The IMF, Kosovo, Iraq, Turkey and the Russian Question
stratfor.com
February 22, 1999
SUMMARY
A series of unconnected problems are coming together as different
aspects of a single problem: Russia. The G-7 met this weekend in Bonn
and made it clear that major help for Russia is not going to be forthcoming
without the implementation of impossible reforms. Russia made it clear
that it was going to stand against the U.S. and the West on the three
critical issues of the week. Russia let the U.S. know that it would oppose
any stationing of NATO troops in Kosovo without Serb permission, and it
would also oppose air strikes. Leaks appeared throughout Western
newspapers about Russian arms sales to Iraq. We believe that these
reports were deliberate leaks from Moscow and Minsk designed to warn
the West. The Russians condemned the Turkish invasion of Iraq, and a
Russian General said that the S-300 missiles shipped to Armenia were
designed to protect the CIS from Turkey and NATO. At the same time,
high-level meetings were being held with German and Japanese leaders.
Russia is putting pressure on these two countries, and particularly
Germany, to get the West to provide financial help to Russia. The Russian
lever on Germany: the threat of a return of a mini-Cold War.
ANALYSIS
Three crises moved along smartly during this past week. In Kosovo, the
United States and NATO postponed an unchangeable deadline after
which air strikes on Serbia would begin. The capture of a Kurdish leader
by Turkey led to intense rioting throughout Europe, a severe governmental
crisis in Greece, and denials by Israelis and Americans concerning
involvement in the capture and handover of Ocalan to the Turks. In Iraq,
daily air attacks against Iraqi air defense sites continues, with Iraq
continuing to warn of undefined retaliation. A Shiite cleric in Iraq has been
killed and the Iranians have now said that they hold Baghdad responsible
for the death. No specific threat of retaliation was made.
What we are seeing is an intensifying arc of crises running from the
Balkans, through Asia Minor to the Persian Gulf. We have, in the past,
speculated on coordination between Baghdad and Belgrade on a strategy
designed to draw U.S. military forces deeper into geographically
dispersed arenas by their intensifying inherently inconclusive conflicts.
Whether there has been intentional collusion or these are merely separate
crises running in parallel, the fact remains that U.S. forces are now
engaged in daily combat operations in Iraq and currently stand a little over
48 hours away from operations against Serbia. In the meantime, almost as
a bridge between the two, Turkey, an American ally, stands
simultaneously exultant over the seizure of Ocalan, as well as under
intensifying pressure from a number of quarters.
There appears to us to be two common denominators to these crises. The
first is obvious. The United States is deeply involved in each of them. The
second is less obvious but increasingly apparent. Russia is increasingly
involved in each of these crises, albeit in different ways. It is our view that
the willingness of both the Iraqi and Serb governments to resist U.S.
pressure and thereby incur the risks of American displeasure has a great
deal to do with their perception of the new role that Russia is playing in the
world. It also appears to us that the Turkish capture of Ocalan and its
invasion of Iraq -- while not particularly triggered by perceptions of
Russian policy -- will serve to hasten the general evolution of Russian
foreign policy.
The Russians are primarily focused on their internal political and economic
condition. There is now a general sense that the West has effectively
abandoned Russia. Except for making impossible demands for reform,
demands that cannot be met given Russian economic and political reality,
the West is no longer prepared to underwrite Russian reform efforts. This
weekend, for example, the finance ministers and central bank governors of
the G-7 group met in Bonn, Germany. Their general position on Russia
was that no further assistance would be forthcoming without major
reforms. Without that, the G-7 announced, Russia "is increasingly faced
with the serious risk of accelerating inflation, further exchange rate
weakening and continued economic retraction." The G-7 announced no
steps whatever to solve Russia's problems, leaving it to the IMF to
negotiate with the Russians.
In parallel to the Bonn discussions, Russian President Boris Yeltsin held
meetings with German Chancellor Gerhard Schroeder on Friday. The
meetings included Russian Prime Minister Yevgeny Primakov, Foreign
Minister Igor Ivanov and Defense Minister Igor Sergeyev. This was
clearly a major bilateral meeting and not a casual get-together. Among the
topics that were to be discussed were Iraq, Kosovo, NATO, weapons
modernization, fighting the Russian Mafia, and, of course, economic
assistance to Russia. After the meeting with Schroeder, Russian Prime
Minister Primakov left for talks with the Japanese in Tokyo.
The Russians have mounted a full-court press focused on Germany and
Japan. They have had no luck pleading with the Americans directly on
economic issues. They have now focused their attention on two key
American partners who also are extremely vulnerable in their own ways.
The Japanese are extremely vulnerable economically, given their lack of
recovery from financial problems. The Russians are carrying this message
to the Japanese: unless Western help is forthcoming, Russia's economy
will continue to worsen, undermining the prospects of a global economic
recovery. Therefore, the Japanese have a serious interest in advocating the
Russian position to the Americans. Moreover, unless the Japanese
succeed in this task, they can forget about recovering Japanese islands
occupied by the Russians at the end of World War II.
The Russians were delivering a more geopolitical message to the
Germans. The Germans badly want stability along the territory running
from the Baltics to the Balkans. They are more directly effected by
instability in these regions than any other major power. They have made
enormous investments in this region as well as huge investments in Russia.
Russia is letting Germany know that more than investments are at stake in
this region. Russia is in a position to destabilize the entire region. This
would lead to increased German dependence on the United States for
stability, to Germany being forced to intervene in the region on its own or
in concert with other European nations, or to the acceptance of instability
and tension in its own back yard. None of these options appeal to the
Germans. That is what the Russians are counting on.
Russia appears now to have adopted a general strategy that takes care of
both its domestic political requirements and its foreign interests. This
strategy is simple and reasonable, because it simultaneously plays to
Russia's strengths while decreasing its weaknesses. The predicate of U.S.
and NATO policy toward Serbia, for example, has been the isolation of
Serbia from both political support and weapons supplies. The core
assumption has been that, given its isolation, Belgrade would, in due
course, have to capitulate to Western demands. Even if this process
required a degree of military intervention, the assumption was that this
intervention carried minimal risk and would have a maximum effect
precisely because of this isolation.
Russia has made it clear that this premise is no longer valid. During the
past week it has done everything possible to signal the United States and
NATO not only that it was opposed to unilateral intervention in Kosovo,
but also that it had the means and the will to make that intervention difficult
and painful. Yeltsin sent a tough note to Clinton earlier in the week,
warning him of the consequences of unilateral action on Kosovo and
warning that, "We will not allow Kosovo to be touched." State Duma
Chairman Gennadiy Seleznev warned that bombing Serbia would
inevitably result in the cancellation of the Russia-NATO treaty, and went
on to say that, "We will have to render military and technical assistance to
Yugoslavia, if aggression is unleashed against it." British press reports
indicated that Russia was canceling a naval cooperation treaty with the
UK.
During the same week, press reports began to surface to the effect that
Russia and its partner Belarus were supplying weapons to Iraq. These
reports have, of course, been surfacing for a while, but the frequency and
prominence of these reports are now increasing. What is decreasing is the
vehemence of the denials. Belarus President Lukashenko was reported by
the Interfax News Agency as saying simply "I have not signed a single
contract for any delivery of weapons to Iraq." He went on to say
"cooperation with Persian Gulf states represents significant possibilities." In
other words, all he said was that he signed no contracts, which is not even
close to saying that Belarus, with Russian knowledge, is not delivering
weapons. There is little doubt in our mind that Russian and Belarussian
weaponry is reaching Iraq. What is interesting is that they are slowly
removing the veil over these deals.
One of the motivating factors here is Turkey. Russia has long been
worried about Turkish intentions in the Caucuses, particularly among the
Moslem nations in the region. Moscow has been increasingly close to
Armenia, a non-Moslem antagonist to Turkey. In recent weeks, Russia
began delivering S-300 surface- to-air missiles to Armenia, in a dramatic
increase in weaponry certain to alarm Armenia's neighbors. This week,
Russia went one better. According to the Armenian Snark News Agency,
Colonel General Anatoly Kornukov, Commander-in-Chief of the Russian
Air Force, made a speech at Air Base 102, a Russian operated facility in
Armenia intended to protect the borders of the CIS. Snark quoted
Kornukov as follows: "The deployment of S-300 missile complexes at
Russian military base No 102 in Armenia is being implemented within the
framework of planned rearmament. At the same time, there is a real threat
from Turkey where, apart from Turkish planes, NATO planes, which in
fact fly daily bombing missions to Iraq, are deployed as well. We cannot
rule out the possibility of flights straying off-course, or apparently off-
course over the territory of the sovereign state of Armenia, which has
joined the CIS Collective Security Treaty. The new missile systems will
enable us to give a dignified response if necessary."
Without speculating on what a dignified response might be, we also note
that the Russians were furious over the Turkish attack into Iraq this week
following the capture of Ocalan. The Russian Foreign Ministry stated that
"We have repeatedly announced the inadmissibility of such moves which
grossly violate the international law, the sovereignty and territorial integrity
of Iraq no matter what motives are given." The statement went on to link
the invasion to the U.S. bombing and demanded that both stop. To
emphasize the situation, the Syrian Foreign Minister, Faruq al-Shar'a
visited Moscow last Tuesday for talks with Prime Minister Yevgeny
Primakov. Both condemned the U.S. bombing of Iraq. Russia endorsed
the Syrian view that there should be no separate Israeli-Lebanese peace
agreement while the Syrians endorsed a strong role for Russia in the
Middle East.
If we didn't know better, we would say that the Cold War is back. That is
overstating it by a great deal. What is going on, however, is a concerted
Russian effort to let the West know what the price will be if it maintains its
current hard line on economic help. The primary audience for this blitz is
not the United States, although Russia would be delighted if it had some
impact. Rather, Germany is the primary audience, with a secondary one in
Japan.
Germany is the key for two reasons. First, it has huge investments in
Russia and is naturally motivated to solve Russia's problems. Second,
even if it was ready to write off those investments, Russia is trying to let
Germany know that the resulting increase in international tension would
leave Germany particularly exposed. With its treaty with Belarus, Russian
troops may well be on the Polish border before the end of the year. This
could mean pressure on Poland, which will be part of NATO, as well as
on the Baltic states and Slovakia. Germany's leftist government is not
eager to intervene unilaterally nor in concert with the United States. It
does not want a geopolitical confrontation with Russia, which, in turn, is
making the same case to the Japanese over the Kuriles. Russia is sending
a message to both Germany and Japan that the price for geopolitical
stability is economic support and will leave it to Germany and Japan to
make the case to the United States in the event that the Americans can't
directly hear it.
Politically, this is an excellent move for the Russian government.
Confronting the West is the one thing that all factions in the Duma can
agree on. No one will speak against it, especially if it is couched in both
economic and geopolitical terms. Confrontation strengthens Yeltsin's and
Primakov's positions. Moreover the Russians do have military levers in
terms of arms sales and weapons transfers, making advisors available, and
potentially, as in Armenia, even committing troops. Finally, however the
U.S. responds, U.S. allies have no stomach for even a low-grade return to
the Cold War.
The Serbs and Iraqis are completely aware of this evolution in Russia.
There is no question in our minds that their willingness to accept increased
risks of U.S. military action is rooted in the perception that whatever the
pain imposed, the long-term results of these actions will be to draw Russia
deeper into the conflicts. The more Russia is present, the stronger Serbia
and Iraq's position becomes. Since the Russians have excellent reasons
for getting involved, reasons having nothing to do with the conflict at hand,
U.S. actions to increase pressure on Serbia and Iraq work against the
U.S. policy of isolating them. When we add into this the genuine Russia
concern about long-term Turkish intentions in the Caucuses, we see a
situation in which discreet problems are beginning to merge into a series of
interrelated crises.
We note that the United States has given Serbia until Tuesday to agree to
NATO troops on its soil. Assume that Belgrade does not agree and
NATO decides to stage Iraqi-like air attacks. Assume that the results of
the air attacks parallel those in Iraq. There is pain but there is no
capitulation. Assume further that the IMF stonewalls the Russians while
the Turks continue their attacks on Iraq. In other words, consider the
world as it will likely be at the end of next week if the U.S. does not shift
its course. Russia will have no reason not to increase pressure. Then the
focus will be on the German government, which does not know what it
will do.
For these reasons, we would likely expect the U.S. to try to defuse the
Kosovo crisis. We do not expect the Serbs to be motivated to provide
much help in defusing it. Therefore the U.S. has three choices: get the IMF
to give the Russians a lot of money in what would, in effect, be a bribe; hit
Belgrade and suffer the consequences; figure a way to climb down out of
the confrontation. We won't try to guess what course the U.S. will
choose. |
