Issue 20

THE BRETON/GEROL NEWSLETTER

SEASON OF THE SUMMITS : AFTER CHARLEVOIX, FROM SINGAPORE TO HELSINKI THROUGH BRUSSELS

President Trump arriving at the G7 Summit in Charlevoix, June 8th
©Facebook

President Trump is scheduled to attend the NATO summit on July 12^th. 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.

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.

No government should attack another nation’s election system, banking, infrastructure, hospitals or other critical systems that depend on the Internet. Just one false move, either by accident or on purpose, could spark a crisis where lives could be placed in harm’s way, and lead to a shooting war. In the worst case scenario this could escalate to nuclear conflict. The fundamental problem has been, however, that in the absence of a minimum of mutual trust, neither side is in a position to begin sharing information about what it knows and what it can do. 

As in traditional arms control negotiation, it may well be necessary to initiate the process through confidence-building measures. 

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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. 

Presidents Kim Jong-un and Trump, Singapore, June 12th
©Facebook

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STRUGGLING ALLIANCES IN THE AGE OF TRUMP

G8 leaders in Charlevoix, June 8th
©Facebook

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. 

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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.

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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.

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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.

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.

Of note for Canadians, the Putin-Trump summit removes another leader from the short list of heads of government who are not in direct contact with Vladimir Putin: Theresa May and Justin Trudeau are the ones left. Despite the recent silence about the Skrypal affair, the matter still justifies May’s reluctance. As for the Poroshenko-Putin phone call, it would seem to undermine the Ukrainian rationale for asking Canada not to engage with Russia.

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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.

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PERSON OF THE MONTH: MOHAMMAD BIN SALMAN BIN ABDULAZIZ AL SAUD

©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. 

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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.