(08-01-2014 01:49 PM)SumOfAllFears Wrote: Russian official burns Obama with Putin-leopard pic
Zero should go hang with Jay-z.
Quote:The image here was tweeted by Russia’s deputy prime minister Dmitry Rogozin.Twitter
It's come to this.
Yes, Russian nationalists are trying to portray Putin as a manly man and Obama as a sissy. But lets review the mess that 'macho man' Putin has placed Russia into.
1) Geopolitical - This time last year, Russia controlled all of Ukraine, faced a very divided Europe, was sucking in the Europeans into even more dependency on Russia energy via the South Stream pipeline. Today, Russia has Crimea (more about that prize later), but has irrevokably lost 95% of the rest of Ukraine (and will lose the remaining 5%), has managed to do the impossible (force the Europeans to stop shamelessly appeasing Putin), has spooked the Azeris, and has ruined his reputation with Europe. Now Russia has a pro-European nation 200 miles from its border with Kazakhstan. Russia also had unfettered access to Transdnestria, which now is landlocked between nations turned hostile to Russia as a result of Putin's actions. He's going to lose that too. In 6 months 500,000+ ethnic Russians will be permanant migrants to Russia proper. Putin's attempt to recreate Russia's influence region as the former CIS using economic and other alliances is in tatters. Ukraine - gone. The Baltics - gone. Azerbaijan - moving away. Georgia - gone. Russia's Eurasian Economic Union is a sham and will never amount to meaning much. Separating Crimea from Ukraine now ensures that a Russophile leader can never win an Ukrainian election (as those voters were very Russophile). Putin could have waited (probably not long) for the new government to fall flat on its' face economically and then watch another Russophile win. Without Crimea, no chance of that happening. In other words, he could have had ALL of Ukraine back in his orbit in 3 years. But now that will never happen. .
Russia has four strategic worries. They are: 1) That they will get cut off from the South by hostile nations blocking their access to the Middle East. With a hostile Ukraine, a hostile Georgia, and a scared Azerbaijan, that is more likely than ever (by the way, Russia's slavish support of Armenia was really stupid, geopolitically for them as it harms their relationship with who they should be working with - the Azeris). 2) They will get cut off from access to the Mediterranean. They had good relations with Turkey, Greece, and Bulgaria and could control a lot of Ukrainian actions. That is now harmed. 3) They will get cut off from access to the Skaggerat. That goal has been harmed by their actions as Sweden is now thinking about joining NATO. 4) They will be constrained in the East. China now knows they can dictate terms to Putin. If Putin moves east, he moves the Japanese and Koreans even closer to the US. Its hard to construct a more damaging geopolitical scenario than Putin has managed to do in less than 5 months. Own goal - Putin. By the way, watch out for Turkish/Russian relations in this. Crimea has a large Turkish minority (and one that supports Ukraine and has been abused by the new masters there) and Turkey blames Russia for a lot of the problems in Syria.
2) Economic - Macho man policies have done colossal damage to the Russian economy. There is over 1 TRILLION dollars of underperformance in the Russian equity markets (calculated by average emerging market PE ratio less the Russian PE ratio x the Russian equity market size). Capital flight is massive and increasing. His policies will dry up investment in energy exploration as a result of banking bans, nervous investors, and bans on technology exports. Russia gets 68% of its budget from energy revenue. And the economy is even more dependent upon energy as non-energy companies are blocked from capital and financial markets (which they need - and Asia isn't going to replace). Its an 'accelerating Dutch disease' without the income growth. Yesterday, Russia basically unplugged from the internet, with a likely catastrophic result for any hope of technological improvement in their private sector. That sector also faces an increasingly arbitrary court system, and massive levels of unchecked corruption. South Stream is dead, the Europeans are moving away from Russian energy, and China isn't going to take up the slack. Russia has relatively large reserves, but these will be exhausted within 2 years at this rate (unless energy prices spike up) as Russia attempts to keep its economy out of recession and is repeatedly forced to enter the markets to prop up the Ruble. Russia starts feeling more pain if Brent prices fall below 100 a barrel and massive pain at prices below 90. The current Brent price is 105 a bbl now (with negative pressure due to glut concerns in the Western Hemisphere). And the price of 105 a barrel is with Nigeria in chaos, Iraq and Syria in civil war, Iran under sanctions, Libya in chaos and Venezuela not being able to produce at full speed due to investment lags. Basically many of the supply shock issues are already in effect right now (saving a revolution in Saudi Arabia). Oil prices are likely to fall below 90 and might actually hit 80 within the next two years. Oil prices at 80 = Ruble at 100 to the dollar and a deep recession in Russia (with inflation). Russia should be kissing Europe's butt.
3a) Economic/Crimea costs - Crimea has some value (although it has always been a drag on whomever owns it). But Crimea's positive values only apply if attached to Ukraine. Crimea as an island is a drag. Russia will have to spend at least a hundred BILLION dollars to prop up Crimea and build infrastructure to provide a lower level of service than Ukraine did. Russia will now need to build water, natural gas, power and transport links between Krasnodar and Crimea. It will take a decade. During that time, Ukraine can (and will) turn the tables on Russia and put the screws to Russia anytime it feels like it. Actually, Putin isn't going to spend the 100 Billion on Crimea. He'll spend 100 million instead and let the whole peninsula rot away economically. But that is tomorrow's problem for Putin. Putin doesn't do 'tomorrows problems'. Just today's. And he's messing both tomorrow and today up.
4) Soft Power - Russia's soft power is negative. They've managed to offend everyone, including the Asians. The Australians are livid. The Europeans are fed up. Russia likes to make noise about some new "BRIC" pole to create an alternative to the US, but that won't happen for many reasons, the most important one being that the Brazil, India, and Russia all have economic problems, and China isn't going to help Russia unless it gets 80 percent of the help. That new bank isn't going anywhere. Neither is their dream of moving away from the USD as a world currency. By the way, Russia did always threaten to not cooperate over Iran to try to limit Western action against Putin's misbehavior. That has shown to be a worthless threat, as the Iranians are so sick of the (extremely effective) sanctions that they've realized that they need to work with the West not Putin.
------------------------------------------
So what are the arrows in Putin's Geopolitical Quiver?
1) Invade Ukraine - Not going to happen. That would cause the end of the Russian economy. And Russia, even if they managed to win the war, is fundamentally incapable of occupying a nation of 40 million people that is overwhelmingly hostile to them. Besides the Ukrainians as they retreated would permanently destroy the water works and the pipelines (thus freeing the Europeans from the luxury of relying on Russian gas).
2) Invade Donetsk and Lukhansk - Probably not going to happen. The EU and the US have set up painful sanctions but not crippling ones. The beauty of the situation now is that Russia is getting slapped, but knows it can still get slapped harder. If he invades those two cities, there would be a hot war (see above) that would probably be hard to contain.
3) Attempt to pivot towards others not happy with the West. Putin is trying to do so, but China just punked Russia on natgas prices and the pipeline will take a decade to build. China operates in China's interest, not Russia's. So Putin will talk big about China (but everyone knows that its not going to mean much), and talk about his great partners in Belarus, Venezuela, Nicaragua, Ecuador, Iran and Syria. None of this will help him gain much leverage. I suppose the only level they have is to (continue) to foment trouble in energy exporting countries, as to better profit from higher prices. But that really is limited right now.
4) Pivot back to the West - Not really an option unless Putin is gone. That's Russia's best solution. Europe isn't permanently hostile to Russia. A Russia that is a responsible, non-corrupt, human rights norm abiding neighbor would be a strong force in Europe (and would have MUCH more power). But that isn't likely to be seen for at least a decade.
5) Pivot towards China - China doesn't do alliances. Nor is there really infrastructure to tie the two economies together better. Doing so would also spook the Koreans and the Japanese.
6) Take the loss - Really that's Putin's only game now. He'll try to set up some sort of conference where he can try to pretend that he got what he wanted. He might get the conference, but it isn't going to provide any incremental guarantees (maybe another guarantee that Russian speakers will be allowed to speak Russian in Ukraine - which is already the case). So he'll tell the home crowd he 'won' because he got Crimea (but no one is going to recognize it) and slink back across the border.
--------------------
Putin's actions have helped the USA immensely. It has forced the Europeans and the Asians to rededicate themselves to their ties with the USA.
Putin might look strong and act strong, but the cartoonish macho act is causing massive damage to his nation. Let them call Obama a sissy all day long. Russia knows that they're stuck with a bad situation now, one of their own creation, and one that is going to limit their ability to act in certain ways for a very long time.