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Posts Tagged ‘Russia’

Last week Putin began his blitzkrieg invasion of Ukraine. His war machine is using rockets and artillery against the much smaller, but more highly motivated, Ukrainian military.

In anticipation of economic sanctions, Putin built a war chest of USD630 Billion. That sounds like a lot of money, but wars have a funny way of outlasting the money available to pay for them. With the ruble no longer accepted anywhere in the west, and with Russia cut off from every advanced funds transfer system, he may not be able to use that money. But even if he could use it, would USD630 Billion be enough to make a difference for Putin?

For some historical context to answer to that question we can turn on the Wayback Machine and revisit an earlier conquest of a hostile little puppy state by a Great Empire with an overwhelming military machine: the Anglo-Boer War of 1899 to 1902 in South Africa.

In 1899, Great Britain was the preeminent economic and military power of the world. London had not yet ceded to New York the title of world financial center. The United States and Germany had been catching up to Great Britain both economically and militarily, and in the latter sphere Kaiser Wilhelm II was determined to challenge England for naval supremacy. But England was still heads above the rest, and when European nations considered important policy choices they gave a great deal of weight to how Whitehall might react to the change.

From a geographical perspective, Russia today sees Ukraine, part of its “near abroad,” as a territory that it must dominate, if not control. In 1899, South Africa held an importance for Great Britain similar to that of today’s Ukraine for Russia. South Africa was key to maintaining a reliable and defensible sea route between England and India. Cape Town was the re-coaling station for steamships on that route. And although by 1899 the Suez Canal had already been open for about thirty years, England could not rely on it: it was owned and operated by France. If, in a conflict, France were adverse to England (which had happened a few times in the past), access to India through the Suez Canal would be lost.

Natural resources ran a close second to global strategy concerns. Within the fifteen years preceding the outbreak of the Anglo-Boer War, gold had been discovered in the Transvaal, and diamonds in Witwatersrand, making South Africa one of the richest spots on the planet. South Africa had become the leading source of gold in the world. The world was on the gold standard then, and because London was the center of world finance, England had a keen interest in the volume of gold in circulation and held in government reserves. Too little gold would unduly constrain commercial and industrial access to capital, while too much would risk metallurgical inflation. Europe had endured that type of inflation back when Spain was its most powerful country. The massive quantities of gold and silver that Spain imported from its possessions in central and south America caused more than a few monetary problems.

Russia now claims that ethnic Russians are being mistreated by Ukraine’s government, which Russia views as illegitimate. By 1899, the Boers had declared the Transvaal and the Orange Free State to be independent republics not subject to rule from London. The many Englishmen extracting wealth from South Africa’s mines in these new Boer republics were second-class citizens, without voting and other civil rights.

Today Russia worries about the consequences of having a successful fledgling democracy like Ukraine on its doorstep because it might give Russian citizens the idea that democracy might be worth a try. Similarly, in 1899 Britain viewed the newly declared Boer republics as an affront to its sovereignty over South Africa, and it worried about the effect such new little breakaway states might have on its subjects in other British colonies around the world. Would they start breaking away too? This was an early domino theory.

Just like Putin’s propaganda about the benevolent nature of rule from Moscow, the British in 1899 thought that British rule was a divine gift to all the empire’s subjects, even if some of those subjects were trying to persuade the Brits to leave by shooting at them.

Russia looks down on the people of Ukraine in the same way that Great Britain looked down at the Boers. Both Russia and England thought they’d have a splendid little war, that it would be over quickly, and that they would easily squelch these little republics.

But every present-day Ukrainian, like every Boer back then, was armed to the teeth and ready to fight. Sure, the Boers were not a regular army with chains of command and discipline in the ranks, etc. But, like Ukrainians today, that strategic weakness becomes a tactical strength when the irregular force is highly motivated and fighting against an outside invader on its home turf. The Boers would attack some organized British column moving through the countryside, and then melt back into the wilderness. The Ukrainians have already ambushed some Russian motor convoys. The Russians will also have to fight Ukrainians in urban environments, which is a nightmare for an attacking force. Think Stalingrad.

So how does all this tie in to Putin’s USD630 Billion war chest?

Well, in October 1899, the government of Prime Minister Robert Cecil, Lord Salisbury, calculated that England’s fine little war against the Boers could be “put through” for 10 million British pounds.

By the time peace was finally negotiated in May 1902, the British government had spent more than 217 million British pounds on its war against the Boers. That was enough to bring down the government of Lord Salisbury, which was replaced by that of Arthur Balfour. To get an idea of how much money that was at the time, it represented 12% of the entire gross national product of the United Kingdom – then the world’s leading economy – for the preceding year.

Were we to apply that same percentage to the 2020 GDP of the United States, today’s leading economy, that would be 12% of USD20.94 Trillion, or about USD2.51 Trillion. That would be not quite twice Russia’s entire GDP of USD1.483 Trillion. So Tsar Vladimir could well find himself a bit short on funds as his Ukraine war drags on, and that’s without any consideration of what happens when no other country in the world accepts your currency.

If Putin had read up on the Anglo-Boer War, there’s no way to know whether he would have changed his mind about invading Ukraine. But at least he would have learned that it was possible, and even likely, that Russia would get Boer-ed.

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NYC Substation

The New York Times today reported that Russian hackers had gained access to nuclear plants and electricity grid controls, and would have been able to shut off the power in the United States at will.

That is deadly serious stuff.

More amazing still, it was the Trump Administration, that leveled the accusation against Russia. Putin may regard that as an act of disloyalty by Trump, perhaps triggering his release of kompromat on the Donald.

Perhaps he’ll announce a 25% tariff on Steele dossiers.

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It wasn't quite peace in our time.

It wasn’t quite peace in our time.

“Those who do not remember the pasta are condemned to reheat it.”

Vinny Santayana, of Vinny’s Collision and Engine Repair Shop, Avenue M, Brooklyn (later adapted by his cousin George).

The Sparkspread is hardly alone in advocating an energy supply strategy as a counter to Putin’s annexation of Crimea:

John Boehner: Counter Putin by Liberating U.S. Natural Gas – WSJ.com.

Back in 1938, then-PM Neville Chamberlain wrote off Hitler’s annexation of Czechoslovakia’s Sudetenland as a ‘quarrel in a far away country, between people of whom we know nothing.’  Europe wasn’t willing to move then, and the rest is history.  The Sudetenland is mountainous and has passes from which a single platoon with one or two surplus soixante-quinze cannon could hold off a Nazi division. Once annexed, this defense was gone and the door was open for the Nazis. The topography of Crimea is somewhat similar in its connection by an isthmus.

Only a few years later, FDR overcame the isolationist contingent in the Congress and got the Lend-Lease Act passed. Supplies and equipment went principally to Britain and Uncle Joe’s Soviet Union for the fight against Hitler.

Now Putin, if he’s not repeating history, is certainly rhyming with it.

I agree with one of the comments on an earlier Sparkspread post that the infrastructure isn’t in place for rapid shipment of LNG to Europe, but it could be within a reasonable period, and the will to complete the plan would affect pricing in forward markets. There is leverage in that given Putin’s need to obtain energy pricing above certain minimum levels to maintain his country’s political will, not to mention his own grip on power.

That’s why I suggest a plan along the lines of the Energy Equivalent of Lend-Lease, with deployment as rapid as it was back when our “Greatest Generation” did it.

One thing we’re lacking is a catchy acronym that can inspire the U.S. The treatment of acronyms as science can be dated to 1972, when some unthinking politicos formed the Committee to Re-Elect the President, or “CREEP.” That didn’t work out well. A few years later, and in the context of another, earlier energy crisis, Jimmy Carter lost sight of that valuable lesson when he declared the Moral Equivalent of War, or “MEOW.”  He served only one term.

EELL doesn’t quite have a ring to it either, so if Sparkspread readers have ideas, feel free to provide them in comments.

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