Monday, March 3, 2014

War and Peace?

Well, this week I decided not to necessarily write about the article, but there can be some correlation. I want to rather write about the ongoing crises in Ukraine. It's well-known that Russia has effectively taken over the Crimea and it's possible it can do the same with other southern and eastern regions of Ukraine. This turn of events was not anticipated, and even the U.S. spies were surprised by the sudden turn of events when Russia's Vladimir Putin was given permission to use military force. Also, the fact that they have about half of the world's nuclear arsenal means there is almost no chance any country other than Ukraine may get involved in a possible military conflict. This leaves Ukraine by itself against Russia and there is absolutely no chance Ukraine can resist the Russian military if Putin decides to use the power given to him this weekend. The only remaining options for the U.S. and E.U. are diplomacy and sanctions, but the U.S. has little economic leverage over Russia where the only effective measure would likely be placing sanctions on Russian banks and freezing Russian assets, but this is a very risky move because it can push Putin to be aggressive in Ukraine. There is financial turmoil on the Russian markets and that is caused by the E.U. having great turnover and economic contact with Russia, but them isolating Russia economically can have very grave consequences for Europe. Isolating Russia will push the country into the Chinese sphere of influence, and that process already been taking place over the past several years. In other words, Obama's and Europe's policy towards Russia are isolating it and the effects of that isolation can last decades if the current situation escalates. Furthermore, since I can speak Russian and often watch television from Russia I often see a sense of apprehension towards the West in the country because of the Soviet collapse and encroachment of the West towards the Russia's borders. Putin even publicly denounces the West for our poor demographics, secularism, and overall departure from traditional values. It seems as if he effectively decided that the country must remain isolated from the West and open to the East, which has many economic consequences such as Russia having negative economic growth this year. I believe the best way to get out of the current situation is to have a different leadership in Kiev that would not cause Russia to be aggressive because the West has effectively taken Ukraine out of Russia's sphere of influence very recently and this left Putin with few alternatives. Furthermore, a good way to prevent Russia from suffering much economic fallout from the Ukraine crises would be to de-escalate the situation and try to engage in trilateral talks that the many in the West vehemently oppose. Also, another possible way to prevent such disasters in the future is by including Russia in the European Union under terms that are favorable to both sides because the current conditions that would theoretically be imposed would destroy entire sectors of the Russian economy. I believe an economic solution to the situation is possible because Ukraine must remain a partner to both Russian and E.U., and not just the E.U. as currently advocated. All the trashing of Russia over Ukraine, the Olympics, an anti-gay law, Syria, Iran, etc. do not help the matter and likely increase the propensity of escalation. I believe the crises in Ukraine has economic roots and an economic solution, but the political implications seems to overshadow that fact. The E.U. wants Ukraine as a member, while Putin hopes to include it in a future Eurasian Union should replace the current customs union, so that conflict of interest has tremendous consequences and our administration publicly states the Eurasian Union should not even exist for political reasons, and it's likely to fail without Ukraine as a member. It's important to note that Putin has publicly stated that Ukraine is not even a nation and that the collapse of the U.S.S.R. was the greatest geopolitical catastrophe of the 20th century, so is he in another world as Germany's Angela Merkel stated or is he correct? I believe many do not understand Russia and its people and prefer to insult them for being different, which is what Russia's Federation Council addressed when granting Putin the rights to use military force after there were insults towards Russia from Obama. The U.S. says Russia is violating international law by sending troops to Ukraine and John Kerry said the U.S. is ready to "isolate Russia economically" and is "prepared to put sanctions in place".  According to Reuters, the ruble is already falling and Russian companies lost nearly $60 billion on Monday when the Moscow bourse slumped 11 percent, but this is hypocrisy when the U.S. didn't face sanctions and sent troops to countries such as Vietnam, Iraq, Afghanistan, Libya, Serbia, and Syria. According to Simon Mandel, Vice President of Emerging Europe at Auerbach Grayson & Co, the fact that "Russia has a natural hedge against geopolitical risk in the region" means there will be limited losses because "Russia-specific risk does rise, but it is hedged on the basis of higher oil and gas prices and the benefit that Russia will reap from that," when Russia is the world's largest energy exporter.

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