THE BRETON/GEROL NEWSLETTER
SEASON OF THE SUMMITS : AFTER CHARLEVOIX, FROM SINGAPORE TO HELSINKI THROUGH BRUSSELS
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| President Trump arriving at the G7 Summit in Charlevoix, June 8th |
President
Trump is scheduled to attend the NATO summit on July 12th. On the
occasion he is bound to encounter serious disagreements with US allies from old
Europe. The main difficulty is the financial contribution of other member
states along with the growing US unwillingness to pay the lion's share of the
organisation’s budget. New tensions may arise if Trump insists on member states
fulfilling their financial obligations by contributing 2% of their budgets to
defense. Immediately after the NATO meeting Trump will fly to Helsinki where he
will sit down with Vladimir Putin. It will be the first official summit of the two
leaders. They previously met only briefly on the sidelines of various
conferences. The major topics of discussion will range from restoration of
nuclear restraint, the Syrian situation and the conflict in Ukraine as well as the
overall improvement in relations between old Cold War foes.
Any possible
improvement in relations between the two nuclear super-states is a positive
step. However, due to a lot of skepticism or outright opposition to such
overtures from the American political establishment and key American allies,
primarily Great Britain, Poland and the Baltic States, not to mention Ukraine
itself, it is hard to foresee a breakthrough. This is not easy to admit, but,
as for the US political establishment, it was rather astute on Trump’s part to
have his meeting with Putin arranged by John Bolton, the one US Republican politician
who could have otherwise been the most critical of such a move.
Ultimately, one thing is clear: in the geopolitical sense if we are to overcome this chaotic period and lay foundations for conflict resolution in the Middle East and Eastern Ukraine, participation of both Moscow and Washington and productive interaction between them is needed.
Ultimately, one thing is clear: in the geopolitical sense if we are to overcome this chaotic period and lay foundations for conflict resolution in the Middle East and Eastern Ukraine, participation of both Moscow and Washington and productive interaction between them is needed.
On the
specific issue of Syria, the question whether there is much left to discuss is
worth asking. The Syrian government is slowly, but surely, regaining control of
its territory, one region at a time. Some Arab commentators have even already observed
that the US is abandoning its Syrian opposition allies. Syria in itself may no
longer be the real issue, but it provides a useful cover to discuss the
security concerns of Israel as well as the concerns about Turkey and its
recently re-elected President. Iran was not mentioned by the US president in
his first comments about the upcoming summit. For Trump himself, it might not
be such an enticing prospect to discuss the Iran nuclear deal, that he just
denounced, with one of its steadfast supporters.
Another
issue of utmost importance for the agenda will be an attempt to craft some sort
of cyberwarfare "rules of the road", or at least a truce, considering the stakes
involved. While there is no doubt that Russian actors tried to interfere in the
2016 US presidential election, the US also has incredible cyberwarfare and
information warfare capabilities that could create havoc across the globe. There
is little doubt that the next major conflict will start in cyberspace. The US and
Russia must begin to work together to draft an agreement, one that hopefully virtually
all other nations can support, that limits hostile state actions in cyberspace.
As in
traditional arms control negotiation, it may well be necessary to initiate the
process through confidence-building measures.
--o--
CURB YOUR ENTHUSIASM
The
euphoria of the Singapore summit between Donald Trump and the North Korean
leader who is often referred to by his people as "Yŏngmyŏng-han Tongji" (영명한 동지), which loosely translates to
"Brilliant Comrade" is fading. Aside from blowing up two nuclear
testing sites and some underground facilities, the North so far has not
disclosed locations of other key sites and has not even begun returning remains
of American servicemen killed during the Korean War. Moreover, according to a
recent Wall Street Journal report, satellite imagery shows that North Korea
began upgrading its main nuclear research center and adjacent site. Meanwhile
Kim visited Beijing to update Chairman Xi Jinping on the results of the Singapore
summit. China, not waiting for international sanctions against North Korea to
be lifted, has resumed purchase of Korean coal and eased certain food
deliveries to its peculiar neighbor.
Just as it
was emphasized by more knowledgeable commentators, not prone to sensationalism,
it will be a long process with many ups and downs before the two main
objectives of denuclearization and a formal peace treaty between both Koreans can
be achieved.
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| Presidents Kim Jong-un and Trump, Singapore, June 12th |
--o--
STRUGGLING ALLIANCES IN THE AGE OF TRUMP
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| G8 leaders in Charlevoix, June 8th |
The established
system of high-level consultations, such as the G7 (formerly G8) and G-20, political
military alliances such as NATO, international treaties such as NAFTA and other
multilateral and bilateral free trade agreements, and finally the WTO, all of
them, looked unassailable not so not long ago.
They now begin to look shaky and vulnerable. It is easy and fashionable
to lay blame at the feet of Donald Trump. After all he is erratic,
unpredictable, not very knowledgeable and has questionable advisers around him.
The situation is by far more complicated than that. Trump continues to find
support among a sizable part of the American electorate, his own party and some
in Europe (particularly in the Central and Eastern part of the continent).
Newly elected populist and right of center governments in several European
countries share a similar view of the world order with Donald Trump, especially
when it comes to immigration and anti-globalism in the economic sphere.
Relations
with Russia have also become a divisive point in the Western alliance. When in
Quebec for the G7 Summit, Trump suddenly expressed his support for re-inviting
Russia back to the G7, making it again the G8. Only Italy did not object. Privately
however France and Germany are looking for an opportunity to make this possible,
provided there is some real progress in the Ukrainian conflict.
Canada, under
PM Justin Trudeau, lost the ability to see nuances in the complex world of
international politics, banking solely on its uncompromising support for
Ukraine and ignoring certain elements of realpolitik and geopolitical
realities. This makes current Canadian stand within the G-7 smack of
provincialism. If you add to this the unfolding economic drama between Canada
and US where Canada holds a much weaker hand and faces some tough choices
ahead, one is inclined to think that things will most likely get even worse
before they get better. As for the future of the Western alliance, at least in
the short term, it looks bleak.
--o--
OLD AGE IS NOT JOY (OLD RUSSIAN SAYING)
The age at
which Russian residents can receive a government old age pension is one of the
few things that have not changed since Soviet times. Men can still retire at
60, women at 55. The government has now proposed to raise the pension age
progressively, beginning in 2019, to bring it to 65 for men by 2028 and 63 for
women by 2034.
Government
authorities are well aware of the unpopularity of such a change. Canadians will
recall that one of the measures taken by the new Trudeau government in 2016 was
to cancel the Harper government decision to raise the pension age from 65 to
67. In Canada, the idea of raising the pension age was not overly popular, but
it did not create the same level of controversy and debate as the current
Russian government proposal. President Putin himself is confronted with his own
2005 statement that he would not countenance a change in pension age. The
statement was made at a time when the Russian government was going through the
also unpopular process of monetizing some of the social benefits that were a
legacy of Soviet practices.
Government
pensions are one of the most difficult issues left over from Soviet times and
one around which there has probably been the greatest popular resentment. Soviet-era
pensions were relatively generous. Nowadays, more important than the occasional delays in
payment, the main problem is that the value of the pension itself, for
a person retiring at this time, no longer corresponds to the income that could
allow a person to live comfortably. Yet, it is still a considerable burden for
the state as there is no dedicated pension fund from which to draw. Touching an acquis social such as early age for
retirement is not only controversial for the fact that it affects a fundamental
right of the worker. In a country where life expectancy overall has grown but still
is at 71.6, the argument is being made that a large proportion of men whose
life expectancy is lower than that of women would never receive a pension. The
counter argument is that life expectancy is on the rise and that the
expectation is that Russia is well on its way to catch up. That is the justification
for raising the pension age to the accepted international level in order to
protect the long-term viability of the system.
The government
is trying to sell its proposal by offering assurances that pension amounts will
continue to grow significantly in coming years. It also is taking measures to
protect the pension system by modernizing it and by making it more similar to
pension systems in the rest of the industrial world. This being said, the
issue will be remaining at the top of the political agenda for the foreseeable
future.
--o--
GAS
GUZZLERS
Along with
Saudi Arabia and the US, Russia is, year in year out, one of the three largest
oil producers. The government recently announced two measures that are related
to oil production and consumption. The first part of the plan is a so-called
fiscal maneuver that will change the structure of taxation for the oil industry.
The rather complex exercise is intended to bring substantially more revenue to
the government, facilitate modernisation of the industry as well as promote
exports. It also incidentally is intended to help companies that have been
subjected to Western sanctions. The whole matter is, however, still the subject
of negotiations between the government and oil sector companies.
The second
part of the plan is to reduce excise taxes on fuel, creating a budget shortfall
of approximately USD$2.2 billion, in order to ensure the stability of gasoline
prices on the retail market, a matter of some serious concern since the
beginning of 2018. The intent of this second measure is to appease consumers.
It may however be seen as encouraging the consumption of more fossil fuels.
--o--
OUT OF UKRAINE ISSUES
The
stalemate in the conflict between Kyiv and its Eastern rebel regions means not
only that the issue ends to drop from world attention. It also means that the
discussion in Ukraine and in Russia tends to shift to issues that are not
necessarily central to the conflict, but have large symbolic value. The completion
of the bridge linking Crimea to the Russian mainland comes to mind. One could
understand that this engineering achievement would receive considerable
attention in Russia and would be greeted there with suitable satisfaction. In
Ukraine, the news was received with more resignation than anger and soon became
the subject of mockery directed at the public figures who had stated that the
construction of such a bridge was impossible.
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| The Crimean Bridge © Preisent of Russia Website |
On an issue
that has little to do with the Ukraine-Russia conflict, there were in Ukraine
many doubters about the capacity for Russia to host successful Football World Cup
events. The idea that Russia might fail at this would have comforted those who
tend to view that anything that is good for Russia must be bad for Ukraine, and
that the reverse is also true. There were even rumours that Ukraine may take
advantage of the Russian leadership being focussed on entertaining a large
number of foreign guests to launch a new government-led military offensive in
Eastern Ukraine. Although there was increased activity on the front line, no
new significant military action was undertaken. There was in fact renewed
diplomatic activity. We now even have yet another ceasefire agreement set to
begin on July 1st.
We had
noted before that there were rumours of frequent phone calls between Presidents
Poroshenko and Putin. Through their web sites, the two presidents acknowledged
that they indeed spoke by phone on June 21st. The focus of the conversation
seems to have been on the issue of political prisoners detained by both sides.
The lack of success of the discussion was confirmed by Poroshenko immediately
thereafter, as he ordered sanctions against most Russian political parties.
With the
announcement of a Putin-Trump summit in July, and Trump saying that Ukraine
will be on the agenda, Ukrainian authorities may experience some trepidation.
Having seen what happened in the US-North Korea discussions and having heard
the rumour that Trump told his G7 counterparts in Charlevoix that “Crimea is
Russian because everyone who lives there speaks Russian”, there may indeed be
some cause for concern on their part.
--o--
THE WORLD CUP IN RUSSIA, SPORT BUT NOT ONLY
So far the
Russians have excelled in organizing this World Cup. The logistics were not
trivial: 11 cities, some 3,000 kilometers apart, covering 3 time zones, and
hundreds of thousands of tourists from all corners of the world. Security,
safety and services, according to participants and journalists, have been top
notch as well. Previously feared Russian soccer hooligans are also kept in
check. Many British soccer fans, on the advice of their Foreign Service,
decided to not to go, but those who went have experienced a warm welcome at the
sites where England played. Many Russians even cheered for the English team.
This World
Cup also has helped Russia conduct some very important diplomatic activities.
Putin was seen at his VIP box with the likes of Crown Prince Salman of Saudi
Arabia, President of Azerbaijan Aliev and newly elected PM of Armenia
Pashinyan. In fact Putin managed to bring Aliev and Pashinyan together for a
handshake during a game in an attempt re-start the negotiation about the
endless conflict over Nagorno-Karabakh. Putin also extended an invitation to Netanyahu and Mahmoud Abbas.
Netanyahu has yet to accept, but Abbas already confirmed his attendance. There
is little doubt that a lot of less visible yet significant meetings are taking
place on the sidelines of this tournament.
--o--
PERSON OF
THE MONTH: MOHAMMAD BIN SALMAN BIN ABDULAZIZ AL SAUD
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| ©Wikipedia |
The 32-year
old Crown Prince Salman of Saudi Arabia has introduced several revolutionary reforms
in his conservative kingdom: legalizing rights of women to drive, female
concert performances, hiring women in civil service, including the police
force. He also significantly restricted the powers of the religious police,
also known as vice squads. On the international scene he directly confronted
Iran for its involvement in Yemen's civil war and together with Israel strongly
lobbied president Trump to withdraw from the Iranian nuclear deal, going as far
as to say that if Iran will be allowed to move towards nuclear weapons, Saudis
will do the same. In fact Prince Salman almost makes no secret of his strategic
alliance with Israel in its confrontation with Iran. He twice hosted in Riyadh Yossi
Cohen, the head of the Mossad (Israeli Intelligence Agency) and other Israeli
security officials. Recently it has been rumored that Bin Salman secretly met
with Israeli PM Netanyahu. In a surprise visit to the World Cup in Moscow for
the opening game between Russia and Saudi Arabia, he stoically and with humor
endured the Russian thrashing of his team (final score was 5-0 for Russia), while
discussing oil business, Iran and Syria with Vladimir Putin.
--o--
BRIEFLY NOTED
ARMENIA
Prime
Minister Nikol Pashinyan unleashed an unprecedented anti-corruption campaign.
His security forces have arrested Manvel Grigoryan, the previously untouchable
Defense Minister and several other key bureaucrats and relatives of former
Prime Minister Serzh Sargsyan.
This is
only the beginning as indictments are being prepared against the mayor of
Yerevan (who happens to be the son of the arrested defense minister) and scores
of others.
TURKMENISTAN
Turkmenistan
introduced tough new austerity measures: food rationing, currency exchange
control and limiting electricity use by private citizens. The reason for such
draconian measures is the ongoing financial crisis affecting such mega projects
as new pipelines and construction of southbound roads.
BELARUS
President
Lukashenko met with EU representatives to announce that his country was ready
for political reforms that could bring Minsk closer to the standards of
European Union. He also stated that Belarus would not object to Ukraine joining
NATO in the future, an unusual view for a close Russian ally
GEORGIA
A Georgian
court sentenced in absentia former President Mikheil Saakashvili to 6 year imprisonment for abuse of power. It is believed
that the real objective of Georgian authorities was to prevent the eccentric, yet popular politician from returning to his native country. He is currently
residing in the Netherlands, but is still actively involved in political
controversy in both Georgia and Ukraine.
UZBEKISTAN
Uzbekistan
has emphasized its readiness to host direct peace talks between the government
of neighboring Afghanistan and the Taliban, after both sides announced a
cease-fire for the Eid al-Fitr holiday. Although the Taliban withdrew from the ceasefire
itself, the negotiations in Tashkent are ongoing. The Foreign Ministry of
Uzbekistan confirms its full readiness to create, at any stage of the peace
process, all the necessary conditions for setting up direct talks between the
government of Afghanistan and the Taliban. The former Soviet republic is
seeking to raise its international profile as part of President Shavkat Mirziyoyev’s
campaign to open up the nation of 32 million after decades of isolation.
NORTH MACEDONIA
The
Macedonian and Greek parliaments ratified a long-awaited agreement to re-name
the Former Yugoslav Republic of Macedonia as North Macedonia. Since the
collapse of Yugoslavia, Greece refused to recognize independent Macedonia
because it claimed for one of its regions the historic name of Macedonia. After
years of tortuous negotiations both sides reached a compromise that culminated
in the country of Macedonia renaming itself to North Macedonia. However, the
President of Macedonia has refused, so far, to ratify the name change.
THE AUTHORS
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.
