DEC. 23, 2014
REUTERS/Maxim ZmeyevRussian President Vladimir Putin speaks during his annual end-of-year news conference in Moscow December 18, 2014.
Russia's financial crisis will get worse before it gets better.
Western sanctions probably aren't going to convince Putin to cease his aggression in Ukraine and elsewhere because Putin and most Russians seem to enjoy being despised by the West.
Economic sanctions from the West might actually encourage more aggression from Russia.
December 2014 is the month Putin’s Russia was plunged into undeniable crisis.
With the dramatic drop in oil prices, the collapse of the ruble, and Western sanctions pressure, Russians are going into the new year in a dramatically different, and lessened, economic situation than the one they enjoyed at the beginning of the year.
This will bring myriad hardships to Russians, particularly because even Moscow is admitting that low oil prices may be the “new normal” until the 2030’s.
Caveats abound here. The vast majority of Russians don’t travel abroad, much less have vacation properties in Europe, nor do they have hard-currency mortgages (the ruble now having returned to its Soviet-era pariah status).
Moreover, the average Russian has a physical and mental toughness about getting by in tough times — it is an unmistakable point of national pride — that Westerners cannot really fathom.
In no case now does Russia face the sort of complete economic collapse that it endured in the 1990s, when the Soviet implosion pushed poor Russians to the edge of survival. Life in Yeltsin’s Russia, particularly beyond the bright lights of Moscow and St. Petersburg, where few Westerners visit, was harsh and frankly dismal.
Nevertheless, the economic undoing of Putinism over the last weeks, brought about by Western sanctions in response to Moscow’s aggression against Ukraine which began in early 2014, heralds major changes for the Kremlin, and not just in its domestic affairs.
While Russia has far deeper hard currency reserves than it possessed the last time the ruble’s bottom fell out in 1998, and it’s clear that Moscow will try to prevent banks from failing, there should be little optimism among Putin’s inner circle.
The Power Of Sanctions
Russia now faces a protracted and serious financial and economic crisis that will get much worse before it gets better. Since much of Putin’s popularity has derived from the impressive economic growth his fifteen years in the Kremlin have brought — a rise in living standards that has benefited average Russians as well as oligarchs — the political implications of this collapse for Russia’s president are grave.
But are they enough to get Putin to cease his aggression and, in the long run, perhaps even leave office? Western politicians, eager to avoid armed confrontation with Russia, have assumed that enough sanctions-related pain will force Putin’s hand and get him to back off in Ukraine and elsewhere. This was always a questionable assumption.
In the first place, sanctions tend to work as intended mostly against countries that strongly dislike being a global pariah, like apartheid-era South Africa, whose English-speaking white elites hated how they suddenly were no longer welcome in the posh parts of London. There is no evidence that Putin and most average Russians find being despised by the West particularly objectionable; on the contrary, many seem to revel in it.
Alexander Zemlianichenko/ReutersRussian President Vladimir Putin toasts with ambassadors during a ceremony to hand over credentials at the Kremlin in Moscow, November 19, 2014.
Then there is the touchy fact that sanctions sometimes work not at all as intended.
Using economic warfare to break a country’s will, which entails real hardship for average citizens, can cause aggression rather than prevent it. The classic example is Imperial Japan, which faced grim economic realities once US-led oil sanctions took effect in retaliation for Tokyo’s aggressive and nasty war in China.
Lacking indigenous petroleum, Japan was wholly dependent on imports that the US blocked through sanctions. These placed Japan on what strategists would term “death ground,” since without imported oil its economy and its military could not function. Moreover, the sanctions were seen — correctly — by Tokyo as a sign that the United States and its allies did not want Japan to dominate the Western Pacific region, which constituted an intolerable affront to Japanese pride.
The closest place to get the oil Japan needed was the Dutch East Indies, today’s Indonesia, and Tokyo resolved to seize the oil there by force. To do that, Japan first had to drive the Royal Navy out of Singapore and the US Navy out of the Philippines, and to enable that they had to disable America’s Pacific Fleet, which was ported in Pearl Harbor. You know the rest of the story.
Japan in 1941 believed it was already facing defeat through oppressive sanctions, so engaging in actual war seemed like a logical choice. The total defeat of the Japanese Empire in 1945 indicates that Tokyo’s decision to bomb Pearl Harbor was madcap, but had things worked out differently at, say, Midway in June 1942, such choices might look very different to historians today.
When sitting on promotion boards for battle-tried colonels hoping for selection to general in his army — something he enjoyed — Napoleon liked to ask of a candidate, pointedly: “Yes, but is he lucky?” Japan was not at all lucky in the war it started in December 1941. But its defeat was hardly preordained, and the salient point is that Tokyo felt that the Americans really started it with their harsh sanctions.
A Push For War
Might Putin do the same and decide that since Russia is facing defeat at the hands of Western sanctions, which represent a kind of war, why not opt for actual war, in which Moscow at least stands a chance of victory? It’s too early to determine that, but 2015 will be the year such grave decisions are made.
To date, there are no indications that Putin intends to back down in Ukraine, or anywhere, thanks to Western sanctions.
It’s important to note that Putin’s narrative, which he has elaborated on several occasions and is accepted by most Russians, is straightforward: He has done nothing illegal in Crimea and eastern Ukraine. He is only protecting Russia and ethnic Russians, which is a legitimate national interest.
David Mdzinarishvili/REUTERSA separatist in eastern Ukraine
Moreover, they believe, it is the height of cheek for the Americans, who after all invade countries all over the world in the name of “freedom,” to call Moscow’s legitimate actions on Russia’s borders “aggression.” Russia will defend itself against this rancid hypocrisy and will resist the West’s warlike sanctions, which are intended to punish Russia for defending itself and its rightful interests.
Putin’s public statements this month make clear that backing down now is not in the cards.
At a press conference last week, he pointedly blamed the financial crisis on the West (“The current situation was obviously provoked primarily by external factors”) while promising the economy will eventually improve. The usual KGB-style tough talk was on display as a British journalist explained:
He brooked no compromise on the annexation of Crimea, and renewed his lambasting of the West’s policies since the fall of the Berlin Wall, accusing it of putting up new “virtual walls” and wanting to “chain” the Russian bear. He said that even if the bear were to “sit tight … supping berries and honey” and “abandon its hunting instincts,” the West would still “seek to chain us … then rip out our teeth and claws.” The bear, he said, had no intention of being turned into a “soft toy.” It would defend its sovereignty.
On the weekend, specifically on 20 December, a holiday that honors Russia’s “special services” — this was the day in 1917 that the Cheka, the Bolshevik secret police, was founded by “Iron Feliks” Dzierżyński; in a normal country this would be a day of national mourning and not celebration — Putin addressed Russia’s security posture, noting this year’s spike in espionage against the country.
He proudly asserted that Russian counterintelligence, Putin’s former employers, had uncovered 230 foreign spies operating in the country during 2014. He minced no words about this threat:
Frank statements are being made to the effect that Russia should pay dearly for its independent stance, for its support for its compatriots, for Crimea and Sevastopol – for merely existing, it sometimes seems. Clearly, no one has ever succeeded in scaring, suppressing or isolating Russia and never will. Such attempts have been made regularly, over the centuries, as I have said publicly on numerous occasions, and in the 20th century it happened several times: in the 1920s, the 1940s and later. It did not work then and it will not work now. Meanwhile, we have to be prepared to experience certain difficulties and always rebuff any threats to our sovereignty, stability and the unity of our society.
This is not a man who is about to back down; doubling-down seems decidedly more likely.
To be fair to Putin, Russia is a democracy of sorts, and popular opinion matters. He has dangerously stoked nationalist fires throughout the year now ending, regularly citing alleged Ukrainian Nazis eager to commit genocide against innocent Russians. So it’s difficult to see how he can turn those passions off with a switch, not least because beating the nationalist drum, while making the diplomatic equivalent of obscene gestures at the West, is popular with the Russian masses.
Neither does Western behavior always help matters. It seems not to have occurred to many Western politicians that gleeful public statements about how sanctions will cripple Russia might make Russians view these devastating acts as tantamount to war waged against them. President Obama, too, has not always been wise in his comments.
In the first place he has not explained why a half-century of sanctions on tiny and impoverished Cuba failed to work — hence his opening to Havana last week — but sanctions on vast and largely self-sufficient Russia should be expected to deliver as advertised. Last weekend, Obama’s comments on his adversary in the Kremlin took a strange turn:
There was a spate of stories about how he is the chess master and outmaneuvering the West and outmaneuvering Mr. Obama and this and that and the other. And right now, he’s presiding over the collapse of his currency, a major financial crisis and a huge economic contraction. That doesn’t sound like somebody who has rolled me or the United States of America.
Obama’s offensive defensiveness here speaks volumes — the self-reference in the third person is revealing — and will be read in Moscow as weakness mingled with taunting.
If this is what prep school Ivy League lawyers think passes for tough talk in Chicago, the Chekists in the Kremlin, who are actual hard men with much blood on their hands, will be happy to give lessons to faux-macho poseurs in the West Wing. And in 2015 they will.
I don’t know if there will be war — real war — between Russia and the West in the new year. Surely such a possibility cannot be ruled out, not least because NATO has signally failed to implement the modest deterrence posture in Eastern Europe that I recommended six months ago, eschewing actual defense in favor of some showy yet small-scale exercises without strategic impact.
It’s not surprising that some NATO frontline states are planning for possible invasion and occupation by Russia, since their faith in the staying power of the Atlantic Alliance, particularly in Obama’s resolve, is increasingly in doubt.
Increasing Provocation
It is unlikely that Putin will soon choose overt aggression against a NATO country with the intent of causing major war. But such a conflict may result anyway in 2015. Rising Kremlin military and espionage operations in Northern Europe are a cause for concern while Kremlin provocations against Estonia, that tiny country being a particular bugbear for Putin, indicate where the next Russian “microaggression” — here meaning an engineered “misunderstanding” at a border town to test Alliance resolve — may perhaps fall.
It’s a tricky game deciding where Obama’s “redlines” are. It's dangerously easy to envision a scenario where the angry gamblers in Moscow roll the dice one time too many, forcing NATO’s hand without realizing it until it’s too late. War can happen by a kind of accident, with a risky Kremlin operational game gone wrong. And since NATO is not seriously prepared to resist Russian aggression on its eastern frontier, in 2015 it just might.
WhiteHouse.govPresident Barack Obama discussing US policy towards Cuba at the White House on December 17, 2014.
What I am absolutely certain of, however, is that the new year will bring the West more of what I’ve termed Special War emanating from the East.
Moscow is far from ready to wage sustained conventional war against NATO, not least because the oil-plus-ruble collapse will delay its long-overdue military modernization program. But it is eminently prepared to engage in the witches’ brew of espionage, subversion, and terrorism that makes up Special War.
Here the West must be vigilant, since Kremlin Special War can do real damage and represents something that NATO is poorly conditioned to recognize, much less defeat and deter.
First, espionage, which is a long-standing Russian core competency. Kremlin intelligence operations against the West are not only rising in number and intensity — even the media has belatedly noticed that Moscow’s special services are as active against us as they ever were during the Cold War — but in aggressiveness as well.
Putin takes a deep and personal interest in the activities of Russia’s intelligence agencies, which formed his unmistakably Chekist personality, and he has given them wide latitude to “get tough.” Just as in Israel, though not at all in the United States, Russian spies know that “the top” has their back if an operation goes wrong, as some inevitably will. Moscow prefers a bias for action, not inaction, in its huge espionage arm.
Moreover, the persistent inability of Westerners to see Russian espionage as the serious threat to our secrets and safety that it is — here the blindness of even some NATO governments to the painful reality of the Snowden Operation does not encourage — gives the Kremlin a latitude to wage Special War against the West that it does not deserve.
Which leads to the matter of subversion, a term which has fallen out of favor since the Cold War but which needs a resurgence as soon as possible. Russian intelligence and its helpers have a sophisticated doctrine, honed over decades, to wage what we would term Political Warfare against their enemies.
To further the Kremlin’s aims, they cultivate Western politicos, activists and journalists to disseminate pro-Russian views on a wide range of issues; much of this is now conducted online. These Western partners range from being full-fledged agents of the Russian special services to mere pro-Putin influencers, not always entirely wittingly.
Political Subversion
Nevertheless, this Kremlin brand of espionage-based psychological operations — the proper term is Active Measures, which has no doctrinal NATO equivalent — can achieve devastating results through lies, half-truths, and forgeries. Russia takes advantage of Western gullibility, niceness, and unwillingness to accept just how dishonest the enemy is, sometimes to strategic effect.
Subversion is back, with online disinformation as its main weapon, and the sooner we accept this the West can begin to counter Russian agitprop that aims to psychologically and politically disarm and divide NATO without fighting.
On the political front, Putin holds quite a few European cards. The Kremlin has successfully established important, multilayered agent-of-influence networks in NATO countries, as I’ve explained previously, and the current political ferment in Europe offers Putin an inroads there that Russia has not enjoyed since the early years of the Cold War.
Moscow has long supported far Left parties and activists in the West, but in recent years they have made major inroads on the far Right as well, whose star is ascendant in many European Union states, thanks to hot-tempered debates about immigration and national identity.
Simply put, if the EU fails to deal with such issues in an effective way, and soon, it will surrender them to the far Right, i.e. Putin’s allies, in a manner that will have strategic results that will benefit Moscow in important ways.
Last, there’s terrorism. In the 21st century this takes many forms, from blowing up bombs to raiding computer networks. It’s remarkable how few Westerners seem to notice that the sudden and devastating “cyber-vandalism” (to cite Obama) against Sony hits the presses just as Russia’s economy buckles under sanctions.
Russian acumen at cyber-terrorism is not exactly news — just ask Georgia and Estonia — but it has yet to be employed against major NATO countries in a strategic fashion. But this should be anticipated as an ancillary to other warlike secret Russian operations against NATO and the EU.
Moreover, the difficulty of establishing firm attribution in cyber-espionage and cyber-terrorism means that many acts that remain officially unresolved — meaning what Western governments are willing to say publicly — actually have the fingerprint of Russian intelligence on them. And more is coming.
The Application Of Terrorism
The notion that an angry Russia would employ actual terrorism, meaning killers and bombers, against the West sounds fanciful to some but it ought not, given decades of Russian activities in this arena.
The Soviet intelligence services engaged a wide range of foreign terrorist groups beginning in the 1960’s, and terrorists as diverse as the Red Brigades, the Red Army Faction, and the PLO, among many others, obtained aid and training from the KGB and GRU, the Kremlin’s military intelligence arm, as well as from East Bloc sister services.
Among major transnational terrorist groups in the late Cold War, only the PFLP-GC was a wholly-owned subsidiary of the Kremlin, while the Soviets were content to give aid, comfort, and cover to the PLO and let it kill innocents as it pleased as long as the KGB’s fingerprint remained difficult to detect. (As a senior KGB officer who dealt with the PLO in the 1970’s replied, when I asked him why the Kremlin never told Arafat’s Fatah terrorists what to attack, “Why give them orders? Everything they do is good!”).
REUTERS/Vasily MaximovRussia's President Vladimir Putin gestures as he chairs a meeting with members of the government at the Novo-Ogaryovo state residence outside Moscow.
It should be noted that the idea the KGB and its East Bloc partners gave assistance to terrorists in the 1970’s and 1980’s was derided at the time as a “conspiracy theory” by nearly all Western “terrorism experts." It turned out to be entirely true, as we learned after the fall of the Soviet Union and the Warsaw Pact. Hence Moscow’s present-day murky links to international terrorism and even al-Qa’ida, merit close examination.
Moscow need not employ cut-outs and false-flags to conduct terrorism abroad. It has plenty of in-house talent in those areas, which fall under the rubric of what Russian spies term “wetwork.” In recent years, Putin has not been shy about wetwork abroad, even when the Kremlin’s footprint is obvious.
The 2006 London murder of the defector Sasha Litvinenko, the infamous radioactive tea assassination, was transparently the work of the Federal Security Service (FSB), Russia’s biggest intelligence agency and Putin’s power-base. Two years earlier, GRU assassins blew up Zelimkhan Yandarbiyev, exiled leader of the Chechen resistance, with a bomb placed in his vehicle; the device exploded on the streets of Doha, Qatar, killing Yandarbiyev and two of his bodyguards.
GRU was sloppy, however, and Qatari authorities quickly arrested the two bombers. At trial, they admitted Moscow had sent them to Doha to assassinate the Chechen leader. Yet they were returned to Russian custody in early 2005 amid promises they would serve their jail sentence for murder in Russia.
In best Putin fashion, the GRU officers served not a day in a Russian jail, instead getting a heroes’ welcome home, including decorations for their good work abroad. Then they disappeared from public view.
Contrary to myth, the Cold War KGB and GRU were decidedly cautious about wetwork in the West. Assassinations of “state enemies” abroad were commonplace in Stalin’s time, but they waned in the 1950’s after several embarrassing missteps, including the defection of one would-be KGB assassin to the Americans.
The 1959 assassination of Stepan Bandera, the top Ukrainian nationalist, in Munich with cyanide was the last operation of its kind, as the KGB’s footprint on the crime was obvious and embarrassing to the Kremlin. After that, the Chekists became notably cautious about wetwork in the West, not least because such an operation gone wrong would lead to the expulsion of many undercover Soviet intelligence officers, undoing years of hard espionage work.
While KGB and GRU maintained significant wetwork capabilities, they were used very sparingly down to the end of the Cold War. Yuri Andropov, who headed the KGB from 1967 to 1982, was notably cautious in such matters, quashing numerous proposals to assassinate defectors and dissidents in the West.
When the Bulgarian DS, a close partner agency, asked for Soviet help to murder a troublesome defector, Andropov told the KGB to help but to steer very clear of the killing itself. The Soviets gave the Bulgarians a special new weapon, an umbrella that fired a micro-pellet filled with highly toxic ricin, which the DS used to assassinate Georgi Markov in London in October 1978 — a crime that British investigators correctly pinned on the DS (though the case still remains officially open).
Yet the Soviets had nothing to do with the killing itself, per Andropov’s orders.
In contrast, Putin shows none of Andropov’s caution. He has been willing to send Russian spies abroad to kill people that the Kremlin does not like. And as Russia finds itself increasingly in a corner and willing to lash out at the West, this ought to concern all Western governments.
Increased espionage and subversion against NATO and the EU, directed by Russian special services, should be considered a given. The West would also be wise to anticipate Russian terrorism, the ugly side of the Kremlin’s Special War, as Putin seeks ways to punish the people whom he blames for his increasingly dire politico-economic predicament.
An Expansion Of 'Special War'
Everything from cyber-attacks to bombings to assassinations of prominent Westerners should be considered eminently possible. The good news is that vigilant Western counterintelligence, employed in a joint and strategic fashion, can blunt Russia’s well-honed Special War acumen and will prevent terrorism by the Kremlin and its friends and various false-flags.
The bad news is that NATO and the EU remain seriously deficient in counterintelligence, beyond the merely tactical realm, and are not yet ready to take on the Russians in this most important game. Money, motivation and cultural change inside US and Western security serv
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