Ukraine Is Hopeless ... but Not Serious

There isn’t going to be a war over Ukraine. There isn’t even going to be a crisis over Ukraine. We will perform our ritual war-dance and excoriate the Evil Emperor, and the result would be the same if we had sung “100 Bottles of Beer on the Wall” on a road trip to Kalamazoo. Worry about something really scary, like Iran.

Ukraine isn’t a country: it’s a Frankenstein monster composed of pieces of dead empires, stitched together by Stalin. It has never had a government in the Western sense of the term after the collapse of the Soviet Union gave it independence, just the equivalent of the family offices for one predatory oligarch after another–including the “Gas Princess,” Yulia Tymoshenko. It has a per capital income of $3,300 per year, about the same as Egypt and Syria, and less than a tenth of the European average. The whole market capitalization of its stock exchange is worth less than the Disney Company. It’s a basket case that claims to need $35 billion to survive the next two years. Money talks and bullshit walks. Who wants to ask the American taxpayer for $35 billion for Ukraine, one of the most corrupt economies on earth? How about $5 billion? Secretary of State Kerry is talking about $1 billion in loan guarantees, and the Europeans are talking a similar amount. That’s not diplomacy. It’s a clown show.

Ukraine’s revolution is odd, even by recent standards. The deposed premier Viktor Yanukovych won the 2010 presidential election against Yulia Tymoshenko, after Tymoshenko’s “Orange Revolution” regime made a ghastly mess of everything. Yanukovich made matters worse. Clearly a lot of Ukrainians got together at Maidan square, ranging from democratic idealists to rent-a-mob demonstrators paid by Ukrainian oligarchs to the sort of hoodlums who think the other side should have won the Second World War. What sort of regime do we have now? As CNN reported Feb. 27, there is

Arseniy Yatseniuk, 39, named as Prime Minister and a practiced politician who has been the chief opposition voice at Maidan Square. While closely associated with former Prime Minister Yulia Tymoshenko — who was freed from prison in the wake of last week’s protests — he can at least do business with the West and talk tough with hard-nosed IMF suits. A realist, on Wednesday he warned that the new government will need to invoke some very unpopular decisions, given the dire state of the economy. “We are a team of people with a suicide wish — welcome to hell,” he said.

Ukraine’s economy is close to Egypt’s in per capital GDP, and its governance is similar: desperately poor people can’t make it through the day without government subsidies, especially for energy. The oligarchs have looted the country so that it has to borrow money from foreigners to maintain the subsidies, leaving Ukraine with $137 billion in foreign debt, and a need to borrow an additional $20 billion a year. Putin offered just under $20 billion in cash and subsidies, and Yanukovych accepted his offer. The alternative was maybe $15 billion from the IMF provided that Ukraine cut subsidies first. Yanukovych, who is neither a Ukrainian patriot nor a Russian stooge, but a man on the make, decided he couldn’t sell the austerity package. That’s why he went with Russia. For the demonstrators at Maidan square, staying in the Russian orbit meant more of the same misery. Some of them decided they would rather die than live that way, which is perfectly understandable. But what precisely to they expect to get from the Europeans, let alone the U.S.? Finding $35 billion of taxpayers’ money has a vanishingly small probability.

Putin bungled things badly: he thought a bailout would solve the problem. That blew up in his face. The West bungled things badly: it has a $35 billion bill on its desk and no intention of paying it. John McCain went to Maidan in December and said the American people were with the Ukrainian demonstrators. He meant in spirit, not in their capacity as taxpayers. The Ukrainian opposition didn’t bungle so much as take a collective bungee jump without a cord. Just what do they propose to do now?

As for the Crimea: Did anyone seriously think that Vladimir Putin would let the main port of Russia’s Black Sea fleet fall into unfriendly hands? Russia will take the Crimea, and the strategic consequences will be nil. We couldn’t have a strategic confrontation if we wanted it. How would we get troops or ships into the Black Sea area in the first place in order to have a confrontation? Perhaps the Belgiums will send in their army instead. I suppose we need to denounce the Russians for violating Ukraine’s territorial integrity.

What should we do (or what should we have done)? It’s obvious that the Ukrainians have no faith in their democratic institutions, having staged a coup against a democratically elected president. In that case, the next step is constitutional reform. The existing system has broken down and the people should choose a new one. But constitutional reform has to take into account the prospect of partition. Lviv and Sevastopol have about as much in common as, say, Bogota and Montreal. The West should encourage the Ukrainians to amend their democratic institutions in order to achieve a national consensus, which might mean a different sort of nation. If Crimea, for example, were to vote for partition, why object? If it voted against partition, that would put Putin on the spot. The West would have come off better by getting in front of the events rather than chasing them.