June 2022 Vol 2 No 20

Your Editor, Jamari Mohtar, could feel that the writing is on the wall as the tide of war is turning against Ukraine, as the Russian forces continue their march in Donbas which could mean the end of war is in sight, bringing much-needed blessings in containing global inflation, and in some cases stagflation, and also an end to both the budding global food and energy crises

  • The war between Russia and Ukraine is entering its fourth month, and the surprising resilience of Ukraine’s military makes it easy to misinterpret the current situation in Ukraine’s favour.
  • Not losing the war is itself a form of victory for Ukraine. In this case, however, not losing actually does not mean winning the war. And not winning is still not winning, as Ukraine is far from winning the war.
  • Ukraine is in far worse shape than commonly believed and needs and will continue to need a staggering amount of aid and support to actually win.
  • We love an underdog – a plucky little guy who beats the odds, fuels hope for us and allows us to feel we are on the morally superior side.
  • This is why Ukrainian President Volodymyr Zelensky has appealed so successfully to the world. His defiance against the odds gave us someone to root for against a bully.
  • While cheering on the fragmented, outmatched Ukrainians, we could also assuage some of our shame at leaving them, whom we have made promises of protection and security guarantees, to die alone in the snow and mud.
  • It is worth remembering Ukraine has been fighting a Russian invasion since 2014. Between then and Feb 2022, almost 10,000 were killed in the Donbas (collectively the area known as Luhansk and Donetsk in eastern Ukraine), but little or no military progress was made.
  • Now Ukraine is fighting with that same army in an expanded theatre against a larger army – a testament to the pure courage of its troops that it has managed since Feb 24 not only to hold its line but also force the Russians into a retreat from Kyiv, Kharkiv, Chernihiv, and surrounding areas.
  • But is this true?
  • A week before Russia retreated from Kyiv, it has already told the whole world of its intention to withdraw from Kyiv in order to focus on the Donbas. Liberating Donbas has always been its prime objective.
  • So, when Russia withdrew from Kyiv there’s a vacuum there, which was easily filled up by the Ukrainian army without a fight. Do you call this a meaningful victory for Ukraine when there is really no fighting to contend with?
  • And the Russian strategy of retreating in order to focus on the Donbas is what military experts describe as a fixing operation i.e. keeping the Ukrainian army fixated with “recapturing” the withdrawn areas, and thus did not reinforce its army in the Donbas to face the real battle until it is too late.
  • That has made it possible for Russia to now control significantly more Ukrainian territory than before Feb 24.
  • Putin’s army now holds Kherson, Mariupol, all the intervening territory, and not only Luhansk and Donetsk but also the entire Donbas Oblast.
  • Whereas Ukrainian authorities controlled approximately 60% of Luhansk before the February invasion, the Washington-based Institute for the Study of War now estimates “Russia controls more than 95% of the broader region of Luhansk as Kremlin-backed troops focus on eastern Ukraine three months into their struggling invasion”.
  • And is it fair to describe the invasion as “struggling” when time and again Russia has stressed it has no deadline for accomplishing its special operation mission to liberate the Donbas?
  • The withdrawal of Russian troops from areas around Kyiv, Chernihiv, and Sumy, completed by April 3, was misleadingly seen as a significant victory for the Ukrainian authorities.
  • The removal of the threat from the capital made it possible to return diplomatic institutions, organise the visits of foreign delegations to the sites of past battles, and convince Nato countries that Ukraine would be able to withstand the war against Russia if it received more serious weapons.
  • All this was presented to Ukrainians as laying the groundwork for preparing a counteroffensive in Kharkov, Kherson, and the Donbas.
  • In addition, a favourite carrot was brought out – promises of early accession to the European Union, bypassing existing norms – as payment for heroism and Ukraine taking up the banner of “Europe’s Shield.”
  • The mood in Ukrainian society was positive. The Russian army had already been stopped. It remained only to wait for Western help, and it would be possible to take revenge for 2014, when Moscow reabsorbed Crimea.
  • Meanwhile, foreign aid was flowing in, but it did not bring relief to Ukraine. It proved effective only in supporting refugees in countries free from Ukraine’s corruption and cronyism.
  • As for the military component, by the end of May, it turned out that the requested artillery and air defense systems were not enough to defeat Russia, and it was necessary to boost the army’s ranks to one million.
  • As a result, there were reports of Kyiv detaining men on the streets of the cities it controls and serving them with draft notices.
  • Meanwhile, Western Ukrainian territorial defense units that initially wanted weapons to protect their villages have found themselves, instead, under Russian aviation and artillery from the eastern Donbas.
  • That is how belief in a speedy victory disappeared from Ukrainian society. Alexey Arestovich, a top adviser to the office of the President, who has somehow become the main military expert in Ukraine, as well as military bloggers associated with the nationalist neo-Nazi Azov unit, are already talking about a difficult June and July.
  • Even Zelensky himself has lost his optimism. What is the reason for this?
  • According to analysts, since the second half of April, the Russian army has concentrated on several objectives:
    • Expanding its foothold around Izium and cutting off Slaviansk;
    • Conducting an offensive from Kupiansk along the Oskol Reservoir to Sviatogorsk and Liman;
    • Liberating the Rubezhnoye-Severodonetsk-Lysychansk area;
    • Breaking through the fortified defense formations in the Popasnaya area to enter the operational theatre;
    • Breaking through the fortified defense formations in the area of Avdeevka and its surroundings; and
    • Establishing control over Mariupol.
  • By the end of May, most of these tasks had been completed. As of this writing the Russian troops are now in control of about 70% of Severodonetsk. Its next move will be capturing nearby Lysychansk
  • “Some Ukrainian troops have retreated to more advantageous, pre-prepared positions,” the governor of eastern Ukraine’s Luhansk region, Serhiy Haidai said in a Telegram post.
  • If Russia captures Severodonetsk, and nearby Lysychansk on the higher west bank of the Siverskyi Donets River, it will hold all of Luhansk – a key war aim for Moscow.
  • A sense that the tide of the war could be turning in favour of Russia comes as some, including former US Secretary of State Henry Kissinger, call for Ukraine to consider trading territory for a cease-fire.
  • Yet how to interpret the Russian advances has sharply divided military analysts, with many warning against drawing conclusions from incremental movements on a relatively small part of the battlefield.
  • Just as previous Russian setbacks led to an over-optimistic consensus on Ukraine’s ability to win the war, relatively minor gains are now driving the kind of pessimism reflected in Kissinger’s remarks, Lawrence Freedman, Emeritus Professor of War Studies at King’s College London, wrote in a Friday (May 27) blog post.
  • “This indicates the ever-present danger for those analysing the course of this war of getting too far ahead of events on the ground,” Freedman wrote. “The best assessment of Russian strategy now is that it seeks to take what it can from the current effort and then dare Ukraine to try to seize it back.”
  • So far, according to analysts, Ukrainian commanders have not taken that bait, either because they are building up reserves and awaiting the arms needed from the US and other allies to make a successful counter-offensive possible, or because they are themselves suffering heavy losses and cannot do so.
  • With Russian artillery now in reach of supply roads to the pocket, Ukraine’s commanders face difficult choices: To bring in reinforcements under fire, to withdraw under fire, or mount a Mariupol-style defense after encirclement, in the hope that a counter-offensive and relief will come in time.
  • “All options are militarily and politically risky,” said Mykola Bielieskov, a military analyst at Ukraine’s National Institute for Strategic Studies, a government think tank.
  • “It’s very difficult to explain to Ukrainians why the Russians still have the ability to move forward, after being rolled back from Kyiv and Kharkiv. So even if it is not a major success, this local success would have negative repercussions for the government.”
  • Bielieskov blamed the slowness of even the US administration to make the move from giving Ukraine’s soldiers what they need to survive Russian attacks, to giving them what’s required to compete with Russia’s quantitative advantage in artillery and mount counter-offensives.
  • Rather than the 90 howitzers the US has promised to date, Ukraine needs 400 to 500, as well as Multiple Launch Rocket System (MLRS) with ranges of at least 70 to 80 km, weapons that will allow it to damage Russian forces and firepower at depth, according to Bielieskov.
  • Concerns over international sanctions imposed by the likes of the US, EU, UK, Canada, Australia, Japan, and Switzerland against a growing range of Russian targets centres around a set of key questions, the most fundamental of which is, will they “work”?
  • Other questions revolve around the impacts they will have on the economies of Russia and others worldwide? Can they slow down, or halt, the Russian war machine? Can the more punitive aspects of these hard-hitting measures translate into concrete political change on the ground? Can their unintended consequences, such as those of a humanitarian nature, be mitigated?
  • In March 2022, Russia became the world’s most sanctioned country. It is subject to more than 5,000 different targeted sanctions, more than Iran, Venezuela, Myanmar and Cuba combined.
  • With 1,194 sanctions against Moscow, the US is the leading sanctioning country, followed by Canada (908) and Switzerland (824).
  • Of restrictions against the financial sector, the most significant is the freezing of half of Russia’s gold and foreign exchange reserves stored in the West – US$300 billion.
  • It is now forbidden to export dollar and euro banknotes to Russia, along with several other currencies. Several Western countries have suspended the services of Russian banks’ branches operating on their territory, and the leading Russian banks have been disconnected from the SWIFT system.
  • The West is also moving toward an embargo on the import of mineral resources from Russia. By the end of 2022, the US and most EU countries will likely stop buying Russian oil and coal. Dependence on Russian gas imports is also gradually decreasing.
  • Sanctions against individuals were also introduced. The entirety of the Russian ruling elite has been targeted, starting with President Vladimir Putin, members of the government and deputies of the State Duma, as well as almost all major Russian businesspeople. Heads of state-controlled television channels have also been sanctioned.
  • In addition to these measures, many non-state actors are also boycotting Russia. For example, several hundred companies refused to continue working in the country, including giants like McDonald’s, Coca-Cola, KFC, BP, and Shell. And the trend continues.
  • Sanctions may have harmed Russia’s credit-worthiness, but the 70% surge in world gas prices alone has supercharged its balance of payments.
  • Its current account trade surplus, according to its central bank, is now over three times the pre-invasion level. At the same time, sanctions are clearly hurting countries in western and central Europe who are imposing them.
  • It is absurd to expect Hungary to starve itself of energy and, as it says, “nuclear bomb” its economy, with no fixed objective or timetable in sight.
  • Sanctions have an awful habit of being hard to dismantle. Worse is to come, as Russia’s reaction to sanctions has been to threaten to cut off gas to Europe, further driving up prices to its advantage.
  • According to a Guardian columnist, Simon Jenkins, Russia is already blockading the Black Sea ports, from which millions of tons of Ukrainian grain are normally shipped to the outside world.
  • This blockade has seen cereal prices rise 48% on their 2019 base, devastating markets, particularly across Africa. This in turn has increased the value of Russia’s own massive grain exports.
  • Russia has offered to lift the blockade if sanctions are lifted. Whether it means this is moot, but the west cannot be blind to the unintended consequence of its sanctions war.
  • Nato, Jenkins added, has been sensibly scrupulous in not escalating the war in Ukraine into a Europe-wide conflict. Sanctions know no such subtlety.
  • Millions of innocent people across Europe and far from its shores will suffer as food and energy prices soar. Supply lines are disrupted. Trade links collapse. The victims are overwhelmingly the poor.
  • The objective – to compel Russia to withdraw its forces from Ukraine – has patently not been achieved.
  • In contrast, military aid, Jenkins said, has been far more effective in that respect. But the harm done to the rest of Europe and the outside world is now glaring.
  • According to him, the EU should stick to helping Ukraine’s war effort and withdraw economic sanctions against Russia. They are self-defeating and senselessly cruel.
  • Let’s just take a brief look at what the impacts of Russian sanctions are on the sanctioning countries, introduced stage by stage since February 24.
  • Russia reacted aggressively once those sanctions hit. “They have done textbook defensive policies to retain capital and stabilise the currency and avoid a financial crisis,” said Rachel Ziemba, an economic and political risk expert and adjunct senior fellow at the Center for a New American Security.
  • Take the ruble, which President Joe Biden declared reduced to “rubble”. In the aftermath of sanctions, its value crashed. It suddenly took a lot more rubles to buy, say, one US dollar.
  • You really wouldn’t want rubles, then, because you wouldn’t have as much purchasing power. So the Russian central bank sought to create demand for rubles.
  • It did so through a series of measures that included raising interest rates, an incentive for Russians to save their money. The bank implemented a series of capital controls that targeted Russian businesses and individuals.
  • For example, companies that export things or do business abroad had to convert 80% of their foreign exchange revenues to rubles.
  • It also limited the amount of money Russians could transfer abroad or remove from foreign bank accounts – currently no more than US$10,000 over the next six months.
  • By May 30, these measures have the ruble firmed sharply on the Moscow Exchange, as it retained support from capital controls and Russia’s strong trade account.
  • On that day, the ruble gained nearly 9% on the US currency at 61 rubles per dollar, and was up around 10% against the euro to trade below 63.
  • On May 25, the Russian currency hit a four-year high of 55.80 to the dollar, and reached a seven-year high of 57.10 against the euro.
  • “The overall fundamental picture for the ruble is not changing much … We’re not ruling out a return to levels of 60-63 to the dollar,” Dmitry Polevoy, head of investment at firm LockoInvest, told Reuters.
  • Hence, despite the unprecedented sanctions imposed on Russia, surging exports and strict capital controls have sapped demand for foreign currencies and sent the ruble soaring to its strongest levels in years.
  • It had risen to become the world’s best-performing currency so far this year, according to Bloomberg, before last week’s slide.
  • However, a rapidly appreciating ruble is a problem for both exporters and the government budget. To stem the ruble’s strength, the Bank of Russia on May 26 slashed the key interest rate by three percentage points to 11%, suggesting that more cuts would follow as inflation risks subside.
  • Russia has also benefited from the fact that it is still exporting a lot of oil and gas, including to places like Europe, which gets more than a third of its natural gas imports from Russia.
  • That money – hundreds of millions per day from the EU alone – is coming into the Kremlin’s coffers, and their ability to replenish funds gives the economy a cushion.
  • This is partly why Putin started demanding “unfriendly countries” pay for natural gas in rubles, as it would help prop up Russia’s currency.
  • Meanwhile, Russian oil exports to India jump 25 times. Deliveries for May surged to 24 million barrels from last year’s average of 960,000 a month
  • India has received 34 million barrels of discounted Russian oil since February, more than 10 times the value of the total imports from the country year-on-year, Reuters reported on May 30, citing Refinitiv Eikon data.
  • According to the report, more than 24 million barrels of Russian crude were supplied in May, up from 7.2 million barrels in April, and from about three million barrels in March. The South Asian nation is set to receive about 28 million barrels in June, data shows.
  • Western sanctions on Moscow have created an opportunity for Indian refiners to increase purchases of Russian oil (mostly Urals crude) at discounted prices, as some European customers have been vocally reluctant to buy Russian crude.
  • India has come under fire from the West for its continued purchases of Russian oil. However, New Delhi has rebuffed the criticism, saying those imports make up a fraction of the country’s overall needs.
  • Authorities also said India will keep buying “cheap” Russian oil as a sudden stop could drive up costs for its consumers. Previous media reports have indicated that the world’s third-biggest oil importer was seeking Russian crude at less than $70 a barrel to compensate for additional hurdles caused by sanctions.
  • Meanwhile on trade, despite the sanctions, ruble-yuan trade soars over 1,000%, as Russia and China are ditching the US dollar in favour of national currencies.
  • According to Bloomberg calculations, some 25.91 billion yuan (US$3.9 billion), have been exchanged for rubles on the Moscow spot market so far in May, marking a twelvefold surge versus the volumes recorded in February, when Russia launched its military operation in Ukraine.
  • The spike coincides with a rally in the ruble to a five-year high against the yuan and the US dollar.
  • “The main players in the yuan-ruble market are corporations and banks, but there is also a growing interest from retail investors,” a currency and rates strategist at Sberbank CIB, Yuri Popov, told the agency.
  • “The volume on the Moscow Exchange’s spot market has surged. This is due to sanctions concerns, as well as the intentions of Russia and China to encourage the usage of national currencies in bilateral trade,” he added.
  • The mass exodus of international brands from the sanctions-hit country have reportedly forced Russian businesses to turn to Chinese goods to replace Western imports.
  • Meanwhile, the Chinese yuan may gain fresh impetus for internationalisation just when growing tensions between Washington and Beijing are slowing that process.
  • All these point out to sanctions do not have the desired negative effect on Russia. But one can rightfully ask what about the impact of sanctions on the sanctioning countries?
  • One negative impact of sanctions on sanctioning countries is inflation in the Eurozone exceeded the worst expectations and hit a record 8.1% in May amid surging energy costs.
  • A flash estimate by EU statistics agency Eurostat revealed the main component of inflation in the euro area is energy, which is expected to jump by 39.2% in May, highlighting the impact of the global energy crunch amid sanctions against Russia.
  • Food prices are projected to surge by 7.5% compared with 6.3% in April, the cost of industrial goods is expected to increase by 4.2%, and services by 3.5%.
  • Consumer prices in the 19 countries that use the euro currency are now rising at the fastest pace since records for the euro began in 1997. The annual inflation in May was earlier predicted to be up to 7.8% against the 7.4% rate in April.
  • Supply-chain disruptions due to the conflict in Ukraine and Covid-related lockdowns in China have put additional pressure on consumer prices.
  • The full data for May will be released on June 17.
  • In Germany, the statistics office Destatis has reported another jump in inflation in May as food and energy prices continue to climb.
  • Annual inflation in Europe’s top economy has reached 7.9%, the highest level since the 1973 oil crisis. The surge comes amid the conflict in Ukraine and the unprecedented sanctions imposed on Russia.
  • Soaring energy prices have had a considerable impact on inflation since late February, when Russia’s military operation in Ukraine began, Destatis said.
  • Energy prices reportedly rose 38.3% in May year-on-year, while food prices posted an 11.1% leap.
  • Consumer prices in May increased 0.9% by national standards and 1.1% by EU-harmonised standards, according to the data. Destatis is expected to publish its final results for the month on June 14.
  • Britons, meanwhile have been warned of winter blackouts, as electricity across the UK could be rationed as the energy crisis deepens.
  • As many as six million British households could be subjected to power cuts this winter if Russian gas supplies to Europe stop, The Times reported Sunday (May 29), citing a Whitehall document.
  • It said import of natural gas from Norway could halve next winter amid surging EU demand. Britain buys around half of its total supplies from the Nordic country.
  • Shipments of liquified natural gas from major producers such as the US and Qatar could also halve this winter, the UK government warned, pointing to fierce global competition for supplies of the fuel.
  • Meanwhile, interconnectors from the Netherlands and Belgium could also be cut off in winter, as the two countries struggle meeting their own demand.
  • The UK, which has vowed to end the importation of Russian oil by the end of the year, is now seeking to bolster electricity supply by extending the life of its coal and aging nuclear power stations.
  • In Italy, an embargo on Russian gas could lead to a serious shortage of fuel crucial for Italy’s industrial and service sectors, according to a study published by the association of Italian industrialists Confindustria.
  • “A possible blocking of natural gas imports from Russia, Italy’s main supplier in recent years, could have a very strong impact on the already weakened Italian economy.
  • Such a shock would cause a serious shortage of gas volumes for industry and services and an additional increase in energy costs,” the analysts behind the study state.
  • The study claims that Italy being deprived of Russian gas would knock an average of 2% per year off of GDP in 2022-2023.
  • Analysts warn that after a drop in economic growth by 0.2% in the first quarter, “in the second quarter of 2022 the scenario for Italy remains difficult due to the continuation of the conflict in Ukraine”.
  • Over in Japan consumers will be hit with higher costs for thousands of food and drink items as the country faces a ‘summer of price hikes’.
  • Major producers of food and beverages in Japan are planning to raise prices for 3,615 items from June, while the total number of items that are expected to see price hikes will total some 8,400 this year, according to a poll carried out by Teikoku Databank.
  • “This summer looks to be a summer of price hikes,” the Japanese Times quotes the survey published by the credit research firm earlier in May.
  • As a result, over 80% of the items set for price jumps from June onward will see the change take effect that month or in July.
  • The 105 food and beverage manufacturers that were surveyed have already increased prices on 4,770 items from January through May. The number includes a wide range of products from spices, vegetables, meat and fish to sweets and alcoholic drinks.
  • Finally in the US, Americans are reeling from surging gas prices, food prices, and the price of rent – all of which have steadily risen since the start of the pandemic.
  • US President Joe Biden had chosen to blame Russian President Vladimir Putin for the situation, dubbing it “Putin’s price hike” – but people aren’t buying it.
  • In addition to high-mile inflation, the US economy risks stagnating as consumers are unable to pay the higher costs of basically everything from gas to essential groceries.
  • The logistical supply chain crisis and shortage of transportation workers – already serious issues exacerbated by pandemic-era lockdowns and movement restrictions – haven’t helped matters.
  • Biden, who ran on the promise to “always choose to unite rather than divide,” is trying to unite Americans in common cause against Russia, which he blames as the source of all of the problems ailing the US – even ones that cropped up well before the conflict in Ukraine, and ahead of Biden’s sanctions on the Russian economy.
  • And he’s doing this all the while condemning Republicans and their “ultra-Maga” (Make America Great Again) plan to “raise taxes on working families.” So much for unity.
  • Despite Biden’s blame game, Americans aren’t buying his excuses. A recent poll conducted by the Democracy Institute for Express.co.uk found some 56% of likely voters disapproved of the president’s handling of foreign policy, compared to 40% who approve.
  • On the topic of Ukraine, only 38% approve of Biden’s policies. “Americans were very pro-sanctions at first, [but] they are not as keen on the sanctions as they were,” Democracy Institute Director Patrick Basham told the Express.
  • “Biden made these predictions at the outset – the ruble would be rubble, we were going to crash the Russian economy, people will rise up, Putin will be out, the Russians will run away from Ukraine… [but] none of those things have happened.”
  • Indeed, Biden faces disapproval on all fronts, and many Americans don’t agree with his preoccupation with Ukraine. Only 16% of those polled perceived Russia as the most significant “threat” to the US, well behind China, Iran, and even North Korea.
  • Around 50% of those surveyed said they’d back the Republicans in the midterms, compared to 42% who said they’d vote for the Democrats.
  • Based on the sufferings of the sanctioning countries themselves for introducing sanctions, it is no wonder Guardian’s Jenkins calls for withdrawing economic sanctions against Russia, as they are self-defeating and senselessly cruel.
  • It has become very clear as the Russia-Ukraine war enter its 100th day today (June 3), more and more cool and level-headed people are saying the endgame lies at the negotiation table.
  • Chairman of the US Joint Chiefs of Staff, General Mark Milley said negotiations between Russia and Ukraine would be a “logical choice” to end the conflict.
  • In an interview with Fox News on May 31, Milley was asked about likely outcomes of the fighting between Moscow and Kiev.
  • “Now you’ve got a very significant operational fight going on in the Donbas between the Ukrainian and the Russian militaries. How that shapes up in the next few weeks will probably in large part shape the outcomes of what will happen,” he said.
  • According to the general, the conflict “could end up as a grind and go on and on; [it could end up in] a stalemate; it could end up with one side or the other having a decisive victory; it could end up in a peace negotiation.”
  • Milley later insisted “a negotiated outcome is a logical choice, but both sides have to come to that conclusion on their own.”
  • The next day, a top Russian MP said Moscow’s military offensive in Ukraine could come to an end if Kiev agrees to negotiate.
  • The head of Russia’s State Duma Defense Committee Andrey Kartapolov claimed the special operation “will develop in accordance with the plan, and, I think, will end when the current Ukrainian leadership is ‘ripe’ for negotiations,” Kartapolov said in an interview with RIA Novosti news agency.
  • He said the situation on the ground has changed and that Kiev’s forces are beginning to crack.
  • The last round of face-to-face talks between the two countries was held on March 29 in Istanbul, where Kiev proposed penning an international agreement on security guarantees for Ukraine in return for agreeing to the neutral status that Russia has been demanding since before the conflict began.
  • However, those talks ultimately fell through and the two sides have continued to blame each other for the lack of progress in negotiations.
  • Meanwhile, Turkish President Recep Tayyip Erdogan invited Moscow and Kiev to hold a new round of talks in Istanbul, noting that the peace process had appeared to make at least some progress before breaking down.
  • “President Erdogan stated Turkey’s readiness, if agreed upon in principle by both parties, to meet with Russia, Ukraine and the UN in Istanbul, and to assume a role in a possible observation mechanism,” the presidency’s directorate of communications said in a statement.
  • Ukrainian President Volodymyr Zelenskyy appeared ready for compromise on key questions in March, for example, offering to set aside Kyiv’s ambitions of joining the Nato and accept neutrality.
  • However, Ukrainian attitudes have hardened since March. That reflects growing confidence in the abilities of the Ukrainian military to deal with the Russian offensive.
  • It could also be because of persuasion and advice from allies like US, UK and EU that Ukraine can win the war or put itself in a position of strength during negotiation with their assistances in the form of weaponries, funds and severe sanctions against Russia.
  • While Kyiv in March offered a proposal that suggested a readiness to compromise on Crimea, seized and annexed by Russia in March 2014, Ukrainian officials now insist on full restoration of Ukraine’s borders as of 1991.
  • Whether Kyiv would sustain that position if the war drags on is unknown. It is difficult to see how Ukraine can muster the necessary leverage to regain Crimea.
  • Back in Sept 2014, some senior Ukrainian officials were reported to have said privately perhaps Kyiv should let the then-occupied part of Donbas go, as “they don’t think like we do”, but quickly added that no serious Ukrainian official could say it publicly and expect to survive.
  • Analysts say privately Ukrainian politicians in general did not argue for giving up Crimea and Donbas but noted that regaining those territories would bring a liability – the return of three or four million pro-Russian voters, which would prove disruptive for Ukraine’s politics.
  • How Ukraine resolves this dilemma is a question for the Ukrainian government to decide. But for Zelenskyy to insist on a full restoration of Ukraine’s borders as of 1991 for negotiation to commence is a non-starter, as it is tantamount to leaving the door close for diplomacy.
  • The question of a peace deal was also touched by Prof Jeffrey Sachs, director of the Centre for Sustainable Development at Columbia University and president of the UN Sustainable Development Solutions Network.
  • Yet to reach a deal, he said, the US will have to compromise on Nato, something Washington has so far rejected. Before the war, Putin presented the West with a list of demands including, most notably, a halt to Nato enlargement.
  • The US, pointedly, was not willing to engage on that point. Now would be a good time to revisit that policy. Putin also would have to show a willingness to make concessions for negotiations to succeed.
  • According to Prof Sachs, US’ arms-and-sanctions approach may sound convincing in the echo chamber of US public opinion, but it doesn’t really work on the global stage.
  • It enjoys little support outside of the US and Europe, and eventually may face a political backlash inside the US and Europe as well.
  • To anyone familiar with the Russian war effort and the horror it has unleashed, it may seem obvious Russia would be relegated to pariah status globally. But that’s not the case.
  • “Developing countries, especially, have declined to join in the West’s campaign of isolation, as seen most recently in a US-led vote to remove Russia from the UN Human Rights Council.
  • “It’s true 93 countries supported the move, but 100 countries did not (24 opposed, 58 abstained, and 18 did not vote). Even more striking, those 100 countries are home to 76% of the world population,” he said.
  • Also, most of the world does not believe in the sanctions and also does not take sides in the Russia-Ukraine war. Add up all of the countries and regions imposing sanctions on Russia – US, UK, European Union, Japan, Singapore, Australia, New Zealand and a handful of others – and their combined population comes to just 14% of the world population.
  • The boomerang effect in which sanctions on Russia hurt not just Russia but the entire world economy, stoking supply-chain disruptions, inflation and food shortages is why many European countries are likely to continue to import gas and oil from Russia, and why Hungary and perhaps some other European countries will agree to pay Russia in rubles.
  • It will also likely hurt Democrats in this November’s midterm elections as inflation eats away at the real earnings of voters.
  • The US likes to say Nato is a purely defensive alliance, but Russia, China and others think otherwise. They look askance at the Nato bombing of Serbia in 1999, Nato forces in Afghanistan for 20 years after 9/11, and the Nato bombing of Libya in 2011, which toppled Moammar Gadhafi.
  • Russian leaders have been objecting to Nato’s eastward enlargement since it began in the mid-1990s with the Czech Republic, Hungary, and Poland. It is notable that when Putin called on Nato to stop its enlargement into Ukraine, Biden pointedly refused to negotiate with Russia over the issue.
  • In short, many countries, certainly including China, will not back global pressures on Russia that could lead to Nato expansion. That’s because the rest of the world wants peace, not a victory by the US or Nato in a proxy war with Russia.
  • American diplomacy is therefore punishing Russia, but without much chance of real success for Ukraine or for US interests.
  • Real success is that Russian troops return home and Ukraine’s safety and security are achieved. Those outcomes can be achieved at the negotiating table.
Read more on peace deal as the endgame of the Russia-Ukraine war:
  • Russia’s war against Ukraine should not stop the world from tackling other pressing global crises, UN Environment Programme chief Inger Andersen has said.
  • “The world has to learn to deal with multiple crises and not let go of one in favour of another,” she told reporters at the two-day Stockholm+50 environmental conference in the Swedish capital.
  • She cited the climate crisis and difficult issues surrounding biodiversity and pollution as “existential” threats that must be urgently faced.
  • Stockholm+50 is also not just about the environment. It is about how nurturing the environment can lessen poverty and help the world achieve the sustainable development goals.
  • So, this is the moment to reimagine and create a fairer economic system, reinvent the structures that have caused environmental degradation and create a global society that offers everyone the opportunity to live a healthy, fair life.
  • In her op-ed published by Al Jazeera, she comes up with five ideas on how to achieve the above over the next 50 years – starting with the political commitment to act at Stockholm+50. 
Read more on these five ideas:
    Today (June 3) the war between Russia and Ukraine is entering its 100th day, and the surprising resilience of Ukraine’s military makes it easy to misinterpret the current situation in Ukraine’s favour.
    Not losing the war is itself a form of victory for Ukraine. In this case, however, not losing actually does not mean winning the war. Ukraine is far from winning the war. But not winning is still not winning.
    Ukraine is in far worse shape than commonly believed and needs and will continue to need a staggering amount of aid and support to actually win.
    We love an underdog – a plucky little guy who beats the odds, fuels hope for us and allows us to feel we are on the morally superior side.
    This is why Ukrainian President Volodymyr Zelensky has appealed so successfully to the world. His defiance against the odds gave us someone to root for against a bully.
    It is worth remembering Ukraine has been fighting a Russian invasion since 2014. Between then and Feb 2022, almost 10,000 were killed in the Donbas (collectively the area known as Luhansk and Donetsk in eastern Ukraine), but little or no military progress was made.
    Now Ukraine is fighting with that same army in an expanded theatre against a larger army – a testament to the pure courage of its troops that it has managed since Feb 24 not only to hold its line but also force the Russians into a retreat from Kyiv, Kharkiv, Chernihiv, and surrounding areas.
    But is this true?
    A week before Russia retreated from Kyiv, it has already told the whole world of its intention to withdraw from Kyiv in order to focus on the Donbas. Liberating Donbas has always been its prime objective.
    So, when Russia withdrew from Kyiv there’s a vacuum there, which was easily filled up by the Ukrainian army without a fight. Do you call this a meaningful victory for Ukraine when there is really no fighting to contend with?
    And the Russian strategy of retreating in order to focus on the Donbas is what military experts describe as a fixing operation i.e. keeping the Ukrainian army fixated with “recapturing” the withdrawn areas, and thus did not reinforce its army in the Donbas to face the real battle until it is too late.
    That has made it possible for Russia to now control significantly more Ukrainian territory than before Feb 24.
    Whereas Ukrainian authorities controlled approximately 60% of Luhansk before the February invasion, the Washington-based Institute for the Study of War now estimates “Russia controls more than 95% of the broader region of Luhansk as Kremlin-backed troops focus on eastern Ukraine three months into their struggling invasion”.
    But is it fair to describe the invasion as “struggling” when time and again Russia has stressed it has no deadline for accomplishing its special operation mission to liberate the Donbas?
    The withdrawal of Russian troops from areas around Kyiv, Chernihiv, and Sumy, completed by April 3, was seen as a significant victory for the Ukrainian authorities.
    The removal of the threat from the capital made it possible to return diplomatic institutions, organise the visits of foreign delegations to the sites of past battles, and convince Nato countries that Ukraine would be able to withstand the war against Russia if it received more serious weapons.
    All this was presented to Ukrainians as laying the groundwork for preparing a counteroffensive in Kharkov, Kherson, and the Donbas.
    The mood in Ukrainian society was positive. The Russian army had already been stopped. It remained only to wait for Western help, and it would be possible to take revenge for 2014, when Moscow reabsorbed Crimea.
    But by the end of May, it turned out the requested artillery and air defense systems were not enough to defeat Russia, and it was necessary to boost the army’s ranks to one million.
    That is how belief in a speedy victory disappeared from Ukrainian society. Alexey Arestovich, a top adviser to the office of the President, who has somehow become the main military expert in Ukraine, as well as military bloggers associated with the nationalist Azov unit, are already talking about a difficult June and July.
    Even Zelensky himself has lost his optimism. What is the reason for this? According to analysts, since the second half of April, the Russian army has concentrated on several objectives:
    • Expanding its foothold around Izium and cutting off Slaviansk;
    • Conducting an offensive from Kupiansk along the Oskol Reservoir to Sviatogorsk and Liman;
    • Liberating Rubezhnoye-Severodonetsk-Lysychansk area;
    • Breaking through the fortified defense formations in the Popasnaya area to enter the operational theatre;
    • Breaking through the fortified defense formations in the area of Avdeevka and its surroundings; and
    • Establishing control over Mariupol.
    By the end of May, most of these tasks had been completed. As of this writing the Russian troops are now in control of about 70% of Severodonetsk. Its next move will be capturing nearby Lysychansk.
    If Russia captures Severodonetsk, and nearby Lysychansk on the higher west bank of the Siverskyi Donets River, it will hold all of Luhansk – a key war aim for Moscow.
    A sense that the tide of the war could be turning in favour of Russia comes as some, including former US Secretary of State Henry Kissinger, call for Ukraine to consider trading territory for a ceasefire.
    Yet how to interpret the Russian advances has sharply divided military analysts, with many warning against drawing conclusions from incremental movements on a relatively small part of the battlefield.
    Just as previous Russian setbacks led to an over-optimistic consensus on Ukraine’s ability to win the war, relatively minor gains are now driving the kind of pessimism reflected in Kissinger’s remarks, Lawrence Freedman, Emeritus Professor of War Studies at King’s College London, wrote in a Friday (May 27) blog post.
    “This indicates the ever-present danger for those analysing the course of this war of getting too far ahead of events on the ground,” Freedman wrote.
    “The best assessment of Russian strategy now is that it seeks to take what it can from the current effort and then dare Ukraine to try to seize it back.”
    So far, according to analysts, Ukrainian commanders have not taken that bait, either because they are building up reserves and awaiting the arms needed from the US and other allies to make a successful counter-offensive possible, or because they are themselves suffering heavy losses and cannot do so.
    With Russian artillery now in reach of supply roads to the pocket, Ukraine’s commanders face difficult choices: To bring in reinforcements under fire, to withdraw under fire, or mount a Mariupol-style defense after encirclement, in the hope that a counter-offensive and relief will come in time.
    “All options are militarily and politically risky,” said Mykola Bielieskov, a military analyst at Ukraine’s National Institute for Strategic Studies, a government think tank. “It’s very difficult to explain to Ukrainians why the Russians still have the ability to move forward, after being rolled back from Kyiv and Kharkiv. So even if it is not a major success, this local success would have negative repercussions for the government.”
    Bielieskov blamed the slowness of even the US administration to make the move from giving Ukraine’s soldiers what they need to survive Russian attacks, to giving them what’s required to compete with Russia’s quantitative advantage in artillery and mount counter-offensives.
    Rather than the 90 howitzers the US has promised to date, Ukraine needs 400 to 500, as well as Multiple Launch Rocket System (MLRS) with ranges of at least 70 to 80 km, weapons that will allow it to damage Russian forces and firepower at depth, according to Bielieskov.
    It has become very clear as the Russia-Ukraine war enters its 100th day, more and more cool and level-headed people are saying the endgame lies at the negotiation table.
    Ukrainian President Volodymyr Zelenskyy appeared ready for compromise on key questions in March, for example, offering to set aside Kyiv’s ambitions of joining the Nato and accept neutrality.
    However, Ukrainian attitudes have hardened since March. That reflects growing confidence in the abilities of the Ukrainian military to deal with the Russian offensive.
    It could also be because of persuasion and advice from allies like US, UK and EU that Ukraine can win the war or put itself in a position of strength during negotiation with their assistances in the form of weaponries, funds and severe sanctions against Russia.
    But all bets are off if Zelenskyy insists on a full restoration of Ukraine’s borders as of 1991 for negotiation to commence. It is a non-starter, as it is tantamount to leaving the door close for diplomacy.
    Regards,
    Jamari Mohtar
    Editor, Let’s Talk!