Thursday, February 28, 2019

Issue 28


This time around the mid-February Munich Conference virtually cemented the broadening rupture in the security arrangements that existed between something that habitually is called the West on one side and Russia/China/Iran on the other. Within that rupture a growing split between the US and so-called "old Europe" (France, Germany and Italy) was also prominently pronounced in Munich. Long-time observers noted that Chancellor Merkel’s speech was one of her strongest ever. Her frontal attack on the US on trade matters was unusual in its directness.

Chancellor Merkel at the Munich Security Conference, February 16th
©Munich Security Conference

During the most dangerous and challenging turns of the Cold War like the Berlin Crisis (1961), the Cuban Missile Crisis (1962) and in 1983 when the US and the USSR came very close to a full blown nuclear confrontation, there was a system of agreements, checks and diplomatic structures that not only prevented a hot war from unfolding, but managed to cut the nuclear arsenals of the US and the Soviet Union from 40,000 nuclear warheads to 8,000. This system is in shambles for various geopolitical reasons like the rise of nuclear states as India, Pakistan, Israel, North Korea and also the rapid and astonishing ascent of China, but in many ways due to the erratic, bombastic and somewhat neanderthal policies of Donald Trump. In the very case of the Intermediate Nuclear Forces Treaty, the past practice of trying to work out differences has, for the US, been replaced by simply walking out of the arrangement.

One of less noticeable outcomes of this year’s Munich Conference is that discord between the US and Old Europe has brought about even more disagreements and disharmony among Europeans in general.



Presidents Kim Jong-un and Trump
Hanoi, February 27th

When even before his summit meeting with Kim Jong-un began President Trump said “I’m in no rush”, journalists should have started thinking about cancelling their extra hotel nights in Hanoi. It should have been clear that none of the preparatory work had been completed that could lead to a deal at the summit in Vietnam.

Kim has dismantled a nuclear test site and implemented a moratorium on nuclear and ballistic missile tests. He has received in exchange two meetings with the US President. Before he will make another concession on de-nuclearisation, he needs something in return. That would be most likely a softening of the sanctions against his country. Trump is in no position to offer anything significant as he seems to have taken an “all-or-nothing” approach: only complete de-nuclearisation would justify the lifting of sanctions. His political and security establishment would pillory him even more should he appear to make a concession to North Korea. Trump’s thoughtless comment about Kim not knowing about the torture of a US student has already put him in enough trouble already. An incremental approach to break the current deadlock would need a lot more work by Secretary of State Pompeo and National Security Advisor Bolton, both at home and in direct negotiations with North Korea.  That does not look like a priority for them at this time.

Kim wanted another summit to show that the negotiation process is still alive, but, despite the dire situation in his country, he too is in no rush. Trump needed a summit to show that during some hours of the day he still does his job as President.

In the absence a pre-negotiated arrangement, the Hanoi Summit turned out as shorter than expected social event. As for South Korea, it will have to recover from its disappointment and keep working at its own direct relationship with its Northern counterpart, without the benefit of a sanction-free environment.



For the first time in years the bulk of Putin's address to the Russian parliament-and, by extension, to the nation was concentrated on the economy, social welfare, medical care, the demographic crisis and overall living standards. He informed the parliament that the economic crisis has been overcome and that the country has started a long-term modernization program.

President Putin addressing the Federal Assembly, February 20th
©President of Russia Website

The main concern of the liberal opposition in Russia is that the stale bureaucratic system will not permit any significant changes. According to the Levada center, an independent sociological institute in Moscow, Putin's rating slightly went down after the most unpopular pension reform and introduction last year of a goods and services tax hike.

For the first time Putin openly stated that poverty rates in Russia are increasing: currently 19 million people stand below the poverty line. He announced a set of measures to strengthen the social net by increasing welfare payments and subsidies to mothers with two or more children.

Putin's most notable comments about the state of international affairs were his assurances that all Russian military postures are of defensive character and that Russia is not looking for a conflict with "such global power as the United states and will not be first to introduce new systems unilaterally, but also will swiftly retaliate not only against countries where the US is planning to station their intermediate nuclear weapons, but also against the so-called "decision making centers".



On the basis of the majority of North American media reports, it is not always easy to understand the current crisis in Venezuela. If indeed the reports are right and so many of Venezuelans are living in abject misery, how is it possible for the Maduro regime to survive one day longer? The explanation then offered by the media is that there are probably still elements of Venezuelan society that support Maduro, including the armed forces and the poorest segments of the population outside Caracas. They are the ones who have gained under the Chavez-Maduro regime. In the case of the armed forces the gains include access to oil profits and allegedly lucrative drug trafficking.

President Maduro

There is as well an understandable temptation to look at the Venezuela problem as a classic ideological and economic conflict between the US and a left-leaning Latin American country. Yet, among the solutions that have been tried by the US with other countries in that same situation elsewhere in the region, measures in the case of Venezuela have been limited to political pressure and economic sanctions. The result has been constant tension between the two countries and a general stalemate. Venezuela is not necessarily too big to be bullied, but it is oil-rich and has over time distanced its military establishment from US counterparts, depriving the US from influence in this area as well as creating an army that could at least cause significant damage in the case of an open conflict.

At the broader international level, it has to be mentioned that Russia and China still support Maduro as they have a lot to lose in Venezuela. China has a $70 billion investment, Russia a $17 billion one. Russia by the way has sent some humanitarian aid to Caracas to substitute for blocked aid from the US.

Despite what Maduro may have said about the negative impact of US economic sanctions, it is the lower price of oil on the world market that has more directly led to the current economic crisis in Venezuela. In simple terms, Maduro and his government could not manage the loss of revenue without further increasing the polarization of society and causing a disastrous macro-economic situation leading to the impoverishment of the urban middle class and the shortage of essential goods.
Maduro had a reputation as an efficient manager as a minister, but he is not  as charismatic and intelligent as Chavez, his predecessor, with the ability to find real friends and supporters and maintain at least a semblance of order and social justice at least in short term as Chavez managed during his first years in power. Maduro has failed because, among other shortcomings,  he does not have the depth and political savvy that a left wing leader needs in that part of the world.

President Guaido

If the countries (including the US and most of the Lima Group*) that have pushed for the recognition of Juan Guaido, the president of the National Assembly, as the real president had an inkling of the highly polarized nature of Venezuelan society, of the support Maduro still has and of his determination to stay in power, how could they expect that the recognition of Guaido would not turn into a major confrontation? It could be argued that, since the status quo is utterly unacceptable any move to change things is better than doing nothing, and that there is no other option in the playbook. Besides, for Guaido and his national and international supporters, the only acceptable solution is Maduro’s departure, one way or another.

Orchestrating confrontation on the borders of the country over the delivery of US humanitarian assistance may have looked like a clever idea and a risk worth taking. After the failure of the humanitarian offer gambit, the main countries promoting Guaido as president have confirmed that a military intervention is not an option. Despite the strong statements by Trump and Pompeo, it was fairly clear in any event that the US had little appetite for a direct military intervention.
The path of peaceful political confrontation has not worked. The threat of military confrontation is no longer credible enough to be effective. Domestic political dialogue is virtually impossible. International negotiations have no basis on which to begin. Even the intervention of an international mediator seems impossible as it is perceived by the Venezuelan opposition as a means of keeping Maduro in power. The political standoff will continue until one side blinks. As any incremental economic improvement seems unlikely at this time, the humanitarian crisis will probably continue until the situation becomes even more disastrous.

*Twelve countries initially signed the Lima Group declaration: Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Honduras, Mexico, Panama, Paraguay and Peru. Guyana and Saint Lucia joined later.



The most important development in the ongoing presidential election campaign is the unexpected emergence of Vladimir Zelensky as the front-runner in the public opinion polls. Zelensky is now consistently ahead of President Poroshenko and former Prime Minister Tymoshenko who are battling for second place.

Presidential candidate Zelensky (middle) performing with his comedy team in 2018

As with other “populist” candidacies around the world, it did not take long for the political establishment to react by suggesting that a Zelensky victory would be a disaster for the country and that the electorate was perhaps not sufficiently well informed to appreciate the nature of the danger.

By profession Zelensky is an actor. His best role was as an anti-corruption President of Ukraine. His profession gives him name recognition, but it is the fact that he is not a professional politician or a senior official that makes him an attractive candidate. The more apt comparison may not be so much with reactionary reality show host Donald Trump, but with the Five Star Anti-establishment movement in Italy. In the Ukrainian context, the fact that he is perceived as outside of the corrupt system of government is a key factor. The suggestion that he may be backed up by Ihor Kholomoisky, a well-known oligarch, does not seem to have affected his reputation. What matters most is that he is a political outsider and that a sizable number of Ukrainian voters are willing to support him, if only to express their dissatisfaction with the current political establishment.

Zelensky is still in the process of fleshing out his political program. He suggested that, if elected, he would deal with Vladimir Putin directly to resolve the Donbass crisis. He also has taken the view that he would not support banning cultural figures from Russian and Ukraine to perform in one another’s country. This may look un-important, but strikes a different tone than currently prevails in official government circles. In a country where the Eurovision competition is still important and where the winner of the Ukrainian national Eurovision competition will not be allowed to represent her country on account of the fact she performed in Russia, such things seem to matter.

In any event, the campaign has already entered a stage where political programs are overtaken by political maneuvering and attempts to discredit opponents.

A few examples:

             Arsen Avakov, the current Minister of the Interior, suggested that President Poroshenko was sitting on a large sum of government money that he was going to spread generously during the campaign to bolster his candidacy

             A media source came out with the story that a company belonging to a close associate of President Poroshenko has profited from a 2015 operation that involved procuring spare parts from Russia for Ukrainian military equipment and selling the parts at an inflated price to the Ministry of Defence.

             The former Chief of Staff of the Ministry of Defence was formally accused of treason for the role he would have played in reducing Ukraine’s military preparedness prior to the annexation of Crimea. Retired Colonel General Zamana had ordered administrative re-arrangements that are now, five years after the fact, considered as treasonous. Thus, the failure to react to Russian actions in Crimea can be blamed on a newly-found traitor, thus absolving past political leaders from having failed at protecting the country.

             A story was allegedly leaked to the effect that a European ambassador, after having met with leading candidate Zelensky offered the following comments: “I thought he was a zero, now I see he is even less than that”.

The fact that there are so many candidates can be explained by the very nature of the political system. It is relatively easy to become a candidate. That is how it was intended. There are, however, candidates whose only presence on the ballot seems to serve to divide the vote, thus allowing a better known candidate to make it to the second round even with relatively modest support. The case of candidate Yuri Tymoshenko shows, however, less subtlety. By running as a candidate that has the same family name and initials as former Prime Minister Yulia Tymoshenko, he may be able to deprive her of enough votes to keep her from the second round. The trick is not new.

In the circumstances, the emergence of a candidate that is not a professional politician is altogether not surprising.



Vladislav Surkov, an influential Kremlin insider often described as its √©minence grise, has predicted a “glorious century” for the political system whose chief architect is Vladimir Putin. Writing in the Nezavisimaya Gazeta newspaper, Vladislav Surkov boldly declared that the so-called “putinism” has yet to see its peak. Surkov also predicted that even adversaries would end up copying his system. He called it "ideology of the future".

Vladislav Surkov
Putin’s system the article claims has “longevity built in”. It would last for decades because it was native, “organic”, and had already survived several shock tests. Surkov's overly optimistic assessment for the future of Putin's ideas should not be dismissed out of hand for the simple reason that Putin and his approach to Russia, his ideas and implementation of his methods not just come from the top but have a wide-spread appeal in all sectors of Russian society.

Surkov was responsible for the Kremlin’s domestic strategy during the 2000s. He could be credited with creating much of Russia’s postmodern, authoritarian model of government. He called the system “managed democracy”, a term that critics suggested was only ever half true. Knowing Russia's legendary tendency for violence and chaos and what the country went through in the 1990's, Surkov's gravitation towards Thomas Hobbes and his absolute sovereign/Leviathan is more than understandable. While it is obvious that Russia needs a strong state, it may not also need a strongman.

In his long and often rambling article, the new ideologue stayed close to his historical form. Russia was strong, he argued, only because it had rejected western notions and democratic institutions. Such institutions only gave an “illusion of choice”, and were inferior to Russia’s wise leader, who was able to “listen, understand and see” his people.

“The modern model of Russian statehood begins on trust and rests on trust,” he claims. “This is its major distinction to the western model, which cultivates distrust and criticism. And herein lies its strength.” 

Surkov spared little praise of his boss. In time, Putin’s Russia would be recognized Russia’s fourth great “model of state-building”, he said – and on a par with the efforts of Ivan the Great in the 15th century, Peter the Great in the 18th century, and Vladimir Lenin in the 20th century.

Putin’s system was also ripe for export, Surkov added. Foreign governments were already paying close attention, since the Russian “political algorithm” had long predicted the volatility now seen in western democracies.

Ideology was important during the Soviet times. An intellectual construct that serves as the justification for the prevailing political system may still be necessary. Surkov provides that by crediting Putin for having created a new model of governance and by expounding the traditional Russian criticism that Western democracies and their established political parties only provide a semblance of choice. The election of Donald Trump over Hillary Clinton could well be one of the examples he had in mind: the candidate who receives less popular vote gets elected and then presides over a divided country.

All things considered, some of Surkov’s criticism of Western democracy may rest on better ground than his glorification of the Putin system.



Iranian Foreing Minister Zarif at the Munich Security Conference
©Munich Security Conference, February 17th

He is known as the international face of the Islamic Republic of Iran that recently marked 40th anniversary of the 1979 revolution.  Throughout the years Mr. Zarif has excelled in putting a more sophisticated and humane spin on often bellicose rhetoric that comes from the religious leaders in Iran and has been regarded as “Iran’s last link to the West”.

Born in 1960, Zarif is an Iranian diplomat and politician and the current minister of foreign affairs in the Rouhani administration. Zarif has held various significant diplomatic and cabinet posts since the 1990s. He is also an associate professor at the University of International Relations, teaching diplomacy and international law. He was the Permanent Representative of Iran to the United Nations from 2002 to 2007. Zarif has held other domestic and international positions as well: senior adviser to the Foreign Minister, Deputy Foreign Minister in Legal and International affairs. 

After the US withdrew from the nuclear treaty with Iran, Zarif's main task-was not an easy one. He has done a fair job at maintaining balanced and good relations with the Europeans who still insist that Iran should honor the deal so as to make it to the end of the Trump presidency in the hope that a new US administration in 2021 would step away from the current inflexible anti-Iranian line.
At the Munich Security Conference in mid-February Zarif nevertheless did not mince his words in calling for the Europeans to do more to save the nuclear deal with his country. Along with Merkel’s above noted presentation, Zarif’s speech was regarded as a “highlight” of this high-powered international conference.

Zarif resigned as Foreign Minister on February 25th, but was back at work on the 27th, President Rouhani having rejected his resignation. A credible rumour is that the reason for the short-lived resignation was Zarif’s displease with his lack of involvement in the very recent visit of Syrian President Assad to Iran. Resigning and having the resignation rejected allowed him to protect his role as the key person in charge of foreign affairs.




Russian presidential spokesman Dmitry Peskov says the Kremlin is following the situation involving the detention of a prominent American investment-fund manager who is accused of large-scale fraud in Russia. Talking to reporters in Moscow on February 18th, Peskov said that the arrest of Michael Calvey, the head of the Baring Vostok investment company, has nothing to do with a deterioration in Russian-U.S relations. «The state of Russia's ties with other countries has no impact whatsoever on the business activities of foreign investors here," Peskov said, adding that Russia has always been interested in creating "comfortable conditions for foreign investments and that Mr. Calvey is a serious investor in our economy who has always supported the idea of the Russian market's attractiveness."
Peskov also said that Russian President Vladimir Putin had met Calvey many times at business forums and other gatherings in Russia in the past, but that Calvey's detention was beyond Putin's competence.

On February 16th, a court in Moscow remanded Calvey in custody until April 13th, pending trial. Calvey denies any wrongdoing. 

Founded in 1994, Baring Vostok is one of the largest private-equity firms in Russia and the former Soviet Union, according to the firm's website. It manages more than $3.7 billion in assets. It is particularly active in the technology sector and owns a stake in the Yandex search engine. Before founding Baring Vostok, Calvey worked for the European Bank for Reconstruction and Development as well as for Salomon Brothers. He is also a member of the board of directors of the Atlantic Council think tank in Washington.


Belarus will always be a reliable partner for the European Union and hopes that this approach in the bilateral relations will be reciprocal, Belarus President Alexander Lukashenko said as he met with European Commissioner for Budget and Human Resources Gunther Oettinger on February 18th.
“I want to assure you that Belarus always pursues a balanced and well-considered policy in relations with its neighbors. We believe that neighbors are given to us by God, we do not choose them. With this in mind, we will always be a reliable partner for the European Union but of course we want such feelings to be reciprocal,” Alexander Lukashenko said.


French President Emmanuel Macron has declared April 24 as a "national day of commemoration of the Armenian genocide. «Macron made the announcement on February 5th at a dinner for the Armenian community in France, honoring a campaign promise from his 2017 election campaign.
France was among the first nations to denounce "the murderous hunt of the Armenian people in the Ottoman Empire," he said at the annual dinner organized by the Coordinating Council of Armenian Organizations of France (CCAF).

France officially recognized the World War I-era mass slaughter and deportation of up to 1.5 million Armenians by Ottoman Turks as genocide in 2001. At least 22 other countries, including Germany, have taken a similar step. Armenia says the mass killing is one of the first examples of genocide in modern history, pre-dating the Holocaust carried out by Nazi Germany against more than 6 million Jews during World War II.

Turkey objects, saying that Armenians died in much smaller numbers and because of civil strife rather than a planned, systemic effort by the Ottoman government against the Christian minority.


The Prime Minister of Georgia, an ex-Soviet republic that aspires to join NATO, has hailed the Western military alliance’s decision to allow North Macedonia to join.

“We see that NATO is pursuing an open-door policy and this is the only right response to the challenge coming from the Russian Federation,” Prime Minister Mamuka Bakhtadze said in interviews on the sidelines of the Munich Security Conference on February 17th.

On February 12th the Former Yugoslav Republic of Macedonia was officially renamed the Republic of North Macedonia, under a landmark agreement to normalize relations with Greece, that also allows Northern Macedonia to enter NATO.

Bakhtadze made the comments after Skopje signed a protocol on February 6th that could see North Macedonia become NATO’s 30th member if the move is ratified by all current members of the alliance.

Moscow has made explicit its opposition to NATO’s further expansion, especially as regards to Georgia and Ukraine. Ukraine’s accession to NATO is a key element of President Poroshenko’s election platform. Most other presidential candidates also generally support the idea.


Russian Foreign Minister Sergei Lavrov has called a Russian military base in Tajikistan "an important factor for Tajikistan's security. «Speaking to journalists in Dushanbe on February 5th after talks with Tajik Foreign Minister Sirojiddin Muhriddin, Lavrov said Moscow is ready to assist Tajikistan in the modernization of its armed forces and "strengthening the state border," taking into account, among other things, "existing threats that continue to be imposed from the territory of Afghanistan."

"I would like to stress the role of Russia’s 201st Military Base [in Tajikistan], which is an important factor of Tajikistan’s security," Lavrov said. About 7,000 troops from Russia’s 201st Motor Rifle Division are stationed at three facilities that are considered part of the Russian base in Tajikistan.
Lavrov, who started his Central Asian tour on February 4th with a visit to Kyrgyzstan, said in Bishkek earlier that Moscow is open to talks about setting up a second Russian military base in Kyrgyzstan if Kyrgyz authorities initiate the issue.


At the end of February, President Nazarbayev appointed a new Council of Ministers and a new Central Bank Governor. The President’s dissatisfaction with the previous government’s economic performance seems to have been the main reason for the re-shuffling of senior ministers and appointing a new Prime Minister in the person of Askar Mamin who was previously Vice Prime Minister. Perhaps more important is the appointment of Yerbolat Dossayev, a former businessman, as Central Bank Governor, as it would signal the intention to tackle the serious problems of the country’s banking sector.


Uzbekistan's Central Bank has announced it is introducing a new 100,000 som banknote as of February 25th.The bank announced on February 16th that for the first time the banknote will have a special sign for blind people. The new banknote will be worth about $12, according to the official exchange rate.

Currently, the 50,000 som banknote is the largest denomination in Uzbekistan and was introduced in August 2017. Uzbek economists have said for years that the introduction of 50,000 and 100,000 som banknotes was necessary to address a problem with cash payments in a country where an unusually large number of bills is needed to purchase ordinary items.


Ilya Gerol, former foreign editor of the Citizen in Ottawa, syndicated columnist in Canadian, US and European media specializing in international affairs. His particular area of expertise includes Russia, Eurasian Economic Union, Eastern and Central Europe.  Ilya Gerol has written several books, one of them, The Manipulators, had become a textbook on relations of media and society.

During his career in the Canadian Foreign Service, Gilles Breton had three assignments at the Canadian Embassy in Moscow. His first posting there began during the Soviet period, in 1983. His last was from 2008 to 2012 as Minister-Counsellor and Deputy Head of Mission. He also served as Deputy Director responsible for Canada’s relations with Russia from 2000 to 2008. As an international civil servant, he was Deputy Director of the OSCE Office for Democratic Institutions and Human Rights in Warsaw from 1994 to 1997.

Gilles Breton also currently serves as Chairman of the National Board of the Canada-Eurasia-Russia Business Association. The views expressed in this newsletter exclusively reflect the opinion of the authors.