And the Winner in Ukraine Is...China

Dimitri K. Simes, Paul J. Saunders | 

March 12, 2014

Here we go again. The Obama administration, confronted with a foreign-policy crisis, is flailing. This time it isn’t Syria, but Ukraine.

The Crimea’s March 16 referendum looms larger each day, but U.S. officials are issuing declarations and little more. America’s paramount goals over the next few days must be to make a final serious effort to preserve Ukraine’s territorial integrity—with a weak hand and very limited time—and to prepare a post-referendum plan to contain the strategic damage from the Obama administration’s latest fumble. If the president and his advisors fail, the only beneficiary would be Beijing.

The crisis in Ukraine is a product of Russia’s desire to restore control over Crimea and of Ukraine’s deep social and political divisions. But in a manner more reckless than feckless, the Obama administration has made matters worse at each step. It is fair to say that the White House “led from behind” as the European Union sought an Association Agreement with Ukraine by failing to press Brussels to do more to secure ousted president Viktor Yanukovych’s signature on the deal—something that could have avoided the crisis and protected key U.S. interests. Once the protests began, the administration essentially abandoned its efforts to persuade Russia that Ukraine’s Western orientation would be “win-win” and instead supported a “winner-takes-all” approach in the streets of Kiev and other Ukrainian cities—something that quickly backfired when a fractured Supreme Rada voted to remove Yanukovych without reaching the constitutionally mandated supermajority and then appointed a new government with only token representation from Russian-speaking regions. Russia has now deployed troops in Crimea, where the region’s legislature likewise went around the constitution in scheduling a referendum on autonomy, and then advancing its date from March 30 to March 16 and adding the option of incorporation into Russia.

After Russian forces established control in Crimea, Obama returned to a policy process that has already failed repeatedly elsewhere: 1) make bold and moralistic pronouncements, 2) put America’s prestige and credibility on the line, and 3) produce no real policy. U.S. policy toward Syria has been the most visible and damaging application of this approach so far, but it is far from the only one. This is how an administration that entered office determined to rebuild America’s image has instead further marred it, discouraged allies, and emboldened foes—grand talk and no action. The administration’s peculiar combination of Bush-era self-righteousness with Obamian instinctive caution, whether through analysis-paralysis or simple timidity, offers the worst of both worlds.

Issuing pompous press statements or fact sheets that approach Bill Clinton’s definition of “is” in their linguistic parsing may be emotionally satisfying, but it does not help to keep Ukraine intact. Nor does it impress Russian leaders who are long past caring about White House bluster or their favorability ratings in Western public-opinion polls. Posturing is not policy. Worse, it is counterproductive when it comes to the one person making decisions about Crimea: Vladimir Putin.

Salvaging Ukraine’s unity requires pragmatic, private and high-level negotiations on significant Crimean autonomy as part of a comprehensive Ukraine settlement with no further delay. Synchronizing America’s and Europe’s positions will be extremely important.

In dealing with Russia, U.S. officials should reiterate that a Russian annexation of Crimea would make Western-Russian relations newly adversarial and that the coming days will provide the final opportunity to avoid that outcome by finding a path forward that preserves Ukraine’s territorial integrity. Specific threats are unwise and will serve primarily to provoke counterthreats, especially if stated publicly.

At the same time, in conversations with Kiev—including during Prime Minister Arseniy Yatsenyuk’s March 12 visit to Washington—the administration should urge restraint and flexibility. Keeping Crimea and calming eastern Ukraine will likely require several steps, including not only very substantial autonomy for Crimea (with guarantees that Kiev will not unilaterally revoke this status in the future), but also a lesser degree of autonomy for some eastern Ukrainian regions and a national-unity government that includes Russian-speaking political leaders. The administration should offer expanded assistance to Ukraine to win its support. The $1 billion already announced is too little.

With Crimea’s regional government, the United States could offer its own commitment as a guarantor of Crimea’s autonomy, modest financial assistance, and a dose of reality: if Russia annexes Crimea, the peninsula will enter a legal no-man’s-land that will constrain its future development. U.S. officials should also seek to persuade the Crimean government to delay its referendum and preferably to remove integration into Russia from the ballot. One option would be to combine a delay in the referendum with a delay in Ukraine’s national elections, scheduled for May 25, if Kiev would agree.

Unfortunately, the odds for success with this approach are less than 50-50 and are decreasing on an almost hourly basis given the scale of the task and the time available. If negotiations fail, the United States must move swiftly after the referendum and Russia’s presumptive incorporation of Crimea to deter Moscow from further intervention and to reassure Ukraine, U.S. allies, and others in the region. Several important realities should guide America’s response.

First, the United States and NATO do not have a credible military option to liberate Crimea. Russia’s military lags far behind America’s, but Moscow is still a nuclear superpower and Russia would have a much higher stake in an armed conflict, particularly after taking a public position that Crimea is Russian territory.

Second, while it will be tempting to punish or to isolate Russia, this could have profound and destructive unintended consequences. The Obama administration and members of Congress must consider whether they are prepared to make Crimea’s fate the organizing principle of U.S. foreign policy—which it will become either deliberately or by default should the United States take this path. They should also think carefully about how other nations, including U.S. allies and rivals, would react.

It is far from certain that the European Union would join the United States in applying the “crippling” sanctions some members of Congress are already discussing. Because Europe-Russia trade and investment are more than ten times greater than U.S.-Russia trade and investment, Washington would be asking its allies to risk over $170 billion in foreign direct investment in Russia and over $100 billion in annual European exports. With only about $10 billion or so in U.S. investment and an equivalent amount in annual exports, European capitals may not be too impressed with our support.

Outside Europe, few seem likely to put their ties to Russia on the line over Crimea. Would Brazil or India take this approach? How about Japan or South Korea? Hopefully President Obama does not really believe his rhetoric about standing with a nonexistent “international community.” Similarly, though Secretary of State John Kerry has reportedly informed his Russian counterpart Sergey Lavrov that Crimea’s annexation “would close any available space for diplomacy,” this does not seem credible. The Bush administration terminated contacts above the deputy assistant secretary level after Russia’s 2008 war with Georgia, and America may do the same again this time. But how long will it last? Obama’s reset ended that effort after just a few months—for good strategic reasons.

The United States can wound Russia’s sputtering economy, but Moscow would look for—and find—ways to respond. Threats to seize officials’ assets are nugatory—what self-respecting Russian official who did not move assets out of the United States after the U.S. Congress passed the Magnitsky Act over a year ago would not have immediately phoned his or her banker the day after the White House announced this option? Broader sanctions against Russian companies could invite disproportionate retaliation against U.S. firms and their employees, who have few legal protections in Russia. To raise revenue, Russia would aim to maximize earnings from its most saleable exports: energy, high-tech and low-tech weapons, and no-questions-asked nuclear power plants with new proliferation risks.

Ukraine would be the first victim of any extended confrontation because it would inevitably become a political, economic and social battlefield, if not a military one. Russia might start by shutting off its natural-gas exports through the country. Though this would be costly for the gas monopoly Gazprom, Ukraine would suffer the most—especially eastern Ukraine, where the country’s industrial cities depend on steady supplies. Ironically, inflicting the greatest pain on predominantly Russian-speaking eastern Ukrainians might only further polarize Ukraine’s divided population. Necessary economic and political reforms would be considerably harder than they have been in the past. Europe would certainly survive a disruption in gas supplies, but it would likely be costly and difficult. Because dependencies and policies vary, it could also stoke differences inside the EU. Finding new energy suppliers and increasing domestic production would preoccupy top officials.

In Cold War 2.0, Russia would exploit asymmetries—making mischief, after all, is far easier than managing it. Russia might reorient its policy toward Iran, Syria and Venezuela, where Moscow could create far more problems than it has so far. Supplying S-300 or newer S-400 missiles to Tehran—which Iranian president Hassan Rouhani could hardly refuse, since his government is suing Russia over a contract to deliver S-300s that Russia’s former president Dmitry Medvedev blocked at Washington’s request—would be only the beginning. Syria’s President Bashar al-Assad doubtless has a long and thus far unfulfilled shopping list too. Post-NATO Afghanistan, where Russia and Iran have both supported the Northern Alliance, offers different opportunities for troublemaking.

In this world, U.S. officials and diplomats would face simultaneous simmering crises. The effect would be nothing less than vertiginous as they pivoted from Asia to Europe to the Middle East and back again. For an Obama administration that often can’t handle individual challenges in isolation, it would almost certainly amount to a massive system overload. Meanwhile, during this global meltdown, leaders in Beijing could relax—waiting and watching for the right moments to act on their own ambitions.

In the end, China’s rise is much more significant than Crimea’s fate, and the United States should avoid reacting to the Ukraine crisis in ways that could severely undermine its ability to manage this paramount priority. China and Russia are not allies today and Beijing will not publicly support Crimea’s self-determination, something that Chinese leaders clearly see as contrary to their view of their own country’s territorial integrity. Nevertheless, there is little doubt about Beijing’s views of who is to blame for the crisis in Ukraine—the West—or about China’s sympathy for Moscow. Leaving Moscow no alternative to a far stronger relationship with Beijing, possibly including new high-tech arms sales and even diplomatic support of China’s territorial claims, would be a Pyrrhic victory. Perversely, efforts to displace Russia’s gas exports to Europe, which current events are likely to accelerate, may make Russian-Chinese deals more likely by putting new pressure on Gazprom to accept the lower prices China is offering. As Henry Kissinger recently wrote, the administration should remember that “the test of policy is how it ends, not how it begins.”

The administration should also consider how long it can maintain domestic and allied support. Having been a major political beneficiary of domestic anger over Iraq, President Obama should recognize that a new Cold War with Moscow could produce similar dynamics at home and abroad—including bigger defense budgets. After U.S. experiences in Iraq and Afghanistan, not to mention in the 2008 Russia-Georgia war, the administration should be thinking not only about its policy options but also about its exit strategy from a confrontation with Moscow. This might encourage U.S. officials to stop making threats that they can’t and won’t deliver on before they further embarrass themselves and the country.

If Russia annexes Crimea, this action will bring an end to the cycles of U.S.-Russia relations since 1992 and begin a qualitatively different era. The United States will have no practical alternative to refusing to recognize the legality of Crimea’s annexation. Washington will also have to discuss new NATO basing and deployments that balance credible deterrence of further Russian action and credible reassurance of U.S. allies and partners with the need to avoid escalation. This may include some military support to Ukraine, but will also require brutal honesty with Kiev. If Ukraine’s new leaders choose to act recklessly—as Georgia’s Mikheil Saakashvili did in 2008—they will do so at their own risk. The United States should also work with the European Union to accelerate U.S. natural-gas exports to Europe, though this will be a long-term effort and is unlikely to produce immediate dividends. Finally, Washington should think long and hard about America’s complex relations with China. If necessary, the United States can confront either Moscow or Beijing, but the U.S. should avoid a simultaneous break with both—something much more difficult to manage. We cannot afford further missteps.

Finally, we must keep a sense of perspective about Russia. Vladimir Putin may have seized Crimea, but he is not Adolf Hitler. History rarely repeats itself. Still, 2014 looks less like 1939 than 1914. In the decade preceding World War I, Russia was weakened by the 1904-05 Russo-Japanese war and its 1905 revolution, and consequently accepted several humiliating setbacks in the Balkans at the hands of the Austro-Hungarian Empire and Imperial Germany. In response, Tsar Nicholas II decided to consolidate his alliance with Britain and France and to modernize the Russian army. Moscow finally took a stand in August 1914, surprising Kaiser Wilhelm and Emperor Franz Joseph, who thought that Russia would not dare to call their bluff. Indeed, the resulting war was suicidal for Russia and its Tsar, but Nicholas took Germany and Austria-Hungary down the drain with him. In an era before nuclear weapons, millions of Europeans died. And the war’s apparent winners—Britain and France—soon faced terrible new challenges.

It’s hardly a pattern that the Obama administration—or any other power—would want to emulate. If Obama wants to restore America domestically and internationally, he will need a different approach to Ukraine—and soon. Otherwise, he will flunk the Kissinger test by clinging to a policy that has begun badly and could well end even worse.

Dimitri K. Simes is publisher & CEO of The National Interest. Paul J. Saunders is executive director of the Center for the National Interest. He served in the State Department from 2003 to 2005.