Syria Disintegrating: Part 2

[Razgovory]

I like the Mussolini analogy as well.  It helps keep this in perspective.  For all his strutting bravado and military aggression, his situation is getting weaker forcing him closer to China.  Fortunately I don't think China wants to play the role of Hitler.  So Russia will just end up in China's back pocket.

[The Brain]

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.

This map appears to support the Malthusian position:

[Malthus]

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.

Yup, pretty well my read on it.

Unfortunate for his Ukrainian victims - but not fortunate for the Russians, either. How long they will be content to have their futures mortgaged for such accomplishments is anyone's guess.

[Tamas]

Around 50 years

[Malthus]

Heh, more awesome economic news from Putin:

http://www.reuters.com/article/2015/09/30/russia-economy-pensions-idUSL5N1201EU20150930

[DGuller]

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

[Malthus]

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

[Josquius]

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.

A lot of soviet era industry was developed less with the idea of "OK, is this a sensible sustainable industry for this location?" and more with the idea of "If the resources have to come from this SSR and they manufacturing is done in this SSR then it will tie the union together!"
Most of this soviet era industry was in the west.
In the east they had pre-existing sensible industries due to raw material reserves.
Thus post soviets the west died whilst the east limped on.

Considering wages in Ukraine being what they are the industry in the east may well have been doing OK.

[Berkut]

Sometimes I get the feeling that the USSR really was a bad deal for many of the republics involved.

[Valmy]

Sometimes I get the feeling that the USSR really was a bad deal for many of the republicans involved.

Democrats didn't fair much better.

[The Minsky Moment]

I think the truth lies somewhere between Guller's map and Brain's schematic.

Dnipropetrovsk oblast -- the dark green region -- is pretty diversified industrially.  But that lies outside the Russian zone of control.  The separatist controlled regions -- Donetsk and Lugansk - are industrial and urbanized (hence higher current levels of GDP) but heavily concentrated in the coal and iron industry ("rusty")

[DGuller]

Sometimes I get the feeling that the USSR really was a bad deal for many of the republics involved.

I'm not sure about that.  It was definitely a bad deal for the Baltic republics, but for the others, it's very debatable.  It's not like the other republics were all that developed, and were guaranteed to flourish if not for Russia.  And once you go from Eastern Europe to *stans, USSR starts looking pretty damn good.

[Admiral Yi]

I'm not sure about that.  It was definitely a bad deal for the Baltic republics, but for the others, it's very debatable.  It's not like the other republics were all that developed, and were guaranteed to flourish if not for Russia.  And once you go from Eastern Europe to *stans, USSR starts looking pretty damn good.

The Stans probably wouldn't have had the resources or the motivation to conduct the industrial scale environmental destruction wrought by the commissars.

[jimmy olsen]

scary demographics including plummeting birth rates and disturbingly high mortality and morbidity rates (alcoholism strikes again),

I thought that the birthrate had mostly recovered in the last few years.

[DGuller]

scary demographics including plummeting birth rates and disturbingly high mortality and morbidity rates (alcoholism strikes again),

I thought that the birthrate had mostly recovered in the last few years.

It has.