Issue 11

THE BRETON/GEROL NEWSLETTER

TRUMP vs UN

President Trump addresses the 72nd Session of the United Nations General Assembly
 (Official White House Photo by D. Myles Cullen)

The September session of the UN General Assembly was undoubtedly one to remember. In the 72 years of the UN existence there were many dramatic moments, turbulent discussions and inflammatory rhetoric. What made this session unique was Donald Trump openly expressing disrespect for the UN itself, an extraordinary pronouncement for the leader whose country was one the founders of the United Nations.

Trump's speech was not received well by the vast majority of world leaders in the General Assembly hall. Judging by the immediate reaction it was the least welcomed speech by a US President in that building ever. Objectively, however, the speech contained some reasonable points in respect to the overblown bureaucracy and inherited biases of the organization. Dmitry Simes, chief editor of the prestigious American National Interest magazine remarked that Trump's speech was put together by two conflicting groups: the Administration and the State Department. Bellicose and threatening parts were obviously produced by the President's inner circle and more conciliatory and diplomatic segments by the State Department bureaucrats. A pure example of this duality was his explicit threat to annihilate all of North Korea (a country of 24 million people) and right after that expressing his strong belief in diplomacy.

His blistering attack against the nuclear deal with Iran was unanimously rejected not only by the 5 other co-signers of the agreement but also by the EU and other major players except maybe for Israel.

The 72nd session of the UN GA has not brought us closer to solving any of the world immediate conflicts.

BGN conjecture: the Iran nuclear agreement will stay in place with a possibility of changes in respect to the number of years Iran is not allowed to enrich uranium.

Syria: limited coordination between the US led coalition and Russian military command will continue.

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PRESIDENT PUTIN LOST THE ELECTION, DID HE?

President Putin at the Gagarinsky District Polling Station, September 10th
President of Russia Official Website

It is rather difficult for commentators to evaluate the significance of the results achieved by some opposition parties on the occasion of the Moscow local council elections held on September 10th. Is it a “new era for Russian politics”, as one activist put it? Perhaps. The opposition, in this case the liberal Yabloko party, indeed won all the seats in the district where the President himself voted. This is symbolically significant. Yet, United Russia, the President’s “pedestal” party won 76% of the Moscow seats overall and most of everything else across the country. That is as clear a victory as one could expect.

To have a better understanding of the situation it is important to take a more long-term view.

In Russia’s managed democracy conditions, the three opposition parties (Communists, Just Russia and Liberal Democrats) that are labeled the “systemic” opposition are expected to be just that, opposition. Their aim is not to gain power, but to serve as faire-valoir for the party that supports the President. This works very well in the context of national elections, especially parliamentary ones. Systemic opposition parties get their share of seats in the Duma. The perks that come with the Duma seats are a non-negligible incentive not to disrupt the system. The opposition parties that are not part of the system barely get any public recognition and seldom manage to get seats at any level.

At the national level, for a non-systemic opposition to emerge and to have some claim to power, it would need a strong leader, a distinct and attractive platform that could stand up to United Russia’s all-you-can-eat approach, as well as a substantial membership. Thus far, this has been “mission impossible”.

Around the time of the December 2011 national legislative elections, the prospect of non-systemic opposition forces being in a position to gain power at the municipal or regional level began to gain some credibility and attractiveness. Some observers argued that if opposition forces could establish themselves firmly at a lower level, they might be able to break out of the managed democracy model and eventually move on to the national level. That, however, did not materialize. A lot of energy was spent on the major public opposition demonstrations in late 2011 and throughout 2012, but the interest for electoral politics at the local level was not sustained.

In that context, the September 10th Moscow local council elections are significant in that they mark the fulfillment of the 2011-12 expectation: a non-systemic opposition group will take over the local council of up to 15 Moscow districts and will have a voice in many other councils. The unifying issue that seems to have brought about this result is the opposition to the Moscow Administration’s plan to renovate Khrushchev-era apartment blocks without taking into account the wishes of their occupants. The opposition groups did not manage to gain enough seats in enough districts to advance their own candidate for the next mayoral election in 2018, but are not giving up on finding a way around that problem. What matters is that the Yabloko opposition becomes relevant and, on account of its central Moscow successes, highly visible. This success could inspire others to try to do the same.

Of no less interest is the fact that the Moscow gains of the non-systemic opposition were accompanied by substantial losses for the systemic opposition parties: for instance, the Communist Party went from a previous overall tally of 212 seats to only 43.The non-systemic opposition may not be close to power, but may be in a position to replace the systemic opposition, in itself a significant moment.

Managed democracy is not dead. It still has a lot of staying power. Wishful thinking on the part of its opponents could lead to major disappointment. The fact is, however, that there is a real well-organised opposition that is finding its voice again in a grass roots based endeavour. What is far more difficult is to assess how long it might take for the revived opposition to alter the current power structure. The first step we just witnessed took more than five years. It could take a lot of time for the next one, in the absence of another major faux-pas by the current holders of power.

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RUSSIAN ECONOMY IS OUT OF RECESSION

It is not the growth Russia dreamed about. Nevertheless 2.1% growth in 2016 and 2.6% growth in the first two quarters of 2017 marks the end of the deepest recession in years. It is particularly surprising in light of sanctions that have squeezed the Russian financial system and deprived industry of some vital imports. The so-called counter-sanctions that Moscow announced in response were aimed at boosting an "import replacement" drive especially in agriculture. For a short while the euphoria of import replacement was somewhat justifiable: domestic production started to grow. However, in the absence of the competition that imported goods provide, the quality of domestic agricultural products in Russia has begun to drop. In technological and industrial sectors Russia is also going through profound difficulties. The European Bank of Reconstruction and Development concluded that while the sanctions were not as damaging for the Russian economy so far as it had been widely expected, they will seriously undermine Russian economic performance in future. Without a 4% annual growth Russia's economy will not be able to maintain the global standards of a post-industrial nation. Only by improving relations with the West, that is not easy due to complex political differences, can Russia meet its economic objectives.

BGN conjecture: It is likely that Russia will offer major compromises on Eastern Ukraine (but certainly not Crimea) in order to remove all or large part of sanctions so it can improve its economy and regain membership at the G8.

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BETTER THAN HOME

President Poroshenko and Prime Minister Trudeau, Toronto, September 22nd

President of Ukraine Official Website

There is probably nothing sweeter for a President of Ukraine than to visit Canada. No matter your latest single-digit poll rating or what difficulties you may have at home, you will be very well received by governments at all levels and by the Ukrainian community. You will also hear the right things, most of the time. No matter also that the discussions are not as productive as you would want: there is a definite answer neither on the provision of satellite images to monitor Russian and rebel troop movements on the Ukraine border nor on Canada joining a UN peacekeeping mission in Ukraine. Yet, there is no definite no heard on the first question and, on the second, you receive a general expression of support for the Ukraine-proposed UN peacekeeping mission. Urgent issues do, however, await you at home.

UN peacekeeping may not be the most pressing issue that needs to be addressed upon arrival in Kyiv, but it has now become less of a winner. For months, if not years, Kyiv could advance the idea of a UN peacekeeping mission, knowing that Moscow would reject it out of hand. Moscow has modified the terms of the discussion by coming up with its own UN peacekeeping proposal. That Russian proposal is unacceptable to Kyiv on at least one major account: UN peacekeepers would be expected to support the work of the OSCE Monitoring Mission, that is they would have to be on the line separating the two sides to the conflict, not on the Ukraine-Russia border. Under German pressure, Russia has allowed that it might be willing to consider the presence of peacekeepers elsewhere in Donbass, but not on the international border, which is a key condition for Kyiv to support any peacekeeping proposal. Other issues, such as the prior removal of heavy weapons, the composition of the peacekeeping contingent and the explicit direct approval of the arrangement by the rebel authorities in Donbass might be resolvable, but the dispute over the location of peacekeepers is likely to make an agreement impossible. By making its own proposal, Russia has, however, not only taken this free ride away from Kyiv, but, by eliciting some open interest on the part of Germany, opened a small crack in the general European support for Kyiv. One may even wonder whether the Germans might not have encouraged the idea.

Mikheil Saakashvili’s illegal presence in Ukraine will be another less than pleasant matter for Poroshenko to address. Piqued by having had his Ukrainian citizenship removed by Poroshenko, Saakashvili is unlikely to limit himself to enjoying the hospitality of his supporters in the capital and throughout the country. He has openly stated that, no longer being a citizen, he no longer seeks an elected position in Ukraine. Instead he seems intent on becoming a political agitator that will seek to regroup and energize opposition activists who share his anti-corruption platform. The outcome of his altruistic efforts is unpredictable, but will not make things any easier for the current Ukrainian leadership whose general political standing is on a downward trend.

Having just signed the new law on Education, Poroshenko will now have to address the controversy arising from the fact that the legislation’s promotion of education in Ukrainian is perceived by some of Ukraine’s EU neighbours (Hungary, Romania)as an infringement of the education rights of “their” ethnic minorities in Ukraine. The matter has been referred by Ukraine to the European Commission for Democracy through Law (also known as Venice Commission) of the Council of Europe”. Poroshenko agreed to take into account the opinion of European experts, but emphasised that Ukraine would make decisions by itself. A most negative reaction had already come from Hungary that described the new legislation as “a stab in the back” and threatened to block Ukraine’s efforts to integrate with the European Union. Many Canadians, being familiar with the education language debate, will have an impression of déjà vu, but with an additional international touch.

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BRICS AND VLADIVOSTOK ECONOMIC FORUM

BRICS leaders 

The September 4th Summit meeting in Xiamen (China) of the leaders of the world emerging economies (Brazil, Russia, India, China, South Africa) under the BRICS moniker did not get  a lot of attention in our media. There is a tendency to think of such summits as the poor relative of the G7 ones. If anything, there are even commentators arguing that the BRICS as an entity has outlived its usefulness. The BRICS s pledge to work together toward a more just, equitable, fair, democratic and representative international political and economic order is appealing, but does not have the same credibility when two of its leaders, President Temer in Brazil and President Zuma in South Africa are facing or have faced corruption charges. The attempts led by China and Russia to “de-dollarize” their commercial exchanges as a way of reducing US influence and insulating the economies from US-inspired sanctions may appear futile.

Yet, despite the mixed reviews BRICS meetings go on. As a mechanism of consultations among the leaders of the world emerging economies, it may fulfill a rather useful mission as a forum to promote greater economic integration (especially between Russia and China) as well as a conflict prevention mechanism (especially between China and India). When compared to what might be achieved by a G8 Summit with Donald Trump on board, the BRICS Summits might even begin to look good.

The Chinese insistence on “the need to seek practical results in our economic cooperation” and on the” need to strengthen the integration of our development strategies” illustrates rather well how BRICS mechanisms are in the long-term expected to create more robust economies better connected with one another. The BRICS’ creation and active promotion of its own New Development Bank is one example of the mechanisms that can lead to tangible accomplishments.

From the BRICS Summit in China, Vladimir Putin travelled to Vladivostok for the third edition of that city’s Economic Forum. This served, if necessary, to highlight the special relevance of BRICS’ and of China in the economic development of Russia’s Far Eastern regions.

Even though the economy is not regarded as Putin’s first strength, it is worthwhile to observe that his interest in modernizing the Russian Far East is a significant departure from past Soviet and Russian policies and that he pursues this regional economic development interest in a sustained manner year in year out.

Japanese Prime Minister Abe, President Putin, September 7th, Vladivostok
President of Russia Official Website

The Presidents of South Korea and of Mongolia as well as the Prime Minister of Japan also attended the Vladivostok Forum. What is striking is the enthusiasm displayed by Japan, followed closely by South Korea, for the fullest possible development of economic cooperation with Russia. The contrast with the attitude of some countries of the Euro-Atlantic region is staggering.

South Korean President Moon Jae-in, President Putin, September 6th, Vladivostok

President of Russia Official Website

Japan, even though it still has not resolved its territorial dispute with Russia, is reportedly in “serious discussions” to link the two countries with a railway bridge that would connect Hokkaido and Sakahlin islands. Russia would build its own link from the continent to Sakhalin. This project may be seen as far-fetched, but the very fact that it is discussed is revealing of the state of mind in the region. Seen in connection with China’s One Belt One Road plans (especially the New Eurasian Land Bridge) the project could lead to a substantial increase in trade flows. It is also not lost on the countries belonging to the Eurasian Economic Union that they would be among the first to benefit from the expansion of rail links in Asia and their connection to the European network.

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GERMANY: JAMAICA COALITION?

The Bundestag, Berlin

The Christian Democratic party of Germany together with its Bavarian cousin Christian Social Union received the biggest slice of the electorate's pie and will again form the Government of the Federal Republic. With only 33% of votes they, however, have to form a coalition. The Social Democrats, after suffering their worst defeat in the post-World War II history, announced their decision to stay in the opposition. Frau Merkel will most probably opt for the so-called Jamaica coalition (party colours of Christian Democrats, Free Democrats and Greens in combination form the Jamaican national flag). 

It was a bittersweet victory for the Christian Democrats because of the rejection by many Germans of the government's decision to let one million Muslim refugees into Germany in 2015-2016. The right-wing Alternative for Germany party won 12.6% of the vote and for the first time got into the Bundestag.

The initial analysis of the election results showed that all 6 regions of the former East Germany together with millions of German citizens of Russian and other Eastern European extraction voted for the AfG. Most of the world media immediately labelled this right-wing party as "neo-Nazi". This is a bit of a stretch. Yet, Angela Merkel admitted that her party has to work hard to bring back those who voted for AfG and that her party will address the root causes of the out of control immigration.

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PERSON OF THE MONTH: ANGELA MERKEL

Angela Merkel, Facebook Profile

After winning the September elections Angela Merkel, became the third longest-serving German chancellor, following Otto von Bismarck and Helmut Kohl.

The daughter of a protestant pastor, Merkel as born in West Germany yet moved to the DDR when she was a child as her father was transferred there by the church. Like Margaret Thatcher, Merkel has a Ph.D. in chemistry. Unlike Thatcher she is not called an "Iron Lady". German politicians prefer to call her "Teflon Lady" for her ability to compromise, build coalitions and take into consideration the views of her bitter political opponents. That is why her cabinets could include right-of-center Free Democrats and left-of-center Social Democrats.

Angela Merkel is a unique politician for Germany and the continent as a whole; her East German upbringing, education, fluency in Russian ( Merkel speaks Putin's language fluently) provides her with a unique understanding of complex political processes underway in Europe and the rest of the world. Merkel is not alone in disliking Donald Trump, but she is the only politician of caliber who openly states so. Her closeness to Israel has a lot do with her deep understanding of history, especially of the 20th century and the tragedies that unfolded. Germany under Merkel provided Israel with unprecedented level of political and military assistance, including the sale of advanced submarines and even annual joint sessions of German and Israeli cabinets. Angela Merkel's radical decision to open her country's doors to one million refugees is in direct line with her feeling of the responsibility Germany carries for the Jewish genocide and other multiple tragedies of World War II.

Despite an evidently eroding support Merkel still commands the strongest ever national economy. She continues to symbolize the stability and prosperity of Germany.

She starts her fourth term as the unquestionable leader of United Europe, as usual with the exception of the United Kingdom.

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NORTH KOREAN ROULETTE

There is a certain system to Kim Jong-un's irrationality. He believes - and he would not be wrong to do so - that the US and South Korea will never mount an attack against him. There are reasons for this. First, up to 10.000 Soviet-made artillery pieces that are embedded into North Korean mountains can open up a barrage against Seoul from 30 miles away and kill tens of thousands of people within hours. They are difficult if not impossible to destroy immediately. Second, North Korea, as it is well known, possesses a deadly arsenal of chemical and biological weapons to be loaded into artillery pieces which unlike rockets are impossible to intercept. Third, there is a high degree of probability that Kim could launch nuclear devices towards South Korea, Japan and even reach American bases as far as Guam. Basically we can find ourselves in all out nuclear exchange with totally unpredictable consequences and scale.

Therefore constantly escalating threats towards Pyongyang are not the most effective way to deal with this problem.

Kim will not give up his pursuit of a nuclear deterrent. He knows all too well what happened to Gaddafi and Saddam Hussein after they either had given up or were forced to end their nuclear programs. Kim and his generals also know what the international experts confirm: the North Korean army, for all its fire power, can conduct war for a maximum of three weeks after which they will start running out of spare parts, fuel and ammunition.

It seems that the Chinese approach of applying economic pressure together with allowing some wiggle room for reflection (for Kim and his inner circle) is a more sensible and safer way to deal with the North Korean menace. 

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THE CANADA RUSSIA EURASIA BUSINESS ASSOCIATION

The Canada Eurasia Russia Business Association (CERBA) held its Annual General Meeting on September 12^th in Montreal. Gilles Breton, the co-editor of the Breton/Gerol Newsletter was elected as the Chairman of the National Board of CERBA. For more detailed information on CERBA and its activities you may visit its web site at  www.cerba.org

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BRIEFLY NOTED

RUSSIA

Twelve governors of the most industrial regions of Russia lost their jobs. Reasons given were age and poor performance. In reality Putin, who fired them, began his pre-election campaign by bringing to his side younger generation of managers. The new governor of Kaliningrad region (Western enclave of Russia) is only 29. By doing so Putin addressed something that had been perceived as his weakness: a lack of connection with younger voters.

KYRGYZSTAN

Kyrgyzstan and Kazakhstan swapped accusations and diplomatic protests after Kazakhstan's president met with Omurbek Babanov, a Kyrgyz presidential candidate. Kyrgyzstan accused Kazakhstan of meddling in its internal affairs. Relations between the two former Soviet republics were never too friendly, but now mighty and industrial Kazakhstan is perceived by Bishkek as a serious threat. 

UZBEKISTAN

For the first time since 1991 Uzbekistan will allow its citizens to buy and sell foreign currency. The law will go into effect on October 1st.  This will boost export/import activities and help the process of privatization.

MOLDOVA

The Socialist party of Moldova proposed a law that is designed to strengthen presidential powers. This law, if adopted, will help to solve almost permanent state of gridlock between the parliament and president. Regional experts believe that such a law could provide president Dodon with an opportunity to dissolve parliament and call new elections.

BELARUS

President Lukashenko threw a royal welcome for the visiting leader of the Chechen Republic, Ramzan Kadyrov. It is highly unusual for a head of state to offer such level of welcome to a regional leader (Chechnya officially is a part of Russian Federation). Yet, Kadyrov's role in the Muslim world and his special relations with Putin are the reasons for Lukashenko to be so friendly.

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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.