As Ukraine Slides Down Bell Curve, Comments By Kissinger And Trump Will Pull Support From Ukraine Funding And 2024 Presidential Campaign Issue Looms. US$150 Billion For Ukraine Is A Political Issue.
At the end of February 2022, first analyses referenced that cessation of the attack into Ukraine by the armed forces of the Russian Federation would be defined by 1) movement along a bell-curve and 2) the definitions of words. Those analyses continue to be relevant.
Thus far, global inflation, increasing fuel prices, increasing food prices, increasing transportation prices, and increasing product prices have been linked to and blamed on the “war in Ukraine.” For Ukraine, of critical importance is for the blame not to transition from being connected directly with decisions by the government of the Russian Federation to being the responsibility of the government of Ukraine- that its leadership in Kyiv can end the “war in Ukraine” by giving into demands of the Russian Federation- for territories already under control of the armed forces of the Russian Federation, but is refusing to do so.
The attack by the armed forces of the Russian Federation commenced into Ukraine in the early morning of 24 February 2022 and has endured for nearing one hundred days.
While the will of the government of the Russian Federation to continue towards obtaining its as yet specifically defined goal(s), the commercial, economic, and political costs to the 140 million citizens of the country spread among its eleven time zones are within the ranges predicted by Moscow-based outcome modeling analyses. They modeled for pain. There is pain. The modeling was inaccurate in terms of the time required for governments to implement what they espoused verbally. A timeline that normally would be expected to consume months was operational within days. The pain arrived more swiftly than expected.
While the will of the government of Ukraine to continue towards obtaining its desired objective of reclaiming its borders as they were at the beginning of 2014, political leadership in Kyiv and its accompanying military officer corps recognize that absent funding, weapons, and intelligence sharing from other countries, the formalized military aspect of the war would likely result with the armed forces of the Russian Federation occupying both what it did on 23 February 2022 and most of what it has occupied additionally since 24 February 2022.
The most impactful issue for the government of Ukraine is to avoid sliding down the right side of the bell curve. While the armed forces of Ukraine were making progress- by retaining territory or retrieving territory previously disconnected, the government of Ukraine was repelling upwards towards the pinnacle of the bell curve. For weeks now, the government of Ukraine has been teetering upon the pinnacle.
Two events recently re-tipped the government of Ukraine into a downward trajectory on the bell curve.
The first was commentary delivered by Dr. Henry Kissinger, a former United States Secretary of State and Assistant to the President for National Security Affairs during the Richard Nixon Administration (1968-1973) and Gerald Ford Administration (1973-1977), at the annual World Economic Forum held in Davos, Switzerland. “Ideally, the dividing line should be a return to the status quo ante,” (pre 24 February 2022 with the Russian Federation controlling the Crimean Peninsula and approximately one-third the Donbas region). “Pursuing the war beyond that point would not be about the freedom of Ukraine, but a new war against Russia itself.”
Dr. Kissinger has throughout his career substantiated the theory of Realpolitik- a “system of politics or principles based on practical rather than moral or ideological considerations.” Basically, an acknowledgement of the realities on the ground and analysis of the costs to change those realities. One critic of Dr. Kissinger, who is of the Jewish faith, proffered that the comments reinforced the worst stereotypes about the Jewish people- making a deal… where one side comes up short.
From the perspective of the government of Ukraine, the validity underpinning Dr. Kissinger’s commentary depends upon the government of Ukraine receiving the military hardware and intelligence support that it “wants” rather than receiving what other countries, led by the United States and thirty-member North Atlantic Treaty Organization (NATO), believe that it “needs.” Since prior to 24 February 2022, the government of Ukraine has continually criticized the distance between what it wants and what it needs.
The second was commentary delivered by Mr. Donald Trump, 45th President of the United States (2017-2021) at the annual meeting of the National Rifle Association (NRA) held in Houston, Texas. “We spent trillions in Iraq and Afghanistan and got nothing for it. Before we nation-build the rest of the world, we should be building safe schools for our own children in our own nation… Why are we giving more than US$40 billion to Ukraine while Europe, by comparison, is giving very little, and they are greatly more impacted by a Russian invasion, obviously, than the US.” Mr. Trump also shared that the government of the People’s Republic of China and other governments are “smiling all the way to the bank” with respect to the billions of dollars the United States has since February 2022 sent to Ukraine.
There are individuals who have won recently Republican Party primaries in districts and states (Ohio, for example) for the 435-member United States House of Representatives and for the 100-member United States Senate who share the same position towards Ukraine as espoused by Mr. Trump. The positions about United States support for Ukraine by these individuals, particularly those seeking seats in the United States Senate, which will be decided on 8 November 2022, are material given the likely closeness dividing the parties.
If Mr. Trump were to seek the Republican Party 2024 nomination for president, the campaign rhetoric would commence in earnest in 2023. If an active military conflict continues between the Russian Federation and Ukraine, he will seek to direct the discussion by supporters of the Republican Party towards support for lessening United States participation and the collective participation of NATO. He will also remind at every opportunity that prior to 24 February 2022, the commercial, economic, and political infrastructures of Ukraine were considered to be among the most corrupt in the world- and he would question why that endemic would miraculously and permanently vanish on 25 February 2022.
If Mr. Trump were elected again in 2024 as the 47th President of the United States, and an active military conflict continues between the Russian Federation and Ukraine, he would seek to lessen United States participation and the collective participation of NATO. While a second Trump-[?] Administration (2025-2029) would initially be composed by a staff who would focus upon lessening disruption to alliances- thus not ceasing all commercial, economic, military, and political support to Ukraine, there would be meaningful reductions and, perhaps more importantly, an increase in rhetoric questioning reasoning for United States taxpayer support to Ukraine at the expense, in his opinion, of a more important relationship with the Russian Federation- regardless of who occupies the Kremlin.
Mr. Trump’s perspective derives in part from his belief that the decision in 1991 by the newly-independent government of Ukraine to transfer its nuclear weapons to the Russian Federation, a process that was completed in 2001, showed weakness and foreshadowed a strong Russian Federation in conflict with a weak Ukraine. For Mr. Trump, strength is to be embraced.
Absent a cessation of hostilities between the Russian Federation and Ukraine, by the end of 2022 those elected and appointed to serve within the United States government will have authorized approximately US$120 billion in borrowing on behalf of United States taxpayers to support Ukraine. Other governments collectively will be nearing the US$60 billion level by the end of 2022. Mr. Rand Paul (R- Kentucky), a member of the United States Senate, referenced that the US$60 billion thus far authorized for Ukraine exceeds United States government funding for cancer research, is collected in gasoline taxes, and exceeds the budgets of the Department of Homeland Security and Department of Energy. Mr. Mitch McConnell (R- Kentucky), minority leader of the United States Senate shared a different approach- US$40 billion is a pittance compared with the US$2 trillion the Democratic Party “dumped on the economy” in 2021 and “We will see how much pain he can sustain.”
A reason for the significance of the comments by Dr. Kissinger and Mr. Trump are they reflect the moderate component of the Republican Party and the right-leaning, “America First” component of the Republican Party, along with some moderate to right leaning members of the Democratic Party and those identifying as Independents.
The definition of words continues to plague and disrupt continuity among and between governments and the ability of the public to grasp precisely what their respective governments are doing to support Ukraine and defend Ukraine.
The fluidity of word definitions has emboldened the armed forces of the Russian Federation and unsettled the armed forces of Ukraine.
Want and Need- Since 2014, the government of Ukraine has wanted increasing commercial, economic, military, and political support from other countries. Whether seeking membership in the twenty-seven member European Union (EU) and membership in NATO, or seeking advanced weaponry, or since 2014 seeking robust sanctions against the Russian Federation for the invasion and annexation of the Crimean Peninsula and invasion and occupation and support for separatists in the Donbas region of Ukraine, the response from other governments has been consistent- Ukraine will receive what it needs to defend itself- not necessarily what Ukraine wants to defend itself.
While the United States government continues to refer to Ukraine as its “partner” as do other countries and NATO and the EU, clearly Ukraine is the junior partner because it must accept what others believe it needs rather than what it believes it needs. A partnership does not always reflect equality.
There is a reality, distasteful certainly for the government of Ukraine, that the government of the United States, government of the United Kingdom, NATO collectively, and EU collectively recognized prior to 24 February 2022 that most of what the armed forces of the Russian Federation wanted to obtain and then sought to retain within the territory of Ukraine would not be prevented absent direct conflict by NATO forces against the armed forces of the Russian Federation. Since that was not to be a reality, the known was always that further parts of Ukraine would be controlled by the Russian Federation.
When the current military conflict is resolved, temporarily or permanently, analyses will be published by organizations, educational institutions, and agencies and departments within governments as to how the distance between Want and Need contributed to the eventual outcome.
Winning and Losing- there remains among country government officials consistent inconsistency as to whether an acceptable outcome for the war is what Ukraine resembled prior to 2014, prior to 23 February 2022, or whatever will be outside of the areas controlled by the government of the Russian Federation when there is a cessation of the military conflict commencing on 24 February 2022.
Boundaries and Territories- there remains among country government officials consistent inconsistency as to whether an acceptable outcome for the war is what Ukraine resembled prior to 2014, prior to 23 February 2022, or whatever will be outside of the areas controlled by the government of the Russian Federation when there is a cessation of the military conflict commencing on 24 February 2022.
Victory and Defeat- there remains among country government officials consistent inconsistency as to whether an acceptable outcome for the war is what Ukraine resembled prior to 2014, prior to 23 February 2022, or whatever will be outside of the areas controlled by the government of the Russian Federation when there is a cessation of the military conflict commencing on 24 February 2022.
Mr Boris Johnson, Prime Minister of the United Kingdom, has publicly gone all-in with supporting the efforts by the armed forces of Ukraine to dispatch the armed forces of the Russian Federation. In public, he has discouraged initiating negotiations with Mr. Vladimir Putin, President of the Russian Federation which would contemplate the Russian Federation not returning occupied territory: “How can you deal with a crocodile when it’s in the middle of eating your left leg?”
Mr. Andrzej Duda, President of Poland, maintains a public posture similar to that of Mr. Johnson. Don’t cede even “one inch” of territory. “Worrying voices have appeared, saying that Ukraine should give in to [President Vladimir] Putin's demands. Only Ukraine has the right to decide about its future.”
At the end of any discussion about Ukraine in every capital will be the subject of money. How much is saving portions of territory in Ukraine worth? How much can taxpayers in any country afford to contribute?
Estimates for cost of the infrastructure reconstruction of Ukraine is approximately US$550 billion. Not included in this calculation are estimates for payments related to civil lawsuits and criminal prosecutions.
This estimate fluctuates based upon the territories controlled by the government of Ukraine at the cessation of military hostilities with the Russian Federation and the percentage of the approximately 6.7 million citizens of Ukraine, approximately 15% of Ukraine’s approximately pre-24 February 2022 population of 44 million who departed the country from 24 February 2022 onward and who decide to return to Ukraine.
The more territories controlled by the Russian Federation, and the more citizens of Ukraine who depart those territories, the type of reconstruction costs shift from reconstituting areas seized to adding residences and workplaces in remaining territories of Ukraine. The Russian Federation may seek to leave uninhabitable what were once residences and workplaces- the fewer people to manage, the easier to manage.
Kyiv, Ukraine, 26 May 2022 (Reuters) - Ukraine's richest man says he plans to sue Russia over what he said was $17 billon to $20 billion in losses caused by its bombardment of steel plants he owns in the devastated city of Mariupol. The Azovstal steelworks suffered heavy damage from Russian bombing and shelling after the sprawling plant became the last bastion of defence in the southern port city. The Illich Steel and Iron Works, also owned by Akhmetov, was also badly damaged during Russian shelling of Mariupol. "We will definitely sue Russia and demand proper compensation for all losses and lost business," Rinat Akhmetov, who owns the biggest Ukrainian steelmaker Metinvest, told Ukrainian news portal mrpl.city in an interview. Asked how much money Metinvest had lost because of the damage to Azovstal and Illich, he said: "The replacement cost ... due to Russian aggression is from $17 to $20 billion. The final amount will be determined in a lawsuit against Russia." Billionaire Akhmetov had already seen his business empire shattered before the war by eight years of fighting in Ukraine’s east after pro-Russian separatists took over swaths of territory there. Since Russia's invasion on Feb. 24, Metinvest has announced it cannot deliver its supply contracts. While Akhmetov's financial and industrial SCM Group is servicing its debt obligations, his private power producer DTEK has restructured its debt portfolio, he said. Akhmetov said he had remained in Ukraine since the war with Russia began, adding: "We believe in our country and believe in our victory."
The discussion about money is becoming acutely much more necessary as leadership of central banks and political leadership in governments have begun to condition the public for the stark likelihood that some or all the approximately US$340 billion in funds controlled by the Central Bank of the Russian Federation which have been frozen in countries (approximately US$30 billion in the United States) will be returned.
Likely too that the estimated US$200 billion in liquid and physical assets seized from individuals of Russian descent including those identified as “oligarchs” will be returned to them and efforts by governments to market yachts, aircraft, residences, artwork, and businesses will find few and hesitant purchasers willing to endure expected multi-year expensive litigation and security issues. Media reporting has financial institutions in Switzerland, including UBS and Credit Suisse, holding approximately US$213 billion in assets of individuals of Russian descent.
The Group of Seven Industrialized Nations (G7)- Canada, France, Germany, Italy, Japan, United Kingdom, and United States support a “massive joint effort” of reconstruction and recovery of Ukraine. There remains disagreement as to whether and how to confiscate Russian Federation assets- both government and privately-held, to fund, partially or in total, the commercial and economic infrastructure of Ukraine. Mr. Christian Lindner, Minister of Finance of Germany, shared that confiscation “… It is an option that still needs to be thought through.”
Political leadership in Canada, EU, Japan, United States, and other countries with need to persuade their respective taxpayers this scenario makes sense:
The Russian Federation invaded Ukraine.
Governments have frozen US$340 billion in funds of the Central Bank of the Russian Federation.
Governments have frozen or have access to another US$200 billion in assets owned by individuals of Russian descent and companies owned/controlled by individuals of Russian descent.
The total US$540 billion will be returned.
Taxpayers in countries other than Ukraine and the Russian Federation will provide US$540 billion for the reconstruction of Ukraine.
Mr. Dimitry Peskov, spokesperson for the government of the Russian Federation, shared that confiscation and use of assets of the government of the Russian Federation for benefit of Ukraine would be “illegal, blatant and of course requiring an appropriate response... It would be, in fact, outright theft.”
The EU continues to debate- and the debate becomes more debatable with each day of military conflict by the Russian Federation and Ukraine, as to defining its collective interests, the interests of its individual members, and how far astray the interests of its individual members may diverge from the collective interests. Primarily, the latter issues are the focus of Hungary and Poland.
Thus far, the EU is considering loans, with the guarantees by all or some of the member countries, and grants provided directly by the EU, to Ukraine for its monthly operating expenses (estimated at US$7 billion) and to fund reconstruction. The European Bank for Reconstruction and Development (EBR) and the International Financial Corporation (IFC) are offering US$34 billion in loans to Ukraine. The EU is discussing support in the range of billions of dollars and tens of billions of dollars- while the expected requirements for Ukraine are estimated at approximately US$550 billion. That leaves a meaningful gap which leads to the question- who will fill this gap? Who should fill this gap?
Like the United States, the EU collectively, and its members will be incurring debt, will be borrowing funds to provide to Ukraine- with no guarantee the funds will be repaid and likely issues with uses of the funds once distributed within Ukraine where prior to 24 February 2022, the country was rife with lack of transparency and endemic corruption.
From Lawschooli