Syria Disintegrating: Part 2

[Valmy]

It is so depressing that here we are, four and a half years into this horrible war, and it does not look anywhere near decided. Hell I am not even sure who has the upper hand right now, now that Russia is going all in with Assad.

[Tamas]

It is so depressing that here we are, four and a half years into this horrible war, and it does not look anywhere near decided. Hell I am not even sure who has the upper hand right now, now that Russia is going all in with Assad.

I am still strongly hoping everyone else will stand aside (apart from the various Muslim states sending weapons to their lieblings) and let Russia fight it out for Assad. There is no bad ending of that one for the West.

[Berkut]

It is so depressing that here we are, four and a half years into this horrible war, and it does not look anywhere near decided. Hell I am not even sure who has the upper hand right now, now that Russia is going all in with Assad.

I am still strongly hoping everyone else will stand aside (apart from the various Muslim states sending weapons to their lieblings) and let Russia fight it out for Assad. There is no bad ending of that one for the West.

I would agree that that bad ending is less bad than most of the other bad endings, but I would not say it isn't a bad ending.

[DGuller]

Nope, Eastern Ukraine was the "rust belt" - full of obsolete Soviet heavy industry gone to seed. It's the Detroit of Ukraine. To the extent that the locals actually support Russia, it's because of a mix of ethno-nationalism (many if not most are "ethnic Russians" moved in after the Soviets murdered the locals), current grinding poverty, and nostalgia for the good old days when there were jobs - under the Soviet Union. They hope that, with Russia in charge, the jobs will return, which is highly unlikely.

I don't think any of this is actually true.  The eastern part of Ukraine is definitely industrial, but the industry was functioning.  Whether it was solely due to subsidies or not is a good question, but GDP per capita of the eastern parts was several times that of the most western parts.  It wasn't even close. 

I also think that there was that much resettlement in the eastern Ukraine, that was more of the case in the western Ukraine (especially Galicia).  It's just that the eastern part of Ukraine has been part of Russia for longer than the western part, historically.

[Syt]

One wonders how Putin's Russia is going to be able to afford war in Syria plus war in Ukraine.

Didn't they put everything on hold in Eastern Ukraine for now?

[Malthus]

Nope, Eastern Ukraine was the "rust belt" - full of obsolete Soviet heavy industry gone to seed. It's the Detroit of Ukraine. To the extent that the locals actually support Russia, it's because of a mix of ethno-nationalism (many if not most are "ethnic Russians" moved in after the Soviets murdered the locals), current grinding poverty, and nostalgia for the good old days when there were jobs - under the Soviet Union. They hope that, with Russia in charge, the jobs will return, which is highly unlikely.

I don't think any of this is actually true.  The eastern part of Ukraine is definitely industrial, but the industry was functioning.  Whether it was solely due to subsidies or not is a good question, but GDP per capita of the eastern parts was several times that of the most western parts.  It wasn't even close. 

I also think that there was that much resettlement in the eastern Ukraine, that was more of the case in the western Ukraine (especially Galicia).  It's just that the eastern part of Ukraine has been part of Russia for longer than the western part, historically.

Ukraine "rust belt" distopian:

http://www.npr.org/sections/parallels/2014/04/10/301025809/in-ukraines-rust-belt-a-mix-of-nostalgia-and-nationalism

Ukraine "rust belt" relies on selling otherwise-uncompetitve products to Russia:

http://www.bloomberg.com/news/articles/2014-04-09/ukraine-s-rust-belt-fears-ruin-as-putin-threatens-imports

What can Russia expect in Ukraine's rust belt:

http://ukrainianpolicy.com/what-russia-can-expect-in-ukraines-rust-belt/

In their search to maintain control, Russians would quickly discover that they are in possession of economically unviable provinces that cannot survive without massive infusions of rubles. According to a detailed Ukrainian study of how much Ukraine's provinces paid into and received from the central budget in the first half of 2013, Crimea, Donetsk, Kherson, Luhansk, Mykolaiv, and Zaporizhzhya represented an enormous drain on Kyiv's resources: 22.82 billion hryvnia (around $2.5 billion, or 90 billion rubles). And that is only for the first six months of the year. Multiplied by two, the deficit amounts to 45.64 billion hryvnia (about $5 billion, or 180 billion rubles).

In 2014, Russia expects its budget revenues to be around 13.6 trillion rubles (around $375 billion); its expenditures are supposed to total 14 trillion rubles ($380 billion). That amounts to a deficit of 400 billion rubles ($11 billion). Even without extra development funds or the costs of an occupation, annexing Ukraine's southeast will raise Russia's deficit by 45 percent.

The bad news gets worse for Russia. Luhansk and Donetsk provinces are home to Ukraine's loss-making coal industry. Kyiv spends between 12 and 14 billion hryvnia(around $1 billion–$1.5 billion, or 47 billion–55 billion rubles) annually to support these mines. Will Russia back these enterprises even as they compete with more economically produced coal from Russia's Kuzbass? It will have to: As Kyiv knows from experience, firing thousands of coal miners could spark massive civil unrest. Moscow will also have to pay them their wages on time. In 2013, wage arrears reached a total of 135 million hryvnia (about $15 million, or 530 million rubles) in Donetsk and Luhansk.

The overwhelming impression is that, in terms of economic gains, invading East Ukraine was a bad idea. It was, as stated, like invading Detroit. What wealth they had, came from uncompetitive industries and highly subsidized resource extraction that Russia will now have to pay for.

Oh yeah, and:

In the early 1930s, to force peasants into joining collective farms, Soviet leader Joseph Stalin orchestrated a famine that resulted in the starvation and death of millions of Ukrainians. Afterward, Stalin imported large numbers of Russians and other Soviet citizens—many with no ability to speak Ukrainian and with few ties to the region—to help repopulate the east.

This, says former ambassador to Ukraine Steven Pifer, is just one of the historic reasons that helps explain why "the sense of Ukrainian nationalism is not as deep in the east as it is in west."

http://news.nationalgeographic.com/news/2014/02/140224-ukraine-protests-president-ousted-history-geography-background/

[Malthus]

One wonders how Putin's Russia is going to be able to afford war in Syria plus war in Ukraine.

Didn't they put everything on hold in Eastern Ukraine for now?

They still have to pay for an army to protect their gains ... and, as mentioned, massive subsidies to keep at least some locals employed.   

[Razgovory]

Most of the former Soviet bloc is made up those crummy factories producing stuff nobody wants.

[Tamas]

Most of the former Soviet bloc is made up those crummy factories producing stuff nobody wants.

IDK about the former Soviet Union, but the rest of Eastern Europe is making a living being (relative) wage slaves to German businesses and factories via the EU.

[Razgovory]

Most of the former Soviet bloc is made up those crummy factories producing stuff nobody wants.

IDK about the former Soviet Union, but the rest of Eastern Europe is making a living being (relative) wage slaves to German businesses and factories via the EU.

What a strange sentiment coming from you.  Anyway, I meant the former Soviet states except for the Baltic ones which made the transition easier.  Ukraine has simply floundered in the post Soviet age.  Russia has revived itself for the most part, and Belarus isn't aware that anything changed.

[Tamas]

Most of the former Soviet bloc is made up those crummy factories producing stuff nobody wants.

IDK about the former Soviet Union, but the rest of Eastern Europe is making a living being (relative) wage slaves to German businesses and factories via the EU.

What a strange sentiment coming from you.  Anyway, I meant the former Soviet states except for the Baltic ones which made the transition easier.  Ukraine has simply floundered in the post Soviet age.  Russia has revived itself for the most part, and Belarus isn't aware that anything changed.

What is strange about it? I have no problems with it - Eastern Europeans offer to do the job with the same skill but for less, and thus get the jobs.

[Razgovory]

The phrase "wage slave" coming from a free market fundamentalist.

[The Minsky Moment]

Peronally, I think Putin resembles Mussolini in the 30s. Mussolini also loved tweaking the West, arousing nationalist fervour, and aggrandizing himself by invading various useless places like Albania and Ethiopia; like Putin, many thought he was a "genius" for doing so.

Not a bad comparison.
Putin is all about the triumph of good tactics over sensible strategy.  Tactically, the surprise fait accomplis and management of the propaganda and information war in Ukraine have been brilliant but to what end?  In the place of a cheap, nice long-term concession in Sevastopol, being saddled with the economic deadweight of the entire Crimean peninsula; in the place of a position of strong informal political and financial influence over all of Ukraine, domination over the bleeding ruin of the eastern rump and the implacable hatred of the rest; comfy relationships with Germany and France replaced with official frigidity and initiatives to wean off Russian gas.

Russia has a decently educated population, solid second tier arms technology and export opportunities and access to natural resources.  Beyond that lots of strategic problems: scary demographics including plummeting birth rates and disturbingly high mortality and morbidity rates (alcoholism strikes again), an energy dominated economy plagued by decades of deferred investment and maintenance problems and collapsing energy prices, a huge dangerously unstable southern flank at high risk of jihadist penetration.  Putin's adventures in Ukraine and Syria are squandering huge resources badly needed elsewhere.  Russia's central geopolitical and diplomatic position could put it in great position to triangulate between the USA and he PRC; by instead playing to the domestic gallery in attacking the West, he has undermined all leverage with China- arguably the more serious potential security threat - and entered into unequal deals for show.

[DGuller]

Nope, Eastern Ukraine was the "rust belt" - full of obsolete Soviet heavy industry gone to seed. It's the Detroit of Ukraine. To the extent that the locals actually support Russia, it's because of a mix of ethno-nationalism (many if not most are "ethnic Russians" moved in after the Soviets murdered the locals), current grinding poverty, and nostalgia for the good old days when there were jobs - under the Soviet Union. They hope that, with Russia in charge, the jobs will return, which is highly unlikely.

I don't think any of this is actually true.  The eastern part of Ukraine is definitely industrial, but the industry was functioning.  Whether it was solely due to subsidies or not is a good question, but GDP per capita of the eastern parts was several times that of the most western parts.  It wasn't even close. 

I also think that there was that much resettlement in the eastern Ukraine, that was more of the case in the western Ukraine (especially Galicia).  It's just that the eastern part of Ukraine has been part of Russia for longer than the western part, historically.

Ukraine "rust belt" distopian:

http://www.npr.org/sections/parallels/2014/04/10/301025809/in-ukraines-rust-belt-a-mix-of-nostalgia-and-nationalism

Ukraine "rust belt" relies on selling otherwise-uncompetitve products to Russia:

http://www.bloomberg.com/news/articles/2014-04-09/ukraine-s-rust-belt-fears-ruin-as-putin-threatens-imports

What can Russia expect in Ukraine's rust belt:

http://ukrainianpolicy.com/what-russia-can-expect-in-ukraines-rust-belt/

In their search to maintain control, Russians would quickly discover that they are in possession of economically unviable provinces that cannot survive without massive infusions of rubles. According to a detailed Ukrainian study of how much Ukraine's provinces paid into and received from the central budget in the first half of 2013, Crimea, Donetsk, Kherson, Luhansk, Mykolaiv, and Zaporizhzhya represented an enormous drain on Kyiv's resources: 22.82 billion hryvnia (around $2.5 billion, or 90 billion rubles). And that is only for the first six months of the year. Multiplied by two, the deficit amounts to 45.64 billion hryvnia (about $5 billion, or 180 billion rubles).

In 2014, Russia expects its budget revenues to be around 13.6 trillion rubles (around $375 billion); its expenditures are supposed to total 14 trillion rubles ($380 billion). That amounts to a deficit of 400 billion rubles ($11 billion). Even without extra development funds or the costs of an occupation, annexing Ukraine's southeast will raise Russia's deficit by 45 percent.

The bad news gets worse for Russia. Luhansk and Donetsk provinces are home to Ukraine's loss-making coal industry. Kyiv spends between 12 and 14 billion hryvnia(around $1 billion–$1.5 billion, or 47 billion–55 billion rubles) annually to support these mines. Will Russia back these enterprises even as they compete with more economically produced coal from Russia's Kuzbass? It will have to: As Kyiv knows from experience, firing thousands of coal miners could spark massive civil unrest. Moscow will also have to pay them their wages on time. In 2013, wage arrears reached a total of 135 million hryvnia (about $15 million, or 530 million rubles) in Donetsk and Luhansk.

The overwhelming impression is that, in terms of economic gains, invading East Ukraine was a bad idea. It was, as stated, like invading Detroit. What wealth they had, came from uncompetitive industries and highly subsidized resource extraction that Russia will now have to pay for.

Oh yeah, and:

In the early 1930s, to force peasants into joining collective farms, Soviet leader Joseph Stalin orchestrated a famine that resulted in the starvation and death of millions of Ukrainians. Afterward, Stalin imported large numbers of Russians and other Soviet citizens—many with no ability to speak Ukrainian and with few ties to the region—to help repopulate the east.

This, says former ambassador to Ukraine Steven Pifer, is just one of the historic reasons that helps explain why "the sense of Ukrainian nationalism is not as deep in the east as it is in west."

http://news.nationalgeographic.com/news/2014/02/140224-ukraine-protests-president-ousted-history-geography-background/

I'm sure the eastern industry is not the most competitive one, and it relied on subsidies from both Kiev and Moscow, but as far as the sense of the citizens there themselves feeling like they were in Detroit, that's not the case.  At least not relatively.  Here is the GDP per capita map from Wiki:



https://en.wikipedia.org/wiki/List_of_Ukrainian_subdivisions_by_GDP_per_capita

If the east is Detroit, than the west is 3x Detroit.

[Malthus]

Just goes to show that GDP isn't everything - particularly where whole regions are artificially kept alive by subsidies and uneconomic trade arrangements.