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Eastern Europe

The Black Sea of Economic Cooperation

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Since the Ukraine crisis of 2014 the security situation in the Black Sea region has significantly deteriorated. The annexation of Crimea by Russia as well as the latter’s military moves around the Kerch Strait and in the Azov Sea destabilized the shaky status quo which had been in place since the end of the Cold War.

To back up the current state of affairs in the Black Sea, many an analysis as well as entire books dedicated to the Ukraine crisis mention various Russian-Turkish wars of 18th-19th centuries, underlying the notion that the Black Sea has always been a space of competition and intermittent confrontation among several powers.

Wars indeed were waged and at least two powers were always competing with each other for influence across the sea. This narrative, however, portrays the Black Sea as a sea of insecurity. In reality, though, seen from a centuries-wide perspective, wars between Russia and Turkey in the Black Sea lasted for a small fraction of time in comparison with the periods of peace in the 18th-19th centuries.

Moreover, the Black Sea, though always surrounded by rival powers, was nevertheless a space of economic exchange. Trade flourished, which contributed to close contacts between coastal states. Take, for example, the period of Greek colonization in the 8th c. BC. Colonies in what is nowadays western Georgia and in the Crimean Peninsula enabled the exchange of goods in the region. During the Roman and Byzantine periods (up to the 7th-8th cc. AD, the coastline of modern western Georgia was closely integrated with great cities in Asia Minor and Crimea.

Under the unified Georgian monarchy (late 10th-15th cc.), despite patchy information in historical sources, there was a wide range of economic activity which connected western Georgia to Byzantium, Crimea and later to the Ottoman Empire. Moreover, this period saw such a large economic interconnection that Georgian traders even visited Constantinople, Thessaloniki and from the late 13th c. onwards, were in close contact with Italian merchants who operated ships and had colonies in Crimea and in Georgian cities – Sokhumi, Poti and Batumi.

Even the period of great empires from the early 18th c. around the Black Sea cannot be considered solely as a time of continuous confrontation. In fact, the Black Sea served as a good merging point for connecting different economic systems represented by Russia and the Muslim world (namely the Ottoman Empire). By the early 20th century, just before the outbreak of World War I, there was much economic activity seeing Russia sending most of its coal and grain through the Bosporus and Dardanelles to different parts of the world. Georgia, too, was connected to the rest of the world by the early 20th century when Batumi operated as a main conduit.

Surprisingly the Soviet period too can be characterized as a period of economic cooperation. Ukraine, Georgia and Russia’s ports transported oil, coal and other natural resources through the straits to the Mediterranean.

Thus, despite the wars we know in history, there have been even longer periods of much deeper economic cooperation which the countries (or empires) around the Black Sea have enjoyed over several centuries.

Back to the current deterioration of the security situation in the Black Sea, it could potentially diminish overall economic activity as the flow of foreign investment may be curbed or diverted elsewhere. In a way, the geopolitical situation in the Black Sea today is more chaotic and unpredictable than it was in the 19th century. A certain order was still in place when the Russian and Ottoman Empires fought each other, whereas in 2019 there is much unpredictability in Russian and NATO behavior. Nevertheless, it is still possible to say that economic cooperation among the countries living around the Black Sea will continue. The sea will again play a role not of a divisive, but rather a unifying character.

Emil Avdaliani specializes on former Soviet space and wider Eurasia with particular focus on Russia's internal and foreign policy, relations with Iran, China, the EU and the US. He teaches history and international relations at Tbilisi State University and Ilia State University (Georgia).

Eastern Europe

Demystifying the Myth of War Crimes in Ukraine

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image source: war.ukraine.ua photo: Vadim Ghirda

Hypocrisy – a prevalent trait of the western powers. West’s policies on human rights are deluged with double standards. What is going around the world is a secondary, to them safeguarding their interest is prime. What Indian barbaric regime is doing in India with the minorities and in Indian occupied Kashmir, Israelis in Palestine, is not enough to catch an eye, because Muslims are dying, its none of their business. Let’s recap what USA did in Afghanistan and Iraq. How war crimes done by the west in these countries can be ignored. Humanity suffered at the hands of these western states. Innocent people got killed in the drone strikes and the West called it ‘Collateral Damage’. Innocent civilians suffered pain, hunger, and anguish, but West was mute. Human rights are for all without any discrimination based on religion, origin, race and colour. Unfortunately, the hypocrite USA only consider Human Rights for its allies and the holy land of USA. Clear violations of international humanitarian law are done by USA and its western allies in Afghanistan and other states. Moreover, the crime partner of USA, India is doing ferocious acts in India Occupied Kashmir, but all of them are silent.

As per the standards set by USA, kill innocent people and then an apology by Central Command is enough to justify an unjust loss of human life. Yes, the world should follow this too. Why only Americans have the right to make unjust just. Who will set an example of justice, war mongers, liars and killer USA? Oh yes, wonderful, now make big news out of nothing or yes something on Ukraine. Ukrainians are the only human left on the face of earth to get the western sympathizes. But it’s important for the Ukrainian decision makers to not to be fooled by the USA. Demystifying the war crimes by Russia in Ukraine is not to support Ukraine but yes to counter Russia. The very reason why this conflict started is West itself. And then, yes USA is excellent at imposing sanctions and it did the same with Russians as well. But, literally speaking who is going to listen to USA, not even India, one of the USA’s defense partners.

International Criminal Court – ICC should know its responsibility and first of all held USA accountable for the war crimes in Afghanistan and Iraq. Fake news, misinformation, mal-information, and disinformation is playing big role in manipulating the contemporary international politics. States are using this to hijack the actual information and create an environment of mistrust. Access to actual information in such circumstances in becoming difficult.  Why Russian news channels are blacklisted, why only Ukrainian and other foreign media outlets are into play. USA is busy in narrative building based on fake information.  USA is actually selling the despairs of Ukrainian people.  Therefore, huge responsibility also lies on journalists as well. Are we living in the stone age or in 21st century? Where is responsible journalism? The journalist and civil societies should work as pressure groups and push ICC to open investigations on unlawful killings by USA and its allies in Afghanistan. ICC also open inquires on the atrocities done by Israelis in Palestine, and Indian barbarism in Indian Occupied Kashmir. A detailed systematic investigation is need of hour.

This will reveal the horrible face of these elites of international arena. The USA forces in Afghanistan have “committed acts of torture, killings, cruel treatment, outrages upon personal dignity, rape and sexual violence”.  Did Russian forces have created a ‘secret kill team’ to allegedly kill innocent Ukrainian Civilians?  The answer is NO.  Let’s also consider ‘Collateral Damage’ in the case of Russia – Ukraine War. Instead of making world fool again on Ukraine, USA should remorse over its war crimes. A shameless country with no ethos is going to advocate Human Rights when its own citizens are not safe from the hate-fire it started. Humanity – a word, not known to USA. All it knows is to control other states’ resources, sovereignty, and independence. Subtle interference in the other countries’ internal matters, and creating fault-lines to manipulate the policy making. I doubt USA as an example of human rights and democracy. Disinformation is the new normal for USA.

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Eastern Europe

The Illusion of Constraint: Russia Advances in Eastern Ukraine Despite Harsh Sanctions

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The war of attrition is gradually becoming a reality as Russia continues to make gains in the east. According to Ukrainian officials, Russian forces now control about 80% of the eastern Ukrainian city of Severodonetsk. Despite new aid packages by the US and European Union (EU), Ukrainian armed forces are struggling in Donbas as a brutal Russian offensive is underway – forces now controlling over 20% of Ukrainian territory, according to president Zelensky. Analytical estimates reveal that Russia (alongside pro-Russian rebels) has already seized almost 90% of eastern Donbas; en route to upend the city of Severodonetsk and Lysychansk in the province of Luhansk. And geopolitical experts believe a similar showdown in the neighboring Donetsk province would ease Russian domination over the entire Donbas region.

The Ukrainian dignitaries have consistently insisted on long-range artillery support to counter Russia’s onslaught. However, a single contention prevails in the Western cohort: supplying long-range weaponry could enable Ukrainian attacks beyond Russian borders, perhaps invoking a direct conflict with a belligerent Russia. Thus, the Western support remains mostly limited to conservative alternatives as Russia defies earlier odds to gain an upper-hand. The core western defense has been the barrage of sanctions imposed on Russia and the damage to the Russian economy. The West believes it could avoid militarily provoking Russia and still economically debilitate the country to the point of desperate negotiation. However, the truth is far divergent from this popular belief.

Even after three and a half months, the torrent of sanctions has failed to decimate the Russian economy as initially envisioned by the West. Putin has spent the last two decades fortifying the Russian economy via integration into the global financial apparatus. Sure, the invasion in late February spurred financial restrictions and constraints on trade. But the initial panic has since receded as relative stability is taking on the reins. The Central Bank of Russia has played a pivotal role in preventing a financial collapse. As sanctions threatened to spur a crisis, the Bank of Russia hiked the policy rate to 20% – encouraging savings; preventing the egress of investments. The Kremlin mandated the state-owned enterprises to hold export receipts in Roubles. And salaries and pensions were generously increased to compensate for the inflationary effects of the invasion. Three months forward, the interest rates are back to the pre-invasion level of 9.5%. The Rouble – crashing to a record low in days following the invasion – is trading near four-year highs. And inflation, though still a vice, has cooled off to 17% year-on-year from a two-decade peak in April. While fiscal and monetary policies have considerably stabilized the economy, another underlying factor has unsurprisingly buttressed the rebound: the Russian energy sector.

Foreign companies are pulling out, investments are downgrading, and currency reserves are locked up around the globe. Then how exactly is Russia financing the war in Ukraine? Sure the stocks of imports are running low, and people are spending less. Yet how is the Russian war machine still operational when the world is closing up for Russia? Ironically, the world is indirectly financing the Russian agenda in Ukraine. Fossil fuel exports have always been monumental for the Russian economy. Receipts from oil and gas exports made up roughly 45% of Russia’s federal budget in 2021. According to a market report of the International Energy Agency (IEA), Russia’s oil revenue alone is up by 50% this year – despite the toughest raft of sanctions ever meted out by the West. The US has utterly banned Russian energy imports while the EU has managed to reduce its reliance on Russian energy supplies. According to the data from the Center for Research on Energy and Clean Air (CREA) – a Finnish nonprofit think tank – the EU lowered natural gas imports from Russia by 23% in the first 100 days of the invasion (February 24 to June 3) compared to the same period last year. The data further reveals that the EU reduced its oil imports from Russia by 18% in May. Still, Russia earned a record $97 billion in revenue from exports of fossil fuels despite a modest fall of 15% in export volumes. How is that possible?

Despite trading at roughly 30% discount from international prices, Russian crude is sailing as surging global oil prices are still fetching receipts over 60% higher compared to last year. The volumes have certainly lowered as many countries have refused to trade with Russia to avoid American fury. Yet some countries have contended for cheap Russian energy supplies to guard domestic economic interests. India has been surprisingly vocal and determined about its choices of self-interest despite Western pressure. Since the invasion, India has procured 27% of its crude needs from Russia – up from less than 5% in April. According to research, India has cumulatively imported roughly 18% of Russia’s total oil exports since the invasion – increasing from roughly 1% pre-war quota. China has been another noteworthy importer of Russian oil, building its strategic reserves amid high global oil prices. Despite agreeing on a partial embargo banning roughly three-quarters of Russian oil imports to the region, Europe would not cast a substantial blow to Russia until 2023. While criticizing India and China for purchasing Russian oil, the EU has perhaps neglected its own energy imports from Russia, approximating €57 billion in the first 100 days of the invasion. And in spite of lofty promises to wean off Russian energy, European countries like Hungary and Slovakia would continue to rely on Russian oil via pipeline till at least 2024. Hence, while the West convenes to topple Russian dominance in Ukraine, the efforts are unfortunately not enough to fluster Putin – at least in the short run.

Nonetheless, the sanctions would hurt Russia somewhere down the line. Elvira Nabiullina – Governor of the Bank of Russia – recently admitted: “The effect of sanctions has not been acute as we feared at the beginning. [However] it would be premature to say that the full effect of sanctions has manifested itself.” The windfall energy export receipts may continue, but the import shortfall could damage the productivity of other sectors of the Russian economy. However, we need to understand that this is a war of attrition. And (despite a budget deficit) Russia has enough fiscal room to finance its domestic and military needs shortly. Mr.Richard Connolly – Director of the Eastern Advisory Group – sums up the reality perfectly: “For as long as the political will is there in the Kremlin and for as long as export prices remain high, I don’t see any immediate financial constraints confronting the Kremlin.” Hence, as sanctions fall short and Ukrainian defense fissures, the outlook is bleak – especially when Kyiv is resistant to negotiate territorial gains to fend off a humanitarian catastrophe.

Ultimately, the West needs to acknowledge its failure and decide: Is the sluggish war in favor of Ukraine or Russia? And what would be the primary goal of negotiations if Russia gains enough territory to dictate the terms? Given how the West has already exhausted almost all of its economic options and military options are off the table, I wonder how even the negotiations could do any good to Ukraine!

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Eastern Europe

Lithuania to lose confidence for German troops in near future

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Nine NATO member states held talks in Romania on Friday ahead of a key NATO summit later this month.

The nine, including Romania, Poland, Hungary, Bulgaria, the Czech Republic, Slovakia, Estonia, Latvia and Lithuania urged NATO to increase their protection.

It should be noted that some of these countries use every political event to call NATO for additional troops on their territories. Thus, the Baltic States are the leaders among applicants.

Germany in its turn agreed last week to increase its contribution to NATO’s Enhanced Forward Presence (eFP) battalion in Lithuania. German Chancellor Olaf Scholz announced such plans after passing legislation to increase defense spending during a visit to Vilnius on Tuesday.Germany leads the 1,200-strong eFP battlegroup in Lithuania and currently has around 500 soldiers stationed there.

“We are going to increase our contribution by strengthening the Eastern flank of NATO. We are going to create a strong brigade and we have discussed that together in our meetings and we are going to have to work towards this direction,” Scholz said at a press conference with Baltic and German leaders.A brigade usually consists of between 3,000-5,000 troops. So, Berlin intends to increase its troops by 10 times.

The Baltic States welcomed Germany’s “historic decision” without suspecting what it could lead to.

It is no secret that German military contingent has very dubious reputation. In 2021 Germany had to recall a platoon from a NATO mission in Lithuania after reports emerged of troops engaging in racist and anti-Semitic behaviour, as well as sexual assault.According to Der Spiegel, the allegations relate to a party held at a hotel in Lithuania at the end of April, 2021.Some 30 German soldiers headed home from Lithuania.

The misconduct of foreign soldiers in Lithuania was a slap in the face of Lithuanian population who believed troops are here to defend.

A number of troops were also suspected of bullying, threatening violence and filming an incident of sexual assault.

Such behaviour is not only inexcusable but brings shame on Germany as NATO’s security guarantor.

Meanwhile, according to the FT latest publication, the proposal from Berlin is that a 3,500-strong brigade would only have a permanent headquarters in Lithuania, staffed by 50 to 60 personnel, but be based in Germany.

And probably, this Germany’s back step will secure Lithuanian population.

The Berlin’s decision to increase its military presence in Lithuania by 10 times could cause potential threat of increasing the number of incidents with inappropriate behavior of German military personnel by 10 times. It is logical that the number of crimes will rise and the residents’ trust in NATO ally will drop significantly. Is Lithuania ready to tolerate aggressive foreign soldiers in the streets of its cities? Can Lithuanians be calm for their children? Does Lithuania really need such foreign troops increasing? There are too many questions to answer before making the final decision.

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