By Ben Aris, Intellinews, 6/4/24

The Russian economy has overtaken Japan to become the fourth largest in the world in PPP terms (purchase power parity), according to revised data from the World Bank released at the start of June.

As bne IntelliNews reported in August, Russia had already overtook Germany to become the fifth biggest economy in adjusted terms. Hit by multiple shocks recently and cut off from cheap Russian gas, Germany is now stagnating and has fallen to sixth place in the World Bank’s ranking.

PPP GDP measurement is preferred by many economists, as it takes into account the difference between local prices and nominal prices similar to The Economist’s famous Big Mac index: a burger in Moscow costs about half as much as the same burger in New York.

The World Bank improved Russia’s ranking after revising its data and says that Russia actually overtook Japan in 2021 and has maintained its position as number four since then. Its previous calculations were based on 2017 data but have now been updated to reflect 2021 figures.

Previously, Russian President Vladimir Putin set his government the goal of producing economic growth ahead of the global average. Before the war in Ukraine started, Russia’s economic growth was well behind that of the global average and close to stagnation. However, following the invasion of Ukraine in 2022, the economy has been enjoying a military Keynesianism boost and is currently the fastest growing of any major economy in the world.

And Russia has overtaken Japan ahead of schedule. Putin explicitly set his government the goal of attaining fourth place among the world’s largest economies in terms of PPP earlier this year, and the Cabinet was instructed to prepare measures to achieve this goal by March 31, 2025.

By breaking off relations with the West Putin has made a big bet on the Global South Century, where most of the developing world countries are growing much faster than the West. Currently China and India are in the number one and three slots in the global ranking in PPP terms but both are expected to become the leaders in nominal terms as well over the next three or four decades. Most of the fastest growing economies from lower down the list are also from the Global South.

As bne IntelliNews has extensively reported, Russia has changed its economic model and after decades of austerity began to invest heavily, spurring growth in a new Putinomics. At the same time as investment is pouring into the military industrial complex, Putin has also launched the National Projects 2.1 programme to invest into the civilian economy as well and improve the quality of life for the average Russian, as he made clear in his recent guns and butter speech. And the war is proving to be a boon for Russians, as Russia’s poorest regions have been the biggest winners and as bne IntelliNews recently reported, the country’s despair index has fallen to its lowest level ever this year – the sum of inflation, unemployment and poverty.

As a result of these changes, economists estimate that Russia’s growth potential has increased from 1-1.5% pre-war to around 3.5% now. Last year, Russia’s economic growth caught analysts off guard with a 3.6% expansion. This year the World Bank has already almost trebled its forecast for growth from 1.1% to 3.2%. Russia’s Economic Ministry is similarly bullish.

Even the World Bank’s PPP adjusted size of the economy may be an underestimate. The World Bank also estimates that 39% of Russia’s economy is in the shadows, while the shadow economy only makes up 10% of Japan’s economy, which would add an additional $2.5 trillion to Russia’s $6.4 trillion PPP adjusted economic size – still not enough to overtake India’s $14.6 trillion PPP adjusted GDP value, but widening the gap with Japan further.

***

World Bank upgrades Russia to “high-income” country due to war-spending boost

By Ben Aris, Intellinews, 7/3/24

The positive economic news keeps coming for Russia after the World Bank upgraded it from an “upper-middle-income” to a “high-income” country, putting it in the same group as the leading G7 nations, the bank said on July 1.

Bulgaria and Palau were also upgraded to “high-income” in the World Bank’s ranking.

Russia’s economy has defied expectations by outperforming all expectations following the imposition of harsh economic sanctions that have been offset by heavy spending on the military industrial complex.

“Economic activity in Russia was influenced by a large increase in military related activity in 2023, while growth was also boosted by a rebound in trade (+6.8%), the financial sector (+8.7%), and construction (+6.6%). These factors led to increases in both real (3.6%) and nominal (10.9%) GDP, and Russia’s Atlas GNI per capita grew by 11.2%,” the World Bank said.

The World Bank’s reclassification is based on the increase in the size of the economy based on its 2023 gross national income (GNI) per capita of $14,250, the World Bank said in a blog. Any country with a GNI per capita of more than $14,005 is considered to be a high-income country.

However, the World Bank noted that the increase in wealth is mostly due to the military Keynesianism boost that the Russian economy has enjoyed as a result of the war with Ukraine that broke out over two years ago. Incomes have also been artificially driven up by the chronic labour shortage that has pushed up nominal wages well above the rate of inflation.

Russia’s economy grew by an unexpected 3.6% last year making it the fastest growing major economy in the world, and is on course to grow again this year by at least 3%, according to the latest Central Bank of Russia (CBR) monthly macroeconomic forecast.

If sanctions were designed to collapse the Russian economy, they have been a failure and some have argued that the economy is now stronger than ever as a result of a fundamental change to Putinomics strategy from hoarding money to releasing massive amounts of pent up fixed investment. Some economists have argued that what started as a Keynesian bump is now transforming into a structural change in the nature of Russia’s economy thanks to the investment that will make growth stronger and more persistent in the medium-term.

Last month Russia also overtook Japan to become the world’s fourth largest economy in the world in PPP (purchase power parity) terms, according to World Bank data. Three of the world’s five largest economies are now BRICS members: China, US, India, Russia and Japan, in that order. Germany was fifth in the last ranking, but has now been pushed into sixth place. Both Japan and Germany are seeing their economies slow in PPP terms while most of the leading Global South countries are seeing their economies accelerate and rise up the income rankings in recent years.

The World Bank attributed Russia’s economic uplift to a significant increase in military-related activities and rebounds in trade, the financial sector, and construction.

Despite the challenges posed by international sanctions and ongoing geopolitical tensions, these sectors have demonstrated resilience and contributed to the country’s economic performance, the World Bank reported.

Ukraine also had an upgrade to “lower-middle-income” to an “upper-middle-income” country, after its GNI per capita rose to $5,070 in 2023. Like Russia, Ukraine was lifted by heavy military spending that has largely been funded by international financial aid – money that Ukraine did not have access to before the war broke out. Since the start of the conflict Ukraine has received some $86bn from donors, equivalent to about two thirds of the value of the pre-war economy.

The World Bank Group assigns the world’s economies to four income groups: low, lower-middle, upper-middle, and high. The classifications are updated each year on July 1, based on the GNI per capita of the previous calendar year. GNI measures are expressed in dollars.

The classification of countries into income categories has evolved significantly over the period since the late 1980s. In 1987, 30% of reporting countries were classified as low-income and 25% as high-income countries. Jumping to 2023, these overall ratios have shifted down to 12% in the low-income category and up to 40% in the high-income category.

The scale and direction of these shifts, however, varies a great deal between world regions. The World Bank profiled some of the notable changes in its blog:

·100% of South Asian countries were classified as low-income countries in 1987, whereas this share has fallen to just 13% in 2023.

·In the Middle East and North Africa there is a higher share of low-income countries in 2023 (10%) than in 1987, when no countries were classified to this category.

·In Latin America and the Caribbean, the share of high-income countries has climbed from 9% in 1987 to 44% in 2023.

·Europe and Central Asia have a slightly lower share of high-income countries in 2023 (69%) than it did in 1987 (71%).

There are a lot of misconceptions about Russia that I encounter on a regular basis. There are, of course, the ones from the establishment about Russia being an autocratic backwards aggressor country. But I also encounter many of a different kind.

For example, I’ve had to explain to several conservative members of my family that Russian conservatism is rather different than American conservatism and if they think they’re going to move to the Russian countryside and enjoy minimal government and have lots of guns, they best think again.

There is also the anti-establishment civil libertarian types who think that the Russian government is some kind of warrior against the WEF-influenced biometric, “cattle-tag” digital id, and vaccine mandate agenda.

Um, no.

While many average Russians do not like or want this, the Russian government largely seems to be ramming it down their throats, as Russian media and sources attest. Neoliberal technocrats still have a lot of sway in the Putin government.

But many people would still rather believe goofy western commentators who are projecting their idealistic fantasies onto Russia. – Natylie

Riley Waggaman, Substack, 6/10/24

As expected, the St. Petersburg International Economic Forum was the hottest anti-globalist multipolar traditional RETVRN values conference of 2024—possibly of all-time.

The unipolar world suffered non-stop humiliations during this mind-blowing freedom event. For example, Moscow Region governor Andrei Vorobyov made an incredible BRICS announcement during a titillating panel discussion about the joys of biometrics, causing the dollar to lose 50% of its value against the gold-backed ruble:

Biometrics is a tool that gives people better quality and more convenience in certain procedures, keeping them neat and tidy. You don’t need any papers or passports—that will all be in the past. Resisting it, in my opinion, is absurd.

The governor of Russia’s second-most-populated region, explaining the inevitable convenience of biometrics—which will replace archaic “papers” and “passports”.

Nothing is being hidden. They’re speaking very frankly. It’s all out there, in the open.

There is even a helpful “recap” of the panel discussion published by SPIEF. Behold the “highlights”:

“I am for biometrics … Everything I do is based on biometrics, everything is based on fingerprints, because I’m too lazy to carry cards with me and it’s much more convenient to just [login in/pass/go] through my face,” pontificated an expert panelist.

Was the BRICS Multipolar Happy Order incapable of finding a single panelist who had reservations about turning eyeballs into IDs? Igor Ashmanov, a member of the Presidential Council for the Development of Civil Society and Human Rights, had to shout his objections from the bleachers because they wouldn’t let his dirty anti-biometric ideas onstage:

Friend of the blog Simplicius posted a Twitter-summary of Igor’s very rude unipolar objections to biometrics:

“Yes, but Russians like biometrics, the most convenient of all forms for identification, which will replace ‘papers’ and ‘passports’,” you might be saying to yourself for some weird and tragic reason.

Take the wheel, nakanune.ru:

People in Russia are narrow-minded and have not yet realized how beautiful, convenient and progressive biometrics are. Therefore, whether they want it or not, the authorities will introduce it wherever possible. Approximately the same reasoning (without these words, but with this meaning) was heard at SPIEF in the section devoted to biometrics. Nakanune.RU provides characteristic statements about the attitude of business towards people.

At first, the presenter of the Russia 24 channel, Maria Kudryavtseva, advertised biometrics, showing how she enters the Unified Biometric System using her face and even the greeting “Hello, Maria!” appears there, which she enthusiastically shows to the audience.

At the same time, there was a feeling of a white gentleman showing “digital beads” to the local natives. And the whole “discussion” came down to one thing—intrusive advertising. It is characteristic that the governor of the Moscow region Andrei Vorobyov, who is a public servant, but showed himself to be a business lobbyist, was also involved in this.

As with artificial intelligence in healthcare , the panel included only proponents of biometrics. Those who might object were simply not invited. Those present were mainly engaged in advertising. Old people do not understand the digital world, but young people were already born with a gadget in their hand, they are very flexible, progressive, digital. They understand how convenient, cool and fast it is. In general, the conversation became very revealing in its vacuity and disregard for the position of citizens.

The first question to the speakers was provocative: is society ready to use biometrics? That is, don’t people want it, does the country need it, not what it will give, not what the risks are—but is society ready, as if the issue has been fundamentally resolved. Which is obscene. Let us recall that according to a 2023 survey , a third of Russians have a positive attitude towards taking biometrics, but almost half are opposed—48%.

[…]

Vorobiev spoke as if he had gone back in time a hundred years ago and was telling backward people of the past about the wonders of the technology of the future. Here are just a few quotes.

“You don’t need a paper or a passport, all this will be a thing of the past, it’s absurd to resist it. We all already use biometrics, including children at school… It’s convenient, you don’t need to twist anything, you just look and that’s it,” said Vorobiev. […]

It is characteristic that one of the main experts in the field of artificial intelligence in the country, a member of the Human Rights Council, Igor Ashmanov, was not invited to the section, who was forced to make remarks from the audience several times, and the section participants politely drew attention to the fact that someone might disagree. So, when Lebedev said that all people are for biometrics, he objected that this was not true. And when they started talking about different points of view, he very briefly but accurately described what was happening.

“You haven’t invited anyone to the presidium, you’re all blowing the same tune! As a member of the Presidential Human Rights Council, I hear completely obscene advertising, and nothing more!” said Ashmanov.

By Joe Lauria, Consortium News, 6/10/24

The United States has for nearly 80 years seen Ukraine as the staging ground for its once covert and increasingly overt war with Russia. 

After years of warnings, and after talk since 2008 of Ukraine joining NATO, Russia fought back two years ago. With neither side backing down Ukraine is increasingly becoming a flashpoint that could lead to nuclear war. 

The West thinks Russia is bluffing. But its doctrine states that if Russia feels that its existence is threatened it could resort to nuclear arms. Instead of taking these warnings seriously, NATO is recklessly opening corridors for a ground war against Russia in Ukraine; France says it’s putting together a coalition of nations to enter the war, despite Russia saying French or any other NATO force would be fair game. 

Unless you read Consortium News and a few other alternative outlets, you won’t get this perspective. You will  think Russia is an out of control aggressor bent on destroying the world.  So …

Please Donate to Our Spring Fund Drive!

In Paris the other day Joe Biden said Russia wants to conquer all of Europe but can’t even take Khariv. It is this kind of inflammatory nonsense, combined with allowing Ukraine to fire NATO weapons into Russian territory, that is imperiling us all. 

The danger started building up many years ago but it is now reaching a head. 

The U.S. relationship with Ukraine, and its extremists, to undermine Russia began after the Second World War. During the war, units of the Organization of Ukrainian Nationalists (OUN-B) took part in the Holocaust, killing at least 100,000 Jews and Poles. 

Mykola Lebed, a top aide to Stepan Bandera, the leader of the fascist OUN-B, was recruited by the C.I.A. after the war, according to a 2010 study by the U.S. National Archives. 

Lebed was the “foreign minister” of a Banderite government in exile, but he later broke with Bandera for acting as a dictator. The U.S. Army Counterintelligence Corps termed Bandera “extremely dangerous” yet said he was “looked upon as the spiritual and national hero of all Ukrainians….”

Instead of Bandera, the C.I.A. was interested in Lebed, despite his fascist background. They set him up in an office in New York City from which he directed sabotage and propaganda operations on the agency’s behalf inside Ukraine against the Soviet Union.  The U.S. government study says:

“CIA operations with these Ukrainians began in 1948 under the cryptonym CARTEL, soon changed to AERODYNAMIC. … Lebed relocated to New York and acquired permanent resident status, then U.S. citizenship. It kept him safe from assassination, allowed him to speak to Ukrainian émigré groups, and permitted him to return to the United States after operational trips to Europe. Once in the United States, Lebed was the CIA’s chief contact for AERODYNAMIC. CIA handlers pointed to his ‘cunning character,’ his ‘relations with the Gestapo and … Gestapo training,’ [and] the fact that he was ‘a very ruthless operator.’”

The C.I.A. worked with Lebed on sabotage and pro-Ukrainian nationalist propaganda operations inside Ukraine until Ukraine’s independence in 1991.

“Mykola Lebed’s relationship with the CIA lasted the entire length of the Cold War,” the study says. “While most CIA operations involving wartime perpetrators backfired, Lebed’s operations augmented the fundamental instability of the Soviet Union.” 

Continued Until and Beyond Ukrainian Independence

The U.S. thus covertly kept Ukrainian fascist ideas alive inside Ukraine until at least Ukrainian independence was achieved. “Mykola Lebed, Bandera’s wartime chief in Ukraine, died in 1998. He is buried in New Jersey, and his papers are located at the Ukrainian Research Institute at Harvard University,” the U.S. National Archives study says.  

The successor organization to the OUN-B in the United States did not die with him, however.  It had been renamed the Ukrainian Congress Committee of America (UCCA), according to IBT.

“By the mid-1980s, the Reagan administration was honeycombed with UCCA members. Reagan personally welcomed [Yaroslav] Stetsko, the Banderist leader who oversaw the massacre of 7,000 Jews in Lviv, in the White House in 1983,” IBT reported.  “Following the demise of [Viktor] Yanukovich’s regime [in 2014], the UCCA helped organise rallies in cities across the US in support of the EuroMaidan protests,” it reported.

That is a direct link between the U.S.-backed 2014 Maidan coup against a democratically-elected Ukrainian government and WWII-era Ukrainian fascism. 

Since 2014, the U.S. pushed for an attack on Russian speakers in eastern Ukraine who had rejected the coup, and NATO began training and equipping Ukrainian troops.  Combined with talk since 2008 of Ukraine joining NATO, Russia acted after years of warning. 

More than two years later, with Ukraine clearly losing the war, Western leaders will do just about anything to save their political skins as they have staked so much on winning in Ukraine.   Don’t listen to them.  They need a West in denial of the dangers facing us.

As President John F. Kennedy said in his 1963 American University speech:

“Above all, while defending our own vital interests, nuclear powers must avert those confrontations which bring an adversary to a choice of either a humiliating retreat or a nuclear war. To adopt that kind of course in the nuclear age would be evidence only of the bankruptcy of our policy–or of a collective death-wish for the world.”

The world may wake up when it’s too late — after the missiles have already started flying.

By George Beebe, Time, 7/1/24

To judge from the editorial pages and Capitol Hill currents that both shape and reflect Washington’s perceptions of the world, the doomsayers sounding alarms over the risk of direct military conflict between the U.S. and Russia over Ukraine have been proved wrong. Despite many Russian warnings and much nuclear saber-rattling, the United States has managed to supply advanced artillery systems, tanks, fighter aircraft, and extended-range missiles to Ukraine without an existential contest—or even significant Russian retaliation.

For Washington’s hawkish chorus, the benefits of providing increasingly greater lethality to Ukraine outweigh the dangers of provoking a direct Russian attack on the West. They insist that the U.S. not allow fears of an unlikely Armageddon to block much-needed aid for Ukraine’s defense, particularly now that battlefield momentum has swung toward Russia. Hence the White House’s recent decision to green-light Ukraine’s use of American weapons to strike into internationally recognized Russian territory and its reported deliberations over putting American military contractors on the ground in Ukraine.

There are several problems with this reasoning. The first is that it treats Russia’s redlines—limits that if crossed, will provoke retaliation against the U.S. or NATO—as fixed rather than moveable. In fact, where they are drawn depends on one man, Vladimir Putin. His judgments about what Russia should tolerate can vary according to his perceptions of battlefield dynamics, Western intentions, sentiment inside Russia, and likely reactions in the rest of the world.

It is true that Putin has proved quite reluctant to strike directly at the West in response to its military aid for Ukraine. But what Putin can live with today may become a casus belli tomorrow. The world will only know where his red lines are actually drawn once they have been crossed and the U.S. finds itself having to respond to Russian retaliation.

The second problem is that by focusing narrowly on how Moscow might react to each individual bit of American assistance to Ukraine, this approach underestimates the cumulative impact on Putin and the Kremlin’s calculations. Russian experts have become convinced that the U.S. has lost its fear of nuclear war, a fear they regard as having been central to stability for most of the Cold War, when it dissuaded both superpowers from taking actions that might threaten the other’s core interests. 

A key question now being debated within Russia’s foreign policy elite is how to restore America’s fear of nuclear escalation while avoiding a direct military clash that might spin out of control. Some Moscow hardliners advocate using tactical nuclear weapons against wartime targets to shock the West into sobriety. More moderate experts have floated the idea of a nuclear bomb demonstration test, hoping that televised images of the signature mushroom cloud would awaken Western publics to the dangers of military confrontation. Others call for a strike on a U.S. satellite involved in providing targeting information to Ukraine or for downing an American Global Hawk reconnaissance drone monitoring Ukraine from airspace over the Black Sea. Any one of these steps could lead to an alarming crisis between Washington and Moscow.

Underlying these internal Russian debates is a widespread consensus that unless the Kremlin draws a hard line soon, the U.S. and its NATO allies will only add more capable weapons to Ukraine’s arsenal that eventually threatens Moscow’s ability to detect and respond to strikes on its nuclear forces. Even just the perception of growing Western involvement in Ukraine could provoke a dangerous Russian reaction.

These concerns undoubtedly played a part in Putin’s decision to visit North Korea and resurrect the mutual defense treaty that was in force from 1962 until the Soviet Union’s demise. “They supply weapons to Ukraine, saying: We are not in control here, so the way Ukraine uses them is none of our business. Why cannot we adopt the same position and say that we supply something to somebody but have no control over what happens afterwards? Let them think about it,” Putin told journalists after the trip.

Last week, following a Ukrainian strike on the Crimean port of Sevastopol that resulted in American-supplied cluster munitions killing at least five Russian beachgoers and wounding more than 100, Russian officials insisted that such an attack was only possible with U.S. satellite guidance aiding Ukraine. The Foreign Ministry summoned the U.S. ambassador in Moscow to charge formally that the U.S. “has become a party to the conflict,” vowing that “retaliatory measures will definitely follow.” The Kremlin spokesperson announced that “the involvement of the United States, the direct involvement, as a result of which Russian civilians are killed, cannot be without consequences.”

Are the Russians bluffing, or are they approaching a point where they fear the consequences of not drawing a hard line outweighs the dangers of precipitating a direct military confrontation? To argue that we cannot know, and therefore should proceed with deploying American military contractors or French trainers in Ukraine until the Russians’ actions match their bellicose words, is to ignore the very real problems we would face in managing a bilateral crisis. 

Unlike in 1962, when President John F. Kennedy and his Russian counterpart Nikita Khrushchev famously went “eyeball to eyeball” during the Cuban missile crisis, neither Washington nor Moscow is well positioned to cope with a similarly alarming prospect today. At the time, the Soviet ambassador was a regular guest in the Oval Office and could conduct a backchannel dialogue with Bobby Kennedy beyond the gaze of internet sleuths and cable television. Today, Russia’s ambassador in Washington is a tightly monitored pariah. Crisis diplomacy would require intense engagement between a contemptuous Putin and an aging Biden, already burdened with containing a crisis in Gaza and conducting an election campaign whose dynamics discourage any search for compromise with Russia. Levels of mutual U.S.-Russian distrust have gone off the charts. Under the circumstances, mistakes and misperception could prove fatal even if—as is likely—neither side desires a confrontation.

Pivotal moments in history often become clear only in hindsight, after a series of developments produce a definitive outcome. Discerning such turning points while events are in motion, and we still have some ability to affect their course, can be maddeningly difficult. We may well be stumbling toward such a moment today.

Brave New Europe, 6/6/24

So, we have reached the point where the first speculations concerning the removal of Zelensky are appearing

Nicolai Petro, Professor of Political Science at the University of Rhode Island and author of The Tragedy of Ukraine: What Classical Greek Tragedy Can Teach Us About Conflict Resolution

Cross-posted from Štandard (Slovakia) May 12, 2024

No country which is weaker and which borders a larger and stronger neighbour can survive if it makes an enemy of that neighbour. This has simply never happened in human history. The Americans and NATO obviously think only of their own security interests in relation to Russia, and Ukraine is only interesting to them as a tool to defeat it, says American professor Nicolai Petro.

As the situation in Ukraine gets steadily more desperate, with military experts now considering a possible collapse of Ukraine’s front line, some Western voices have begun to dismiss the conventional wisdom that negotiations must eventually take place between Moscow and Washington, calling instead for direct talks between Ukrainian and Russian leaders. One such voice is Nicolai Petro, Professor of Political Science at the University of Rhode Island and author of The Tragedy of Ukraine: What Classical Greek Tragedy Can Teach Us About Conflict Resolution.

Fluent in both Russian and German from his youth, Petro served as Special Advisor for Policy in the Office of Soviet Union Affairs at the US State Department in the early 1990s, as dramatic and historic events were unfolding. Since that time he has written extensively on Russian foreign and domestic policy, and was invited in 2008 by the Ukrainian Academy of Sciences to come and talk about ‚future visions‘ of Ukraine. This began a long-term cooperation with Ukrainian academia which continues to this day. His recent remarks in favour of direct talks between Ukraine and Russia, which came as something of a surprise to me, have been echoed by the likes of John Mearsheimer, Chas Freeman and others. And so – as the mood among Western leaders deteriorates and more desperate measures are being considered – I wanted to hear more of what Nicolai Petro had to say on the possibility of some sort of directly negotiated settlement between the two warring countries.

Q: You’ve recently argued that the logical path to peace for Russia is not to negotiate with the West but rather directly with Ukraine, and that Ukraine should see that it’s in their interest to deal directly with Russia – which would essentially cut the West out of the picture. Given the strong influence of ultra-nationalist figures in the current Ukrainian government, do you see any realistic chance of that happening?

Someone more knowledgeable than I am, and with his ear to the upper echelons of Ukrainian society – and who was Zelensky’s advisor until January of last year – Oleksiy Arestovych, has made a similar point: that there is no alternative, for a Ukraine that wants to have agency in its own affairs, but to regain its sovereignty. Not only from Russia but also from the West. And that requires negotiating directly with the only country that can guarantee Ukraine’s stability and safety and prosperity, and that is Russia. Because, as I’ve said many times, no country that is weaker and that borders on a larger more powerful neighbour can survive by making that neighbour its enemy. That has just never happened in human history. And as a result, we will have to come to that at some point. The question is only at what cost.

Q: Why couldn’t Ukrainian leaders see that?

Because they believed Boris Johnson’s lie, when the Istanbul accords were derailed. At that time it seemed plausible to believe that a well-funded Ukraine could be given sufficient military supplies to fight back the Russian army. And in answer to the obvious question: How is that going to happen, given that Russia has a population, let’s say five times larger than Ukraine? Well, in the same way, presumably, that smaller, more dedicated countries have fought, historically, against larger empires. And that is by demoralizing them. And I remember the articles written at the outset of the Ukrainian counteroffensive last year, that once Ukrainian forces begin to make advances, the Russian front lines will collapse and they will flee. As a matter of fact they would even flee from Crimea. And so it wasn’t just a matter of supplying weapons that were, of course, supposed to be superior both in quality and in quantity to their Russian counterparts. And it wasn’t only that these be provided in very large numbers, along with all the additional social support that would be needed for Ukrainian society. It was also the aspect of morale, and the demoralization of the Russian troops, that would make a difference. None of this came to pass, and as a result we have a situation on the battlefield which is not successful for Ukraine. But if it had succeeded, this should have provided an impetus. As some argued in the West at the time: once Ukraine recaptures what it wants to recapture we will then rein it in, and Ukraine will be able to achieve a negotiated settlement much more to its liking than what it achieved in Istanbul. And now we have the reverse happening. I think the logic is true, but having failed, Russia is now in a much better position to open the negotiations. And it is interesting to me that Putin, who had disavowed not long ago the relevance of the Istanbul accords for future negotiations, is now starting to refer to them – I should say not Putin himself, but his press spokesman Dmitry Peskov – as a plausible starting point for negotiations, taking into consideration how realities have changed.

Q: In what sense can the Istanbul accords be a starting point for negotiations, now that four oblasts, in addition to Crimea, have been annexed to Russia, and Russia is not likely ever to agree to give them back?

No, but Russia is still advancing within those four regions and looking to ‚liberate‘ them, as it sees it, to their administrative borders. When that happens, as seems likely, will Russia continue? And to what end? If I am right, that Russia invaded not in order to subjugate Ukraine but in order to force it to accept neutrality – to keep it from manoeuvring in ways that Russia considered threatening – then we’re essentially back to where the Istanbul accords left us: with the same deal on the table of security and neutrality for Ukraine in exchange for Russia not taking more territory, for not pushing further. It’s still the same exchange. So let’s assume for a moment one scenario, which is being more and more widely discussed. There’s a breakthrough on the front lines, the lines collapse, Ukraine has no defensive positions left. Russia can now either move forward – for example in the direction of major cities, Kharkiv, Kiev, Odessa – or not. Let’s assume Russia really doesn’t want to do that, because of the costs involved – in all senses. Then the option of not doing that becomes what they are offering – because they could obviously do it, given the collapse of Ukraine’s lines. And they say to Ukraine: we will in fact guarantee the security of your borders, in a multilateral guarantee with other parties agreeing to serve as guarantors, as they did in the 1990s with the Budapest Memorandum. And this then becomes part of the negotiations.

Q: Right, the Budapest Memorandum, which involved Western countries as well. And you foresee this as a possibility as to how things might be settled, some sort of similar agreement for Ukraine’s security, guaranteed by Russia on one side and Western countries on the other?

Logic would dictate that if a country’s elite wants to survive, then in the face of military collapse it negotiates. It negotiates essentially a surrender. World War I ended without Germany being invaded, because the high command of the German staff said: Well, we lost the battle, we are now vulnerable, let’s cut a deal. Which is why they suffered at the settlement in Versailles, but not to the extent that the Austro-Hungarian and Ottoman Empires did, which were totally dismembered. And we know that the German high command basically posed an ultimatum to Kaiser Wilhelm II. They said we can’t fight anymore – there are no resources – so you need to abdicate, so that we can negotiate a ceasefire and surrender. So that would be the scenario presumably in Ukraine now. Again, not an unusual scenario – basically involving, as it did after World War I, a military coup replacing the political leadership at the time.

Q: And how likely do you think a military coup is? You said recently that you think it’s unlikely, given the presence of Western military intelligence everywhere the Ukrainian government and military. So any little hints of a coup being organized would immediately be reported to the authorities in Kiev.

Yes, that is a concern, but that’s not to say that Western intelligence services couldn’t decide to turn a blind eye, or couldn’t also decide that it’s time for Zelensky to go. There are clearly tensions already, about which we have not only hints but actual public statements by Lloyd Austin, US Secretary of Defense, and Vice President Kamala Harris, saying: Ukraine, stop bombing oil refineries in Russia – that raises the price of oil and endangers Joe Biden’s re-election. Much is said about the influence of the West in Ukraine, but this influence is a double-edged sword. On the one hand we have influence because we could withdraw the support Ukrainians need simply in order to pay their bills and fund the war effort. But will we do that? And what would the costs be? That depends on what we see as a plausible outcome. If in the higher echelons of power they decide there is no way to save Ukraine, then the strategy in the West might well be simply to fund Ukraine at a persistent but ever decreasing level in order to further weaken Russia – the objective being: who cares about Ukraine, we need to contain Russia. And the longer we can draw out this bloodletting between Russia and Ukraine, the better. The better for the United States strategically, and that’s an argument that makes sense in Washington. But if that’s the case, then it cannot have escaped the attention of Ukrainian political leaders. Hence the double-edged sword. And you see hints of this in the frustration attributed to Zelensky, and in the caustic statements by the Ukrainian foreign minister and several people in the president’s party in the Rada, the Ukrainian parliament, that the West should be doing much more: ‚We are all frustrated and disappointed in the West; we are indeed angry with the West.‘ Then the question becomes: If we’re being hung out to dry, why not negotiate a settlement with Russia, because they can actually give us what we want. Whereas the West says it will give us what we want but is refusing to do so. So we can’t fight and we we’re just bleeding to death, whereas if we reach a settlement – an unpalatable settlement, a hurtful settlement, but nevertheless a settlement – we can then begin to rebuild. And that kind of settlement can only be reached directly with Russia, which the West does not want. So again, that’s an incentive, as I see it, for negotiating directly with Russia, and one that has been mentioned many times now by senior Ukrainian officials.

Q: What do you know about what’s happening within the Ukrainian political establishment – with hard-core nationalists on the one hand and moderates on the other – that might suggest this is more likely, or less likely, to happen?

If something happens it will be sudden and dramatic. There is no political life in Ukraine anymore, because there are no elections. In order to have a political life you have to have political competition, and elections have been suspended for the foreseeable future at every level – local, parliamentary and presidential. So there’s nothing, there are no debates. And the president therefore retains his office and his absolute majority in parliament. Which politicians in his party do not seem especially happy about, because they believe they are being scapegoated. Because Zelensky’s popularity remains fairly high – it has suffered somewhat as the political and military situation has deteriorated, but nevertheless it remains much higher than the popularity of the parliament. So as soon as there are elections, obviously everyone in parliament is going to go and be replaced with somebody. And so, whatever happens – in terms of changing the dynamics of the conflict and enabling negotiations – will happen, I think, by virtue of personalities replacing other personalities and beginning to speak about the need to do things in a very different light. And it will have to happen, as I said, fairly suddenly. And if it becomes a matter of senior officials in Ukraine reaching out to have a negotiation with Russia, then I think far right militarized units would oppose this and launch an attack on Kiev, and probably themselves try to oust the current government and form some sort of national committee for salvation or something like that. And so in order to avoid that – which is an obvious thing to worry about – the negotiations would have to be well underway and an agreement essentially presented as a fait accompli. And people would then have to be brought on board, larger groups of people, constituencies would have to be appealed to – to support the government in its peace efforts, and to oppose the nationalists who are committed to war and therefore the eventual destruction of Ukraine at any cost. That would be the argument.

Q: And these negotiations would have to happen in secret somehow beforehand?

Yeah, I think so. And then also there would have to be efforts made by the police and the military of Ukraine, essentially to arrest or contain key nationalist leaders who are on record as opposing any compromise short of victory for Ukraine. So it would be that kind of coup – not really slow moving and not overnight either. But essentially still a coup.

Q: And is that feasible, given the fact that – as you mentioned when we talked last year – these far right leaders have been placed in positions at the highest levels of government, precisely in the area of internal security? Wouldn’t be hard to arrest them?

It could be, but I don’t know enough about the people in the Kiev menagerie to really understand who feels committed one way or another. On the eve of his resignation, Oleksiy Arestovych was a Ukrainian nationalist. Now he’s all for ‚negotiate with Russia or we’re all doomed.‘ And he’s not the only one. You see a lot of that now.

Q: Would the West be able to prevent a coup of this sort, if they didn’t want it to happen?

I don’t think the West has enough special forces in Kiev and Ukraine to actually prevent it. They would be forewarned but unable to stop it. They could, at that point, exercise leverage on whoever the alternatives would be, and say ‚do this‘ or ‚don’t do that‘. But I don’t know what the scenario will be and it’s a very fluid situation. Right now we’re in a kind of ‚in between‘ period. Nine months ago we were saying ‚Ukrainian victory is on the horizon, let’s plan for negotiations with a defeated Russia.‘ Now we’re in the middle period of: ‚Oh, things are not going very well. Let’s try to sit it out, provide a minimum level of support and see how it goes.‘ In any case, we’re not ready in the United States to make any serious decisions before November. We just can’t focus on Ukraine right now, we have to focus on the American presidential elections. Everything else is a distraction. After November, whoever is in power will have a free hand. So November-December is the ideal time to actually make an innovative proposal with respect to Ukraine. But what the situation on the ground will be, we don’t know. Will it be one in which Ukraine has survived, or has theoretically retaken some territory and moved on the offensive, with Western assistance – new weapons and new troops and things like that? Or will it be, as people like John Mearsheimer and Lieutenant Colonel Davis have said, that the lines will collapse and it’ll be obvious that there’s nothing but military defeat ahead for Ukraine? The Americans can plan for these various contingencies, but I think the basic decision as to what to do next has to be made, and will be made, by Ukrainians themselves. But they have to decide that they have the agency to do that, and be willing to think again in the interests of the country of Ukraine, not in the interests of the United States. Obviously the Americans and NATO are only thinking about the interests of their own security with respect to Russia, and Ukraine is only interesting to them as a tool to beat Russia. So it’s important that Ukrainians think independently, recognising that ultimately only Russia can guarantee Ukraine’s security – not the West. And Russia is not demanding so-called ‚co-optation‘ – to co-opt or subsume Ukraine. What it has demanded is neutrality. Which is rather a generous position, I would say.

Q: Isn’t it more in Russia’s interest not to subsume Ukraine, but rather to keep it as a separate state that can serve as a buffer between Russia and NATO?

Well the interesting thing about that is that Ukraine is being offered a curious combination of security and economic prosperity: security by Russia agreeing to the current borders – guaranteed also by a number of other countries – and prosperity by membership in the EU.

Q: Which Russia will not object to?

Will not object to, right. That was part of the Istanbul accords as well. It’s an interesting strategy, because what it ultimately does, oddly enough, is to reconstitute Ukraine in what I have been arguing for, for more than a decade. Actually sixteen years ago – in 2008, my first trip to Ukraine – I gave a talk at Kharkiv University, which was later published. And I said: Ukraine needs to be a bridge between Russia and the West. And by linking the essential security and economic interests of Russia and Europe in Ukraine, it effectively constitutes Ukraine as that bridge.