Russian and foreign economists agree that Russian economic growth will continue to be weak into the 2020s even if the price of oil rise sharply. While the rest of the world continues to see an average of three percent GDP growth a year Russia will be stuck at two percent a year, or worse. Since 2014 the government has insisted that the economy was under control. That was only partly true. The government had made progress in restoring the police state that had been dismantled in the 1990s and that has interfered with economic growth. Another limiting factor are the continued Western economic sanction, which Russians are told by their government are no longer a problem. That is not true. Ukraine, in large part because they are not dependent on oil exports or suffering from sanctions, are expecting three percent GDP growth in 2017.
But in Russia even the government admits that its all about oil. Until now the government predicted that the economy would “stabilize” once oil was over $50 a barrel and GDP growth would resume. That happened in late 2016 but the price rise has stalled and that apparently will not change. That appears to be halting the shrinking (.6 percent in 2016) of the GDP but best case for 2017 be two percent GDP growth. The reality is that the real average income of Russians has, as of the end of 2016, been declining 25 months in a row and the decline continues. With so many people seeing their income decline corruption is getting worse, despite vigorous (or at least well publicized) efforts to curb it. The number of best educated and capable Russians who have left the country since 2014 is over 1.5 million. The poor are getting poorer and more Russians are slipping into poverty. The military is telling its veteran officers and NCOs that a new benefit for ex-military personnel is preferential treatment when it comes to getting unemployment benefits. There is still the implied promise of a government job for retired officers but, well, you know hard times and all that. And then there are the foreign cash reserves, essential for buying imports. Those reserves will be exhausted later in 2017 or in 2018. So no, the economic news is not good so it is not discussed much in the state controlled mass media. The Internet is another matter, despite ongoing government efforts to shut down that access to what is really going on (or at least other opinions about what the government report).
The government generally follows Chinese policy regarding North Korea and to that end Russia is preparing to break diplomatic relations (and most trade agreements) with North Korea in light of the recent North Korean use of VX nerve gas to assassinate Kim Jong Nam, the older brother of North Korean tyrant Kim Jong Un. The brothers did not get along and the older one was under the protection of China. Russia, like China, was already angry about continuing North Korean nuclear and ballistic missile development. Russia also joined with China to try and halt South Korean plans to obtain and put into service the American THAAD anti-missile system. South Korea wants THAAD for protection from North Korean missile attack. The Chinese would not come right out and say it but they object mainly because THAAD would also make South Korea less vulnerable to intimidation by Chinese ballistic missiles. Russia South Korea openly refused to comply with the Chinese threats in 2015 and South Korean public opinion became even more enthusiastic about the high tech and very expensive (over $100 million per launcher and associated equipment) THAAD system. China sees South Korea more of an ally of the United States and a potential wartime foe than as an ally in attempts to keep North Korea from doing anything that would cause major economic and diplomatic problems (like starting a war). South Korea ignores the Chinese threat noting that China has done nothing to interfere with the profitable trade between the two countries. Russia opposes THAAD for the same reasons China does.
Ukraine continues to block Russian efforts to take more territory in the east (Donbas) and is apparently using some novel tactics to slowly regain control of territory. Not that its making much of a difference in persuading the Russians to leave. There is another indefinite ceasefire in Donbas, which began in late December and ended after a few days as the number of unprovoked attacks by the Russian backed rebels resumed and kept increasing. Despite that the casualty rate has been reduced. In the last two years the fighting in Donbas has left about 3,700 dead. That is a sharp decline from the first year of the war, where there were nearly twice as many deaths. One thing that hasn’t changed is the high proportion of casualties (about two-thirds) are civilians. By mid-2017 the death toll will pass 10,000, with nearly three times as many wounded. Nearly two million Ukrainians have been displaced, although over half of that took place by early 2015. About 15 percent of the Ukrainian military dead were volunteers, often locals, hastily organized into battalions and these were crucial is halting the initial Russian attempts to grab all of Donbas. Meanwhile it is costing Russia about $2 billion a year to support the rebel controlled half of Donbas. Russian currency circulates there as do about 5,000 Russian soldiers, most of them dressed as local rebels (most of whom are ethnic Russians).
In Ukraine the OSCE (Organization for Security and Cooperation in Europe) is recognized by Russia and is supposed to be monitoring the situation in Donbas. That has proved to be difficult because the Russian backed rebels (and sometimes Russian troops pretending to be rebels) regularly interfere with OSCE monitoring team. This year that harassment has concentrated on the commercial UAVs (usually quad-copters) the monitors increasingly use for their inspections. The rebels will often “arrest” the monitors at gunpoint and confiscate or destroy their UAV. Rebels will usually shoot down OSCE UAVs and claim it was an accident. Russia has apparently been closely monitoring OSCE in Ukraine. This became clear after a hacker attack in November that hit OSCE personnel in Ukraine. This hack was similar to the one carried out against government networks throughout Ukraine. The Russians ignore or harass OSCE whenever they feel the need to, or simply feel like it. The pro-Russian rebels continue to block the movement of observers in their territory. The OSCE has found that Russian backed rebels are responsible for most (sometimes 90 percent) of the violent incidents in eastern Ukraine. The hundreds of OSCE monitors in eastern Ukraine and Donbas, whose job is to oversee the ceasefire, have been complaining since 2015 that they are being restricted by rebels and, less frequently Ukrainian forces from carrying out inspections. Since early 2016 the rebels have been violating the ceasefire on a daily basis. Anyone in or near Donbas (as a lot of foreign journalists are) can hear or see the daily machine-gun, mortar, rocket and artillery fire by Russian and rebel units. Russia denies everything and insists that any evidence is fabricated. Some OSCE observer teams report coming under rebel fire which, in some cases, is believed to be deliberately directed at the OSCE personnel.
Ukraine is recovering from the economic damage suffered because of the war with Russia and is coming to realize that the biggest problems Ukraine is facing are internal. Yet despite the continued widespread corruption in 2016 Ukrainian GDP grew 1.5 percent and is expected to be three percent in 2017. In contrast 2015 GDP declined 10 percent. But the corruption is still in play and most obvious when it comes to the growing defense budget. The U.S. is not happy with all the continued plundering of the Ukrainian defense budget and threatens to cut support unless the Ukrainian officials stop the stealing and cooperate with each other for the common good.
Recent opinion polls show that the majority of Ukrainians would now vote to join NATO and move closer to the less corrupt and more prosperous West. For the last decade Russia has threated to declare war if Ukraine joined NATO. Because of this by 2009 the U.S. lost its enthusiasm for letting Ukraine join NATO, thus leaving Ukraine on its own to deal with Russian aggression. That led to a popular uprising in 2014 that ousted a pro-Russian (and very corrupt) president of Ukraine and triggered an undeclared Russian war against Ukraine.
The Unstable Unnaturals
The unusual alliance of Iran, Turkey and Russia is seen by all three countries as historically unnatural and unsustainable. But decades of arms sanctions forced Iran to depend mainly on Russia and China for what arms (or military equipment) it could get. Russia has shown itself to be a reliable supplier and able to deal with Iranian efforts to take unfair advantage of that relationship. But for centuries Iran has been fighting the Russians and Turks over who had the most power, control and influence in the areas where they were neighbors. Each of the three still have fundamental differences with the other two and popular opinion in all three nations shows widespread distrust of these “unnatural” allies. The Turkish government justifies the alliance with Iran and Russia in Syria by referring to increased cooperation with Russia and Iran since the 1990s. But in Syria the Turks have to deal with the fact that Iran is run by a religious dictatorship and Turkey and Russia are not. Iran justifies breaking agreements by blaming it on the many religious fanatics in its government and military. Russia is willing to ignore that sort of thing, Turkey isn’t. At the same time a growing number of Iranians openly demonstrate against the alliance with Russia, especially highly visible things like the continued use of Iranian airspace by Russian military aircraft travelling to and from Syria. For decades (in part because of the Russian attempt to occupy Afghanistan in the 1980s) Russia was depicted (by Iranian media, governments and personal experience) as a dangerous enemy of Iran. Russia and Iran still have some major issues. Russia openly supports Israel’s efforts to defend itself from Hezbollah or Iranian missile attacks. Despite all the frictions the three unusual allies in Syria are making the best of an unnatural, and likely temporary, situation.
In Libya Russia has decided to back the faction (HoR) the UN and the West does not approve of. The Libyan unity government known as the GNA (Government of National Accord) was created in late 2015 with the support of the UN and the West. GNA took control of Tripoli (the traditional capital) in early 2016 but has been unable to placate or unite the many factions that have been keeping the country in chaos since 2012. The rival HoR (House of Representatives) government based in Tobruk controls eastern Libya and, more importantly, most of the oil production facilities. HoR is better organized, united and hostile to Islamic radicals and terrorists of any sort. HoR gained the very public support of Russia in 2016. That was when Russia printed new currency for HoR and providing unspecified (because of the UN arms embargo) military support. Russia also provides HoR with some support inside the UN as Russia is one of the few countries that can veto proposed UN resolutions. The GNA made a major mistake early on by underestimating the resurrected Libyan Armed Forces and its leader general Khalifa Belgacem Hiftar. Russia did not make that error. In part because of several (since 2016) visits from general Hiftar Russia has now agreed to sell HoR weapons. The GNA has asked NATO to provide assistance in recruiting and training a new military. Most of what was left of the pre-2011 Libyan armed forces was rebuilt by Hiftar, who was a Libyan Army officer who turned against Kaddafi in the 1980s and received asylum in the United States. But Hiftar was unacceptable to some of the factions the UN had united to form the GNA and that turned out to be a bad decision. The HoR has now asked Russia for economic assistance and state controlled Russian oil company has agreed to work with the Libyan NOC (National Oil Company) to repair, upgrade and expand Libyan oil facilities. Hiftar visits Egypt regularly and has managed to keep Egypt, a few other Arab states providing support. Egypt allows banned goods (like weapons and ammo) to cross the border unhindered. Russia and many Arab states are pressuring the UN to rethink its Libyan strategy and its support for the GNA.
February 24, 2017: The U.S. is leading an effort to have the UN impose new sanctions on Syria for continuing to use chemical weapons. Russia said it would use its veto in the UN to prevent that.
February 20, 2017: In eastern Ukraine another ceasefire began on the Donbas front. Like the earlier ones it wasn’t really observed by the Russian backed rebels.
February 19, 2017: Russia announced that it would ensure that Iranian forces in Syria, including Hezbollah) leave Syria once the civil war there was over. Israel was happy with that, Iran was not.
February 16, 2017: In central Syria (near Homs) four Russian troops died and two were wounded by a roadside bomb. Russia has managed to keep its casualties very low in Syria but as the Assad government it supports reclaims more territory from the rebels Russian troops are going to be at greater risk. For that reason Russia pays well (lots of bonuses) for military personnel or contractors who will serve in Syria. Russia also has the state controlled media praise the service of who spend time in Syria and honor those who die there.
February 15, 2017: A Russian electronic intelligence ship (“spy ship”) moved up the east coast of the United States and to within 50 kilometers of a major submarine base in Groton Connecticut (between Boston and New York). In 2015 a similar ship arrived in Cuba for a visit, the day before American diplomats were to arrive to discuss resuming diplomatic relations. Both visits were believed more for publicity than to collect useful information.
February 13, 2017: In Syria a second battalion of Russian police arrived to help protect bases used by Russian forces and other vital facilities (like hospitals). This battalion recruited police (most of them Moslem) in the Caucasus, mainly Ingushetia. The first Russian police battalion arrived in December 2016 and was assigned to Aleppo. Russian media played up the fact that so many Moslems were in the second battalion and that this was an example of Russian Moslems helping Middle Eastern Moslems. There hasn’t been much of that since the Cold War (1947-91).
February 11, 2017: Iran told Russia that continued use of Iranian air space (for Russian military aircraft to take a shortcut to Syria and back) would depend on continued cooperation between Russia and Iran on Syrian matters.
February 9, 2017: In northern Syria, outside al Bab, a Russian airstrike in support of Turkish troops hit a building Turkish troops were in and killed three Turkish soldiers and wounded 11. Turkey and Russia did not agree on who was at fault here in a case of bad information or miscommunication. Elsewhere in the area Russian troops intervened and halted fighting between Syrian troops and FSA rebels who are working with Turkish forces to drive ISIL (Islamic State in Iraq and the Levant) out of al Bab. Syria has tolerated rebels who will, at least temporarily, cooperate in going after common foes (usually ISIL).
February 8, 2017: In eastern Ukraine (Donbas) another pro-Russian rebel leader (Mikhail Tolstykh) was killed. At first it appeared that the assassins were armed with a flamethrower who caught Tolstykh alone in his officer. But further analysis showed that the assassin used a Russian rocket launcher that fired a thermobaric (fuel-air explosive) into his office. Thermobaric explosions often leave the wreckage looking like someone used a flamethrower. Tolstykh was the commander of the “Somali battalion” and the latest of several Russian backed rebel leaders who have been assassinated. He is the first to die in 2017. The last such death took place in late 2016. The rebels blame these attacks on Ukraine but people in rebel held areas believe this is how Russia is trying to maintain discipline among the rebels, many of whom are Russians who came to join the rebels seeking fame and fortune. A growing number of rebel leaders are refusing to follow orders from their Russian patrons and despite these assassinations, continue to be unreliable. Tolstykh is an ethnic Russian who was born in Donbas. Ukraine believes some of these rebel leaders are being killed by Russia to prevent unreliable rebel leaders from confirming to war crimes investigators the extent of Russian involvement in the Donbas. Tolstykh was already under investigation (by the UN) for war crimes. Russia denies arming, training or financing the rebels but boast in Russian media of developing new and improved tactics and subversion techniques in Ukraine. This can be seen in how they have handled troublesome allies like Tolstykh. Back in the Soviet days Tolstykh would be declared an “enemy of the people” and after a brief show trial would face revolutionary justice. But Tolstykh was hailed as a hero and there was two days of mourning in Donbas to honor the rebel hero. But the locals know better and talk about it. I mean, seriously, a guy walks into your office with a flamethrower? It does sound scarier than thermobaric.
February 7, 2017: In Syria a Russian ship delivered fifty SS-21 missiles. This is the largest Russian ballistic missile shipment to Syria in decades. Originally introduced in 1976 the SS-21 has long been a popular export item. Russia still maintains a force of 300 SS-21 launchers (a special truck design for carrying and launching one missile). Before 2011 Syria had 210 SS-21 missiles and a smaller number of launchers. There used to be more but Syria apparently sold North Korea some SS-21 launchers and missiles in 1996, for the purpose of allowing North Korea to copy the design. The original SS-21 model had a range of 70 kilometers, but the current one is good for 120 kilometers, or as much as 185 kilometers for the model Russia will not export. SS-21s weigh two tons and carries a half ton warhead. The SS-21 warheads can land within 75 meters of its aiming point and apparently all of the pre-2011 Syrian ones were used or destroyed on the ground since 2011.
A Russian official confirmed that Russia had promised Israel that Russian weapons would not be given to Hezbollah. It is believed such arrangements include quietly providing Israel with targeting information in the event that Hezbollah does get possession of Russian weapons.
February 4, 2017: In northwest Syria (Latakia province) five Russian soldiers died when the armored vehicle they were transporting ammunition in exploded. This was believed to be an accident, not deliberate.
February 2, 2017: The Proton satellite launching rocket has not been used since June 2016 because of reliability problems. Investigators believe they have found the problem (faulty components in some of the engines) and which rocket motors have them. Repairs are being made but Proton probably won’t be cleared for launching again until mid-2017. This is but the latest problem with the troubled Russian space flight industry. In early 2016 the government ordered everyone in the Russian Federal Space Agency to prepare for an unprecedented round of inspections. In addition all suppliers were to be recertified. What triggered this was persistent problems with poor quality components and human error in the space program. It wasn’t just the Proton rockets. There was a recent incident where the launch of a Soyuz rocket was delayed because of a faulty cable. The decision to inspect everyone came after several years of vigorous and often very public efforts to eliminate the flawed components and poor workmanship. For example in 2013 the government revealed that the cause of a recent satellite launch failure was criminal negligence by space program workers and managers. The failure occurred at the Soviet era Baikonur space center in Kazakhstan when a Russian Proton-M rocket exploded ten seconds after launch, destroying three Glonas satellites it was carrying. This disaster cost Russia over $200 million and further blemished the reliability of Russian satellite launch services. The satellites, being state property, were not insured so the total loss comes out of the government budget. An investigation of the wreckage soon revealed that the cause of the Proton-M failure was the installation of a sensor upside down, which caused the rocket control system to believe the rocket was going in the wrong direction. The rocket them tried to adjust for the incorrect sensor signal and began behaving erratically and crashed. There were supposed to be visual inspections of all installed equipment and the government is seeking to discover who did not do their job. This is supposed to lead to prosecution of whoever was responsible. During the Soviet period (1921-1991) those responsible for disasters like would often be executed or imprisoned. But now the government corruption and inefficiency makes it difficult to get competent people to run operations like the Space Agency. That has been partially successful but the quality control and competence problems persist as the current Proton problem demonstrates. Government inspectors reported that the core problem is inept management and poor worker morale at plants where rocket components are manufactured and assembled. This was a problem during the Soviet period but was kept quiet. After the Cold War ended details emerged and confirmed suspicions in the West that this was a problem throughout Russian industry. It still is.
February 1, 2017: In the Black Sea a Ukrainian military transport flying through Ukrainian air space was fired on by a Russian anti-aircraft system, which damaged the two engine transport.
January 30, 2017: The government reported that in 2016 at least 140 Islamic terrorists were killed by the security forces. Some deaths could not be verified because battles took place in remote areas where not all the bodies are found right away. It was known that 24 of those deaths were of wanted Islamic terrorist group leaders. Most of the Islamic terrorist violence takes place in the south (the Caucasus), mainly in Dagestan and Chechnya. There have been many more arrests. The most violent groups have declared themselves as allies (or subordinate to) ISIL. Russia also reported that it believes about 4,000 Russian Moslems have gone to join ISIL in Syria, along with another 5,000 Moslems from nations that were part of the Soviet Union until 1991. In some respects this current outbreak of Islamic terrorism has helped Russia because a lot of Moslems in the Caucasus who were ready to fight the new Russian state in the 1990s, got diverted distant lands so they could join al Qaeda, ISIL and so on. While some returned, many more potential recruits left Russia and now they are dying in great numbers from North Africa to Afghanistan.
January 29, 2017: In the south (the Caucasus) there was a gun battle in Chechnya as a group of Islamic terrorists attacked a police facility outside the provincial capital. Three Islamic terrorists died as did two policemen. Two nearby civilians were wounded. In neighboring Dagestan three Islamic terrorists refused to surrender and were killed when police cornered them in a rural home they were using as a hideout.