Last Minute Survival

President Obama and his Secretary of State John Kerry have to be the laughing stock of the foreign policy world.  In less than a year they have managed to draw two “Red Lines” only to have them almost immediately ignored, crossed, and forgotten.  With this track record the word impotent comes to mind in reference to US Foreign Policy and particularly President (Carter) Obama.  Not to be trifled with, President Obama and his partners within the EU managed to order the assets of a handful of Russians frozen, obviously leaving Putin quaking in his finely crafted leather shoes.  The act is almost comical in that it seems to show even less resolve than if Obama and the EU had done nothing.  After all, freezing the non-existent US assets of a couple dozen Russians long after they hid and/or offshored anything of value can only be viewed in one of two ways.  Either the US is as weak as it appears or the US never intended to truly oppose Russia’s aims to annex Crimea and this is all political show so that they can say they “stood up to Putin.”  Further, at least one of victims of Washington’s sanctions appears to have nothing to do with events in the Ukraine and everything to do with Russia’s Christian grounded stance against homosexuality, which at least someone high up in the Obama Administration took exception.  This random list of targets unrelated to the events in the Ukraine undermines any shred of legitimacy the sanctions purportedly were imbued with.  Either way, Putin has to be concluding that at this point the US and the EU have zero resolve when it comes to actually opposing Russia’s annexation of Crimea.  Nonetheless, Putin, the same man that would order a former Russian defector assassinated with a rare radioactive isotope placed in his cocktail in a fine London bar, is not likely to take Obama’s cheap shot lightly.

Now that Washington has proved it couldn’t resist taking a cheap shot, what can we expect Russia’s response to be?  First of all, Putin has shown that unlike Obama, his actions speak for themselves and he doesn’t need to talk.  Since Washington and the EU attacked Russia financially, it is likely Russia will respond financially.  Last week, Russia’s Foreign Minister Sergey Lavrov declared that any sanctions introduced by Washington against Moscow will have a “boomerang” effect.  Senior Russian Presidential Advisor, Sergey Glazyev, one of the individual’s sanctioned by Obama’s executive order, suggested Russia would dump US treasuries and walk away from the US Dollar as a reserve currency.  It is questionable how much of an impact this would have, but it certainly wouldn’t help the US economically and add to the growing list of countries dumping the US Dollar as the world’s reserve currency.  American businesses operating in Russia may also suffer retaliation in the form of their assets being frozen, confiscated, or shutdown.  Further, Russia has the ability to call in billions in debt from the Ukraine and cut supplies of gas to the Ukraine and EU.  Cutting gas supplies to the EU would certainly hurt Russia too, but this logic is fundamentally flawed if one believes that it will deter Russia.  Russia is renowned for its ability to suffer austerity.  In fact, one of the critical failures in US-Russia policy has been the inability of our senior policy makers to recognize Russia’s ability to endure extreme hardships and willingly cut off its nose, leg and hand to spite its face if it means victory can be assured.  The US and EU are not willing to go to those extremes so, by that fact alone, Russia will prevail in any developing economic stand-off.

Respective of Russian natural gas and oil, I produced a paper a half a decade ago that looked into the future political ramifications of Russian geopolitical power as Western economies waned and Asian economies waxed.  What became apparent was that once Russia completed pipelines in its east that could link their large gas and oil fields to China and coastal ports in the Pacific, Russia would gain significant leverage in what had previously been a status quo relationship with Europe between supply and demand.  Until recently, Europe has always felt safe in that at worst, Russia would only cut gas supplies during a political crisis for a short period of time because Russia needed the money as much as Europe needed the gas.  However, with pipelines now directly extending supply to China, Russia is more than able to divert supplies from Europe, southeast to China.  This is a game changer, which increases Russia’s geopolitical maneuver space.  China welcomes this and is happy to buy all of the petrol resources it can obtain from Russia so that its supplies are more reliable.  Further, China will be likely to back any move that drives Russia to sell to China at more favorable rates, which to date, have been below what Russia was willing to agree to sell at.  China would also see the advantage of a marginalized Russia that dumps the US Dollar and is willing to trade directly in their respective currencies.  Remember, China seeks to replace the US Dollar as the world’s reserve currency and sees that transition as critical to achieving super power status and eclipsing the US.  Considering the above, it is highly likely that China will not just quietly support Russia, but actively back Russia against the US and EU.

Russia also has the ability to increase the sale of military weapons to countries such as Iran and Syria.  In particular, the S-300 air defense system would be a highly sought after leap ahead in technology for both the Iranian and Syrian militaries.  This system alone would be penetrable by American airpower; however, it would significantly increase the complexities and cost of carrying out any type of air attack against either nation.  Russia could also dangle the idea of selling an even more advanced S-400 air defense system, which if fielded, would mean that US would be at a high risk of losing significant numbers of aircraft in the event they attacked any nation using the system.  Respective of countries such as Israel, the S-400 would make it all but impossible for them to successfully carrying out an air attack making any suggestion of the sale of the weapon system a serious threat.  Respective of the civil war in Syria, Russia could begin sending ship loads of various weapons and even advisors and troops to support President Assad.  This would tip the balance in favor of Assad just as his army is gaining ground on the rebels making it possible to achieve a decisive victory.  Ensuring Assad’s victory would have the added benefit of snubbing Washington while stopping Qatari efforts to build a gas pipeline to Europe that would reduce the European reliance on Russian gas.

Finally, among numerous options for retaliation, Russia has the ability to make NATO’s withdrawal from Afghanistan extremely painful.  First of all, Russia has the ability to shut down all supply routes to and from Afghanistan from the north.  This would disrupt NATO’s ability to sustain the current forces in Afghanistan and retard efforts under way to retreat with all of its equipment in tow.  Further, it would force NATO to pay premium prices to Pakistan to move all of its equipment out of the country via Karachi.  The Karachi route is extremely dangerous and once it is clear that the US must use this route, the Taliban could concentrate its attacks along the entire stretch of this road network.  Even darker is Russia’s proven, albeit very covert ability to provide the Taliban with substantial support and weapons.  Should the Russians decide to really make life a living hell for the US, expect to see the Taliban suddenly supplied with more sophisticated weaponry capable of destroying armored vehicles from long range or even engaging NATO aircraft and drones.  Imagine what NATO’s retreat from Afghanistan would look like as troop numbers dwindle and the remaining isolated outposts begin to be overrun, supply convoys are wiped out by sophisticated  laser beam riding anti-tank weapons, and aircraft are suddenly being shot down by the modern Russian equivalent of the Stinger missile.

In truth, the US is far more exposed than many realize.  Should Washington decide to ratchet up pressure on Russia by continuing to try and subvert Russia’s historic sphere of interest, expect Putin to begin playing cards he has so far politely held in reserve.  Putin’s trump cards are for, let’s say, more uncivilized forms of diplomacy, which Washington now seems to want to engage.  Obama’s thug style Chicago politics may have worked within the confines of the decrepit US political system, but Barry will be sorely mistaken if he thinks he even remotely approaches a match for Putin in the global arena.  As Putin has repeatedly demonstrated with very little talk and decisive action, Washington is a paper tiger that not just lacks teeth, but a functioning brain.

By Guiles Hendrik

March 23, 2014

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