins the U.S. in applying such sanctions, they will obviously be far less effective.

If Putin is unwilling to reverse course or at least stop advancing even in the face of targeted sanctions, the West’s strategy should be to reduce or limit Russia’s financial capacity to reestablish its former empire. Putin’s hold on power rests on the wealth he has directed to his friends, and wage and pension promises to the general public. About one half of Russia’s federal budget financing comes from its exports of oil and gas. The price of oil needed for Russian fiscal balance is in the neighborhood of $120 per barrel. This so-called breakeven price increases with expenditures by the Russian government and with the cost of producing its oil and gas. Brent crude is currently trading for around $108 per barrel. Russian exports and government revenue have become overly dependent on oil and gas and its supply of cheap oil is running out. It has not kept up with the investment in newer technologies and while its output can be sustained for some time its cost of production is rising.  Acquiring the Crimea or eastern Ukraine would add to Russia’s budgetary costs.  “Crimea as consolation prize-Russia faces some big costs over Ukrainian region” Washington Post /2014/03/15/

Europe is more cautious than the U.S. about trade sections in part because of its heavy reliance on Russian gas delivered though pipelines running through Ukraine and large investments by some of its companies in Russia. One of the interesting and beneficial things about increasing trade interdependence is that it cuts both ways and thus tempers the behavior of all sides. Russia is reluctant to shut off its gas sales to Europe as it did in 2006 and 2009 because it needs the money. Europe is less dependent on Russian gas than it was then and could replace it all together if it got over its aversion to the use of fracking technology. The U.S. should be doing everything possible to bring oil prices down in any event. Obama’s long delay in approving the Keystone Pipeline project to deliver Canadian oil to and through the U.S. is more than embarrassing. And all U.S. restrictions on shipping natural gas to Europe or elsewhere should be removed. In addition, oil supplies globally are expected to improve as the embargo on Iranian oil is lifted and production in Iraq, Libya, and South Sudan increases. Liberalization in Mexico promise increases in its oil production. Russia can’t afford to expand its empire of inefficient industries.

If we went all out, Russians and Russian companies could be locked out of the use of the U.S. dollar, a tool that has brought increasing pain to Iran. It is an effective tool because of the dominance of the dollar and dollar financial instruments in international commerce.  But like Russia’s shutting its gas pipelines to Europe, every use of such tools reduces its future effectiveness as those affected take measures to reduce their dependence on the products involved (Russian oil, or the U.S. dollar and financial system).

If in the hopes of preventing a Russian attack, the United States threatens to respond militarily in any way, it had better be prepared to do so. But should it? Clearly the American defense umbrella over our NATO allies should not be questioned and deploying additional aircraft and military capacity to Europe (especially the Baltic members) makes sense. Ukraine is not a member of NATO and I agree with Henry Kissinger that they should not be. If Russia grows up and behaves like a responsible adult we should not unnecessarily provoke insecurity on its part.

But if Russia, despite all, invades mainland Ukraine, should we militarily assist Ukraine and if so in what ways? Or should we prepare for a new cold war of containment, isolation and the eventual economic collapse of the new Russian empire? This, as they say, is above my pay grade. However, an invasion of Ukraine would be quite different from the invasions of Iraq and Afghanistan because we wouldn’t be the invaders. It would be different from the situations in Syria, or Libya because we would not be joining one group or another in a civil war.

The new interim government in Ukraine is promising but unproven. The distraction from the reforms needed that would result from a Russian invasion of Ukraine would be a tragedy for Ukraine as well as Russia. Excessive external aid (financial and/or military) from the West would likely prolong Ukraine’s history of corruption and deepen ethnic tensions. The external financial assistance now planned would largely address external debt service and would allow a more gradual reduction in government spending than would be required by a debt default. This would allow Ukraine itself to strengthen its governance and economy, but would not guarantee such a result. The West can encourage the adoptions of helpful reforms but cannot impose them on an unwilling or unready Ukraine. Russia is in a position to destroy or undermine these efforts, if that is Russia’s role in history that Putin wants.

Democracy vs the Rule of Law

Tunisia is providing a hopeful example of how countries can transition to freer societies for the general good. In the following Washington Post Op-Ed David Ignatius provides an excellent account of the process followed and still underway there. From Tunisia-Hopeful Signs/2014/01/24/ It contrasts sharply with the sadly confused and muddled account of “democratic transition” in Egypt presented by Michael Dunn and Thomas Carothers of the Carnegie Endowment for International Peace in the Post three days earlier. Egypt’s Evolving Governance is no Democratic Transition.  They speak of democracy and human rights as if they are the same thing.

Literally democracy means rule of the majority. In fact, the majority of Egyptians voting in the first free elections in memory chose Muslim Brotherhood candidate Mohamed Morsi as their President who proceeded to rule on behalf of Egypt’s majority religious group in disregard for the interests of minority Christians and other groups. That is democracy in its literal sense. Modern democracies, however, are not pure in that the majority is limited in what it may do in order to protect the rights of minorities. From an imaginary “veil of ignorance” the citizens of most modern democracies have written into their constitutions limitations on what they may do even when in the majority. The rule of just laws is more important than, and often in conflict with, democracy.

The bigger government gets the more it’s necessarily uniform treatment of all tends to reduce the freedom of individual citizens to behave differently. The United States from its beginning favored individual freedom over state authority and thus struck a balance between the two that imposed more limits on the role of government than had existed up to that time. Every special interest that gains government favor becomes an entrenched interest that is very difficult to reverse (farm subsidies and defense contractors leap to mind). Keeping government limited to what is really important is a never-ending but critical battle.

More on Syria

My high school and college friend, Bill Hulsy, now living in Southern California, offers his analysis of Obama’s justification for attaching Syria:

Dear Friends:

This e-mail will discuss the various flaws in the arguments provided by the Obama Administration for an attack on Syria.  There are seven major flaws in the argument, to wit:  1) the predicate proof is unsatisfactory and unpersuasive, 2) the action is illegal under our law and international law, 3) the Chemical Weapons Convention does not provide a legal basis for this action, 4) the ostensible beneficiaries and cheerleaders of this action are bad actors, 5) this action is a pretext for War with Iran, 6) the United States has no moral standing since we have both used and aided and abetted the use of chemical weapons, and 7) U.S. loss of face is the problem of Obama himself, and a lesser alternative to bad policy.

This proposed action is predicated on alleged use of chemical gas by the government of Syria.  This contention is illogical as the Syrian government was winning the civil war, and the use of chemical agents is an act of desperation.  Much of Syria has been overrun by the rebels and they have captured many munitions and that includes chemical agents.  The Internet is full of pictures and stories showing that the Syrian rebels have chemical agents.  Logic suggests their use of the gas as a “false flag” operation.

The whole post-WWII peace process has been based on the use of the United Nations.  The United Nations Charter was adopted and ratified by the United States in 1945.  It is a treaty and is United States law.  Article 42 provides that force may be used individually or collectively by signators only if approved by the Security Council.  The only exception is the right of “self defense.” which is permitted under Article 51.  There is no special exception for chemical warfare.

The Chemical Weapons Convention was adopted in 1993.  Syria is not a signatory.  That convention has no enforcement mechanism.  Hence, there is no right to wage war or commit acts of war (such as proposed) pursuant to some “norm” of the Chemical Weapons Convention.

The rebels in Syria are Sunni jihadis.  These are the same people who attacked the United States on 9/11.  Syria is a secular, not a religious state.  The Christians (numbering 2 million souls) make up 10% of the population.  The government protects the interests of the minorities in Syria of which the Christians are one.  The Sunni jihadis want to commit a sectarian cleansing, driving the Syrian Christians into Lebanon.  For a look at what a Sunni jihadi victory would look like, from a religious point of view, see what happened to the Christian community in Iraq after the Iraq War.

This attack is nothing but a pretext for a War with Iran.  This attack will provoke counter-measures by Syria’s allies.  Either an agent of Iran (or one of our agents operating in Iran) will fire a missile at a U.S. ship or tanker and, then, immediately we will attack Iran’s nuclear facilities and the war will be on.  Israel will attack Hezbolla in Lebanon, reactively or pre-emptively,  Russia will cut off oil supplies to Europe.  United States assets all over Arabia and the Moslem world will be at risk.  I believe that is the real reason for the attack on Syria–to promote war with Iran.  It is the American Way.

Not only does the United States have no legal standing for this attack, but, also it has no moral standing to attack Syria.  We used Agent Orange in Vietnam, which was a chemical agent.  We used phosphorus in Fallouja, and we aided and abetted Iraq in its use of gas in warfare in its war with Iran.  We provided the intelligence for where the gas was to be placed to devastate the Iranians where they were massing troops.

It is said that America will lose face if Congress does not approve an attack.  Well, even if that is true, the fault will be Obama’s since lacked any legal or moral power to draw “red lines” regarding the conduct and internal affairs of independent states.  The alternative to the “loss of face” is much worse.  Mr. Obama styles himself a Constitutional Scholar.  He should have known better.

William S. Hulsy
Attorney at Law

Syria and the Red Line

On August 21, 2013, a chemical weapons attack killed 1,429 men, women and children on the outskirts of Damascus. President Obama and Secretary of State John Kerry attribute the horrifying attack to the Assad government. The Geneva Protocol of 1925, the Biological Weapons Convention of 1972, and the Chemical Weapons Convention of 1993 forbid the use of chemical weapons. The use of force to punish violators of the ban may be authorized by the UN Security Council. The United States is not unilaterally authorized under international law to do so.

President Obama continues to surprise me. Despite over a 100,000 casualties in Syria’s two-year plus civil war, he has wisely resisted direct involvement in a conflict that the U.S. has no obvious self-interest in. We have no real control over the unfolding events and outcome of the struggle underway there. Unfortunately, there is no plausible outcome that serves our interest in peace and democracy in the region much less in having a friendly regime. There is no obvious successor to Assad’s regime, though radical Islamism (al Qaeda) forces seem to currently dominate the anti-government forces. Edward Luttwak argues in a NY Times op-ed that a stalemate is the least bad of bad options. “In-Syria America Loses if Either Side Wins”

Obama then foolishly drew a red line against the Assad regime’s use of chemical weapons. It now seems very likely that Assad has crossed it in a big way. If the U.S. does not act decisively it will lose credibility and its red lines will become meaningless. If it acts, as Obama has suggested, in a limited, “surgical” manner that does not tip the balance of Syria’s civil war, will it have “taught” Assad a lesson that will detour him from using chemical weapons in the future? More likely it will affirm U.S. powerlessness in the area. And what about the inevitable collateral damage even if our rockets hit their intended targets and Syria’s unpredictable countermeasures? In a statement released September 1, the International Crisis Group stated that: “To precisely gauge in advance the impact of a U.S. military attack, regardless of its scope and of efforts to carefully calibrate it, by definition is a fool’s errand…. Consequences almost certainly will be unpredictable.” “Syria Statement”

In a letter to the Senate Armed Services Committee last month, Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, stated that: “As we weigh our options, we should be able to conclude with some confidence that use of force will move us toward the intended outcome. Once we take action, we should be prepared for what comes next. Deeper involvement is hard to avoid.” More recently he added that: “Simply the application of force rarely produces and, in fact, maybe never produce the outcome we seek.” According to Daniel Byman of Brookings Institute “A limited bombing campaign against Syria’s chemical weapons infrastructure is likely to produce the worst of all worlds: raising expectations and further involving the United States in the Syrian civil war without significantly altering the balance of forces on the ground.” “Syria Crisis-Military Action”

Syria’s use of chemical weapons without consequences could render their prohibition toothless. However, not only is the US not legally authorized to police world agreements, it can’t afford to go into another war and still remain economically and militarily strong. Given Russian and Chinese opposition, the UN Security Council will not authorize the use of force. A U.S. attack on Syria would violate international law every bit as much as Syria’s apparent use of chemical weapons has. That does not mean that nothing can be done within the framework of the law in reaction to the use of chemical weapons. If we continue to disregard international law, why would we expect others to abide by it? Globalization, which has dramatically reduced poverty around the world, would suffer. We would be left to police the world by military force (and how has that been working for us?) until we burned ourselves out.

In his rose garden address to the nation Saturday the President said that: “I have decided that the United States should take military action against Syrian regime targets….  And I’m prepared to give that order.” His surprise, however, was his promise to seek Congress’s authorization, something he had not considered necessary for Libya. “But having made my decision as Commander-in-Chief based on what I am convinced is our national security interests,… I will seek authorization for the use of force from the American people’s representatives in Congress.” Regrettably he did not seem to seek this authorization as a legal requirement of the constitution but rather as a pragmatic way to build public support. What ever his reason the step is welcomed.

Harvard Law Professor Jack Goldsmith reviewed the legal arguments over the President’s war powers in a recent New York Times article: “What Happened to the Rule of Law?”  The Obama administration has pushed Presidential authority further than any previous administration. A return to the rule of law, domestically and internationally, is America’s best chance of survival in a dramatically changing world.

Congress should say no to Obama’s request for an illegal and unpromising attack on Syria. But we can thank him for asking.