There are still factors beyond the control of Russia's president: the economy, regional resistance, and the Crimea's Tatars
**The economy*
*
Following the 2010 election of Viktor Yanukovych as president, Ukraine relied increasingly on Russia for trade and investment. But what was once a steady source of income for Putin's oligarch friends could prove Ukraine's undoing - and lead to its eventual departure from Moscow's friendly embrace. In the last two years few international investment agencies have been prepared to put their money into Kiev. Private investment has collapsed and ageing industrial equipment has become more outdated and less productive. The World Bank ranked Ukraine 137 out of 183 economies in its Doing Business Report in 2013.A falling currency has seen foreign income from the sale of wheat, corn and sunflower oil decline despite increases in production; industrial export income has slumped while imports continued a steady climb. The result has been a balance of payments crisis made worse by a prolonged recession. The central bank has spent most of its foreign reserves propping up the currency and the government has run annual deficits just to keep the lights on.
The International Monetary Fund was due to offer Kiev a lifeline last summer but pulled out after it became obvious Yanukovych was unwilling to push through reformsto government supply contracts, new banking regulations and end state subsidies that favoured Ukraine's own oligarch community. Corruption not only scared off the Washington-based lender of last resort, it has changed the face of Ukraine's fledgling western-style economy by forcing thousands of small and medium-sized businesses to hand over control to conglomerates run by oligarchs.
Should Kiev's new government agree to the IMF's reforms, it could spell disaster for Russian oligarchs as much as Ukraine's homegrown billionaires. An IMF deal, possibly supplemented by John Kerry's $1bn offer of loan guarantees and something similar from the EU, would allow another look at the estimated $25bn of loans the government and banks cannot afford to cover. IMF officials would want to see legal documents to support loans and without them would likely cancel the debt. Without a loan, hundreds of businesses, including Russian firms lubricated by Ukrainian bank cash, could be forced to sell their assets on the cheap.
Loans considered legitimate would also lose out. Past IMF deals show that lenders would be made to wait up to five years before interest payments restarted.
The silver lining for Moscow is that a healthy Ukrainian economy would want more of Russia gas and oil - and would have the money to pay for them.
**Regional reaction*
*
Vladimir Putin is expected to meet the allied leaders of Belarus and Kazakhstan on Wednesday in an attempt to shore up regional support for his campaign in Ukraine, amidst rumblings of nervousness from neighbouring countries. The meeting with Alexander Lukashenko, the dictatorial leader of Belarus, bordering Ukraine, Russia and the European Union, and Nursultan Nazarbayev, president of Kazakhstan, has been brought forward by a week because of the Ukrainian crisis. The three countries are the sole members of Russia's Eurasia Union, the trading bloc that the Kremlin is seeking to form as its answer to the EU and which it wants Ukraine to join. Armenia, dependent on Russia for military support in its longrunning conflict with Azerbaijan over Nagorno-Karabakh, has agreed to join the Russia-dominated bloc after spurning trade and political pacts with Brussels.
Putin is unlikely to hear any opposition from Lukashenko, but Nazarbayev has been voicing worries that the crisis is a risk for the region. He demanded a "thorough exchange of opinions and discussion of measures to prevent dangerous trends in the current situation," according to his press service.
The three leaders discussed Ukraine on Monday, focusing, according to the Kremlin, on the alleged dangers facing ethnic Russians or Russian-speakers in Ukraine.
"The parties discussed the developing crisis in Ukraine which creates real danger to the life and legitimate interests of the Russian-speaking population, in the first place in Crimea and eastern regions of that country," the Kremlin said.
Elsewhere in the former Soviet Union or in the broader eastern bloc, the alarm about Putin has reached fever pitch. The Baltic countries and the rest of eastern Europe are all Nato and EU members. Poland has been leading the calls for action against Russia, dubbing the Ukraine crisis the most dangerous in Europe since the wars in Yugoslavia. Lithuania, Latvia and Estonia are solidly on Ukraine's side against Russia. Hungary, the Czech Republic, Slovakia and Poland released a statement on Tuesday recalling Soviet interventions in their countries in 1956, 1968, and 1981, deploring the Russian conduct and calling for a stiff international response.
**Crimean Tatars **
For all the merits of Moscow's arguments that Crimea's ethnic Russian population feels betrayed by a Kiev-led move to cut ties with Moscow, there is another group in the region with a considerably longer history in the region: the Tatars. Descended from the Golden Horde, the western edge of the Mongol empire, which flourished for about a century after Genghis Khan's death, the Turkic-speaking Tatars have been in Crimea since around the end of the 14th century, remaining there after the Mongol empire broke up.
The Muslim Tatars have faced a difficult and sometimes brutal modern existence in Crimea, with large numbers of Russians moving into the region under the Tsars, while hundreds of thousands of Tatars relocated to Turkey.
The early years of Soviet rule marked something of a revival for the Tatars, with their language given official status alongside Russian in the so-called Crimean Autonomous Socialist Republic, set up by Moscow in 1921. But under Stalin the Tatars suffered terribly, facing famine under Stalin's agricultural programmes as well as campaigns of Russification, which obliged them to use the Cyrillic alphabet for their language.
In 1944 Stalin decreed that all Crimean Tatars had collaborated with the Nazis following the German occupation of Crimea, and 200,000 of them were deported to central Asia and other remote regions. Many died en route, and mosques were destroyed. It was not until 1967 that the USSR ruled that the mass deportations had been unjust, but even then leaders in Moscow made no efforts to assist their return. Some Tatars began to trickle home from exile in the late 1980s, finding a region now dominated by Russians and Ukrainians. With Ukrainian independence – Crimea had been given to Ukraine in 1954 by Nikita Krushchev in a move seen at the time as a purely symbolic act – and many more returned. They now number about 240,000, around 12% of the country's population.
The Tatar population is mainly rural, and has enjoyed relative autonomy under Ukrainian rule, with representation in the national parliament. While there are exceptions, the Tatar population is assumed to be strongly in favour of Crimea staying under the control of Kiev rather than again passing into Russian hands. Writing in the Washington Post, Oxana Shevel, a specialist in post-communist politics at Tufts University, said that any Russian attempt to hold on to Crimea would face "sustained and mobilised opposition" from the Tatars. "When faced with the choice of being under either Russian or Ukrainian control, the Crimean Tatar leadership has consistently and unequivocally chosen Ukraine," she wrote.
* * Reported by guardian.co.uk 9 hours ago.
**The economy*
*
Following the 2010 election of Viktor Yanukovych as president, Ukraine relied increasingly on Russia for trade and investment. But what was once a steady source of income for Putin's oligarch friends could prove Ukraine's undoing - and lead to its eventual departure from Moscow's friendly embrace. In the last two years few international investment agencies have been prepared to put their money into Kiev. Private investment has collapsed and ageing industrial equipment has become more outdated and less productive. The World Bank ranked Ukraine 137 out of 183 economies in its Doing Business Report in 2013.A falling currency has seen foreign income from the sale of wheat, corn and sunflower oil decline despite increases in production; industrial export income has slumped while imports continued a steady climb. The result has been a balance of payments crisis made worse by a prolonged recession. The central bank has spent most of its foreign reserves propping up the currency and the government has run annual deficits just to keep the lights on.
The International Monetary Fund was due to offer Kiev a lifeline last summer but pulled out after it became obvious Yanukovych was unwilling to push through reformsto government supply contracts, new banking regulations and end state subsidies that favoured Ukraine's own oligarch community. Corruption not only scared off the Washington-based lender of last resort, it has changed the face of Ukraine's fledgling western-style economy by forcing thousands of small and medium-sized businesses to hand over control to conglomerates run by oligarchs.
Should Kiev's new government agree to the IMF's reforms, it could spell disaster for Russian oligarchs as much as Ukraine's homegrown billionaires. An IMF deal, possibly supplemented by John Kerry's $1bn offer of loan guarantees and something similar from the EU, would allow another look at the estimated $25bn of loans the government and banks cannot afford to cover. IMF officials would want to see legal documents to support loans and without them would likely cancel the debt. Without a loan, hundreds of businesses, including Russian firms lubricated by Ukrainian bank cash, could be forced to sell their assets on the cheap.
Loans considered legitimate would also lose out. Past IMF deals show that lenders would be made to wait up to five years before interest payments restarted.
The silver lining for Moscow is that a healthy Ukrainian economy would want more of Russia gas and oil - and would have the money to pay for them.
**Regional reaction*
*
Vladimir Putin is expected to meet the allied leaders of Belarus and Kazakhstan on Wednesday in an attempt to shore up regional support for his campaign in Ukraine, amidst rumblings of nervousness from neighbouring countries. The meeting with Alexander Lukashenko, the dictatorial leader of Belarus, bordering Ukraine, Russia and the European Union, and Nursultan Nazarbayev, president of Kazakhstan, has been brought forward by a week because of the Ukrainian crisis. The three countries are the sole members of Russia's Eurasia Union, the trading bloc that the Kremlin is seeking to form as its answer to the EU and which it wants Ukraine to join. Armenia, dependent on Russia for military support in its longrunning conflict with Azerbaijan over Nagorno-Karabakh, has agreed to join the Russia-dominated bloc after spurning trade and political pacts with Brussels.
Putin is unlikely to hear any opposition from Lukashenko, but Nazarbayev has been voicing worries that the crisis is a risk for the region. He demanded a "thorough exchange of opinions and discussion of measures to prevent dangerous trends in the current situation," according to his press service.
The three leaders discussed Ukraine on Monday, focusing, according to the Kremlin, on the alleged dangers facing ethnic Russians or Russian-speakers in Ukraine.
"The parties discussed the developing crisis in Ukraine which creates real danger to the life and legitimate interests of the Russian-speaking population, in the first place in Crimea and eastern regions of that country," the Kremlin said.
Elsewhere in the former Soviet Union or in the broader eastern bloc, the alarm about Putin has reached fever pitch. The Baltic countries and the rest of eastern Europe are all Nato and EU members. Poland has been leading the calls for action against Russia, dubbing the Ukraine crisis the most dangerous in Europe since the wars in Yugoslavia. Lithuania, Latvia and Estonia are solidly on Ukraine's side against Russia. Hungary, the Czech Republic, Slovakia and Poland released a statement on Tuesday recalling Soviet interventions in their countries in 1956, 1968, and 1981, deploring the Russian conduct and calling for a stiff international response.
**Crimean Tatars **
For all the merits of Moscow's arguments that Crimea's ethnic Russian population feels betrayed by a Kiev-led move to cut ties with Moscow, there is another group in the region with a considerably longer history in the region: the Tatars. Descended from the Golden Horde, the western edge of the Mongol empire, which flourished for about a century after Genghis Khan's death, the Turkic-speaking Tatars have been in Crimea since around the end of the 14th century, remaining there after the Mongol empire broke up.
The Muslim Tatars have faced a difficult and sometimes brutal modern existence in Crimea, with large numbers of Russians moving into the region under the Tsars, while hundreds of thousands of Tatars relocated to Turkey.
The early years of Soviet rule marked something of a revival for the Tatars, with their language given official status alongside Russian in the so-called Crimean Autonomous Socialist Republic, set up by Moscow in 1921. But under Stalin the Tatars suffered terribly, facing famine under Stalin's agricultural programmes as well as campaigns of Russification, which obliged them to use the Cyrillic alphabet for their language.
In 1944 Stalin decreed that all Crimean Tatars had collaborated with the Nazis following the German occupation of Crimea, and 200,000 of them were deported to central Asia and other remote regions. Many died en route, and mosques were destroyed. It was not until 1967 that the USSR ruled that the mass deportations had been unjust, but even then leaders in Moscow made no efforts to assist their return. Some Tatars began to trickle home from exile in the late 1980s, finding a region now dominated by Russians and Ukrainians. With Ukrainian independence – Crimea had been given to Ukraine in 1954 by Nikita Krushchev in a move seen at the time as a purely symbolic act – and many more returned. They now number about 240,000, around 12% of the country's population.
The Tatar population is mainly rural, and has enjoyed relative autonomy under Ukrainian rule, with representation in the national parliament. While there are exceptions, the Tatar population is assumed to be strongly in favour of Crimea staying under the control of Kiev rather than again passing into Russian hands. Writing in the Washington Post, Oxana Shevel, a specialist in post-communist politics at Tufts University, said that any Russian attempt to hold on to Crimea would face "sustained and mobilised opposition" from the Tatars. "When faced with the choice of being under either Russian or Ukrainian control, the Crimean Tatar leadership has consistently and unequivocally chosen Ukraine," she wrote.
* * Reported by guardian.co.uk 9 hours ago.