In Reality It Resulted Largely from Kyiv’s Destruction of Eastern Ukraine’s Economy Under Neo-Liberal Economic Policies Pushed by Washington Since the 1990s

By Ambrose Sylvan, Covert Action Magazine, 7/13/23

Ambrose is an independent researcher and former social worker from Toronto, Ontario.

The war in Ukraine is commonly seen through one of two lenses. The vision presented by Western, NATO-aligned powers is one of an astro-turfed Donbas separatism created by Moscow to justify the division of Ukraine.

The view of NATO’s critics is that the Donbas republics rebelled against the Euromaidan revolution and the country’s nationalistic, Euro-centric tilt. The reality is that this conflict started much earlier and was merely frozen until the overthrow of the Ukrainian government in 2013.

Political Economy of the Donbas

Global Security outlines the economic situation in Donbas at the time of the dissolution of the USSR.

The Donetsk basin had been settled by Russian and Bessarabian people in the 18th century, after the steppes of Ukraine and the coasts of the Black and Azov Seas were added to the Russian Empire.

Donbas held enormous reserves of coal, which were vital to the industrialization of the Empire and, later, the Soviet Union. During Soviet times Donbas became the industrial center of the Ukrainian Soviet Socialist Republic, with major iron mines in Krivoy Rog, the massive “Azovstal” steelworks, and the manufacture of machine parts for the defense and space industries.

Coal miners were able to exert political power throughout the industrial age by staging widespread strikes. Major strikes in August and September 1962 were held in Donbas and neighboring regions, resulting in promises of extra pay and threats of military force from the authorities.

Another wave of Donbas strikes in 1989 received concessions from the central government and the strike committees were effectively left in control of mining towns instead of the Communist Party.

The tension between the central government and the Donbas miners was fueled by the increasing difficulty (and cost) of pulling coal from Donbas mines. Other coal-mining regions of the USSR were less costly but the social unrest in Donbas was placated with increasing state subsidies.

Ukrainian independence ended the Donbas struggle against Moscow but created intractable economic problems. The extensive subsidies for Donbas mines were shifted to the less wealthy government in Kyiv, the economic integration of the Soviet Union’s republics was disrupted, and the shift to a market economy was disastrous.

After the break-up of the Union, the political leaders of the Donbas miners would become known as “red directors,” socialists who put the interconnected economic needs of the Donbas and surrounding regions at the heart of their demands to Kyiv.

One of the earliest separatist organizations in Ukraine was the International Movement of Donbas. The Ukrainian news site DEPO, citing Novosti Donbas, describes the origin of the Intermovement as a project of academics at Donetsk University. The group was created as the “International Front for Donbas” at a meeting held on August 31, 1989.

The “Interfront” was clearly inspired by the Intermovement of Estonia, which had formed the year before to defend communism and the Union state from Estonian separatists. In the summer of 1990 two of the leading figures of the Interfront, the brothers Dmitry and Vladimir Kornilov, traveled to the Baltics and western Ukraine. On this trip they studied the Intermovement of Estonia and its parallel organizations in Lithuania and Latvia, as well as the anti-Soviet People’s Movement of Ukraine (“Rukh”) based in Lviv.

The founding conference of the Intermovement of Donbas was held on November 18, 1990, and the Kornilov brothers were among those elected to its central council. The Intermovement unsuccessfully promoted the New Union Treaty and gained little popular support. Their most enduring success debuted at a rally on October 18, 1991, not long before the referendum on Ukraine’s declaration of independence: a red, blue, and black tricolor flag that would eventually become the flag of the Donetsk People’s Republic.

Again citing Novosti Donbas, DEPO reports that former KGB General Oleg Kalugin had accused all of the Intermovements of being created by the KGB. According to Kalugin the Intermovements were meant to undermine nationalist separatism in the republics of the Soviet Union.

One might question whether or not Kalugin is the most reliable source on this subject. He had been demoted for criticizing KGB chief Yuri Andropov during Andropov’s anti-corruption campaign, and also allegedly protected CIA spies in the USSR.

Kalugin was elected to the Congress of People’s Deputies on the Democratic Platform of the CPSU in 1990 and supported the anti-communist reformer Boris Yeltsin. After securing the break-up of the KGB, Kalugin moved to the United States in 1995. From the 1980s onward Kalugin had been an opponent of the socialist system and a supporter of those who would destroy it.

Whatever the truth is behind Kalugin’s statements, it is evident that an enthusiastic clique of academics, even with KGB backing, could not create a separatist movement out of thin air. The proof is in the results of the December 1, 1991, referendum, in which 92% of voters said “YES” to the Declaration of Independence from the USSR.

The Intermovement for Donbas failed to raise support for a renewed USSR, but the separatist movement would grow larger and stronger with every crisis that shook independent Ukraine.

The Shock Year

The act of independence immediately triggered a years-long economic crisis which was the driving force behind Ukraine’s growing separatist and anti-government movements.

The March 1990 elections to the Congress of People’s Deputies and Supreme Soviet of Ukraine had been the first to allow non-communist candidates to participate. Liberals, nationalists, and other anti-communist groups like Rukh entered the legislature. During the reaction to the August Coup in 1991 the Communist Party of Ukraine was banned and the nationalist groups remained as the most organized factions in the legislature.

As Ukrainian news site STRANA opined in its retrospective on 30 years of independence:

“The nerve of 1992 is the first attempt by the country’s leadership to deviate from the framework set by 1991. When Ukraine arose as a result of a compromise between very different groups (including representatives of the party apparatus, directors of enterprises), most of [them], as well as the population as a whole (which was shown by voting for Kravchuk, and not for Chornovil [leader of Rukh]), were not nationalistic and did not want to completely break with Russia.”

The newly independent government rapidly implemented policies which served nationalist and anti-communist ideologies irrespective of the material impact they had on the people of Ukraine. Per STRANA, “the nationalist tilt and the growing tension in relations with Russia became a serious factor in internal destabilization.”

The year 1992 was immediately characterized by economic “shock therapy.” On January 2, 1992, all price controls were released and the market was allowed to dictate prices on all consumer goods. The stated goal of this policy was to find balance between the shortage of goods and the large amount of money that the public held with nothing to buy. The “solution” to the “problem” of the public having too much money was predictable: The shelves were full of goods once more but prices increased by 2100% by the end of the year.

Inflation was accelerated by the spike in oil and gas prices as Ukraine lost the preferential rates it had enjoyed in the Soviet Union. Despite warnings from Moscow and the National Bank of Ukraine that the country would have to pay world prices if it exited the “Ruble Zone,” the government decided to drop the ruble as Ukraine’s currency by year-end.

New national borders interrupted the industrial sector, costs soared, demand fell (especially in state-driven industries like defense and science), and production crashed. For the first time in living memory, Ukrainians experienced the terrors of unemployment, price gouging, and starvation in a time of plenty.

In a Year, We All Became Impoverished Millionaires

The monetary crisis was an indirect result of the USSR’s final Five-Year Plan, developed under the principle of “acceleration.” Starting in 1990 the Union Republics were forced to issue “Consumer Cards” alongside wages to help ration basic goods like bread and sugar.

The cards were perforated sheets of tear-off tokens that were printed in color and valid only if stamped by the employer or issuing agency. These were commonly referred to as “coupons” in Ukraine (as in English this comes from the French word couper, “to cut”). The main obstacle to counterfeiting was the limited availability of color photocopiers, which became increasingly accessible after the borders were opened to Western trade.

From-UA tells us the origin of the “coupon-karbovanets,” Ukraine’s first national currency. Independent Ukraine still used the ruble as its official currency in 1992, but rubles were printed by Goznak in Moscow. Unable to print more rubles to accommodate soaring prices and (slightly) increased wages, the Kyiv government had to issue its own currency which was of much lower quality and was much easier to counterfeit than the ruble.

Introduced January 10, 1992, the karbovanets was printed on simple paper with few protections. It was meant to supplement the ruble and replace coupons, not to act as a primary currency. The ease of counterfeiting was made worse by the ease of modification: A one karbovanets note was the same color as a 100 karbovantsiv note. The kupon-karbovanets (notes were marked “купон,” literally “coupon”) became the most counterfeited currency in the world and inflation accelerated further. By the end of 1992 the karbovanets was so worthless that it was no longer profitable to counterfeit.

Counterfeiters and “shuttle traders” who exploited shortages of money and goods made enormous illicit profits. Criminal enterprises flourished and became increasingly appealing to an impoverished public and dissolute youth, such as the “Runners.” These were gangs of ultraviolent teenagers who terrorized the streets of southern cities, using grenades and handmade pistols in their feuds.

Ukraine dropped the ruble on November 12, 1992, and had no stable legal currency to use at markets. Wages were worthless and some workers were paid directly in consumer goods like soap instead of money. The economic problems of the working masses had become many times worse than they had been at the end of the Soviet era.

Demands of Donbas

Naturally there were outbursts of popular rage against the government as people lost their livelihoods. Ph.D. student Vadim Borisov was with the miners in Donetsk when the 1993 general strike began.

Borisov describes the inciting incident at Zasyadko coal mine on June 7:

The spark that ignited the flame was the increase in prices, carried out in the Donetsk region without advance warning on June 7. Half-smoked sausage, the daily food of miners, almost quadrupled in price overnight to 20,000 rubles (£4), compared to an average miner’s monthly salary of 120,000.

Many miners found out about the price increase when their wives returned in the morning from the shops, where they were going to buy food for their men on the “brake” …

The last straw was the director’s innocent attempt to justify the state’s price policy—here the workers immediately agreed with the words of one of their comrades: ‘Work yourself!’”

As the workers marched to the Kirov District Council, a local journalist informed the City Strike Committee of the spontaneous action. The Strike Committee in turn contacted all of the mines in the region and work stopped in mines and other industries across Donetsk, Luhansk and Dnipropetrovsk.

A government commission headed by the Finance Minister (who had authored the disastrous economic reforms) arrived in Donetsk on June 8. The striking miners made their demands clear: a no-confidence referendum on the President and parliament, and stronger regional self-government for Donbas. On June 18 the government agreed to schedule the referendum for September and to double miners’ wages. However this wage increase did little in the face of hyperinflation and the referendum was eventually canceled in favor of early elections.

Regional autonomy had already been a project of the Donetsk Regional Council before the 1993 general strike. Chairman Vadim Chuprun, elected November 12, 1992, had been carefully negotiating agreements with the president regarding Donetsk Oblast’s right to determine some of its own economic policies. In a February 1993 interview with Dmitry Kornilov’s newspaper, Chuprun explicitly proposed the federalization of Ukraine. Then on June 8, when the miners demanded autonomy and a confidence vote, Chuprun called a meeting of the Donetsk Council to demand broad autonomy for Donetsk, Luhansk, Dnipropetrovsk and Zaporizhzhia.

Even after the general strike had ended, President Kravchuk acceded to some of these demands and, on November 26, 1993, his Decree no. 560/93 gave those four regions control over 400 state-owned enterprises. When the parliament blocked this decree and only 200 enterprises passed to regional control the Donetsk Council responded by refusing to remit taxes to Kyiv, keeping the money to fund their own budget.

The federalist movement reached its maturity the next year. A “consultative poll” was held in Donetsk and Luhansk oblasts on the same day as the early elections, March 27, 1994. The central government refused to acknowledge it as a legally binding referendum, but the poll results showed that Donbas had a popular mandate to establish an autonomous government.

The poll had four questions: whether the constitution of Ukraine should change from a unitary state to a federal state; whether the Russian language should be constitutionally equal to the Ukrainian language; whether Russian should be an equal language of government and education in Donbas; and whether Ukraine should be a full participant in the post-Soviet Commonwealth of Independent States.

An overwhelming majority of voters said “YES” to all four questions: The federal system received 84% of all valid ballots in Donetsk, and the other three questions received more than 90% of all valid ballots in both regions.

Writing from Donetsk during the 1993 strike, Borisov noted that the national news media were hostile toward the Donbas movements. Though this strike was the largest in Ukrainian history, it received much less coverage than those during the Soviet era, directed against the Communist Party. The advocates of autonomy and federalism were portrayed as separatists or even as Russian nationalists. Were these movements really motivated by nationalist ideology?

Deindustrialization

Tensions between the Donbas miners and the Ukrainian government continued to intensify over economic and political issues, and major labor actions continued through the decade.

In 1995 Kyiv cut coal subsidies to reduce budget deficits and inflation, resulting in “mounting financial losses and payment arrears across all sectors of the economy.” That November the coal miners went on strike for two days to demand $112 million worth of unpaid wages in addition to their unpaid disability benefits, increased pensions, and worker control of coal policy. On November 15th the government agreed to pay a quarter of back wages immediately and to gradually release the remaining arrears.

The government did not follow through and strike action resumed on February 2, 1996, coordinated across Russia and Ukraine from Siberia to Donbas. As many as one million miners and allied workers went on strike in Ukraine. This time they demanded more than $560 million in unpaid wages. The strikes resumed in July when miners blocked roads and railways and picketed local administration buildings, bringing economic activity to a halt.[1]

The government was finally compelled to agree to a full repayment of wages but its restructuring of the coal industry accelerated. Mines were divided into categories based on profitability and work was halted at the least profitable sites. Subsidies were distributed unevenly and wages continued to go unpaid, provoking chronic labor actions and rivalries between mines and between unions.

Wage arrears reached $1 billion (or $3 billion by some estimates) by May 4, 1998, but only one of two major mining unions organized a strike, at only 45 of Ukraine’s more than 200 mines. The next week 1,000 miners marched to Kyiv on bleeding feet, unable to pay for buses after 15 months without pay. Some 20,000 desperate miners were on strike for months, many occupying a tent city in front of the Luhansk government building. It was there, on December 14th, that miner Oleksandr Mykhalevych burned himself alive. He left a note explaining his action:

“I’m tired of being scorned by mine directors and the regional administration. My [self-immolation] is hardly a way out, but it might help resolve the matter more quickly.”

Oligarch Rinat Akhmetov amassed his fortune in the 1990s by privatizing mines and steel mills, including Azovstal. Today he is the wealthiest man in Ukraine, #466 on the Forbes 500. [Source: kyivpost.com]

This time the government would not relent. Permanent mine closures began in June and the government secured loans from the International Monetary Fund by promising coal sector restructuring. The August 1998 Memorandum of Economic Policies guaranteed that no government subsidies would support production of coal, that no new mines would be opened, and that all mining subsidies would be used for “restructuring” (privatizing) the industry and permanently closing another 20 mines every year.

The central government’s economic warfare against the Donbas has continued unabated for decades. By the time of the Euromaidan and the rebellions in Donbas, Ukraine had only 150 mines remaining in operation, compared to 275 in 1998.

The mining workforce had shrunk from 1.2 million in 1996 to 500,000 in 2014 and miners were still owed an average of two to three months of back pay. The prospects for miners under the post-Maidan government were bleak: Only a month into his term Prime Minister Arseniy Yatsenyuk—a U.S. favorite—had sought a massive IMF restructuring loan worth up to $14 billion (almost 10% of Ukraine’s GDP). Yatsenyuk said that his policies would stabilize the economy but would increase gas prices by 50%, personal income taxes by 47-66%, and inflation by 1,000%.

Pushed to the Edge

Kyiv’s systematic destruction of the Donbas economy is a much greater driver of separatism than any Russophile nationalism. Sociological surveys conducted in early 2014 show us the most important issues to eastern Ukrainians on the verge of civil war.

Eight southern and eastern oblasts were surveyed by the Kyiv International Institute of Sociology (KIIS) in April 2014. KIIS found that, overall, 69.7% opposed annexing their region to Russia. In Donetsk this fell to 52.1% opposed, with 27.5% in favor. In Luhansk 51.9% opposed annexation while 30.3% supported it.

A Gallup poll conducted for the International Republican Institute in March 2014 had similar findings: 74% of easterners (Donetsk, Luhansk, Dnipropetrovsk, Kharkiv) did not feel that Russians were under threat because of their language, and 61% did not support Russian military intervention to protect Russo-Ukrainians. Even among ethnic Russians there was no clear preference for intervention, with responses split between 43% in support and 43% opposed.

Both surveys found stronger opinions about international economic relations than about ethnic politics. According to KIIS only 24.7% of respondents would choose Ukraine’s entry to the European Union over the Eurasian Customs Union; 46.8% preferred to join the ECU, rising to 64.3% in Luhansk and 72.5% in Donetsk. In Gallup’s poll the national average showed 52% in favor of the EU and 27% for the ECU. These proportions were inverted in the East, where only 20% supported EU membership and 59% favored the ECU.

KIIS additionally asked about the state structure of Ukraine. Only 10.6% in Donetsk and 12.4% in Luhansk indicated that they would keep the unitary state with its weak oblasts; 41.1% in Donetsk and 34.2% in Luhansk wanted power to be decentralized with oblasts given greater authority; and 38.4% in Donetsk and 41.9% in Luhansk endorsed a federal system with each region having its own state and the national government becoming a federation of these states. There were clear majorities in Donetsk and Luhansk (79.5% and 76.1%) that desired autonomous local governments.

Another survey was carried out by the Donetsk Institute for Social Research and Political Analysis in April 2014. It found that 31% of respondents in Donetsk favored a decentralized government with strong oblasts, 16% supported federalism, 27% supported Russian annexation, and 5% supported Donetsk independence. In total, 79% of respondents wanted Kyiv to have less power and 48% wanted Donetsk to have its own state formation, whether independent or federated with Ukraine or Russia.

On the eve of the separatist rebellion there was a clear preference among Donbas residents of all nationalities to have their own state and to join the Eurasian Customs Union. These were the political-economic concerns which the separatist republics could address in order to win popular support.

Breakaway

The infamous Donbas independence referendums were held just a few weeks after these surveys had been published. Despite accusations of endemic fraud and fabricated results the outcome was not far from what had been described by scientific opinion polls. The ballots asked not for independence but whether the republics should have “self-rule,” which the Donetsk electoral commissioner said could include autonomous or federal status within Ukraine.

When we consider the souring of public opinion on Kyiv’s “Anti-Terrorist Operation” and its civilian casualties, it is not hard to imagine how the 79% that polled in favor of more self-governance could have become 89% voting in favor of Donetsk self-rule.

Actions speak louder than words, and the people of Donbas did more than vote and answer surveys. KIIS found that the People’s Militias had little support in April 2014: In Donetsk they had 18.1% in favor and 72% opposed, and in Luhansk they had 24.4% in favor and 58.3% opposed. The separatists did not endear themselves to the hundreds of thousands of Donbas miners. They blocked mine exits, stole vehicles and explosives, kidnapped managers and union leaders, and tried to gang-press workers.

Nevertheless, analysis by Foreign Affairs found that “the size of the local mining labor force remains the strongest predictor of rebel activity.” They may not have been nationalists, but the people of Donbas were joining the revolt against Kyiv.

Surveys taken after the Minsk Protocol showed the solidification of Donbas separatism. In a 2016 survey by the Humboldt University of Berlin, 55.6% of DNR respondents wanted to remain within Ukraine while support for Russian annexation had grown to 44.4%. Another 2016 study, commissioned by Ukraine’s Ministry of Information Policy, showed 31% supporting autonomy within Ukraine and 47% supporting DNR independence; only 6% wanted Ukraine to regain the territory by force.

By 2020 the Donetsk Institute’s follow-up survey had found that 45-50% of respondents favored annexation and only 20-25% supported a return to Ukraine; the remaining 25-30% answered that they wanted any resolution that would end the war.

At the start of the 1990s Ukrainians were united in seeking independence from the USSR. It was the years of struggle and starvation which followed, aggravated by nationalist politicians and anti-Russian policies, that alienated the people of the Donbas. In large and heterogeneous countries like Ukraine, contradictions naturally arise between the interests of the people. Federalism has been proven to mitigate these contradictions in countries such as the United States and Canada, yet it was denounced at every turn by Kyiv.

Shut out of power, the Donbas was subjected to decades of ruthless economic policies which suited northern and western Ukraine’s desires to join the European Union. When President Viktor Yanukovych refused to sign the EU Association Agreement, acting in the interests of the south and east, he was ousted by the Euromaidan protests and riots in the capital. The government which replaced Yanukovych’s Party of Regions immediately signed the agreement, took on colossal debts, and adopted catastrophic austerity measures.

This is how Russian separatists, far-right extremists, and paramilitary bandits were able to find support. Their militant actions burst the tension and made secession a real possibility for the first time. Now a decade of war and blockades has deepened the fissure between Donbas and Ukraine and, with the accession of Donetsk and Luhansk to the Russian Federation, this division may become permanent.

By Stephen Bryen, Asia Times, 7/18/23

Wagner troops are in Belarus training the army there. More Wagner troops are now in a convoy on their way to Belarus. A spokesperson for Wagner and one of its top leaders have released videos with essentially the same bottom line: they will defend the fatherland and support Russia’s military and civilian leaders.

Wagner’s troops are back and private military contractor appears to be positioning to play a strategic role for Russia and Belarus.

A new head for Wagner has been selected. He is Andrei Troshev, a highly decorated Russian army veteran, a colonel, 70 years old, who played a major role in Syria where he was directly involved in military operations. His nom de guerre is Grey Hair.

The cofounder and éminence grise of Wagner, Yevgeny Prigozhin, has disappeared.

On June 29th Russian President Vladimir Putin held a Kremlin meeting with about 30 Wagner commanders, including Prigozhin. (General Sergey Surovikin, another missing player, did not attend the June 29th meeting.)

This three hour-long meeting, according to the Kremlin, came with an offer from Putin. He is reported to have said that all of the Wagners “can gather in one place and continue to serve and nothing will change for them. They will be led by the same person who has been their real commander all this time.” That person, Putin said, is “Sedoy,” using the Russian word for Grey Hair.

In reply Prigozhin said, “No, the guys do not agree with this decision.”

Prigozhin’s reply effectively terminated his control of Wagner. After the meeting, on either June 4 or 5, Russian police and the FSB (Russia’s successor to the KGB) raided Prigozhin’s large estate in St Petersburg.

Different reports popped up, some saying that Prigozhin had gone to his mansion in St Petersburg in a limousine to pick up his money and guns that were seized previously. Another report had him reporting to FSB’s offices in St Petersburg, doing the same thing. But in both cases these were rumors and no eye witnesses came forward.

It seems, in retrospect, that these stories and others were designed to keep Prigozhin’s actual fate under wraps. 

The Prigozhin-led attack aimed at Moscow on June 24 was a near disaster for Putin. The Russian leader was moved out of Moscow as a security precaution. Loyal forces, including Chechens, presidential guards and police, were moved in to protect the Defense Ministry in Moscow, Prigozhin’s main target. 

Prigozhin apparently believed that key leaders in the army, aside from Defense Minister Sergey Shoigu and Chief of Staff General Valery Gerasimov, would support his takeover, purge the defense minister and chief of staff and put Prigozhin and, perhaps, Surovikin in charge of Russia’s armed forces.

Putin would be handed a fait accompli. Either he could accept the change or, in Prigozhin’s view, he would be replaced. Prigozhin saw himself as Russia’s power broker and, depending on how things turned out, perhaps Russia’s new President.

Putin, it seemed, also was unsure about the loyalty of the army. That uncertainty was no doubt prompted by concern over “General Armageddon,” Sergey Surovikin.

Surovikin, who served as a special consultant to Prigozhin and Wagner, was extremely angry with the army’s leadership. Surovikin had been commander in chief of Russia’s armed forces from October 8, 2022, until January, 2023, when he was replaced by Valery Gerasimov.

Surovikin was given the vague title of deputy to Gerasimov and, while formally keeping the job, became a special consultant to Prigozhin. Surovikin’s humiliation, dished out by the old guard in the Army, no doubt led him to back Prigozhin strongly. The two of them made their move after the Bakhmut victory.

On June 24, as Wagner forces moved toward Rostov on Don, Surovikin made a self-serving video claiming that the invasion was wrong and saying that the Wagner forces should return to their bases. There is a presumption that this video was made to avoid any future prosecution if the Prigozhin-led coup d’état failed.

In late June Surovikin’s daughter allegedly told Baza, a Telegram channel, that Surovikin was working from home and had not been detained. Subsequently, Surovikin’s wife reported that her husband had not come home.

According to the Wall Street Journal and other outlets, Surovikin was detained along with thirteen other army officers.

Disposition of Wagner forces

It is now known that some Wagner forces are in Belarus training regular army forces there.

Andrey Kartapolov, who chairs the Russian parliament’s defense committee, said: “It is clear that Wagner went to Belarus to train the Belarusian armed forces. There is such a place as the Suwalki Corridor. Should anything happen, we need this Suwalki Corridor very much. A strike force is ready to take this corridor in a matter of hours.”

Poland has been massing forces along the border with Belarus, causing alarm in Minsk and Moscow. Foreign advisors, including the British, are now serving as technical aides to Polish forces at the Belarus border, signaling to Russia that the real issue might be a NATO initiative to bail out Ukraine by attacking Belarus, forcing Russia to divide its forces.

The Suwalki Corridor is a 96 km strip of land that connects the Russian enclave of Kaliningrad to Belarus. While Kaliningrad can be supported by sea or by air, the land bridge is important to assure normal communications. There are both roadway and rail links. This land strip is Polish territory on one side, and Lithuanian on the other.

Last year the Lithuanians blocked shipments along this route, lifting the blockade after the Russians threatened serious consequences. The Corridor is also thought of as a weak link for NATO since it is the only NATO land connection to the Baltic states from Poland and from Europe. Other than airlift, this is the land route NATO needs to support these countries.

Indian Punchline reports that, in a weekend interview, the number two German party Christian Democratic Union’s “leading foreign and defense expert Roderich Kiesewetter (an ex-colonel who headed the Association of Reservists of the Bundeswehr from 2011 to 2016) suggested that if conditions warrant in the Ukraine situation, NATO should consider a move to ‘cut off Kaliningrad from the Russian supply lines. We see how Putin reacts when he is under pressure.’”

On July 6 the Russians flew a Tu-214SR and two Su-30M fighter jets in international waters near Kaliningrad and on to Russia. They were met by British Typhoons that flew from Estonia to shadow them. The Tu-214SR is known as the Russian “Doomsday” plane. It is a mobile command and control platform with an extensive multi-intelligence payload. (See TASS photo below.)

The Tu-214SR was likely in the area reporting on Polish and NATO operations close to Belarus and Kaliningrad. The Russians regard Kaliningrad as having great strategic importance and are sensitive about developments that may threaten the enclave.

The US position on these developments is not known, but what is clear is that Ukraine is now taking heavy losses and may be on the cusp of losing the war with Russia.

There have been a number of negative reports coming from the Pentagon including Ukrainian Chief of Staff Valerii Zaluzhny, trying to rethink the failed Ukrainian offensive. 

Africa

It appears that the deployment of Wagner forces in Africa is being normalized. Around 200 Wagner troops, in effect a normal rotation, have now arrived in the Central African Republic. They were flown there by COSI ( Community of Officers for International Security), a Wagner affiliate, on military helicopters. Earlier reports that there was a purge of Wagner forces in Africa appear to have been wrong and confused a force rotation with a purge.

Strategic Issues

The Ukraine war is part of a proxy battle between NATO and Russia. While there are indeed subsidiary issues important to the main combatants, for example the Russian-speaking population of Ukraine, NATO built up Ukraine’s forces before the Russian invasion to have sufficient force to take back key territories in the Donbas and Crimea. The NATO buildup was part of a plan to bring Ukraine into NATO and strategically isolate Russia.

The Russians countered the NATO plan, forcing the issue of the Ukrainian army buildup by openly invading Ukrainian territory. But before Russia sent its forces over the border, the Russians tried to engage Washington and NATO in a diplomatic process aimed at sorting out Russia-NATO and Russia-US issues. The effort took its most mature form in December, 2021, but it failed as both Washington and NATO refused the Russian initiative.

The issue of bringing Ukraine into NATO is still unresolved, even after the latest NATO summit in Vilnius. The Summit itself had hopes of declaring victory in Ukraine and even foresaw the overthrow of the Russian government. There were secret talks with key Russian figures, including Prigozhin.

But the Prigozhin coup failed and the Russians successfully fended off the long-awaited Ukrainian offensive. Ukraine suffered very high casualties and the initial loss of at least 20% of the Western equipment sent there to win the fight. Systems such as the German Leopard tank and the American Bradley infantry fighting vehicle were unsuccessful and an embarrassment.

Worse than that, the battle (still ongoing) revealed that systems and tactics designed to protect NATO from Russia were inadequate and based on a number of erroneous assumptions about war fighting.

It is far from clear that any gambit to try and save Ukraine by widening the war to Belarus would succeed, and doing so could put Europe into a general war on its territory. NATO is not prepared for war now. The failures in Ukraine amply illustrate that.

While it may be true that NATO can muster superior airpower, it would have to fly against effective Russian air defense systems and Russian fighter aircraft. But the big war would be on the ground, and NATO can’t fight that war now, possibly never can.

Will Washington use its proxy, Poland, to attack Belarus to try and save Ukraine? 

Wagner forces are now risen from the ashes and Prigozhin and Surovikin are gone. If the chairman of the Duma’s Defense Committee is right, those forces are prepared to take the Suwalki corridor in case Poland starts a war with Belarus.

The Bell, 7/17/23

President Vladimir Putin signed a decree that transferred the shares of foreign shareholders to the “temporary control” of Rosimushchestvo, the agency responsible for state property. The decree affects the Baltika brewery, which is 100% owned by Denmark’s Carlsberg, and dairy firm Danone Rossiya, which is owned by France’s Danone. In effect, the state has appropriated the assets of foreign investors who have poured billions of dollars into the Russian eonomy over the years. Danone Rossiya and Baltika are important players on the Russian consumer market. Danone is Russia’s biggest diary producer and Baltika is the second-largest brewery. Danone first started producing its branded products in Russian factories in 1994, and opened its own plant in the country in 2000. By 2022, the French company owned 13 businesses in the country, employing 100,000 staff.  Carlsberg became a key player in the Russian beer market in 2000 when it partnered with Norway’s Orka to acquire a 50% stake in Baltika. In 2008 the Danes increased their share in Baltika to 100%. From 1996 to 2020, Baltika was consistently the leading beer brand in Russia. The decree might come as a surprise to Carlsberg: three weeks ago the company  announced that it found a buyer for its Russian assets (although the buyer’s identity was never publicized). However, it’s currently impossible to sell Russian subsidiaries of foreign companies without the permission of a special government commission. Carlsberg’s press service admitted that it was awaiting that permit. In February 2023, media reports said Danone planned to transfer control over its assets to new investors. However, there were never any reports that new investors had been found.“ Transfer to temporary control” is de facto nationalization. This mechanism was introduced at the end of April and was first applied to two major foreign investors in the Russian electricity market: Germany’s Uniper and Finland’s Fortum. The day after Putin’s decree was published, the management of both companies’ Russian subsidiaries were replaced with individuals from Rosneft boss Igor Sechin’s circle. This week Fortum announced that it was filing a multi-billion-euro compensation claim to international arbitration. Why the world should care: In reality, nationalization happened some time ago, and it fell upon everyone at once. Last fall, Putin banned foreign companies from selling Russian assets without the government’s permission. If you cannot sell your business when you choose, it is no longer your business.

Inflation gains momentum Russia’s Central Bank expects prices to rise. But just a month ago, Putin was hailing the country’s low inflation rates compared to the rest of the world. At the start of the summer, Putin boasted of how inflation in Russia was approaching record lows and was even less than in many Western countries at 2.9%. However, with the rapid fall in the ruble and high levels of consumer demand, the Central Bank is warning of price rises to come. According to the Central Bank’s latest figures, price rises over the past 12 months reached 6.4%. Since the start of this year alone, they are up 3.25%. The bank’s analysts anticipate that the coming months will see annual inflation rates getting higher. Taking into account current monetary policies, the rate will be 4.5-6.5% this year. The weakening ruble’s knock-on effects are currently less noticeable than usual, the Bank warned. There are exceptions for specific goods and services where demand remains high (cars, foreign tourism). As demand grows and existing stocks deplete, the combined impact of ruble depreciation may have a greater impact on prices, the Bank’s analysts warned. Inflation was also boosted by labor shortages, wage increases outstripping productivity and consumers choosing to spend rather than save, which encourages manufactures to hike prices. The Central Bank published fresh data on inflation a week before its next meeting to discuss the base interest rate, which has held steady at 7.5% since September 2022. Now, Russian analysts predict a 50bp increase.  Why the world should care: Official inflation rates in Russia have been low all year, close to the Central Bank’s 4% target. However, factors such as ruble depreciation, increased demand, depleted stocks of imported goods indicate that inflation is set to increase. This will compel Russia’s Central Bank to pursue a stricter monetary policy.

By Andrew Korybko, Substack, 7/24/23

Russia carried out a surgical strike early Monday morning against targets in the town of Reni on the Ukrainian side of the Danube River near the tri-border with Moldova and Romania. This video alleges to show one of the explosions at its port while this image purports to be of a grain warehouse that was supposedly destroyed in the aftermath. It can’t be ruled out that military and/or terrorist assets were hidden there, however, since Russia insists that it doesn’t strike purely civilian infrastructure.

In any case, Monday morning’s surgical strike was very important since it sent several messages that Russia’s opponents would do well to heed. For starters, Reni is located on the other side of the Danube from NATO-member Romania, which demonstrated that Russia will hit targets anywhere in Ukraine and can do so with maximum precision. Those military and/or terrorist assets based on the literal border of that bloc but just outside of Article 5’s jurisdiction can no longer take their security for granted. 

The second message is that Russia is serious about cracking down on those threats to its security that were previously untouchable due to Kiev exploiting the grain deal to protect some of its aforesaid assets. Russia remained committed to that agreement in spite of that since it sincerely expected that the West would eventually remove those sanctions that impeded its agricultural exports. Since that didn’t happen and Russia therefore declined to extend the deal, Kiev’s selfsame assets are now fair game.

Third, carrying out a surgical strike on Reni proved that Russia had actionable intelligence regarding the Danube’s role in Kiev’s military logistical network, which many observers have suspected for a while. Related targets were previously untouchable for the abovementioned reason, but that’s no longer the case now that the grain deal expired. Accordingly, it can be expected that this won’t be the last surgical strike on the Danube, though it of course can’t be known when the next ones will occur.

The fourth message is that Russia now knows that NATO won’t extend its air defense umbrella over any part of Ukraine after no effort was made to stop its surgical strike in Reni on the Romanian border. The bloc either didn’t see the missiles approaching their air defense zone or detected them but declined to attempt an interception in order for Russia not to think they’re ready to get directly involved in this proxy war. Either way, NATO looks weak and Russia thus feels emboldened to continue striking near its borders.

And finally, this successful strike signifies that no part of Kiev’s military logistical network is safe, which could lead to Moscow’s edge in the NATO-Russian “race of logistics”/“war of attrition” growing even larger if it keeps up the tempo of these attacks against its opponent’s previously untouchable assets. In that event, peace talks might resume earlier than many expect if this accelerates the erosion of Ukraine’s military capabilities and thus forces its patrons to move up their timeline for freezing the conflict.

With these five messages in mind, there’s no doubt that Russia’s surgical strike against military and/or terrorist assets on the Moldovan-Romanian-Ukrainian tri-border is much more important than it might appear at first glance. Not only did Russia hit closer to NATO than ever, but that bloc didn’t even try to stop it, thus suggesting that they’re reluctant to get dragged even deeper into this proxy war. If Poland doesn’t unilaterally intervene by summer’s end, then peace talks might recommence shortly after.

John Varoli is a former foreign correspondent for New York Times, Bloomberg and Reuters TV. Trained as a U.S. foreign policy expert with a focus on Russia and Ukraine.

By John Varoli, Substack, 7/17/23

Kiev, April 2019 — I was dining in an upscale restaurant and warned my wealthy Ukrainian friends not to let their country become a pawn in NATO’s deadly chess game with Russia. Some said they understood what I meant, but others said the following words that sent chills up and down my spine: “We will fight the Russians even if it means that all of Ukraine will burn”.

This was the first time I encountered suicidal nationalism. Previously, I wasn’t convinced by Moscow’s claims of “Nazis” in Ukraine. But at that moment in Kiev everything became clear. Truly something dark and evil resides in the soul of Ukraine’s intellectual and political elite. Nationalists in Lvov and Kiev who openly glorify World War II Nazi collaborators are ready to accept their country’s destruction and see their people slaughtered just to insist on their ‘right’ to join NATO.

Most [independent] geopolitical experts know that this war between Russia and Ukraine was easily avoidable — it’s necessary only to guarantee political autonomy and human rights for the ethnic Russians of the Donbass region; allow Crimea the right to self-determination as enshrined in international law; and keep Ukraine geopolitically neutral and end all talk of NATO membership.

The solution really is that simple. Except it isn’t, because self-destructive Ukrainian nationalism and American imperial ambitions have found common cause. I ended that dinner in April 2019 by predicting to my Kiev friends that NATO will eventually betray Ukraine and it will be discarded on the gutter of European history, mauled, battered and violated.

Fast forward to July 2023. Last week’s NATO Summit in Lithuania sealed Ukraine’s sad fate. Despite the encouraging words and public praise, behind the scenes it was clear that Ukraine will never join NATO and that the country is merely a geopolitical ‘pawn’ in the hands of Washington DC and Brussels.

NATO’s cynical conditions

Ukraine’s shameless con man and president, Vladimir Zelensky, finally woke up to the fact that he’s been out-scammed by more devious western leaders. Zelensky took to social media and responded with petulant outbursts about no NATO membership. His masters, however, quickly put him in his place, reminding who calls the shots.

Still, Zelensky returned home from Vilnius with vague and empty promises that Ukraine might be accepted into NATO if it fulfills “certain conditions”, which of course are inherently unattainable and will never be met.

One cynical ‘condition’ for NATO membership is the defeat of Russia and conquest of the breakaway regions of Donbass and Crimea. This, of course, requires the slaughter and ethnic cleansing of the 4 million Russian citizens who live there. While Kiev can easily stomach such genocide, the fact remains that neither it nor NATO have the military might to do so.

The Kremlin won’t let such atrocities happen, and that’s why Russian troops vigorously hold the line against the Ukrainian/ NATO invasion. The lives of millions of innocent Russian civilians are literally at stake.

Bye bye Zelensky?

Zelensky’s popularity is plummeting at home and abroad. I have a feeling that the White House might soon dispatch him to the Underworld, and proclaim him a ‘martyr’ in the cause of ‘democracy’ — though, of course, pin the blame on Moscow.

Biden can’t afford to go into the presidential election with Zelensky and the Ukrainian war around his neck. He must end this war in the next six months. Zelensky’s timely demise could be the catalyst to freeze this conflict until the November 2024 election, after which the NATO crusade against Russia will resume.

What’s one more Ukrainian death, even if it’s a prominent comedian? The deaths of nearly 300,000 Ukrainian soldiers hasn’t been sufficient to satisfy the bloodlust of NATO’s vampire elite, who constantly call for more death and destruction.

Sadly, many Ukrainians are brainwashed, blinded by hatred and a desire for revenge, and unable to realize that they’re being ‘played’ by NATO. Meanwhile, Ukraine is becoming a land of the dead: Cemeteries are overflowing, funeral processions are ubiquitous, hospitals and morgues swell with the maimed and dead; and the corpses of forgotten and abandoned soldiers fertilize the fields.

In the aftermath of the NATO summit, Ukraine’s future is now almost certain — the country will slowly be depopulated and turned into a desolate wasteland. Ukraine is a failed state, having lost nearly 50% of its pre-2014 population, nearly 23% of its pre-2014 territory, and seen its economy pulverized.

Western media as sinister sirens

Despite all the western media disinformation about Russia’s imminent collapse, NATO elites in fact now understand that they’ve awakened a sleeping giant (Russia) whose feet are made of steel, not clay. Kiev’s six-week old ‘counteroffensive’ has been an absolute disaster, with a large part of its invading army already destroyed or knocked out of commission by the Russian army and air force.

Still, from across the ocean sinister sirens demand more war, enticing hapless Ukrainians to their death. White House propaganda outlets such as the New York Times and the Washington Post exhort Ukrainians to continue to die “for freedom and democracy”. Of course, these media companies earn enormous sums from major news events; they have a vested interest in fueling the war. That’s just how the media business works today. What has happened to the liberal American press of the 1980s that once preached peace and coexistence with Moscow?

In order to deceive and prod Ukrainians to march to their certain deaths, western media have concocted a bizarre parallel universe claiming that Ukraine is winning the war and that no sacrifice is too great to defeat “Putin’s autocratic Russia”. Just a little more effort, send more weapons and Kiev will be victorious over Putin’s “demoralized and poorly equipped army”.

Meanwhile, in the real world, where real people pay the price for the sins of a greedy and heartless ruling class, millions of Ukrainian families have seen their lives shattered. A recent Ukrainian survey says that nearly 70% have a family member or close friend who has been killed or injured in the war. Such collective trauma will impact current and future generations for at least half a century.

The informal army of young widows and orphans grows rapidly each day. But their suffering fails to melt the callous hearts of oligarchs, politicians, Pentagon generals and journalists in Washington DC and New York who demand: “Go fight and die!”

As far as my wealthy Kiev friends who in 2019 were so eager for war with Russia — Where are they now? They’re living in Europe and the U.S. of course. Neither they nor their children are fighting and dying.

Are liberal regimes the new Nazis?

I spent a decade (2011-2021) promoting Ukrainian cultural, business and educational projects, and I always noticed how western elites hate Ukrainians just as much as they hate Russians. Ukraine’s destruction is a desirable goal for most NATO elites. Russians and Ukrainians killing each other is their dream come true.

In this context, NATO’s diabolical policies are a continuation of the Third Reich of the 1930s and 1940s. In essence, we are witnessing a resurgent western hatred of the eastern Slavs, and a desire to exterminate them and steal their land.

The survival of both Ukraine and Russia depends on putting aside their animosity and uniting against a common enemy. The liberal regimes of NATO are determined to succeed where the Nazis failed — destroy the eastern Slavs and then establish control over Eurasia.

Only when united, just like in 1945, can the eastern Slavs put an end to this grave threat to their survival and to world civilization. The non-aligned global community, led by countries such as India and Brazil, should do everything possible to assist the two Slavic giants in achieving such a goal and reestablishing peace in Eastern Europe.

The age of NATO militarism must end. And we in the West would only benefit from a conclusion to one of the most disgraceful chapters in our collective history.