Issue 41

THE BRETON/GEROL NEWSLETTER

COVID-19, PUBLIC POLICY AND INTERNATIONAL RELATIONS

The COVID-19 pandemic has challenged political leaders all over the world to come up with policies and measures they would have found impossible to imagine just a few weeks ago. The public policy choice is whether to take radical measures to stem propagation, thus avoiding the top-of-the-curve overburdening of the health system and reducing the number of deaths or whether to limit action to precautionary measures and let the pandemic spread to the point where some form of “herd immunity” is achieved. Except in Belarus and to some extent in Brazil, there is now a broad consensus that states should deal with the pandemic by performing maximum possible testing, by restricting travel and by instituting social distancing measures. At the outset, the UK seems to have flirted with the idea of letting the development of “herd immunity” take care of the problem. The quick propagation of the virus has put an end to that discussion.

The other country that adopted a different approach is Sweden where the response was initially not to adopt strict confinement measures. The assumption seems to have been that a healthier population living in a cleaner environment and more assiduously following hygiene recommendations might fare better without normal economic activity being curtailed. The matter was not to chose between public health and the economy, but to seek a balance between the two in a context where there a strong expectation exists that the overall population will be very disciplined in following public health recommendations to a point where confinement would be counterproductive. This may work in Sweden, but that remains to be seen.

The question of the damage to the economy only surfaced after some of the right-wing partisans and influencers of the US President raised the idea that the stringent anti-pandemic measures were unjustified. Trump even said “the cure is worse than the disease”. In any event, that idea has also become a victim of the virus as the number of US cases now seems set to grow exponentially for two weeks, maybe more. The uncertainty over the time that it will take to “flatten the curve” will be difficult to withstand, but there is no other choice. This is not to say that would not of using intelligent flexibility in lifting movement restrictions down the road.

Virtually all states have taken financial measures to protect their economies and societies from the impact of the pandemic. The US response was essentially delayed because its of initial greater emphasis on protecting the large economic entities rather than society. If the pandemic subsides by the time of the November elections, the effectiveness of the financial response will clearly be a decisive factor, perhaps even equal to the health care response to the pandemic.  

The immediate risk is the over-burdening of the health care system in some countries or parts thereof. The situation in Third World countries is unpredictable: the achievement of the above-mentioned herd immunity may become the default solution in some cases.

The following risk lies in the magnitude and unknown duration of the upcoming economic slowdown and of its impact on economic structures and social cohesion.

In dealing with the first, states have mostly turned to themselves.

In dealing with the second, there have been a few attempts to re-emphasise international solidarity. The EU is, for one, struggling with this challenge.

Beyond the risks, there might also have been opportunity. The call by the UN Secretary General for a truce in military conflicts and a later collective call for the suspension of economic sanctions, especially against Iran, drew little response so far. It seems though that the situation still must get worse for such ideas to find some traction. It seems that the US leadership is even using the time when no one is looking to double down on Iran and Venezuela. Secretary of State Pompeo has reportedly taken the view that it was a good time to go after regimes that may be weakened by the pandemic. Hoping for the pandemic to lead to a greater disposition towards conflict resolution is, to say the least, premature.

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COVID-19 COMPARISONS, US VS RUSSIA, AND CANADA

In understanding the current crisis, it might be useful to look at the comparative capacity of states to address the challenge, more specifically the US and Russia. The question that has been raised by many is why a country that shares a land border with China and Europe has comparatively fewer cases than a country that stands an ocean away from the first and the second epicentre of the pandemic.

US Navy Hospital Ship Comfort

There has of course been some debate about whether the Russian authorities were at the outset hiding the real numbers, with some arguing that early low numbers were unrealistic, others arguing that Putin’s subsequent decision to postpone the referendum on constitutional amendments was a signal that the situation is far worse than official numbers suggest. Some of the perceived early discrepancies may have been the result of a controlled release of the information. Certain objective factors may also have played a part. Russia, although it is closer than the US to China and Europe does not necessarily see the same number of international visitors. (International visitors are indeed what seems to explain the especially difficult situation in New York city.) Another part of the explanation may have been given in the admission made by Moscow Mayor Sergei Sobyanin who essentially stated on March 24th that “there is no real picture of the COVID-2019 situation in Russian regions”.  Another part of the explanation may be found in testing level and methodology discrepancies. Asymptomatic cases will not be revealed so readily in low testing circumstances. The fact is that the authorities’ perceived slow response would suggest they believed their own figures. The question has become somewhat academic. The growth of the number of cases in Russia now follows the same pattern as elsewhere. It also seems to corelate closely with case growth in Ukraine, a more similar comparator.

The White House signing of the financial stimulus bill, March 27th

In comparing the US and Russian response, it might be useful to focus on some of the factors that are currently considered as having an influence on the quality of the state response:

-An early, effective and decisive response by public authorities in implementing travel restrictions and social distancing measures.

In the US, Donald Trump claims that his decision to close the US to Chinese visitors at the end of January was a sign he acted early and decisively. Afterwards he decided to close the door to EU visitors. His early public comments about the innocuity did not help mobilize the public.  His stubborn reliance on the private sector and his reluctance to use government powers to deal with shortages may also have delayed necessary action.

In Russia, the decision was also made in late January to close the border with China. A relative early slowness in implementing strict confinement measures was observed. Undeniable growth of the number of people affected by the virus radically changed the situation and forced President Putin to speak to the nation on March 25th. There was no discrepancy between his message and that of public health specialists. All available government resources have been enlisted support the fight against the pandemic, including the Armed Forces and their biological defence units. Russia can also more readily completely close its borders, as it just did.

With an ineffectual national leader, the saving grace for the US is that it is a federal state where governors have the authority to take real action, even though not all governors are as effective.

With an authoritarian leader who eventually follows scientific advice, Russia’s converse problem is that regional leaders may not all be equally up to the task.

President Putin's visit to Komunarka Hospital, March 24th
©President of Russia Website

-The pre-existing availability of sufficient technical and human resources, including testing material.

Some observers, such as Robert Reich, former Labour Secretary under Bill Clinton, have highlighted the fact that the US does not have a public health system but rather a private for-profit system. The implication is that health care providers focus on activity that brings revenue not on prevention or preparedness. Testing capacity issues have not been resolved. The well-funded US system has all the most modern equipment. It may not have enough to meet all the needs in a crisis situation.  

In Russia, health care expenditures are much less than in the US. There are however more hospital beds and physicians per capita in Russia than the US.  While specific information about ventilators has not surfaced yet, one would have to assume that the availability of modern medical equipment could be a problem when it comes to the treatment of seriously affected patients.  The WHO representative in Russia nevertheless gave good marks to Russian testing, but, in a country the size of Russia, the number of facilities doing the testing could have been a problem.

Russia’s health care system is public and there is also a strong civil defence tradition and capacity. For instance, it has a “Ministry of Emergency Situations”. That Ministry has been widely seen as the best-run department in the Russian government. Russia’s relative capacity to handle emergencies was confirmed by the fact that it was the only country other than China to deliver medical assistance to Italy in late March.

-The pre-disposition of the population to heed the instructions and warnings of the health authorities.

As for the US population willingness to listen, there is more than anecdotal evidence of a rather less rigorous observation than is desirable. The misleading presidential statements obviously do not help. The distrust among conservatives and Trump supporters toward mainstream medias is also a serious concern.

In Russia, the matter would seem slightly different. There may not be a lot of trust towards government authorities. The fact though is that there seems to exist a greater inclination on the part of general population to trust official scientific opinion, especially the Academy of Sciences, and to follow the doctor’s advice. In other words, the Russian equivalent of a Dr. Fauci would enjoy a credibility neither affected by political factors nor undermined by his political leader. The political authorities would also have few qualms about imposing science-driven quarantine measures.  

In the long-term, Russia may have the advantage of a public (rather than private) health system as well as of a greater alignment to science-based advice. Only time will tell whether that will materialize in a more effective response. Russian leadership may not have reacted as quickly as leadership in South Korea, Taiwan or Singapore, but has eventually become more decisive. The greatest observable difference so far is that the US seems at a disadvantage on account of its erratic leader and his misleading pronouncements.

If we bring Canada into the comparison, we might even see in the above some reason to explain the relative effectiveness of the Canadian response. A quick reaction (especially in Québec), unusually good federal-provincial cooperation and coordination, a strong public health system as well as an inclination to trust government and to listen to scientists would seem to help better meet the challenge.

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IDLIB, THE OTHER HUMANITARIAN DISASTER

Over the past few years, Turkey and Russia repeatedly sat at negotiating table to strike a deal on opposition-held areas in northwestern Syria. Yet, despite these agreements, the situation in the area, particularly the northwestern province of Idlib, has only gotten worse, with no clear solution in sight.

The latest Turkish-Russian deal, which Turkish President Recep Tayyip Erdogan and his Russian counterpart, Vladimir Putin, concluded on March 5th in Moscow will not be an exception. While the agreement has managed to stop the fighting and give a respite to the three million Syrians living in the province, the majority of them displaced multiple times, it has not provided a stable solution that would prevent another military offensive by the Syrian regime and its allies on the last stronghold of the Turkish-backed Syrian opposition.

The deal, for the time being froze the conflict, stopped the military momentum of the regime and its allies and prevented at least temporarily any further advances. As in many other war zones massive air raids virtually stopped. The Russian air force is taking a break. So does the Turkish artillery and their other assets.

The deal (at least in bilateral terms) has solidified the Turkish military presence in Idlib. It also stopped attacks on Turkish military personnel which were threatening to unravel Russian-Turkish relations. Several Turkish soldiers were killed by the Russian air force, though Turkey and Russia both preferred not to admit this. The payback for this by the superior Turkish firepower was, however, directed solely against Assad's army, killing untold number of soldiers.

It must be noted here that while Syria wants to take over the strategic infrastructure of Idlib province, it does not want its population, a mix of local residents and displaced people from other provinces, which it perceives as opposition minded. It would rather see the three million civilians become someone else's problem, be it Turkey, Europe or anyone else.

The people of Idlib also do not want to move to territories under regime control, having witnessed continuous revenge killings, arrests and torture in areas which have reconciled with the regime, such as Deraa province in the south.

The deal also omitted some of the major contentious issues such as the M5 highway, linking Damascus to Aleppo, and the future of Turkey's military observation posts, as most of them are effectively under Assad-controlled areas.

The deal also did not resolve the status of the Hay'et Tahrir al-Sham (HTS), an armed group formerly affiliated with al-Qaeda and considered a terrorist organization by the UNSC. Russia has repeatedly demanded that Turkey deal with it, which so far has not happened. As a result, its continuous presence in Idlib province remains one of the major sticking points between Moscow and Ankara.

Clearly, both Ankara and Moscow see this as a temporary measure, despite assurances that they aim for this ceasefire to continue for a while. Both sides are militarily reinforcing their positions in Idlib.

Moreover, Turkey has used the lull in fighting to seek support from Western allies. At this stage, it appears that the US is offering only rhetorical support and intelligence sharing to Turkey. The US will not and can not forget Turkish purchase of S-400 from Russia. No real support from the EU seems to be forthcoming either. Everyone is busy with the virus.

So, what happens next?

On the positive side Turkish and Russian troops recently conducted joint patrols on the M4 highway, linking Latakia to Aleppo, part of which still falls within opposition-held areas. If such patrols continue it will indicate the overall commitment to this deal.

It is clear that as soon as Covid-19 will be brought under control, the deal between Turkey and Russia could collapse.   

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FORGOTTEN UKRAINE, FORGOTTEN CONFLICT

The country.

March in Ukraine began with the appointment of a new Prime Minister and government. After only 6 months on the job, lawyer Oleksiy Honcharuk was replaced as Prime Minister by Denys Shmyhal, an experienced manager.

“The previous government did its best, but today Ukrainians need a government that will do the impossible. I hope that the next Cabinet of Ministers of Ukraine will do so,” Volodymyr Zelenskyy stressed, as he announced the appointment of Shmyhal.

Although changing government quickly does not create an impression of stability, Zelenskyy had little choice. He was not so much firing Honcharuk (despite Honcharuk’s critical comments about Zelenskyy’s understanding of the economy), as he was attempting to put together a more professional government. The elevation of former Ambassador to Canada Vadim Pristayko from Minister of Foreign Affairs to Deputy Prime Minister confirms the idea of rewarding proficiency in government management.

Personnel changes kept occurring with the appointment of a new Prosecutor General, a key job in Zelenskyy’s anti-corruption campaign.

COVID-19 coordination meeting, March 31st
©President of Ukraine Website

Further personnel changes had to be made with the resignation of the Health Minister and the Finance Minister as the COVID-19 pandemic reached Ukraine at the end of March.

Some political analysts in Ukraine have already begun discussing how the COVID-19 pandemic could inflict extremely serious damage on the country should it propagate there as it has in virtually every other country. Ukraine already has a severe demographic challenge with working-age individuals leaving the country in large numbers. The authorities may have reacted quickly, but the public health system would not seem to dispose of the human or physical resources to handle a major crisis. At last count, Ukraine had lost a significant proportion of its physicians in the post-Soviet period. Furthermore, despite the respect the population may have for Zelenskyy as an individual, it is not clear that the authorities would have the credibility to enforce unpopular measures. Finally, the government, already trying to avoid default, will have to turn to outside assistance for any financial rescue package, if any is readily available in the current circumstances.

The conflict

The Trilateral Contact Group (Ukraine, Russia, OSCE) is the entity through which discussions on bringing peace to the Donbass region of Eastern Ukraine are conducted. At the March 11^th meeting of the TCG, it was agreed to create an Advisory Group whose composition remains uncertain at this time, but that might include representatives of the rebel regions. The Chief of Staff of the President immediately had to make a statement clarifying that this does not imply the beginning of a dialogue with the representatives of rebel regions, but rather the inclusion in the negotiation process of Ukrainians who were displaced from the rebel regions as a result of the conflict. Oleksii Reznikov, Deputy Prime Minister and Minister for Reintegration of the Temporarily Occupied Territories of Ukraine had to reinforce the point that the creation of the Advisory Group did not constitute a “treason”. This may not have been enough for the opponents to any political dialogue with the rebel regions. As a result of the COVID-19 pandemic, the process of creating the Advisory Group is suspended.

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PERSON OF THE MONTH

During the extraordinary times when the whole world struggles to deal with the COVID-19 pandemic, BGN wishes to acknowledge those who are at the front lines of this fight: doctors, nurses, paramedics and lab technicians who work around the clock to save lives and develop a vaccine. Let us also acknowledge the WHO as the main organizing force world-wide in combating the worse pandemic on the planet in 100 years.

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RUSSIA’S PRESIDENT 

The issue was quickly swept off the stage by the COVID-19 pandemic, but when the national referendum on constitutional amendments can be held, it will most likely confirm the possibility for President Putin to remain in power till 2036. The idea of nullifying Putin’s previous and current presidential mandates for the purposes of his eligibility as president under the revised constitution came from Valentina Tereshkova, member of the Duma and first woman to have accomplished outer space travel. The attempt to present this as a surprise to Putin himself did not convince many. In his most recent interview on the subject, Putin refused to confirm his plans for the future, beyond the expiration of his current mandate. Observers now know that it is imprudent to speculate on Putin’s intentions. The only thing that is certain is that if the constitution is revised as expected, Putin will never have to face the lame duck problem

RUSSIA’S MONEY

Prior to the onset of the pandemic, Russians had been applying for consumer credit and mortgages in greater numbers due to fears that prices and rates would soon increase. Russians have historically rushed to purchase foreign consumer goods, such as electronics and cars, as well as apartments during periods of economic volatility and ruble depreciation.

The Russian ruble has fallen nearly 20 percent after oil prices collapsed on March 9th following a disagreement between Moscow and Riyadh on production cuts. A weaker ruble will make popular imported products like iPhones more expensive.

Russians scooped up household appliances and cars at the end of 2014 and the beginning of 2015 when oil prices last nosedived, causing a sharp currency devaluation, and citizens probably “feared missing the moment” this time.

Fear over the impact the coronavirus could have on the economy and supply chain has also played a role in credit demand as Russians, just like their European and American counterparts, stock up on food and other goods.

BELARUS

Belarusian President Alexander Lukashenko has criticized Russia's "unnecessary" decision to close the border between the two countries to slow the spread of the novel coronavirus.

"There must be no unnecessary moves that might complicate already uneasy relations between the two nations," he said on March 16^th during a meeting with officials in Minsk.

The Russian government said the restrictive measures against Belarus, announced earlier in the day, were "prompted by special circumstances and are absolutely temporary."

Belarus, heavily reliant on Russia for cheap oil, has been at odds with Moscow over oil prices for months. The dispute is part of wider political discord between the two countries over forming a union state.

Instead of closing the Russian-Belarusian border, Lukashenko said, "our dearly beloved" Russia should help Belarus beef up security against coronavirus at its border with Poland, which he called "our common union-state border."

RUSSIA’S NON-MONEY

Russia is testing facial-payment technology at supermarkets and could roll it out on a large scale by the middle of the year. VTB, Russia's second-largest lender, is testing the technology in the Lenta supermarket chain. Promsvyazbank, another Russian lender, is holding talks to launch the technology in other supermarket chains next year.

The technology will enable shoppers who have linked an image of their face to a bank account to pay for goods by posing in front of point-of-sale machines equipped with cameras. China, which has one of the most advanced mobile-payment systems, has already rolled out facial-recognition technology in many stores.

SnapPay, a Canadian company, announced in October it would offer the payment method in North America.

The popularity of the technology could receive a boost from the novel coronavirus, amid concerns that the virus can be transmitted through cash and cards. Advocates say it is more convenient and speeds up the checkout process. The use of facial-recognition technology has, however, raised concerns over privacy, especially in countries with authoritarian governments.

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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 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.