The chutzpah! #Putin Defends #Ukraine’s Jews, Slams Ukraine’s Jewish Oligarchs

The chutzpah!

Putin Defends Ukraine's Jews, Slams Ukraine's Jewish Oligarchs

Cites Ukraine's appointment of oligarchs as governors as reason for unrest
Yesterday morning, Vladimir Putin, president of the Russian Federation, gave his first post-Crimea invasion press conference. What rapidly became apparent, as he slouched in a gilded hall studded with Russian flags, was that the combination of Putin's surreal interpretation of events with his lavishly baroque epistemology has given form to some bizarrely contradictory dualities in his worldview. He railed against a politicized judiciary selectively prosecuting the enemies of the chief executive, overlooking that it's exactly what the Russian Judiciary does routinely; he argued the change of government in Kiev was an armed coup, but the one in Crimea was entirely legitimate. The usage of force by Ukrainians is unjustified, but completely justified from the Russian side.

The Russian leader also insisted that Ukraine's deposed president, Viktor Yanukovych, retains authority as the country's elected head of state, but also described him as a corrupt failure whose political career was finished. Putin also admitted that he understood well popular demands for "cardinal changes in government" by Ukrainians—demands, he asserted, that simply stemmed from their "having become habituated to switching one thief and opportunist for another thief and opportunist." He spat out the word "opportunist" in disgust.

What #Russians Think of the Intervention in #Ukraine @ForeignAffairs

By sending troops into Crimea, Russian President Vladimir Putin has amplified Ukraine's turmoil and set off the most dangerous crisis Europe has seen this century. Less noted, however, is that the move portends a significant change in Russia's domestic politics. Putin has abandoned the strategy that has underwritten his political dominance for the last 14 years. And in doing so, he has bet the throne on an approach that is likely to fail.

The secret to Putin's past political success is simple: Presiding over years of rapid economic recovery, he could claim credit for restoring stability after Russia's chaotic transition from communism. During his first two presidential terms, from 2000 to 2008, the country's growth rate averaged seven percent a year. In fact, that success mostly reflected factors beyond Putin's control, including surging oil prices and a flood of liquidity into emerging markets. But it did also require a commitment to open borders, integration into international institutions such as the World Trade Organization and the Organization for Economic Cooperation and Development, cordial relations with Western business circles, and efforts to project an image of modernity and increasing sophistication. A 13 percent flat income tax and a conservative macroeconomic policy did not hurt.

As Russians' incomes soared, so did Putin's popularity. His consistently high approval ratings -- since 2000, they have never fallen below 60 percent on polls conducted by the Levada Center, a Russian nongovernmental organization -- have rallied Russia's fractious elites to the president's side and kept naysayers at bay. The global financial crisis in 2008–9 threw Putin's strategy into doubt. By massively boosting spending, the government managed to protect Russians' living standards. But in the last two years, the public has recognized that the growth rates of Putin's first two terms are not returning. Since late 2011, quarterly growth has fallen steadily from 5.1 to 1.2 percent a year.

Recharging the economy would require a serious commitment to safeguarding property rights and attacking corruption. As stagnation deepened, rumors circulated in Moscow last year that Putin would reinstate his competent and respected former finance minister, Alexei Kudrin, and allow him to introduce political and economic reforms. But that did not happen.

Instead, with the invasion of Crimea, Putin appears to have settled on a Plan B for mobilizing support. Whereas the first approach demanded integration, the second embraces isolation. It involves appealing to emotional nationalism, berating the West, and rallying the public against supposed attempts at cultural imperialism. Plan B is not entirely new. In fact, Putin has been flirting with it since the mid-2000s. Since then, the two approaches have coexisted awkwardly. He has managed to slip back and forth between aggressive rhetoric -- for instance, comparing NATO foreign policy to that of the Third Reich -- and signing deals with Wall Street executives.

But with Russian troops now in Simferopol, Putin appears to have doubled down on nationalism and given up on rapid growth. The great champion of "stability" has taken to tearing up the map of Europe. Whatever the ultimate outcome of the recent intervention, it has already done serious damage to Russia's economic prospects.

The military operation itself will not cost much, although perhaps more if Putin extends it to other regions of eastern Ukraine. Subsidizing the Crimean economy -- and perhaps even that of Ukraine's Russian-speaking rust belt -- is not even the main concern. Nor is the ruble's fall, which the Central Bank slowed on Monday with a frantic raise in interest rates and the sale of $12 billion of currency reserves. That will drive up prices of imports, which will surely anger consumers, but it will help exports and ease pressure on the budget.

The real problem is the potential medium-run fall in foreign investment and acceleration of capital flight. Wars tend to elevate perceived political risk -- and that goes double when leaders' decisions appear erratic. Western sanctions, if they materialize, will add to the discomfort. Few investors will want to tie up money in companies whose executives may be banned from travel to the West, whose accounts may be frozen, and whose board meetings may be upstaged by the home country invading another of its neighbors.

Putin may have discounted such economic consequences based on the short-lived and moderate international reaction to Russia's 2008 war with Georgia. But that was quite different. Russian troops intervened only after Georgian artillery fired on Russian peacemakers and local South Ossetian civilians. In the Crimea, no one had shot at the locally stationed Russian troops with so much as a peashooter. The Ukrainian case looks more like unprovoked aggression. It also starts to look like a pattern -- one that already has other countries with large Russian-speaking minorities, such as Estonia, Latvia, and Kazakhstan, worried.

If Putin has decisively embraced anti-Western nationalism as his mobilizing strategy, evidence suggests that it will not work.

For one thing, Russians, in general, do not like foreign adventures. A survey one month ago by the polling firm VCIOM found that 73 percent of respondents were opposed to Russia getting involved in Ukrainian politics. Not even supporters of the ultranationalist Liberal Democratic Party or the communists favored intervention. Of course, at the time of polling, Putin's supporters might have thought that he favored staying out as well.

No polls have yet appeared on the Crimean operation. When they do, we should expect a temporary rally. Still, after previous comparable incidents, the immediate boost has been fleeting. In late 1999, Putin, then prime minister to President Boris Yeltsin, sent troops into Chechnya and saw his approval rating leap to 79 percent. By June 2000, it had tumbled to 61 percent. In March 2000, 73 percent of Russians favored continuing the military operation that Putin had started. By January 2001, that had fallen to 38 percent, and a majority already supported negotiating with the Chechen guerrillas. Russians rallied behind Putin in 2002, when Chechen terrorists took hostages in a Moscow theater. But just two months later, the six-point jump in his rating had evaporated. Similarly, as Russian troops fought in Georgia in September 2008, Putin's approval surged by eight percentage points. Yet by February 2009, it had fallen back below the initial level.

Second, playing the anti-Western card may also work less well than Putin imagines. Strange as it may seem, Putin is actually much less popular among Russians who are hostile toward the West than among those with pro-Western views. After 13 years of hobnobbing with former Italian Prime Minister Silvio Berlusconi and German Chancellor Angela Merkel, it is hard for him to play the anti-establishment nationalist. In a November 2012 Levada Center poll, 72 percent of those who said they felt "very positive" about the United States approved of Putin. Among those who said they felt "very negative" about the United States, his approval rate was only 42 percent.

By reaching out to Russian patriots, Putin risks splitting his elite supporters. For his friends in business, the Ukraine operation creates enormous headaches -- from potential sanctions and travel bans to market volatility and tighter Western credit. They will see the vulgar nationalism of some of Putin's other friends costing them money and respect, and Putin's unpredictable behavior threatening their investments. Their loyalty will become more conditional than it already was. And as economic conditions worsen, protests are likely to break out among ordinary Russians.

Putin's Crimean adventure thus promises to accelerate the degeneration within his regime that started with the December 2011 demonstrations and the economic slowdown. Even if the Kremlin finds a quick and face-saving exit, it will have to juggle a multiplying series of challenges -- dealing with the Ukrainian aftermath, minimizing international fallout, reassuring other neighbors, managing economic turbulence -- just as differences of opinion within the inner circle make action more difficult.

Read the article online here: http://www.foreignaffairs.com/articles/141005/daniel-treisman/watching-putin-in-moscow?cid=soc-twitter-in-snapshots-watching_putin_in_moscow-030614

"Ukraine Turns From Revolution to Recovery is republished with permission of Stratfor."

Ukraine Turns From Revolution to Recovery

By George Friedman

The uprising in Kiev has apparently reached its conclusion. President Viktor Yanukovich and the opposition reached an agreement, negotiated by the Polish, German and French foreign ministers. The parliament is now effectively in charge, deciding who will be ministers and when elections will be held, whether to dismiss judges and so on. It isn't clear whether the parliament can fire the sitting president without impeachment and trial, but all of this is now moot. What is interesting is that the Polish, French and German foreign ministers negotiated an outcome that, for practical purposes, ignored the Constitution of Ukraine. It sets an interesting precedent. But for Ukraine, the constitution didn't have the patina of tradition that a true constitution requires, and few will miss Yanukovich.

The question now is whether all of this makes any real difference in Ukraine or the world. There is a new temporary leadership, although it is still factionalized and the leaders of the factions have not fully emerged. The effect of hostile gunfire will forge unity in Kiev for a while, but in due course, ideology, ambition and animosity will re-emerge. That will make governing Ukraine as difficult as in the past, particularly because the differences among the neo-Nazis, the liberals and groups in between --- all of which manned the barricades --- are profound. A government of national unity will be difficult to form.

Another issue is what will happen the next time crowds storm government buildings. The precedent has been set -- or rather, it was set during the 2004 Orange Revolution -- that governments and regimes can be changed by a legalistic sleight of hand. At some point a large crowd will gather and occupy buildings. If the government opens fire, it is run by monsters. I don't mean that ironically; I mean it literally. But if the government allows itself to be paralyzed by demonstrators, then how can it carry out its constitutional responsibilities? I don't mean that ironically either. The Ukrainian Constitution, new or old, is meaningless because Ukrainians will not endure the pain of following it -- and because foreign powers will pressure them to deviate from constitutional democracy in order to create a new one.

There should be no mistake. The Yanukovich government was rotten to the core, and he will not be missed. But most governments of Ukraine will be rotten to the core, partly because there is no tradition of respect for the law and because of the way property was privatized. How could there be a tradition of law in a country that was reduced to a province of another state and that numbered among its rulers Josef Stalin? Privatization, following the fall of the Soviet Union, occurred suddenly with vague rules that gave the advantage to the fast and ruthless. These people now own Ukraine, and however much the crowd despises them, it can't unseat them. The oligarchs, as rich people in the former Soviet Union are called, are free; they can eliminate their critics or bribe them into silence. The only thing that is more powerful than money is a gun. But guns cost money and lives.

The idea that what will follow the Ukrainian revolution will be the birth of a liberal democracy reminds me of the Arab Spring. In the West, there is a tradition of seeing a passionate crowd massed in a square as the voice of the people. Reporters interview demonstrators and hear that they want an end to a corrupt and evil regime and subliminally recall the storming of the Bastille, the founding myth of the revolutionary tradition. A large crowd and a building anger at government evil points to the millennium.

In the Arab Spring the hope was great and the results disappointing. There was genuine hope for change, and observers assumed that the change was for liberal democracy. Perhaps it will yet be. Sometimes it was a change to a very different type of regime. What is portrayed and seen in this situation are the corrupt leaders commanding brutal soldiers. If the regime and the soldiers are wicked, it follows by this storyboard logic of good and evil that then their victims must be virtuous. It is rarely that easy. It is not only that the crowd is usually divided into many factions and bound together only by anger at the regime and the passionate moment. It is also that unexpected consequences lead them far from what they intended.

How Long Will Unity Last?

The deepest symbolism of revolution, and the most problematic, is that the people in the square speak for the people as a whole. The assumption made by the three foreign ministers was that in the negotiation between the three leaders of the demonstrators and the president, the protests' leaders were more faithful representatives of the people than the elected president. They may have been in this case, but it is not certain.

Parts of Ukraine are bitterly angry about the outcome in Kiev. A Russian flag was raised over the city hall of Sevastopol, located in Crimea in the south, over the weekend. Crimea has historically belonged to Russia. In 1954, Nikita Khrushchev took it away from Russia and gave it to Ukraine. The Russians in Crimea have never really liked being part of Ukraine and the demonstrators didn't represent them. Nor did they represent all those who live in the eastern part of the country, where Russian is commonly spoken and where being close to Russia is both an economic and cultural desire.

Thus there are two questions. The first is whether there is enough unity in the Ukrainian parliament to do what they must now do: create a government. The excitement of the moment has hidden the factions, which will soon re-emerge along with new ones. Yanukovich was not without support, for good reasons or bad. His supporters are bitter at this outcome and they are biding their time. In addition, the oligarchs are weaving their webs, save that many of the lawmakers are already caught in their web, some happily and some not. The underlying constraints that created the Yanukovich government are still there and can create a new Yanukovich out of the most enlightened Ukrainian leader.

The second question is whether Ukraine can remain united. The distinctions between the region oriented toward the West and that oriented toward Russia have been there from the beginning. In the past, governments have tried to balance between these two camps. Our three foreign ministers and the leaders of the demonstration have signaled that the days of taking Crimea and the east into account are over. At the very least their interests weren't represented at the talks. Those interests could be rebalanced in the parliament, or they could be dismissed. If the latter were to happen, will Ukraine split in two? And if it does, what will be the economic and social consequences? If parliament takes to accommodating the two sides and their respective oligarchs, then how does it avoid winding up with a more photogenic and sympathetic Yanukovich?

The Motives of Outsiders

What happened to Ukraine mattered deeply to the Germans, French, Poles and Americans, all of whom had a deep involvement and sympathy for the demonstrators and hostility toward Yanukovich. Certainly it matters to the Russians, for whom maintaining at least a neutral Ukraine is essential to the national interest. This entire crisis began when Yanukovich decided to reject closer ties to the European Union. It was that decision that triggered the demonstrations, which, after violent repression, evolved from desiring closer EU ties to desiring regime change and blood.

The Ukrainian government has $13 billion in debt, owed mostly to Western institutions. The Russian government has agreed to provide Ukraine with $15 billion in aid doled out in tranches to cover it, since Ukraine can't. Russia is now withholding additional aid until it can be confident the emerging government in Kiev is one with which it can work. It has also given Ukraine discounted natural gas. Without this assistance Ukraine would be in an even worse situation.

In turning toward Europe, parliament has to address refinancing its debt and ensure that the Russians will continue to discount natural gas. The Europeans are in no position politically to underwrite the Ukrainian debt. Given the economic situation and austerity in many EU countries, there would be an uproar if Brussels diverted scarce resources to a non-member. And regardless of what might be believed, the idea that Ukraine will become a member of the European Union under current circumstances is dismal. The bloc has enough sick economies on its hands.

The Germans have suggested that the International Monetary Fund handle Ukraine's economic problem. The IMF's approach to such problems is best compared to surgery without anesthesia. The patient may survive and be better for it, but the agony will be intense. In return for any bailout, the IMF will demand a restructuring of Ukraine's finances. Given Ukraine's finances, that restructuring would be dramatic. And the consequences could well lead to yet another round of protests.

The Russians have agreed to this, likely chuckling. Either parliament will reject the IMF plan and ask Russia to assume the burden immediately, or it will turn to Russia after experiencing the pain. There is a reason the Russians have been so relaxed about events in Ukraine. They understand that between the debt, natural gas and tariffs on Ukrainian exports to Russia, Ukraine has extremely powerful constraints. Under the worst circumstances Ukraine would move into the Western camp an economic cripple. Under the best, Ukraine would recognize its fate and turn to Russia.

What the Europeans and Americans were doing in Ukraine is less clear. They had the triumphant moment and they have eliminated a corrupt leader. But they certainly are not ready to take on the burden of Ukraine's economic problems. And with those economic problems, the ability to form a government that does not suffer from the ills of Yanukovich is slim. Good intentions notwithstanding, the Ukrainians will not like the IMF deal.

I will guess at two motives for European and American actions. One is to repay the Russians for their more aggressive stance in the world and to remind them of how vulnerable Russia is. The second is as a low-risk human rights intervention to satisfy internal political demand without risking much. The pure geopolitical explanation -- that they did this in order to gain a platform from which to threaten Russia and increase its caution -- is hard to believe. None of these powers were in a position to protect Ukraine from Russian economic or military retaliation. None of them have any appetite for threatening Russia's fundamental interests.

As stated above, the question now is two fold. Will the Ukrainian parliament, once the adrenaline of revolution stops flowing, be able to govern, or will it fall into the factional gridlock that a presidential system was supposed to solve? Further, will the east and Crimea decide they don't want to cast their lot with the new regime and proceed to secede, either becoming independent or joining Russia? In large part the second question will be determined by the first. If the parliament is gridlocked, or it adopts measures hostile to the east and Crimea, secession is possible. Of course, if it decides to accommodate these regions, it is not clear how the government will differ from Yanukovich's.

Revolutions are much easier to make than to recover from. This was not such a vast uprising that it takes much recovery. But to the extent that Ukraine had a constitutional democracy, that is now broken by people who said their intention was to create one. The issue is whether good intentions align with reality. It is never a bad idea to be pessimistic about Ukraine. Perhaps this time will be different.

Ukraine Turns From Revolution to Recovery