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THE WAR IN UKRAINE IS THE WAR FOR THE DOLLAR
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*This is the second of three parts of an interview that Oleg Nesterenko, President of the CCIE, gave to the publication “L’Éclaireur des Alpes”. This part looks at the real reasons behind the war in Ukraine, which is really a war for the dollar, the third to be precise.


 

 

L’Éclaireur – At a time when the question of the end of the supremacy of the dollar is being raised, you say that the war in Ukraine is not only the war of the American dollar, but that it is not the first…

Oleg Nesterenko – I see that you are referring to my analysis of the dollar wars, published some time ago… In fact, this is not the first, or even the second, but the third dollar war. The first was the war against Saddam Hussein’s Iraq. The second was the war against Gaddafi’s Libya. And the third, against Moscow on the territory of Ukraine, waged on the territory of a third country, simply because you can’t wage war against the Russians in their own country. And it is only the hybrid and proxy war that can be waged against Russia.

As far as the first two dollar wars are concerned, the first thing to understand is that countries like Iraq and Libya are, above all, major energy powers. Powers that dared to put the American currency at risk. In 2003, Saddam Hussein made good on his threat to stop selling hydrocarbons and gas in US dollars. Saddam Hussein was the first to raise the question of the legitimacy of the dollar, of the petrodollar and, above all, to act in a very significant way against it. He signed his own death warrant.
In February 2003, Saddam Hussein sold 3 billion barrels of crude oil for more than 25 billion euros. This sale was made in euros, not US dollars. A month later, the United States invaded Iraq. We don’t know the exact figures, but the number of victims is estimated at one million, one in two of whom were minors. Not to mention the hundreds of thousands more who died in the years that followed as a result of the total destruction of the country’s social and economic infrastructure. The Americans themselves, their analysts worthy of the name, recognise this.

In Libya in 2009, there was also a war on the dollar. Muammar Gaddafi, who was President of the African Union at the time, proposed a veritable monetary revolution to the entire African continent: to break away from the domination of the US dollar and create a pan-African monetary union. Under this union, exports of oil and other natural resources from the black continent would be paid for not in dollars or petrodollars, but in a new currency he called the gold dinar. He too has signed his own death warrant.

If such statements had been made not by Iraq or Libya, which are rich in oil and gas, but, for example, by Burkina Faso, which is rich in gold but lacks proven hydrocarbon reserves – there would have been no war. Saddam Hussein’s Iraq and Gaddafi’s Libya, as energy powers with gigantic reserves, were an existential threat to the American economy. Both leaders had openly and officially announced that they wanted to get rid of the US dollar. They were also two countries with which the United States had no reason to fear harmful consequences in the event of aggression. So they had to be annihilated. And this was done without delay.

With Moscow, this was not possible. Russia is not Iran, Iraq or Libya. With Russia, the United States could only act indirectly.

L’Éclaireur- But what does the war between Ukraine and Moscow have to do with the American dollar?

Oleg Nesterenko – Moscow has really threatened the status of the American dollar on the international stage, and therefore the whole American economy behind it. As soon as Putin came to power, well before 2021 and even before the anti-Russian coup in Ukraine in 2014, Russia, which is a leading energy power, began the process of liquidating US Treasury bonds (held by the Russian state, editor’s note), bonds denominated in dollars.

In five years, from 2010 to 2015, Russia halved the number of US Treasury bills it held. Whereas it used to be one of the world’s biggest holders, it now has virtually none.

At the same time, the Russian Federation has also begun to gradually separate itself from the petrodollar system by concluding trade agreements payable in national currencies, starting with China. Huge quantities of energy products began to be paid for in Chinese yuan and Russian rouble.

These were the beginnings of the new war that began to be prepared and that we have known since February 2022.

At the same time, there is an unofficial agreement between Russia and China to synchronise their actions against the United States. In this way, China is also gradually ridding itself of the US debtor. In 2015, China held over 1270 billion in US Treasury bonds; today it holds around 950 billion – the lowest level for over 10 years.

China is the United States’ number 1 adversary, but it was the Russian Federation that set in motion the process of freeing the world from the petrodollar system.

With the start in February 2022 of what I call the active phase of the war that has been going on for nearly 10 years, Russia and China, in tandem, this time officially since the masks have come off, are encouraging central banks around the world to rethink the wisdom of their investments in US Treasury bonds and, therefore, in the economy and well-being of Americans.

The US dollar is a monkey’s currency. There is nothing behind it. Nothing tangible. The current value of the US dollar has absolutely nothing to do with the real assets that should back it. Its value is sustained only by money printing and the military domination of the United States. The kind of domination that suppresses all discontent.

L’Eclaireur – With de-dollarisation, could the euro, which nobody seems to have pushed, have been an alternative to the dollar?

Oleg Nesterenko – We must not underestimate the weight and potential role of the euro. In the past, Saddam Hussein, for example, wanted to sell his oil not in dollars but in euros. And that was the main reason for the Iraq war and Saddam’s assassination. The euro can, or rather could, play a more important role than it does today. But I have absolutely no faith that this will happen. The potential will not be realised. Quite simply because European policy is deeply subservient to American will.
The United States will never allow the currency of its vassal to overshadow it. And with the level of mediocrity of Europe’s top leaders – or rather, it should be said, irresponsible leaders – and the majority of its current heads of state, the Americans and their currency really have nothing to fear from the euro. The initiatives of European leaders are so anti-European and anti-national most of the time that they are more like honorary consuls of the United States on the old continent than anything else.

And as if that wasn’t enough, practically tomorrow – in 2025 – the Presidency of the Council of the European Union will be held by the Poles. Poland is a direct agent, practically an employee, of the United States within the EU. The Poles will take over the helm of the EU just after Hungary and will do whatever is necessary to wipe out the slightest sovereignist gains made by the Hungarian rebels. Two years before this deplorable event takes place, they have already announced that their main priority will be to strengthen the EU’s ‘collaboration’ with the United States. In the years to come, the very modest remnants of European autonomy, both military and economic, will be further reduced and will be no more than symbolic.

It is not for nothing that no power in the world, including the United States and even more so Russia and China, recognises the EU as a serious interlocutor and prefers to deal only with individual Member States. On the international stage, Brussels officials have no political clout and are just window-dressers.

But I do not believe in the worst-case scenario for the European currency – its demise. Because the euro ship has already sailed far too far out to sea and has no fuel left to turn back without sinking the economies of the member countries. But, having said that, I am more than just a Eurosceptic. Not that I’m against the Western countries coming together around a European centre – far from it: the history of mankind shows that similar forces with similar visions, values and objectives always come together.

It’s just that the project in its optimistic version, the ideal image – that’s one thing; the reality – that’s another. If we look at the ‘degeneration’ of the original European project over the last few decades, and especially since 2004, it is no longer possible to ignore the fact that the European Union has become nothing more than a kind of dysfunctional hydra, each head of which has its own ideas. It is pleasing to note that Russia alone has succeeded in bringing these heads together. It is fear, hatred and phobias that have brought them closer together than anything else in the European project.

L’Éclaireur – How is the Russian economy faring in the light of the sanctions imposed by the West?

Oleg Nesterenko – In the short and medium term, the impact of Western sanctions on the Russian economy is relatively small. From the point of view of the standard of living of the vast majority of the population, the effect of these sanctions is quite simply non-existent. That said, we must not be naïve: in the long term, there will obviously be certain areas of activity that will suffer to some degree. A degree that will depend on a large number of variables.

When talking about the consequences of Western sanctions against Russia, we must not lose sight of the very reason why these sanctions were introduced in the first place. In every business plan, there is the obligatory and fundamental presence of the notions of investment and return on investment within precisely predefined time limits. The first good question to ask is: have the sanctions achieved their fixed objectives within the pre-calculated time and scope?

The facts are well known, although they are carefully minimised and distorted by their authors in order to save face: the objectives of the sanctions were to collapse the economy of the Russian Federation, which should have led, de facto, to Russia’s capitulation to the conflict in Ukraine. The result was a total failure. There has been no collapse. There is no collapse today and there will be no collapse tomorrow. Talking about it is pure fantasy speculation divorced from reality.
The sanctions that had the greatest chance of success were put in place at the very start of the confrontation. Especially those in the second and third waves, which targeted the very foundations of Russia’s financial system infrastructure, the ability of public and private players to raise capital from global financial markets, and the disconnection of hundreds of Russian banks from the Swift system, including ‘systemic’ banks.

These sanctions were part of the initial business plan and were deemed to be fully sufficient to achieve the pre-established objectives of collapsing the Russian economy within a limited timeframe of less than twelve months. All the other waves of sanctions that have followed and will follow in the future are no less dangerous for Russia’s economic and financial stability and are nothing more than chaotic gesticulations caused by the collapse of the initial Western plan.

Are the consequences of these actions harmful to the country in the long term? The answer is no. Let me remind you that it is not since 2022, but since 2014 that Russia has been subject to major sanctions by the Western camp. There is no longer any talk of these “original” sanctions in “Atlanticist” propaganda, and for good reason. Not only has the Russian economy not been in any way shaken, despite Barak Obama’s jubilations – “the Russian economy is in pieces!” at the time of a major, but one-off, fall in the Russian currency – but the sanctions have also acted as a catalyst and greatly strengthened the sovereignty of the national economy.

 

 

There’s no need to comment on Bruno le Maire’s comments of 1 March 2022 on the imminent destruction of the Russian economy, which are even more ridiculous than those of Obama and which simply demonstrate, once again, the flagrant amateurism of this gentleman occupying a position that does not coincide with his professional skills and abilities.

Nature abhors a vacuum. While embargoes can maintain the artificially created sectoral vacuum in countries with limited capacity for international cooperation, this does not work in the case of the major powers, whose economies can never be kept in isolation over the long term. National and international alternatives are always being put in place.

Restrictions on food imports from countries that supported sanctions against Russia have led to significant growth and consolidation in the agri-food sector. In just a few years of sanctions, Russia has gone from being a major importer of agri-food products to an exporter. Other sectors are in the process of becoming self-sufficient and, at the end of the Russian-Western hostilities, will become virtually impenetrable for European economic players.

Companies in the energy and defence sectors easily circumvent the sanctions by simply refusing to use the US dollar in their international transactions in favour of the Russian currency and that of the partner country. At the same time, they are speeding up the process of de-dollarising the world, a currency that has become highly toxic.

In the financial sector, anticipating as early as 2015 the risk of one day being cut off from the international Swift banking messaging system controlled by the West, the Central Bank of the Russian Federation has created its own interbank transmission system, the SPFS system, as well as its own payment system for bank cards, the MIR system. Both systems can be used internationally and are already linked to the Chinese Union Pay banking system. Other countries are set to join SPFS. The great tool of threats and permanent blackmail by the American-centric camp vis-à-vis the rest of the world to be cut off from their SWIFT is no longer considered a fatality and an existential danger.
At the same time, we are today discussing very seriously not only the creation of a new common currency for the Brics countries, but also a digital currency: the digital rouble. This currency will be an excellent additional means of getting rid of the constraint of illegal sanctions, because it will be able to be used without calling on the services of banks, which themselves may fear being subject to Western hostilities.

L’Éclaireur – So in your view, the West has more to fear, particularly from the backlash of its sanctions?

Oleg Nesterenko – If Russian-German economic relations are destroyed, the repercussions for the German economy, for example, will be dramatic. German industry, a large part of which is energy-intensive, is already in great difficulty because its production costs have simply exploded and its direct non-European competitors, starting with the Americans, do not have the problems that the Germans have just created for themselves.

In the European Union, which is in fact the second major collateral target of the American anti-Russian sanctions, most intra-Community cooperation projects in the scientific, technological and energy fields have already been scaled back. In the medium term, the total losses for all EU countries as a result of the sanctions against Moscow are estimated at several hundred billion euros.

When I mentioned the restrictions on food imports from hostile countries to Russia, we must not forget that European farmers lose billions of euros every year and will lose tens of billions more in the long term, because the Russian market is closed to them for the very long term. And even in the distant future, when Russian restrictions are lifted, the market share they will be able to regain will be derisory compared with what they have had in the past.

As far as tourism is concerned, in Europe it is mainly France that is footing the bill. There is no longer any tourism between Russia and France. If you talk to professionals in the hotel and tourism sector in the south of France, it’s disastrous for them, as it is for the property sector. For the last 30 years, the Russian customer has been a major player in terms of sales. The mass media are very careful to hide this fact.

For the energy sector, it’s not even worth talking about. We all know the scale of the disaster. It’s a disaster that is being more or less covered up by gigantic state compensation payments, which are adding to the already excessive public debt that will certainly never be repaid.

From now on, it is the United States that will not only regulate the cost of energy-intensive industries, but will also decide on the price of a baguette at the bakery or the heating bill for households. And anyone who thinks that the Americans are going to hand out gifts to their vassalised competitors, the Europeans, should give up their bad habit of dreaming, because it doesn’t work for them…

Generally speaking, all those who have followed the American project are suffering and will continue to suffer negative consequences for their economies, consequences far more harmful than those that Russia will experience in the years to come. Because in economics, as in business, it’s all a question of alternatives. And Russia has alternatives that the countries of the European Union do not have and will not have.

For the situation to change, particularly in France, French foreign policy must change radically. But with the propaganda relayed so extensively by the mainstream media and the conditioning of the French electorate, it is clear that even the forthcoming elections in 2027 have no chance of bringing anyone to power who would bring about a significant improvement in relations with Russia.

L’Éclaireur – In your opinion, are the penalty trains (currently the 11th) no longer effective?

Oleg Nesterenko – The entire range of serious sanctions that the Atlanticist camp can control has already been exhausted. Sometimes, when it comes to restrictions, the West falls into the most grotesque ridicule. For example, one of the sanctions put in place was a ban on domestic cats taking part in international competitions in Europe. I’ve already asked myself the question: why haven’t migratory birds been sanctioned yet? If the Poles haven’t already done so, they should start shooting them at the entrance to their airspace…
One of the main sanctions put in place is the one against Russian oil. What are the results? In the first quarter of 2023, Russia sold even more oil than it did before the war in Ukraine began.

The embargo on Russian gold is not working either. And, this time, I even regret it… Because tomorrow gold will play a much more important role in the global economy than it does today. If I were the Russian government, I would have severely restricted Russian gold exports, and have done so for some time. It’s important to remember that while national gold reserves in the United States and Germany have remained virtually unchanged in terms of volume since 2000 – and in France they have even fallen significantly – in Russia they have increased sixfold over the same period. But it is important to increase them further.

As far as serious sanctions are concerned, the only ones left are those involving blackmail and threats from Russia’s partners. But given that these are always strategic, even vital, for the countries targeted, the chances of success are close to zero.

Today, there is talk of sanctions against nuclear energy, against the Russian atom. These plans are totally unrealistic. What those responsible, or rather the irresponsible, in European politics want will never work. The bureaucrats in Brussels are demanding that Hungary, which is heavily dependent on the Russian atom, abandon it. Yet almost half the country’s energy comes from nuclear facilities built by the Russians. And today, new nuclear facilities are being built to increase Hungary’s energy independence. When I hear Von der Leyen asking Orban to write it off… The losses for the Hungarian people would be gigantic. By bowing to Brussels, they will be going back thirty years. And it’s pure fantasy to imagine that the Hungarian government would be so foolish.

Josep Borrell (the head of European diplomacy, editor’s note) also mentioned sanctions against India and Russian oil products refined in the country. The introduction of such sanctions would be sheer madness and would be very costly for Europe, because India has a large number of levers for retaliation against the European economy.

Source: L’Eclaireur des Alpes

 

 

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Tucker Carlson’s confused exasperation over Russian President Vladmir Putin’s extemporaneous history lesson at the start of their landmark February interview (which has been watched more than a billion times), underscored one realty. For a Western audience, the question of the historical bona fides of Russia’s claim of sovereign interest in territories located on the left (eastern) bank of the Dnieper River, currently claimed by Ukraine, is confusing to the point of incomprehension.

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Novorossiya isn’t just a construct of Vladimir Putin’s imagination, but rather a notion drawn from historic fact that resonated with the people who populated the territories it encompassed. Following the collapse of the Soviet Union, there was an abortive effort by pro-Russia citizens of the new Ukrainian state to restore Novorossiya as an independent region. 

While this effort failed, the concept of a greater Novorossiya confederation was revived in May 2014 by the newly proclaimed Donetsk and Lugansk People’s Republics. But this effort, too, was short-lived, being put on ice in 2015. This, however, did not mean the death of the idea of Novorossiya. On February 21, 2022, Putin delivered a lengthy address to the Russian nation on the eve of his decision to send Russian troops into Ukraine as part of what he termed a Special Military Operation. Those who watched Tucker Carlson’s February 9, 2024, interview with Putin would have been struck by the similarity between the two presentations.

While he did not make a direct reference to Novorossiya, the president did outline fundamental historic and cultural linkages which serve as the foundation for any discussion about the viability and legitimacy of Novorossiya in the context of Russian-Ukrainian relations.

“I would like to emphasize,” Putin said, “once again that Ukraine is not just a neighboring country for us. It is an integral part of our own history, culture, and spiritual space. It is our friends, our relatives, not only colleagues, friends, and former work colleagues, but also our relatives and close family members. Since the oldest times,” Putin continued, “the inhabitants of the south-western historical territories of ancient Russia have called themselves Russians and Orthodox Christians. It was the same in the 17th century, when a part of these territories [i.e., Novorossiya] was reunited with the Russian state, and even after that.”

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Putin went on to issue a threat which, when seen in the context of the present, proved ominously prescient. “And today the ’grateful progeny’ has overturned monuments to Lenin in Ukraine. They call it decommunization. You want decommunization? Very well, this suits us just fine. But why stop halfway? We are ready to show what real decommunizations would mean for Ukraine.”

In September 2022 Putin followed through on this, ordering referendums in four territories (Kherson and Zaporozhye, and the newly independent Donetsk and Lugansk People’s Republics) to determine whether the populations residing there wished to join the Russian Federation. All four did so. Putin has since then referred to these new Russian territories as Novorossiya, perhaps nowhere more poignantly that in June 2023, when he praised the Russian soldiers “who fought and gave their lives to Novorossiya and for the unity of the Russian world.”

The story of those who fought and gave their lives to Novorossiya is one that I have wanted to tell for some time now. I have borne witness here in the United States to the extremely one-sided coverage of the military aspects of Russia’s military operation. Like many of my fellow analysts, I had to undertake the extremely difficult task of trying to parse out fact from an overwhelmingly fictional narrative. Nor was I helped in any way in this regard by the Russian side, which was parsimonious in the release of information that reflected its side of reality.

In preparing for my December 2023 visit to Russia, I had hoped to be able to visit the four new Russian territories to see for myself what the truth was when it came to the fighting between Russia and Ukraine. I also wanted to interview the Russian military and civilian leadership to get a broader perspective of the conflict. I had reached out to the Russian Foreign and Defense ministries through the Russian Embassy in the US, bending the ear of both the Ambassador, Anatoly Antonov, and the Defense Attache, Major-General Evgeny Bobkin, about my plans.

While both men supported my project and wrote recommendations back to their respective ministries in this regard, the Russian Defense Ministry, which had the final say over what happened in the four new territories, vetoed the idea. This veto was not because they didn’t like the idea of me writing an in-depth analysis of the conflict from the Russian perspective, but rather that the project as I outlined it, which would have required sustained access to frontline units and personnel, was deemed too dangerous. In short, the Russian Defense Ministry did not relish the idea of me being killed on its watch.

Under normal circumstances, I would have backed off. I had no desire to create any difficulty with the Russian government, and I was always cognizant of the reality that I was a guest in the country.

The last thing I wanted to be was a “war tourist,” where I put myself and others at risk for purely personal reasons. But I also felt strongly that if I were going to continue to provide so-called “expert analysis” about the military operation and the geopolitical realities of Novorossiya and Crimea, then I needed to see these places firsthand. I strongly believed that I had a professional obligation to see the new territories. Fortunately for me, Aleksandr Zyryanov, a Crimea native and director general of the Novosibirsk Region Development Corporation, agreed.

It wasn’t going to be easy.

We first tried to enter the new territories via Donetsk, driving west out of Rostov-on-Don. However, when we arrived at the checkpoint, we were told that the Ministry of Defense had not cleared us for entry. Not willing to take no for an answer, Aleksandr drove south, towards Krasnodar, and then – after making some phone calls – across the Crimean Bridge into Crimea. Once it became clear that we were planning on entering the new territories from Crimea, the Ministry of Defense yielded, granting permission for me to visit the four new Russian territories under one non-negotiable condition – I was not to go anywhere near the frontlines.

We left Feodosia early on the morning of January 15, 2024. At Dzhankoy, in northern Crimea, we took highway 18 north toward the Tup-Dzhankoy Peninsula and the Chongar Strait, which separates the Sivash lagoon system that forms the border between Crimea and the mainland into eastern and western portions. It was here that Red Army forces, on the night of November 12, 1920, broke through the defenses of the White Army of General Wrangel, leading to the capture of the Crimean Peninsula by Soviet forces. And it was also here that the Russian Army, on February 24, 2022, crossed into the Kherson Region from Crimea.

The Chongar Bridge is one of three highway crossings that connect Crimea with Kherson. It has been struck twice by Ukrainian forces seeking to disrupt Russian supply lines, once, in June 2023, when it was hit by British-made Storm Shadow missiles, and once again that August when it was hit by French-made SCALP missiles (a variant of the Storm Shadow.) In both instances, the bridge was temporarily shut down for repairs, evidence of which was clearly visible as we made our way across, and on to the Chongar checkpoint, where we were cleared by Russian soldiers for entry into the Kherson Region.

At the checkpoint we picked up a vehicle carrying a bodyguard detachment from the reconnaissance company of the Sparta Battalion, a veteran military formation whose roots date back to the very beginning of the Donbass revolt against the Ukrainian nationalists who seized power in Kiev during the February 2014 Maidan coup. They would be our escort through the Kherson and Zaporozhye Regions – even though we were going to give the frontlines a wide berth, Ukrainian “deep reconnaissance groups”, or DRGs, were known to target traffic along the M18 highway. Aleksandr was driving an armored Chevrolet Suburban, and the Sparta detachment had their own armored SUV. If we were to come under attack, our response would be to try and drive through the ambush. If that failed, then the Sparta boys would have to go to work.

Our first destination was the city of Genichesk, a port city along the Sea of Azov. Genichesk is the capital of the Genichesk District of the Kherson Region and, since November 9, 2022, when Russian forces withdrew from the city of Kherson, it has served as the temporary capital of the region. Aleksandr had been on his phone since morning, and his efforts had paid off – I was scheduled to meet with Vladimir Saldo, the local Governor.

RT

Genichesk is – literally – off the beaten path. When we reached the town of Novoalekseyevka, we got off the M18 highway and headed east along a two-lane road that took us toward the Sea of Azov. There were armed checkpoints all along the route, but the Sparta bodyguards were able to get us waved through without any issues. But the effect of these checkpoints was chilling – there was no doubt that one was in a region at war.

To call Genichesk a ghost town would be misleading – it is populated, and the evidence of civilian life is everywhere you look. The problem was, there didn’t seem to be enough people present. The city, like the region, is in a general state of decay, a holdover from the neglect it had suffered at the hands of a Ukrainian government that largely ignored territories that had, since 2004, voted in favor of the Party of Regions, the party of former President Viktor Yanukovich, who was ousted in the February 2014 Maidan coup. Nearly two years of war had likewise contributed to the atmosphere of societal neglect, an impression which was magnified by the weather – overcast, cold, with a light sleet blowing in off the water.

As we made our way into the building where the government of the Kherson Region had established its temporary offices, I couldn’t help but notice a statue of Lenin in the courtyard. Ukrainian nationalists had taken it down in July 2015, but the citizens of Genichesk had reinstalled it in April 2022, once the Russians had taken control of the city. Given Putin’s feeling about the role Lenin played in creating Ukraine, I found both the presence of this monument, and the role of the Russian citizens of Genichesk in restoring it, curiously ironic.

Vladimir Saldo is a man imbued with enthusiasm for his work. A civil engineer by profession, with a PhD in economics, Saldo had served in senior management positions in the “Khersonbud” Project and Construction Company before moving on into politics, serving on the Kherson City Council, the Kherson Regional Administration, and two terms as the mayor of the city of Kherson. Saldo, as a member of the Party of Regions, moved to the opposition and was effectively subjected to political ostracism in 2014, when the Ukrainian nationalists who had seized power all but forced it out of politics.

Aleksandr and I had the pleasure of meeting with Saldo in his office in the government building in downtown Genichesk. We talked about a wide range of issues, including his own path from a Ukrainian construction specialist to his current position as the governor of Kherson Oblast.

We talked about the war.

But Saldo’s passion was the economy, and how he could help revive the civilian economy of Kherson in a manner that best served the interests of its diminished population. On the eve of the military operation, back in early 2022, the population of the Kherson Region stood at just over a million, of which some 280,000 were residing in the city of Kherson. By November 2022, following the withdrawal of Russian forces from the right bank of the Dnieper River – including the city of Kherson – the population of the region had fallen below 400,000 and, with dismal economic prospects, the numbers kept falling. Many of those who left were Ukrainians who did not want to live under Russian rule. But others were Russians and Ukrainians who felt that they had no future in the war-torn region, and as such sought their fortunes elsewhere in Russia.

“My job is to give the people of Kherson hope for a better future,” Saldo told me. “And the time for this to happen is now, not when the war ends.”

Restoration of Kherson’s once vibrant agricultural sector is a top priority, and Saldo has personally taken the lead in signing agreements for the provision of Kherson produce to Moscow supermarkets. Saldo has also turned the region into a special economic zone, where potential investors and entrepreneurs can receive preferential loans and financial support, as well as organizational and legal assistance for businesses willing to open shop there.

The man responsible for making this vision a reality is Mikhail Panchenko, the Director of the Kherson Region Industry Development Fund. I met Mikhail in a restaurant located across the street from the governmental building which Saldo called home. Mikhail had come to Kherson in the summer of 2022, leaving a prominent position in Moscow in the process. “The Russian government was interested in rebuilding Kherson,” Mikhail told me, “and established the Industry Development Fund as a way of attracting businesses to the region.” Mikhail, who was born in 1968, was too old to enlist in the military. “When the opportunity came to direct the Industry Development Fund, I jumped at it as a way to do my patriotic duty.”

The first year of the fund’s operation saw Mikhail hand out 300 million rubles (almost $3.3 million at the current rate) in loans and grants (some of which was used to open the very restaurant where we were meeting.) The second year saw the allotment grow to some 700 million rubles. One of the biggest projects was the opening of a concrete production line capable of producing 60 cubic meters of concrete per hour. Mikhail took Alexander and me on a tour of the plant, which had grown to three production lines generating some 180 cubic meters of concrete an hour. Mikhail had just approved funding for an additional four production lines, for a total concrete production rate of 420 cubic meters per hour.

“That’s a lot of concrete,” I remarked to Mikhail.

“We are making good use of it,” he replied. “We are rebuilding schools, hospitals, and government buildings that had been neglected over the years. Revitalizing the basic infrastructure a society needs if it is to nurture a growing population.”

The problem Mikhail faces, however, is that most of the population growth being experienced in Kherson today comes from the military. The war can’t last forever, Mikhail noted. “Someday the army will leave, and we will need civilians. Right now, the people who left are not returning, and we’re having a hard time attracting newcomers. But we will keep building in anticipation of a time when the population of the Kherson region will grow from an impetus other than war. And for that,” he said, a twinkle in his eye, “we need concrete!”

I thought long and hard about the words of Vladimir Saldo and Panchenko as Aleksandr drove back onto the M18 highway, heading northeast, toward Donetsk. The reconstruction efforts being undertaken are impressive. But the number that kept coming to mind was the precipitous decline in the population – more than 60% of the pre-war population has left the Kherson region since the Russian military operation began.

According to statistics provided by the Russian Central Election Commission, some 571,000 voters took part in the referendum on joining Russia that was held in late September 2022. A little over 497,000, or some 87%, voted in favor, while slightly more than 68,800, or 12%, voted against. The turnout was almost 77%.

hese numbers, if accurate, implied that there was a population of over 740,000 eligible voters at the time of the election. While the loss of the city of Kherson in November 2022 could account for a significant source of the population drop that took place between September 2022 and the time of my visit in January 2024, it could not account for all of it.

The Russian population of Kherson in 2022 stood at approximately 20%, or around 200,000. One can safely say that the number of Russians who fled west to Kiev following the start of the military operation amounts to a negligible figure. If one assumes that the Russian population of the Kherson Region remained relatively stable, then most of the population decline came from the Ukrainian population.

While Saldo did not admit to such, the Governor of the neighboring Zaporozhya Region, Yevgeny Balitsky, has acknowledged that many Ukrainian families deemed by the authorities to be anti-Russian were deported following the initiation of the military operation (Russians accounted for a little more than 25% of the pre-conflict Zaporozhye population.) Many others fled to Russia to escape the deprivations of war.

Evidence of the war was everywhere to be seen. While the conflict in Kherson has stabilized along a line defined by the Dnieper River, Zaporozhye is very much a frontline region. Indeed, the main direction of attack of the summer 2023 Ukrainian counteroffensive was from the Zaporozhye region village of Rabotino, toward the town of Tokmak, and on towards the temporary regional capital of Melitopol (the city of Zaporozhye has remained under Ukrainian control throughout the conflict to date.)

I had petitioned to visit the frontlines near Rabotino but had been denied by the Russian Ministry of Defense. So, too, was my request to visit units deployed in the vicinity of Tokmak – too close to the front. The closest I would get would be the city of Melitopol, the ultimate objective of the Ukrainian counterattack. We drove past fields filled with the concrete “dragon’s teeth” and antitank ditches that marked the final layer of defenses that constituted the “Surovikin Line,” named after the Russian General, Sergey Surovikin, who had commanded the forces when the defenses were put in place.

The Ukrainians had hoped to reach the city of Melitopol in a matter of days once their attack began; they never breached the first line of defense situated to the southeast of Rabotino.

Melitopol, however, is not immune to the horrors of war, with Ukrainian artillery and rockets targeting it often to disrupt Russian military logistics. I kept this in mind as we drove through the streets of the city, past military checkpoints, and roving patrols. I was struck by the fact that the civilians I saw were going about their business, seemingly oblivious to the everyday reality of war that existed around them.

As was the case in Kherson, the entirety of the Zaporozhye Region seemed strangely depopulated, as if one were driving through the French capital of Paris in August, when half the city is away on vacation. I had hoped to be able to talk with Balitsky about the reduced population and other questions I had about life in the region during wartime, but this time Aleksandr’s phone could not produce the desired result – Balitsky was away from the region and unavailable.

If he had been available, I would have asked him the same question I had put to Saldo earlier in the day: given that Putin was apparently willing to return the Kherson and Zaporozhye regions to Ukraine as part of the peace deal negotiated in March 2022, how does the population of his region feel about being part of Russia today? Are they convinced that Russia is, in fact, there to stay?  Do they feel like they are a genuine part of the Novorossiya that Putin speaks about?

Saldo had talked in depth about the transition from being occupied by Russian forces, which lasted until April-May 2022 (about the time that Ukraine backed out of the ceasefire agreement), to being administered by Moscow. “There never was a doubt in my mind, or anyone else’s, that Kherson was historically a part of Russia,” Saldo said, “or that, once Russian troops arrived, that we would forever be Russian again.”

But the declining population, and the admission of forced deportations on the part of Balitsky, suggests that there was a significant part of the population that had, in fact, taken umbrage at such a future.

I would have liked to hear what Balitsky had to say about this question.

Reality, however, doesn’t deal with hypotheticals, and the present reality is that both Kherson and Zaporozhye are today part of the Russian Federation, and that both regions are populated by people who had made the decision to remain there as citizens of Russia. We will never know what the fate of these two territories would have been had the Ukrainian government honored the ceasefire agreement negotiated in March 2022. What we do know is that today both Kherson and Zaporozhye are part of the “New Territories” – Novorossiya.

Russia will for some time find its acquisition of the “new territories” challenged by nations who question the legitimacy of Russia’s military occupation and subsequent absorption of the Kherson and Zaporozhye regions into the Russian Federation. The reticence of foreigners to recognize these regions as being part of Russia, however, is the least of Russia’s problems. As was the case with Crimea, the Russian government will proceed irrespective of any international opposition.

The real challenge facing Russia is to convince Russians that the new territories are as integral to the Russian motherland as Crimea, a region reabsorbed by Russia in 2014 which has seen its economic fortunes and its population grow over the past decade. The diminished demographics of Kherson and Zaporozhye represent a litmus test of sorts for the Russian government, and for the governments of both Kherson and Zaporozhye. If the populations of these regions cannot regenerate, then these regions will wither on the vine. If, however, these new Russian lands can be transformed into places where Russians can envision themselves raising families in an environment free from want and fear, then Novorossiya will flourish.

Novorossiya is a reality, and the people who live there are citizens by choice more than circumstances. They are well served by men like Saldo and Balitsky, who are dedicated to the giant task of making these regions part of the Russian Motherland in actuality, not just in name.

Behind Saldo and Balitsky are men like Panchenko, people who left an easy life in Moscow or some other Russian city to come to the “New Territories” not for the purpose of seeking their fortunes, but rather to improve the lives of the new Russian citizens of Novorossiya.

For this to happen, Russia must emerge victorious in its struggle against the Ukrainian nationalists ensconced in Kiev, and their Western allies. Thanks to the sacrifices of the Russian military, this victory is in the process of being accomplished.

Then the real test begins – turning Novorossiya into a place Russians will want to call home.

 

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Ukraine SitRep: Retreat Continues For Lack Of Defense Lines

 

On February 17, after Ukrainian units in Avdeevka had started to leave their position, the commander-in-chief of the Ukrainian army, General Syrski, announced a retreat to new defense lines:

"Based on the operational situation around Avdiivka, in order to avoid encirclement and preserve the lives and health of the military, I decided to withdraw our units from the city and move to defense on more favorable lines," Syrskyi said.

He emphasized that Ukrainian soldiers had fulfilled their duty with dignity, did their best to destroy the best Russian military units and inflicted significant losses in manpower and equipment on the enemy.

"The lives of servicemen are the highest value. We will take back Avdiivka anyway," the Chief added.

As some had already predicted it turned out that the "more favorable lines" Syrski promoted did not exist.

On February 17, the same day Syrski announced the retreat, Strana already reported on the lack of new defense lines (machine translation):

Ukrainian photographers Konstantin and Vlada Liberov, who document the war, wonder around which Ukrainian city, next after Avdiivka, the Russians will try to push through the defense of the Armed Forces of Ukraine.

They report this in their Instagram.

"So what is the next "fortetsia" - Pokrovsk? Or just Konstantinovka?", - write Liberov, criticizing the command of the Armed Forces of Ukraine because of the lack of a second line of defense in Avdiivka.

"Where is the second line of defense? If you use the Deepstate map, "claws" around the city began to form almost a year ago. It certainly wasn't a surprise. So where's the second line of defense?" The Liberovs ask themselves.

"While the military was waiting for weapons for the Zaporozhye counteroffensive, the enemy passed through the fields, concreted trenches, built entire underground cities… Why didn't we do the same in Avdiivka? Moreover, a blind defense, the purpose of which is to deplete the enemy's forces, is like our official strategy.

Others confirmed the observation (machine translation):

West of Avdiivka, no significant defense line has been built for Ukrainian troops, and the Russian army continues to advance.

This was announced by the editor-in-chief of Censor, Yuri Butusov, following his trip to this area.

"There are no words. Gap: here in Kiev, the supreme commander-in-chief says one thing, but at the front something completely different is happening. I want to say that no field lines of fortifications have been built beyond Avdiivka so far. I saw Russian drones attacking our soldiers in their burrows in the middle of a field, " Butusov said.

According to him, no conclusions are drawn from previous failures.

"If the government can't find builders to build at least basic rear lines of defense, if they can't find engineers to maintain modern equipment, drones, sensors, communications, if they can't find workers and technologists to produce ammunition, then there will never be enough attack aircraft," the journalist added.

The government claimed to have allocated money to local authorities for building defense lines. But such money always seem to drain away before the first fortification gets finished.

A lack of serious organization and incompetence add to the picture (machine translation):

In the absence of fortified trenches in the east of the country, the engineering services of the Armed Forces of Ukraine are to blame.

This was stated in the social network X military engineer with the nickname Corsair.

As stated in a series of his posts, the heads of engineering services of brigades "do not know how to plan ahead and do not submit requests on time."

"When I arrive at a place, I have neither a map nor a proper justification. As a rule, they say: "We need to dig from that stump to planting." But that's not how it works. The defense should be solid, " Korsar wrote.

According to him, engineers do not have wood and concrete either, because "the brigades do not have the willpower to insist on this, and the AHS (operational-tactical group - Ed. ) do not have money."

For construction equipment, you need to sign contracts with businesses, but no one does this.

Since the loss of Avdeevka the Ukrainian forces had to fall back again and again. There are no natural barriers that could be used for defenses and there is no equipment and material to build defense lines across bare land.

Today even the New York Times took note of this:

Surprisingly Weak Ukrainian Defenses Help Russian Advance (archived) - New York Times, Mar 2 2024

Russian forces continue to make small but rapid gains outside of the eastern Ukrainian city of Avdiivka, attributable in part to dwindling Ukrainian ammunition and declining Western aid.

But there’s another reason the Kremlin’s troops are advancing in the area: poor Ukrainian defenses.

Sparse, rudimentary trench lines populate the area west of Avdiivka that Ukraine is trying to defend, according to a Times review of imagery by Planet Labs, a commercial satellite company. These trench lines lack many of the additional fortifications that could help slow Russian tanks and help defend major roads and important terrain.

Avdiivka became the site of a fierce standoff over the last nine months, emerging as one of the bloodiest battles of the war. When Russia captured the city on Feb. 17, its first major gain since last May, the Ukrainian Army claimed it had secured defensive lines outside the city.

But Russian troops have captured three villages to the west of Avdiivka in the span of a week, and they are contesting at least one other.

Avdeevka Feb 17 2024
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Avdeevka Mar 2 2024
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The Ukraine friendly Live UA map from where the above maps were copied is not fully up to date. The town Orlivka, still shown as Ukrainian, is already in Russian hands.

The next geographic feature that might be useful for defense is the north-to-south river and reservoir line 12 kilometer west of Orlivka. Nothing in between was prepared for a serious defense. It can not be held against any serious attacker:

Ukrainian commanders have had ample time to prepare defenses outside Avdiivka. The area has been under attack since 2014, and Ukraine has had a tenuous hold on it since Russia launched its full-scale invasion two years ago.

But the Ukrainian defenses outside Avdiivka show rudimentary earthen fortifications, often with a connecting trench for infantry troops to reach firing positions closest to the enemy, but little else.

But instead acknowledging that and instead of retreating to that river line the Ukrainian command is again throwing reserves into the already crumbling defenses.

Mr. Hrabskyi said Russia was currently preventing Ukrainian troops from shoring up their defenses by relentlessly bombarding them, including with powerful glide bombs carrying hundreds of tons of explosives that can smash through even well-prepared fortifications.

“The quality of these defensive lines cannot be good enough to resist massive bulldozer tactics by the Russian forces,” Mr. Hrabskyi said.

The current political uproar in Europe and the U.S. about the war in Ukraine is an acknowledgment of the fact that Russia is certain to win this fight. I do not expect any serious consequences coming from it.

It will simply take a few more weeks of discussions until resignation sets in.

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Scott Ritter: How the US misleads the world about its involvement in Yemen
While Washington maintains that the strikes on Houthi installations are defensive and fully legal, neither is the case

“The strikes in Yemen were necessary, proportionate, and consistent with international law.” With this statement, the United States delegate to the United Nations defended the joint US-UK military strikes against targets affiliated with the Houthi militia undertaken on the night of January 12, 2024.

The irony of this statement is that it was made before a body, the United Nations Security Council, which had not authorized any such action, thereby eliminating any claim to legitimacy that could possibly be made by the US.

The Charter of the UN specifies two conditions under international law in which military force can be used. One is in the conduct of legitimate self-defense as articulated in Article 51 of the Charter. The other is in accordance with the authority granted by the UN Security Council through a resolution passed under Chapter VII of the Charter.

British Foreign Minister David Cameron cited the UN Security Council in his justification of the UK’s involvement in the attacks on Yemen, claiming that the Council had “made clear” that the “Houthi must halt attacks in the Red Sea.”

While the Security Council had issued a resolution demanding that the Houthi cease their attacks on international shipping in the Red Sea, this resolution was not passed under Chapter VII, and therefore neither the US nor the UK had any authority under international law to carry out their attacks on Yemen.

Both the US and UK invoked the notion of self-defense in their attacks on Yemen, thereby indirectly alluding to a possible cognizable action under Article 51 of the UN Charter. US President Joe Biden justified the US military attack on Houthi militia forces in Yemen in a statement released shortly after the strikes ended. “I ordered this military action,” he declared, “in accordance with my responsibility to protect Americans at home and abroad.” 

The main problem with this argument is that the Houthis had not attacked Americans, either at home or abroad. To the extent that US forces had previously engaged weapons fired by the Houthis, they had done so to shield non-American assets – either the State of Israel or international shipping – from Houthi attack. Under no circumstances could the US argue that it had been attacked by the Houthis.

The US attacks, Biden asserted, “were carried out to deter and weaken the Houthi ability to launch future attacks.”

This language suggests that the US was seeking to eliminate an imminent threat to commercial maritime operations in international shipping lanes. To comply with the requirements of international law regarding collective self-defense – the only possible argument for legitimacy since the US itself had not been attacked – the US would need to demonstrate that it was part of a collective of nation states that were either under attack by the Houthis or were threatened with imminent attack of a nature that precluded seeking Security Council intervention. 

In late December 2023, the US had, together with several other nations, gathered military forces in what was known as Operation Prosperity Guardian to deter Houthi attacks on maritime shipping that had been taking place since November 19, 2023.

However, the US subsequently undermined any case it could possibly have made that its actions were consistent with international law, namely that they were an act of collective pre-emptive self-defense done in accordance with Article 51 of the UN Charter.

US Central Command (CENTCOM), which is responsible for operations in the Middle East, issued a press release shortly after Washington launched a second attack against a Houthi radar installation that it claims was involved in targeting shipping in the Red Sea.

The statement claimed the attack on the Houthi radar installation was a “follow-on action” of the strikes carried out on January 12, and had “no association with and are separate from Operation Prosperity Guardian, a defensive coalition of over 20 countries operating in the Red Sea, Bab al-Mandeb Strait, and the Gulf of Aden.”

By distancing itself from Operation Prosperity Guardian, the US has fatally undermined any notion of pre-emptive collective self-defense under Article 51 of the UN Charter, highlighting the unilateral, and inherently illegal, nature of its military attacks on Yemen.

 

 

Scott RITTER

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