Issue 4

THE BRETON/GEROL NEWSLETTER

SOBERING EFFECT
Only five weeks ago the political mood in Russia's upper circles and media could be defined as "Trumpomania". There was an avalanche of predictions about the imminent lifting of Western sanctions, the rapid improvements of relations between Moscow and Washington and the coordination of their efforts in solving a series of international conflicts.

Meanwhile in Europe there was a mood of unease and anxiety. Trump's tirades against NATO, multiculturalism and the European Union (he enthusiastically supported Brexit) made Europeans very apprehensive about the future developments.

It has appeared that Moscow's joy and Europe's grief were somewhat premature. Trump's team has confirmed Washington's commitment to NATO providing, of course, a substantial increase in members' financial participation. At the same time the lifting of sanctions against Russia was put on hold until the Minsk agreements are fully implemented.

In the final analysis, however, the status quo will not last forever. Strategically Washington and Moscow both crave to move beyond the Obama-Kerry foreign policy paradigm. Probably Syria not Ukraine will be the first field where they would attempt to find a common ground. 

At the G-20 meeting in July 2017 in Hamburg Donald Trump and Vladimir Putin will most likely meet for the first time. This could be the start of a new era in relations between West and East. 

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INTERVIEW OF THE MONTH

KAZAKHSTAN 2017: THE NEW DIRECTION

The vacuum of knowledge that the Breton/Gerol Newsletter is hoping to fill affects all countries of the region. Kazakhstan is no exception. BGN proposes to initiate its interview of the month series with His Excellency Konstantin V. Zhigalov, Ambassador of Kazakhstan to Canada. The first part of the interview follows, in which Ambassador Zhigalov answers BGN's question about Kazakhstan's domestic priorities for 2017. The second part will follow next month.

H.E. Konstantin V. Zhigalov

On January 20-22, 2017, a Canadian Parliamentary Delegation headed by Chair of the Standing Committee on Foreign Affairs and International Development of the House of Commons Mr. Robert Nault visited Astana. The visit was an important step in the Committee’s study on the “Situation in Eastern Europe and Central Asia: 25 years after the end of the Cold War”. The delegation included two members of Kazakhstan-Canada Inter-Parliamentary Cooperation Group – Mr. Nault and Mr. Kent. The Canadian parliamentarians held fruitful discussions with Prime Minister Bakhytzhan Sagintayev and other dignitaries.

It is worth mentioning that the visit to Astana took place at a very important period for modern Kazakhstan. In a few days after the visit, on January 25th, President Nazarbayev made a historic statement proposing important amendments to Kazakhstan’s Constitution. This announcement was followed by the President’s annual State-of-the-Nation Address, titled “Kazakhstan’s Modernization: Global Competitiveness”. To better understand the “Third Modernization” and perspectives of the country’s development, let me explain you the previous milestones of modernization of Kazakhstan.

The First Stage of modernization started with the dissolution of the former Soviet Union. From 1991 to 1995, our country went through a deep recession as a result of the sudden break-up of major supply chains and economic ties with the post-Soviet area. We had to start with entirely disintegrated economy and hyperinflation of as much as 2000%. However, thanks to the good governance and consistent socio-economic reforms, we have managed to establish a free-market economy, based on private ownership, openness and free competition. At this period, a lot of work has been done to attract major international corporations to Kazakhstan’s economy, primarily in energy sector.

At the same time, Kazakhstan has been focusing on regional and global security. In 1991, President Nazarbayev shut down the world’s largest nuclear test site in Semipalatinsk. Kazakhstan has also given up the fourth largest nuclear arsenal. Our commitment to peaceful development and balanced foreign policy was highly appreciated by the P5 countries, or permanent members of the UN Security Council, who in 1994 offered guarantee for Kazakhstan’s security and territorial integrity. Besides, from the wake of Independence, Kazakhstan has been actively involved in border negotiations with its neighbors – China, Russia, Turkmenistan, Uzbekistan and Kyrgyzstan. As a result, every part of land border with those countries was successfully delimited, which was indeed a huge achievement in the fragile geopolitical context.

As President Nazarbayev once mentioned, economic reforms were carried out hand in hand with political reforms. In this period, we experienced the awakening of civil society that contributed to strengthening government institutions, private sector, and social justice. Most importantly, mentality of people who got used to live in the socialist society was changing gradually. The ultimate goal of these socio-economic reforms and openness to the world was to bring modernization to the people’s hearts and minds.

The Second Phase of modernization began with the adoption of the Kazakhstan-2030 Strategy. This resulted in Kazakhstan’s joining the world’s 50 most competitive countries and creating the new capital, Astana. Kazakhstan reached a 12-fold growth of foreign trade turnover and a 20-fold increase in industrial output. Kazakhstan has become a leader in the region in terms of attracting foreign investment (over $260 billion so far). In the first three quarters of 2016, Kazakhstan attracted $14,5 billion of Foreign Direct Investment.

The Government of Kazakhstan continues large-scale institutional reforms in five areas initiated in 2015, specifically in: improving public governance; ensuring the rule of law; promoting economic growth; strengthening Kazakhstan’s identity and increasing transparency and accountability of the government. In this regard, in January, 2015 Kazakhstan signed a Country Programme with the Organisation for Economic Cooperation and Development, which unites 35 the most developed countries, including Canada. The Country Programme helped us in implementing these reforms. Following that, past July, Kazakhstan was accepted as a new member of the OECD Competition Committee, and in February, 2017 Kazakhstan was invited to the OECD Investment Committee. In 2015, Kazakhstan joined the World Trade Organization.

Modernization of Kazakhstan’s economy is also based on the “Nurly Zhol” (The Path to the Future)”. Economic Policy Program, which is similar to A Transformation Infrastructure Plan “Investing in Canada” proposed by the current Canadian Government. In our program, the development of transport and logistics, industrial, energy, housing and social infrastructure has been identified as a key priority.

International experts recognize the effectiveness of the reforms undertaken by Kazakhstan. Our country has moved up 6 spots and improved its ranking to 35th position in the World Bank’s Doing Business 2017 report.

(Second part of the interview in next issue.)

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ASTANA MEETINGS ON SYRIA

It has been very difficult for Western news media to get a sense of what if anything was accomplished at the two rounds of talks on the Syrian conflict, that were held in Astana in January and February. Fact that Jordan got involved in the second round and that Qatar expressed an interest in being involved in the future would suggest that the process of some consequence. The creation of a “Joint Operational Group for as part of a trilateral mechanism to observe and ensure full compliance with the ceasefire regime in the Syrian Arab Republic”may not look like a major accomplishment, but could pave the way for an eventual solution to the conflict. It would now remain for Syrian Kurds and maybe even Saudi Arabia to be brought into the picture.

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A PHONE CALL TOO MANY

The contacts between Russian officials and the Trump camp have claimed a first victim and understandably continue to attract a lot of interest on the part of Trump opponents. 

When it comes to former National Security Adviser Michael Flynn’s conversation with Russian Ambassador Kislyak on December 29 of last year, a number of observations apply:

A phone call with the Russian Ambassador on a “normal” phone is virtually a public event. A record of it will exist somewhere. Flynn would have known that.

It defies common sense that the Ambassador and Flynn would not have discussed the new sanctions on the day when they were announced. Flynn would have had no reason to engage in the conversation otherwise. It would seem he was too impatient to take charge and convey the views of the new administration to the Russian side. That impatience may have been illegal. In any event, it showed poor judgment.

In an administration that deals with alternate facts, Mr. Flynn not having been perfectly honest with Vice-President Pence would not have been so bad. The problem is that Pence was made to vouch publicly for Flynn. Again, that could also have been managed with some extra efforts. What, however, could not be managed is the loss of trust between the National Security Advisor and the intelligence establishment. With members of that establishment willing to leak compromising information, Flynn was too much a liability. 

Furthermore, apart from allegedly being less than the ideal team player, what seems to have distinguished Michael Flynn from others in the US intelligence/military establishment is most likely his recognition of the validity of the Russian understanding of the situation in Syria. As one who was known for his strong views about the Islamist threat, the idea that President Assad could be an asset in the fight against further Islamist gains would have come naturally. Agreeing on anything with Russia and especially on keeping Assad in power would have made him an unwelcome dissident voice in an environment that has little tolerance for unorthodox views.

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ON CONTACTS WITH RUSSIAN OFFICIALS

In the context of various more or less credible allegations about being under Russian influence, the Trump administration is now caught with the challenge of trying to prove the absence of contacts between its officials and “Russian agents known to US intelligence”. Proving a negative is a daunting challenge any day. Besides, what counter-intelligence organization in any country would be willing to reveal even indirectly what individuals it has identified as intelligence agents? On this count, Trump opponents can continue to raise doubts about the extent of Russian influence and are likely to do so.

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SHOWING OFF THE KIDS MAY BE THE ANSWER

Prime Minister Trudeau’s recent visit to Washington for his first meeting with President Trump was widely presented as a success. Some saw in that success the hand of Former Prime Minister Brian Mulroney,a neighbour of Trump in Florida and newly-minted adviser to the current Canadian PM. Others, more discretely alluded to the good preparatory work done by Trudeau’s office with their counterparts in Trump’s office. Fewer, however, cared to observe that the one thing that would have made Trump happy, happy is the inclusion of his favourite daughter in the program of the visit, in the context of a round table with Women Entrepreneurs.

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PERSONALITY OF THE MONTH

Lieutenant-General H.R. McMaster, the new NSA, is not described as a dissident but more as an innovator in an inherently conservative milieu. He was not the first choice and the President had to settle for him in order to put an end to the impression of disorder that the early departure of Flynn and the lack of a quick replacement was creating. The new NSA is presented as hawkish on Russia. Flynn was unique! President Trump can likely live with the new NSA’s more traditional views on Russia. With a personality like Trump’s, the viability of the relationship between the President and his new NSA is under more danger from the new appointee being regarded as a straightforward and thoughtful individual as well as a strategic thinker. There are already signs of trouble from McMaster's insistence on intellectual rigour.

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DEATH OF A DIPLOMAT

Vitaly Churkin, Russia's Permanent Representative to the United Nations died in New York on the eve his 65th birthday. Many will remember his combative style, wry sense of humor and his eloquence in defending his country's position in the polemic battles at the UN Security Council. However it is less known that he began as a child actor in several Soviet movies about Lenin. More importantly however is that Mr. Churkin was the first ever press secretary for the Soviet Foreign Ministry. He pioneered a more open style in relations between Foreign Ministry apparatus and the international media. 

As Russia's ambassador to Canada (1998-2003) he was instrumental in improving economic and cultural ties between both countries. Now, at the peak of global tensions and ever increasing insecurity the loss of a diplomat of Churkin's caliber will surely be felt.

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NO LIGHT AT THE END OF THE TUNNEL

Habitual spikes in combat between Ukrainian forces and Donbass separatists have been replaced by something potentially more dangerous: the blockade imposed by Ukrainian radical nationalists and some volunteer, para-military formations against some remaining economic and trade ties between the both sides of Ukrainian conflict. This blockade effectively cut off the coal supply from Donbass to Ukraine. More than 100.000 people employed by the coal industry in Eastern Ukraine are now facing unemployment. At the same time large areas of Ukraine are facing energy black outs in the middle of winter.

While politically very much charged, this blockade also has a financial aspect; the clash between Ukrainian energy sector's oligarchs is bringing about the demise of Renat Akhmetov, the owner of coal and metal sectors in Eastern Ukraine. This could have serious implications for the future of the area.In fact, the re-orientation of coal and metal sectors of Donbass brings this area out of the Ukraine's economic structure.

Unexploded Ordnance (UXO) in Debaltseve, Eastern Ukraine. 

(Flickr/UNICEF Ukraine)

RECOGNIZING THE DOCUMENTS FROM REBEL AREAS

The Kremlin’s decision to recognize, on a temporary basis, the validity in Russia of documents issued by certain areas of the Donetsk and Lugansk regions of Ukraine drew some expected international criticism. The fact is that the decision in itself does not change much to the reality on the ground. Given the difficulty for residents of the rebel-controlled areas to renew their Ukrainian documents, it offers a practical solution. Beyond the debate over its legality, the measure conveys two messages from Russia. The first one, clearly stated, is that this is a temporary arrangement, pending the resolution of the conflict on the basis of the Minsk agreements. The second message, implied, is that the issuance of Russian documents is not encouraged. Over 10 years ago, in the context of the conflict with Georgia, Russian “passportisation”of residents of the separatist regions of Abkhasia and South Ossetia became a prevailing practice. This will not be the case in Ukraine, at least for now.

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COMMUNIST DYNASTY'S BLOODY FEUD

 In a strange psychological twist North Korea accused Malaysia of being behind the assassination of Kim Jong-nam at Kuala-Lumpur airport. Paradoxically Malaysia was one of very few South East Asian countries that had close relations with the regime in Pyongyang. The murder of  Kim Jong-nam, half-brother of the current dictator Kim jong-un, was so carried in such a pathetically crude and unprofessional manner that it left no doubt who was behind it.

Kim Jong-nam was an illegitimate son of Kim Jong-il, the previous North Korean leader and Song Hye-rim the actress that ended up in Russia cutting all ties with the family. Most likely the real motive for the killing was the desire of Kim Jong-un to eradicate anyone who could even remotely challenge his absolute power. This also speaks volumes about Kim Jong-un's regime's weakness and insecurity. We are also witnessing a classic Shakespearean drama in the modern, North Korean interpretation. 

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BRIEFLY NOTED

IRAN

Senior US officials continue to call Iran the main sponsor of state terrorism. Senior Iranian officials are not surprised, but seem genuinely puzzled by these statements. Iranian Foreign Minister Javad Zarif even gave an interview to the BBC to try to project a different image. Iran’s image problem in Washington will not go away as long as the US brief will be largely influenced by Saudi Arabia and Israel rather than based on direct contacts. Iran remains the issue on which there can be an early and significant rift between the Trump administration and the Kremlin.

AZERBAIJAN

IIham Aliyev, president of Azerbaijan had appointed his wife Mehriban to be a vice-president. While this appointment raised eyebrows in international circles-after all Azerbaijan is relatively developed and modern state in the region-the Baku's official explanation was that aside from her education and diplomatic background her appointment represents women's emancipation in Azerbaijan. At the same time this could also be interpreted as the firm desire of Aliev's family to keep its grip on power. 

UZBEKISTAN

It was announced in Tashkent that Uzbekistan is renewing commercial flights with Tajikistan. They were interrupted 25 years ago at the peak of animosity between two former Soviet republics. The liberalization of the economic and political situation in Uzbekistan is bringing the two countries back together.

BELARUS

After unusually lengthy (7 hours) press conference of president Aleksandr Lukashenko where he expressed his displeasure with Russia over its energy policy and other aspects of cooperation between two allies.

Shortly after the press conference he traveled to Sochi-it was announced as a private visit- for a meeting with president Putin. The latter however appeared to be too busy to meet his Belarus colleague. It looks like more effort will be needed to repair the relations between Minsk and Moscow.

MOLDOVA

The status of neutrality between major political powers and economic blocks suddenly started to be seriously discussed in Moldova. While newly elected president Yuri Dodon does not hide his pro-Moscow stance on many international issues, the government continued to be more pro-Western. Meanwhile the complicated issues between Moldova and Russian-speaking Prednestrovie enclave as well as between Moldova and the Gagauz autonomous region could only begin to be solved if there is some warming of relations between Russia and the West.

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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.