Thoughts on Ukraine

It has been over a 100 days since Russia launched its invasion of Ukraine which has led to countless lives lost and the destruction on many Ukrainian cities. All due to the lust for power and international recognition of one man: Vladimir Putin. Since the invasion we have seen an impact primarily of the almighty gas pump which to this day fuels American lives, right or wrong. We are also starting to see food shortages on top of an inflation spike which is hurting peoples wallet’s. Fingers can be pointed but in this case they will all lead back to one man, no matter what your political agenda. Global affairs is not something many American’s pay attention to until it directly impacts them. No President has ever been elected because people were passionate about his foreign policy agenda. Ukraine will not alter that, but it will impact how foreign policy is carried out moving forward, we live in a inter connected world and in the end we are all globalists whether we like it or not. Most Americans cannot find Ukraine on a map, but it will impact us in the near term and long term, funny as it may seem to some geography matters, here are just a collection of my thoughts.

There have been a number of books written about Putin, a couple I have read Stephen Lee Meyer’s, “The New Tsar: The Rise and Reign of Vladimir Putin” and Fiona Hill and Clifford Gaddy’s “Mr. Putin: Operative in the Kremlin”. I would recommend both. Putin as we know was a kid who grew up in the Soviet Union, looking towards a future in the KGB. Which he achieved and was eventually stationed in Dresden, East Germany. This is where he would be when the Berlin Wall fell. As is well noted Putin would say the fall of the Soviet Union “was a disaster”. The next decade as Russia transitioned would be a decade of disaster and humiliation for Russia as it saw its standing in the world order begin to plummet. It would also lay the groundwork for where we are today. From the ashes rose a new leader, seemingly from nowhere (ok he was from St Petersburg), to be the number two behind Boris Yeltsin and thus on the world stage Putin was born. How he rose from relative obscurity to become a virtual dictator is still clouded in mystery. He had not done anything of significant note in his past, but obviously in the back ground he must have been a shrewd player

Over the next couple of decades Russia would go through several US Presidents, but in Russia Putin would remain, even when demoted to Prime Minister he would return and consolidate power. During the decades many former Russian satellite countries would join the European Union and NATO encircling Russia in alliances with its former enemies. This can only have created anxiety within Russia (and in Putin’s mind). During this time Putin would increasingly put himself at direct odds with western Europe and push the levers of what he could get away with. Following the 2014 Sochi Olympics he would set his sites on Crimea and eventually annex Crimea. The west responded by reducing the G-8 to the G-7. Russia would interfere in the 2016 US elections and receive no punishment, with Trump in office it seemed they would skate along unimpeded. Acting like a puppet master to get what Putin wanted. But like all dictators they eventually over reach.

Putin is steeped very deep in Russian history and with that he saw a nation in Ukraine that shared what he believed was a common history together with Russia. Strategically the black soils of Ukraine have always been the bread basket of Europe. Ukraine also has desired ports in the Black Sea. Ukraine from a Russian perspective was a very attractive land grab and could create a land bridge to strategic ports in Ukraine. By annexing Ukraine it was in Putin’s mind a win for Russia and for Ukraine, problem being Ukraine had no intention of becoming a Russian satellite. As has been noted the expected welcoming of Russian troops into Ukraine did not happen, instead we have had a bloody war and now then a common shared history, one bent toward resentment and hatred. This shared history was not as glorious as Putin would have us think as one can discover in Miron Dolot’s excellent book “Execution by Hunger: The Hidden Holocaust” When communism showed up in Ukraine in the twenties the results were disastrous and let many Ukrainians to starve to death. Stalin was a ruthless leader. History has along arc, and Ukarinians have not forgotten the suffering at Russian hands.

A second point is the global world order, which since the fall of the Berlin wall has been dominated by one nation: the United States of America. We have lived in a unipolar world, much to the dismay of many nations. Putin came of age and grew up in a bi-polar world, where it was the USA and the Soviet Union. Putin would love nothing better than to see Russia return to the international stage in a place of power. The short answer is that will not happen, not with Russia. However the idea of a bi-polar world will happen, that other power being China. A big reason comes down to GDP. Russia’s economy is small compared to the US, where as China’s is at 70% compared to US GDP and growing and gaining. Russia’s is less than 10%. You can view GDP info here. Even though Russia has a very strong military their ability to keep pace with the US and China will be limited do the availability of money. In the need all great militaries need funding. To have great funding you need a modern and growing economy to achieve your ambitions.

Putin made some significant strategic mistakes. Most significantly he felt NATO was not as strong as it had been during the cold war. Which to a large degree was true as NATO had struggled for purpose since the fall of communism, the one exception being the Balkan War under President Clinton (that would also cause a split between the west and Russia). He under estimated the United States. It seems a common mistake, but President Biden to his credit rallied the allied forces and has built a stronger and now expanding NATO. Putin has done what was seemingly impossible, he has caused Sweden and Finland to seek membership in NATO. Neutrality has been part of Sweden’s DNA for over a century, but frankly Putin left them little choice (since I started writing they are now accepted into NATO). Putin gave NATO a renewed purpose. In the background watching very closely and taking diligent notes is China as they have a similar grievance called Taiwan.

There have been of late chips in he alliance. Recently President Macron in France stated, “We must not humiliate Russia”. I understand the spirit and historical context, but in this case he is just wrong. The Balkan War was a case in point where Russia was simply not listened to and shown any respect. The difference being in that war it was Serbian leader Slobodan Milosevic who pursued geocide, which required international intervention. In this case Putin instigated this series of events and he will have to suffer its consequences. Macron comes across like a long line of French Leaders starting with Charles DeGaulle trying to carve out a position of power as a world leader, it has had limited success. That being said he is the one western leader in constant contact with Putin, which is better than a closed line. Right now a lot of attention at the negotiation table is finding a way for Putin to get out of Ukraine unscathed, Putin at the time this writing does not seem interested. The only thing Macron can buy him is time.

Economic pain being felt today and the foreseeable future will be the one thing that could cause the alliance to start to fracture. In my opinion it is also a opportunity. A main export for Russia is oil and much of the economic pain we see today stems from this . A gas prices rise so does the cost to get goods to market causing the prices of food to increase and this causing a spike in inflation. Our vacations will be scaled back as it is expensive to fly or drive anywhere. Going to restaurants is increasing in price, so we may have to eat in more. All this happening on the back drop of recovering form Covid, which has consumed us for over two years. The one thing in America that seem to be misunderstood by many is we do not set oil prices, even though we are the largest single producer of oil at 14% OPEC controls 37%. OPEC also controls 4/5 of global oil reserves. We are just a part of a global market place. Renewable energies can help offset costs at the pump as I am sure Tesla owners are very happy they are not on gas. This moment in time can be sure to accelerate that growth, but it is a long term play and will not help in the short run

Probably most concerning is not just the increase in food prices but the potential now for food shortages. Both Russia and Ukraine are major grain exporters In 2021 Ukraine exported 107 tons of grains and oilseeds. Much of that cannot move now do to ports being bombed along with grain silos. In terms of wheat exports Russia ranks number one, while Ukraine is number five. Having two countries in top 5 that are at war impacts global food prices. It is one thing to not be able to afford gas, but when food snot available people will begin to suffer and starve to death global opinions will change very quickly. In a world of social media and instant content, photos and video’s of people starving will have a major impact on peoples mental health.

Thinking long term Russia will become a pariah state. To the west. It’s one solace being it will have a welcoming market in China. However if Putin thinks this will be a game played on equal footing over time he will be sorely disappointed. China has its own global global ambitions and if Russia can help further those, great, but Russia will be the junior partner in that relationship. If you read Rush Doshi’s book on China “The Long Game” , China has time and is targeting and building the Chinese Century. Russia is not included and will not be a equal partner. It will be interesting how two big ego’s in Xi and Putin handle that relationship.

For Ukraine, Putin has done an accidently masterful job of creating a Ukrainian national identity. Not that it did not exist before, but Putin portrayed it as one with Russia. Now it is most definitely not one with Russia and now a country aligned with western Europe and seeking a future in the west and not the east. I do not think this will be as a member of NATO but down the road I could foresee a European Union membership (they have applied and willlikely be accepted). They have existing status within the EU just not as a full member. Given they are an agricultural power house they would be welcomed. In the short term Russia will still try and hold sway over this decision.

With all that Putin has done wrong and despite the significant investment of Western allies, it seems unlikely that Ukraine can holdout forever. Russia is a superior military with resources, so it will likely secure the eastern part of Ukraine and the southern coast. In the short run they will succeed but Ukraine will continue to resist and you will have a lengthy spell of an insurgency in the regions Russia has captured. They will continue to have access to weapons from the west. Not to mention Russia will be vulnerable on her borders with Finland and Poland. They have given NATO a purpose

Will the global order change? It most certainly will, that has been inevitable for some time with the rise of China and their One Belt, One Road initiative. Russia is looking to exploit that change and make themselves relevant on the world stage. Putin recently declare a end to the unipolar world (might as well have said the United States world), which is true and the reverberations will be felt for decades, in fact probably the remainder of the century. How we handle and more importantly balance that relationship will be critical for future generations. In America we often view the world through American eyes. What is outside our borders does not matter. But as we can tell what has happened in Ukraine has impacted us. I am sure when Hitler annexed the Sudetenland many US citizens said it would not impact them, it i seasy to get comfortable in your own home, in America we seem to excel at that. For long time we have lived in a global economy, and a global community. Driven in large part by the United States market driven economic policies. We are a connected global community and when that balance gets disrupted the cracks in the system start to become magnified, which s what we are experiencing now

Good Night and Good Luck,

Hans Henrik Hoffmann June 28, 2022

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