Friday, 18 July 2014

In Ukraine, downed airliner could be catalyst for geopolitical shift

The Malaysian Airlines flight MH17 shot down in eastern Ukraine is a potential geopolitical game changer for the major powers at play in the country. The exact events leading up to and surrounding the supposed missile strike and responsibility for its launch will take weeks or months to categorically ascertain. It is what happens next that may alter the reality for the whole of Europe.

Pro-Russian separatists are still claiming they had nothing to do with the missile strike on the passing Boeing 777. Their handlers in Moscow are also distancing themselves from the tragedy. Russian President Vladimir Putin spoke to a press conference July 17 saying the incident would not have occurred if fresh fighting had not broken out recently. Ukraine’s military also assert their forces did not shoot down the civilian airliner. Ukraine President Petro Poroshenko says whoever is responsible for the incident should be considered part of a terrorist group.

Telephone intercepts of a call between Russian intelligence officers indicate that Moscow may know more about the details of the event than it is letting on. The fact that Russian intelligence officers are on the ground in eastern Ukraine is not surprising considering the interests of Moscow in the region. But the public exposure via the phone calls of known officers allegedly communicating and acting as leaders of particular pro-Russian separatist groups show how deep Moscow’s connections and involvement actually is with Ukraine’s conflict.

Adding some context to the crisis, today’s tragedy happened on the back of tightened sanctions against Russia’s elite and against Mr Putin’s inner Kremlin circle. Both the US and Europe agreed to pile on more sanctions, with the threat of more to come in the future.

European Union leaders agreed at a July 16 summit in Brussels to blacklist more Russian entities and individuals who are supporting separatists in eastern Ukraine. Two international banks, the European Investment Bank and the European Bank for Reconstruction and Development, will block new projects in Russia. The European Commission will also suspend the majority of the roughly 450 million euros in grants and loans set aside for Russia. The news came shortly after the United States announced its own new batch of sanctions
The White House says it has decided to broaden US sanctions against Russia to include major banks and energy and defence firms. The decision will not fully cut off sectors of the Russian economy as threatened but will restrict access to US debt markets. At a July 16 European summit in Brussels, officials decided on less severe sanctions, including a plan to block loans for Russia from European investment and development banks.

These sanctions have an extra bite to them, and are slightly different to the ones levelled against strictly Russian elites made earlier in the year. For the first time, the United States is using sectoral sanctions against some of Russia's most important firms: Gazprombank, Rosneft, Novatek, and Vnesheconombank. Each new twist of the sanction screw pushes the US and Europe closer to the red lines Mr Putin has warned against. But neither Brussels nor Washington appear to be intimidated.

This calculation is rapidly changing. Now that a civilian aircraft has been struck, someone has to move. Russia has many sound reasons to keep its puppet strings attached to the separatists, but their options are narrowing. It is unclear whether the rebels are to blame for the missile strike, and yet Mr Putin can’t take the risk by either overtly or covertly backing the rebel groups so early in the event timeline. There are some moves he can make, but he will have to act quickly.

If Mr Putin has the influence many observers and analysts suspect over the rebels, then he is likely to instruct them to gather the black box flight recorders from MH17, bring them both to Moscow, assess the strike pattern on the plane wreckage, collect any relevant radar data from the surface-to-air missile systems, gather and remove any incriminating shards of missile amongst the debris, and try to control access to the site for as long as possible until the previous goals can be met.

Should his special forces and intelligence officers remain on the ground by the time international investigators arrive on the scene, his options for plausible deniability will shrink. Russia’s intelligence agencies do not want to be the last people holding the bag when the music stops. And considering Russian advisors were apparently training the separatists to use the exact advanced weapons systems which allegedly fired at the aircraft, data showing incompetence or any outright assistance will be bad news for Mr Putin.

Moscow may step away from the separatists for the time-being until the incident is controlled. However, the strategic underlying reasons for supporting the rebels still remain highly relevant. Ukraine is seen as critically important strategically for Russia to control as part of a defensive buffer from Europe proper. The issue of who controls the region is still unresolved and Moscow needs to keep some sort of dog in that fight. So if Russia steps back temporarily over the next few days, it can be guaranteed to come back in the near future. Its work is not over.

In Kiev, Ukraine’s government will first have to make sure their forces did not accidentally shoot the civilian aircraft down. Once they are sure, a range of rhetorical and potentially economic actions can be taken against Russia. The propaganda war will reinvigorate.

Kiev may also take the opportunity to push troops into the region to secure the crash site and take control of more of eastern Ukraine from the rebels. This will be made simpler if Moscow decides to quietly pull back the majority of its intelligence officers, special forces and especially the Russian armed forces parked just across the border. Should the Ukraine government reposition forces to attain this goal, the situation on the ground would have to include more international attention and actors such as inspectors and crash site investigators to dissuade Russia from intervening once again.

Ukraine’s president may decide to reposition troops near the region and facilitate the arrival of investigators but stop short of retaking the region by force. Mr Poroshenko has not been able to remove the rebel threat from the area for months, despite heavy fighting. Nothing has changed regarding the military capabilities of the Ukraine armed forces and, while clearly undertrained and incompetent, the separatists possess an impressive array of advanced weaponry with or without official  Russian assistance. US troops based in nearby Poland or the highly-secret EU quick reaction force (QRF) could be called in to secure the area as peacekeepers should Kiev feel it cannot operate unilaterally.

A miscalculation by either Kiev or Moscow could throw the region back into turmoil and risk spreading violence to other restive Ukraine regions or involving the Russian armed forces. Whatever happens in the next few days is likely to be carefully thought-out and deliberate, with a heavy dose of sideline talks and covert movements.

In Europe, the political climate could now be changing regarding how Brussels and Berlin see their relationship with Moscow. Brussels is so far cooperating and strengthening sanctions against Russia, but it has been unwilling to follow in lock-step with the United States for fear of a backlash from EU states dependent on Russian energy. Europe has deep ties with Russian money and energy and can’t risk alienating it.

Berlin is a particularly special case here, given their high dependency on Russian energy exports. They are yet to show seriousness in sanctioning Russia’s government or business interests. But this is not from lack of desire. The missile strike might offer Berlin the excuse it has been looking for to impose sanctions on Russia. However, Moscow and Berlin have been getting closer over the years and punitive actions by Germany may be politically unpalatable even given the new climate.

Mr Putin could hurt Germany by shutting off gas supplies as it has done multiple times against Ukraine, but this doesn’t carry as much weight in the third quarter of 2014.

For one, Russia has already lost a significant amount of prestige with the missile strike, Crimea invasion, and ongoing support of rebels in eastern Ukraine. Plus it is summertime in Europe, which means the demand for energy is seasonally at its lowest ebb. By the time Germany or western Europe needs to import more energy from Russia later in the year, the sanctions they leverage against Russia will have had their desired effect. Moscow is now on the back foot almost everywhere it turns.

If European powers seize the opportunity to put more pressure on Russia, tensions in the region will rise. Mr Putin planned the current campaign from the beginning of his adventure in eastern Europe, but he could not have predicted this black swan event. The randomness of war has constantly beaten the brightest forecasting minds of history and Mr Putin is not a genius.

How he rolls with this new obstacle will show exactly how much control he has over the region and whether he is truly a master tactician and adaptable. It will also flush out his assets in the region and show what they are capable of, all well before he is ready to activate them. The assessment is that Mr Putin will probably not show panic or frustration, but will find it difficult to make any robust actions probably for the rest of the month. His campaign to control Ukraine has lost the initiative and Kiev and Europe now step into an advantage.

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