Sunday, 23 March 2014


President Putin has made no secret of aspiring to make Russia a country that must recapture some part of its former glory as a world power. Using the natural gas, oil and mineral reserves, as well as its low asset values, including low-cost labor force in comparison to the EU members, Russia has been able to recapture some of its former glory, but nowhere near where it was under the USSR or the era of the Czars when it held vast territories. The US and EU in essence drove Russia to use military intervention, placed it in a corner as Putin said, to capture Crimea over which Russia had gone to war in the 1850s and has always deemed it vital to its strategic interests, otherwise it has no outlet to the Eastern Mediterranean and no influence in the region.

In previous articles, I argued that the Ukrainian/Crimean crisis was one that went to the heart of whether Russia would have any voice in determining the regional - trans-Caucasus and Eurasian balance of power, or simply permit the US and its EU partners to impose a policy of encirclement and containment on Russia, thus weakening it strategically and by extension limiting its overall political and economic influence. The US spent enormous resources to outspend the USSR and claimed victory when the Communist system collapsed, only to be followed by the current oligarchic capitalist system that is immersed in corruption that the US also decries, although it helped to create it. Given that Russia has been an obstacle to US anti-Iran, anti-Syria policy, and given that Moscow is hosting Edward Snowden, and considering that Russia has repeatedly embarrassed the US by leaking confidential information such as the Ast/Sec Victoria Nuland tapes, the cumulative effect played an important role in the decision to pressure Russia as much as possible over the Ukraine issue.

The US behaves toward Russia as though it were the old Soviet Union simply because Putin's Russia is refusing to permit US-EU integration model to be imposed on Russia, which wants national capitalism to prevail. The enemy for the US and EU is Putin's national capitalism that has replaced Communism. In short, the US and EU are angry not only that they cannot determine the balance of power in Eurasia. but that their corporations do not have an "open door" policy to exploit the markets, labor and raw materials.  The Open Door Policy was introduced at the turn of the 20th century by the US toward China that held the promise of big profits, but it was in essence a division of China into spheres of influence - a scheme of imperialism not very different from what the US-EU on the one hand, and Russia on the other have done with Ukraine in 2014.In short, we are back to the Age of Imperialism, not Cold War, although it is a new era of Imperialism where nationalism rather than democracy and Communism are essential to this struggle. 

The irony in this new era of Imperialism is that the opposing sides are using as leverage the Jews, while claiming the other is neo-Nazi or Fascist. Putin and his regime, not known for their tolerance of minorities of any type from homosexuals to Muslims, have gone out of their way to argue that Russia is really fighting neo-Nazis in the Ukraine where an unelected government took over and contains extreme right wing elements with anti-Semitic tendencies. It is true that indeed neo-Nazi elements are inside the new regime and they do have the back-door backing of the US and EU, something Putin has been exploiting. However, very wealthy Jews in the Ukraine have sided with the new regime against Russia's interventionist policy in the Crimea, because those Ukrainian Jews see their best interests served by a pro-Western regime, even if it does have neo-Nazis in it.

To further defend his own record toward the Jews, Puttin stresses that his government has incorporated Russian Jews into the mainstream, and it is no surprise that some of the wealthiest oligarchs - billionaires and multi-millionaires - come from the Jewish community. No one can deny that Russia has a long history of anti-Semitic policies, something that has changed dramatically after the collapse of the USSR and the emergence of oligarchic capitalism in which a Jewish elite is very prominent.

Besides Russian Jews as part of the "overnight-created oligarchy" after the collapse of Communism, Putin has pursued cordial relations with Israel that has roughly a million Russian Jews. Israel has benefited from the corrupt oligarchic capitalist system of Russia owing to the reality that many wealthy oligarchs are Russian Jews friendly to Israel by spending and investing in the country. In fact, Russian money has helped enormously the economy of Israel that currently has a $3 billion trade with Russia, while trade between Israel and Ukraine is well under one billion dollars and diminishing because of Ukraine's poor economic status.

Given that there are Russian Jews who are part of the corrupt oligarchic capitalist system of Russia and given that Israel has benefited from this system, the question that some in Israel have been asking
if it matters that Putin adopted a militarist foreign policy toward Ukraine? If Israel had cordial relations with South Africa under the apartheid regime, why not pursue cordial relations with Putin that pro-Israel US politicians compare to Hitler?

Boris Shpigel, a Russian-Jewish oligarch, has been heading a Putin-supported campaign called "World without Nazism", apparently intended to hit at the neo-Nazi elements in the Ukraine and their US and EU supporters. The Russian-Jewish oligarchs and some of the Russian-Jewish organizations have no qualms of going along with Putin's anti-Ukraine anti-West campaign that clashes directly with Ukrainian Jewish and Western Jewish interests. Complicating matters further, the Kremlin has used Mikhail Dobkin, a Ukrainian Jewish politician-oligarch, to create further division in the West and Ukraine where Dobkin has no political prospects at this juncture but is solidly behind Putin's policies.

Anti-Semitic societal attitudes are about the same in Russia as they are in the Ukraine, and both of these countries have a long history of racism toward minorities, and especially toward Jews. However, after the collapse of Communism, in both countries a number of Jews became part of the oligarchic political and financial elites. That there are Jews who have been financing Ukraine's Nazi-Svoboda party has been something that Russian government exploited by presenting Russian Jews to argue of the dangers buried in the pro-West Ukrainian regime. Because the Ukraine has a problem with its neo-Nazi past and present, one ultra-nationalist organization “Right Sector” met with the Israeli ambassador in Kiev to state that it opposed anti-Semitism.

Given the very complicated picture of Putin's inner circle of oligarchs and of Ukraine's regime's mixed bag of neo-Nazi and oligarch supporters, the propaganda war has become more puzzling for the average person. A BBC commentator noted that the US and EU would not dare freeze the assets of prominent Russian-Jewish billionaire Roman Abramovich, for he is far too prominent and well-connected. Besides, if the West goes after Russian Jewish oligarchs, many close to Putin, is that not a form of anti-Semitic policy and hurting Israel as well. European analysts are cautioning that hurting Russian billionaires and millionaires who have their money in the West would only hurt the EU, while benefiting non-Western countries where funds will be transferring.

According to Western financial experts and Russian oligarchs, if the US and EU really wanted to hurt Russia, they would cut off its access to banking capital, forcing the Russian banks to rely on domestic reserves that would eventually run out. This measure would invite retaliation from Moscow and it would also have consequences for the West as well. Instead, the West opted for a softer approach. Among those the US target for sanctions is mega oligarch Gennady Timchenko, head of the largest energy company in Russia and close to Putin. Others on the list include Putin's chief of staff Sergei B. Ivanov, and Yuri V. Kovalchuk, a banker for Russian oligarchs. But the core of the US sanctions on Russia are intended to hit the oil and gas industries on which Russia depends for most of its revenues. Sanctions are very light and symbolic at this stage, but they could become heavier and more painful. My view is that will never take place because Russia is such an integral part of the EU and world economy that serious sanctions would mean a contraction in the world economy, with the US and China benefiting while EU hurting the most.

The Ukrainian crisis was from the very beginning a struggle of imperialist powers trying to exploit the country for geopolitical advantage and to secure its internal markets and raw materials. Like struggles of imperialism of the 19th and 20th century, this one is veiled under rhetoric about freedom and democracy, fighting against neo-Nazism and anti-Semitic elements, trying to protect national sovereignty. None of these things are true because countries involved could care less about Ukraine's national sovereignty or social justice.

There is a great deal of analysis regarding the Ukrainian crisis, and many Westerners have concluded that Putin has been reckless in his approach because of the unforeseen consequences to the Russian economy after a sanctions regime is imposed. I would argue that Putin has been "calculatingly risky" rather than reckless, because Moscow has actually gone through procedural steps - Crimea referendum as one example - to secure what is obviously a tacit legality that Russia believes the regime in Kiev lacks. This does not mean that what has unfolded in the Crimea is not a form of imperialism, but it is in reaction to Western imperialism and containment policy of Russia. By contrast, Obama is far more constrained by institutional limits than exist in the Kremlin, so Obama is actually less of a risk-taker in this respect. Having said this, US foreign policy in general and toward Eurasia specifically is rooted in expansion whether by diplomatic, economic or military means and this is something not lost on many in Crimea who voted for the "imperialist with the most benefits for the region". 

While the people of Crimea voted on sentiment of nationalism, they also voted to join Russia because they see their identity and a better future with Moscow instead of Kiev. After all, the EU and US do not have a good track record in dealing with periphery countries - Portugal, Ireland, Spain and Greece - given that austerity has resulted in sharply lower living standards. Once the IMF and the US-EU fully integrate Ukraine into the Western economic bloc, the fate of the majority of Ukrainians would be about the same as other northern Balkan people where its average income is about $400 a month.The prospect that integration with the EU would sharply raise living standards is very real, but for the oligarchic elements and not for workers and the middle class. Given that people were faced with choices of choosing imperialist patrons, the Western Ukrainians for the most part are convinced that the West offers the best longer term options, while the citizens of Crimea look to Russian imperialism for immediate benefits. 

Is Ukraine the last country over which imperialist rivals will be fighting over for influence, or is this a sign of things to come? As we are entering a period of very tough global competition for markets and raw materials, Ukraine is the tip of the iceberg. If the Great Powers are not willing to place limits on their imperialist designs, the result will be a massive military build up on a world scale. Already the US is calling on its allies, including the poorer East European ones, to spend more on defense, thereby enriching the defense contractors of mostly Western countries. If a new wave of military spending gets under way, the net losers will be the declining middle class and workers whose living standards have been declining in the last decade.

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