The Arkin Group

June 30, 2022

Time Is No One’s Friend in Ukraine. While murmurings of peace talks seem to have all but disappeared, all sides seem to be playing the clock. Resolve is hardening on both sides and even the recent prisoner swap of 144 Ukrainian soldiers, many of whom defended the Azovstal steelworks in Mariupol, feels less like an advance towards peace and more as a harbinger of the entrenchment of a long war.

Russia intent to wait out the West with its brutal and indiscriminate campaign in the Donbas seemed ever-more misguided this week as it defaulted on its foreign debt and G7 leaders reiterated in word and deed their united resolve to support Ukraine and punish Russia. Then at the NATO Summit, members took measures to both expand NATO by supporting the applications of Finland and Sweden and announcing a decision to boost its numbers of deployed troops seven-fold. Moreover, reports on the dearth of semiconductor exports to Russia indicate that there will be severe impact to its military and commercial aviation sectors. These are strategic realignments that will have reverberations for years to come, but while these shifts occur Ukraine continues to be assailed relentlessly.

Putin appears unmoved by any of it as indicated by the launching a rocket into Kiev at the start of the G7 meetings to underscore his doggedness. The negotiations to release Ukrainian grain stores at a critical time to make room for the summer harvest also seem at an impasse as the global food shortage serves Russia’s strategic aims. Putin is counting that he can break the West with soaring inflation and energy costs and a possible influx of refugees into Europe. Eventually, he hopes a protracted war will weaken popular support for Ukraine and create cleavages in the Western alliance. In the interim, Russia seems to have taken aim at Europe’s new primary gas provider, Norway, as Russian-based criminal elements launched a series of Denial of Service (DDoS) cyber-attacks against a slew of Norwegian public institutions.

However, U.S. intelligence assessments indicate that Putin’s campaign in Ukraine has profoundly degraded his forces and while he still would like to take the whole of Ukraine, he probably will only be able to make incremental gains like the recent advance on Severodonesk. And even those gains are ephemeral as illustrated by Russia’s retreat today from the strategic and symbolic outcrop of Snake Island in the Black Sea. This tug and pull will endure for the foreseeable future.
June 30, 2022

Time Is No One’s Friend in Ukraine. While murmurings of peace talks seem to have all but disappeared, all sides seem to be playing the clock. Resolve is hardening on both sides and even the recent prisoner swap of 144 Ukrainian soldiers, many of whom defended the Azovstal steelworks in Mariupol, feels less like an advance towards peace and more as a harbinger of the entrenchment of a long war.

Russia intent to wait out the West with its brutal and indiscriminate campaign in the Donbas seemed ever-more misguided this week as it defaulted on its foreign debt and G7 leaders reiterated in word and deed their united resolve to support Ukraine and punish Russia. Then at the NATO Summit, members took measures to both expand NATO by supporting the applications of Finland and Sweden and announcing a decision to boost its numbers of deployed troops seven-fold. Moreover, reports on the dearth of semiconductor exports to Russia indicate that there will be severe impact to its military and commercial aviation sectors. These are strategic realignments that will have reverberations for years to come, but while these shifts occur Ukraine continues to be assailed relentlessly.

Putin appears unmoved by any of it as indicated by the launching a rocket into Kiev at the start of the G7 meetings to underscore his doggedness. The negotiations to release Ukrainian grain stores at a critical time to make room for the summer harvest also seem at an impasse as the global food shortage serves Russia’s strategic aims. Putin is counting that he can break the West with soaring inflation and energy costs and a possible influx of refugees into Europe. Eventually, he hopes a protracted war will weaken popular support for Ukraine and create cleavages in the Western alliance. In the interim, Russia seems to have taken aim at Europe’s new primary gas provider, Norway, as Russian-based criminal elements launched a series of Denial of Service (DDoS) cyber-attacks against a slew of Norwegian public institutions.

However, U.S. intelligence assessments indicate that Putin’s campaign in Ukraine has profoundly degraded his forces and while he still would like to take the whole of Ukraine, he probably will only be able to make incremental gains like the recent advance on Severodonesk. And even those gains are ephemeral as illustrated by Russia’s retreat today from the strategic and symbolic outcrop of Snake Island in the Black Sea. This tug and pull will endure for the foreseeable future.

June 23, 2022

The Russian invasion of Ukraine has triggered renewed focus on political alliances with an eye towards physical, economic, and energy security. While fierce military battles continued in Ukraine this week, international heads of state have been convening to address the many serious knock-on effects of the conflict. Since the onset of the war, there’s been a renewed interest in securing and strengthening political alliances. We’ve seen this most overtly though a reinvigorated NATO replete with new membership bids from Sweden and Finland, and through heightened attention on security alliances like the Quad and AUKUS. Much of the renewed collaboration initially focused on physical security, but the alliances are also proving valuable to strengthen economic and energy security, especially now that energy’s been clearly deemed a national security interest.

At the BRICS summit this week, leaders from Brazil, Russia, India, China and South Africa are meeting virtually to reignite their effort to curb the influence of the US dollar. While Putin was quick to emphasize that Russia’s presence in the BRICS is rising, reflected by the sizable increase in Russian oil exports to India and China, it was Chinese President Xi who has been exploiting the global economic crisis to elevate Beijing’s standing, calling upon the BRICS nations to use their collective economic clout to advocate for leadership over the global financial system. Xi also heavily criticized “the abuse” of international sanctions.

China is now reportedly looking to expand the BRICS alliance to include nations like Turkey and Saudi Arabia. But India, who is a thorn in Beijing’s side, is likely to oppose any further expansion that could elevate China’s status within the group. Brazil is also relatively cautious of China. Russia’s already been reaching out beyond the BRICS to try to secure its financial future, and this week Russian Foreign Minister Lavrov is in Iran attempting to “reconfigure” economic relations to operate outside of the Western system.

Meanwhile, while BRICS and friendly nations try to collaborate, NATO and allies are doubling down on their own alliances and security initiatives. The EU is currently determined in its resolve to support Ukraine, and just today granted Ukraine candidate status. Moldova was also granted candidate status in a further show of unity. The G7 is also scheduled to meet this weekend and while the climate crisis was a big topic at last year’s event, energy security is likely to headline this year. The critical need to secure energy for Europe that isn’t dependent upon Russian supplies has sparked new conversations and strategies.

While some EU members are likely to revert temporarily to coal, especially if supplies aren’t sufficient during the colder months, EU and allies are taking a multipronged approach to energy security. The EU and Norway just announced that they would increase collaboration to ensure additional short and long-term gas supplies from Norway, and the EU recently signed an MOU with Israel and Egypt to explore increasing natural gas sales to EU countries. The United States is also at the forefront of the effort to ensure LNG reaches Europe, and Canada has also stated that it’s open to speeding up gas projects that could supply Europe in just a few years. These are just a handful of myriad initiatives underway, including reevaluating the role of nuclear power and simultaneously increasing the viability of alternative energy sources and technology. As the reconfiguration of energy sources continues for the EU, BRICS, and much of the world, further innovative solutions and novel political partnerships are likely.

June 16, 2022

This week’s events in Russia and Ukraine are a microcosm of the broader geo-political landscape. Russia is currently hosting its annual St. Petersburg International Economic Forum, themed “New Opportunities in a New World”, yet the program makes scarce mention of the war in Ukraine. Putin is scheduled to speak on Friday, but earlier in June he addressed forum participants via Telegram where he blamed the West and NATO allies for widespread economic issues like inflation, supply chain disruption, and the ensuing food crisis. Although the program will seek to address how Russia should adapt to the new economic conditions, Putin is expected to take no responsibility for inciting said conditions. Instead, the Russian invasion of Ukraine is only anticipated to be explicitly discussed in a session on “Fake news in the era of globalization.”

While the St. Petersburg forum was initially launched as an outreach effort to encourage foreign investment back in 1997, this year’s event is primarily comprised of Russian attendees. It’s ironic that just last week Putin likened himself to Peter the Great, who sought to open Russia to the West, and yet this year foreign investors from the United States and European Union will be largely absent. According to one of Putin’s foreign policy advisors, the largest delegation and “guest” delegation of honor will be from Egypt. Turkey also sent a representative from the Ministry of Energy, indicating that Ankara still hopes to have a foot in both worlds. Other notable attendees will be representatives of the Afghan Taliban and a minister from Myanmar’s military apparatus.

Chinese President Xi, who vowed on Wednesday to firmly support Moscow’s “sovereignty and security” in a shift from his previous stance of supporting the sovereignty of all nations, is scheduled to address the forum via video call on Friday. Chinese participants and attendees will also hold a Russia-Chinese business dialogue, in line with the Kremlin’s recent statement that “Foreign investors are not only from the United States and European Union.” While Russian officials are towing this line, participants and topics of the forum will largely focus on Russian self-reliance, discussing how businesses and consumers can support Russian-made products and how the nation can boost its industry, including oil and gas. This seems to be a tacit admission that Russia is under strain from international sanctions and cannot easily pivot to other markets.

Meanwhile, as the limited version of the forum is underway, the German Chancellor, French President, Romanian President, and Italian Prime Minister are meeting with President Zelenskyy on their first visit to Kyiv since the onset of the war. After coming face-to-face with the destruction in Irpin, German Chancellor Scholtz tweeted that “Irpin, like Bucha, has become a symbol of the unimaginable cruelty of the Russian war, of senseless violence”, a sentiment that was corroborated by the chief prosecutor of the International Criminal Court who described the country as a crime scene. Ukraine is actively calling upon the visiting heads of state to “increase pressure” on Moscow, including a Russian gas embargo, and the leaders have responded by promising more long-range artillery and backing Ukraine’s EU candidate status.

As NATO and allies continue to display a unified stance against Russia, and atrocities pile up while Putin simultaneously points fingers and deflects blame, the world continues to feel the repercussions of the conflict. The head of the UN refugee agency has reported that the food security crisis prompted by the Ukraine war will likely cause more people to flee their homes in poorer countries, making already record levels of displacement even higher. But while much of the world watches and winces, Russia mistakenly seems to view the chaos as another weapon in its arsenal, hoping to wear down the world’s patience and put Ukraine under pressure to surrender. While Putin is incorrect to think that he can starve the world to capitulation, a war of attrition will not only challenge endurance on the battlefield but test the durability and strength of old and new geopolitical and economic alliances that are on full display this week.

June 9, 2022

On the heels of Davos and in the weeks before the NATO summit, Russia makes some battlefield gains but it’s unclear how far that will take them. This week, there was fierce fighting in Severodonetsk, where reportedly over 10,000 Ukrainian civilians are now trapped, and at a court in the Russia-backed self-declared breakaway Donetsk People’s Republic three foreign fighters serving with the Ukrainian armed forces were handed death sentences for being “mercenaries” for Ukraine. Further, while the UN and Turkey have tried to convince the Kremlin to allow grain exports from Ukrainian ports, there’s no sound deal in sight and Moscow continues to blame the global food shortage on financial sanctions.

Western nations and allies continue to stand firmly behind Ukraine, newly committing to send weapons packages and aid, but as the UN recently reported, “the war’s impact on food security, energy and finance is systemic, severe, and speeding up.” On Wednesday, President Zelenskyy called upon the West for tougher sanctions against Moscow and regional Ukrainian officials have emphasized the critical need for more Western long-range artillery, replacement parts, and training. But getting the materials into the right hands is logistically challenging and it needs to happen quickly. Indeed, as the fighting continues in the Donbas, it’s a race for supplies and Zelenskyy has noted that the battle for Severodonetsk, a strategic industrial hub, could decide the outcome of the east.

Meanwhile, the Kremlin’s also taking measures to assert Russian control of the occupied Ukrainian south. According to the Russian defense minister, the military and Russian Railways have now repaired over 700 miles of track that will allow traffic from Russia to reach Crimea and Kherson via Ukraine’s eastern Donbas. Putin is trying hard to solidify Russian bureaucratic and social control by appointing proxy leaders, elevating the Russian language, and granting the ruble official status for citizens of occupied Ukraine. On the 106th day of the war, Putin delusionally likened himself to Peter the Great in their shared mission to “reclaim” Russian territory, and he shows little sign of changing course.

But a war of attrition wears down both equipment and the individuals serving in the armed forces. In the battle for Donbas, Russia’s losing many of its elite fighters and they can’t be quickly or easily replaced. And while claiming a victory might be good for Putin’s propaganda purposes, Ukraine will still be able to replenish its stock of weapons from the west and right now NATO remains strong in its resolve to help supply Kyiv. While the battle is grinding and Russia’s war crimes pile up, motivation will be an important factor during the upcoming phase of attrition, and Ukraine is fundamentally motivated by the will to survive or even prevail.

June 2, 2022

A wide range of weapons will be essential for Ukraine to withstand Russia in the next phase of battle. This week, in a video address to the Luxembourg Parliament, Ukrainian President Zelenskyy stated that Russia is currently occupying about 20% of Ukraine. Noting the uptick in Russian gains, and the immediate need for Ukrainian rearmament, the United States and NATO allies have made fresh pledges to send sophisticated weapons to Kyiv. On Wednesday, President Biden announced a new $700 million weapons package for Ukraine, including artillery rocket systems capable of hitting targets up to 50 miles away, and Germany has promised anti-aircraft missiles and radar systems. The UK has also pledged sophisticated medium-range rocket systems and Sweden has promised anti-ship missiles and anti-tank weapons. And in a distinctly modern twist and show of solidarity, Lithuanians crowdfunded nearly $6.45 million to purchase a T2 advanced combat drone from Turkey to send to Ukraine, but Turkey decided to donate the weapon for free and the funds will reportedly be redirected for humanitarian aid.

Given the physical circumstances of the conflict, these type of anti-aircraft and anti-tank weapons have been key to Ukraine’s defense thus far and will remain critical in the days and weeks ahead. But Ukraine and allies are simultaneously leveraging economic weapons and the punishment is getting worse. Despite disagreements with Hungary, the EU has approved new sanctions on Russian oil and agreed to cut off Sberbank, Russia’s largest bank, from the SWIFT international transaction system. New US sanctions aim to prevent Russia and Belarus from obtaining US or foreign-made products derived from certain US technology or software, and Russian oligarchs, yacht companies, and Putin-friendly elites are all being targeted. Notably, Taiwan has also banned the export of modern chips and materials for chip production to Russia or Belarus, which will limit Moscow’s ability to keep up with emerging technologies.

While these efforts will start to make things more difficult for the Russians, the knock-on effects of the war continue to make life more difficult for many. OPEC+ has agreed to a larger increase in oil supply than planned for this summer, which might provide a bit of financial relief, but it’s notable that many African and the Middle East nations, who will be hurt the most from food and supply chain shortages, remain some of Putin’s staunchest supporters. Recognizing this, Ukraine is trying to get these nations to put some pressure on Putin to lift the blockade of Ukrainian exports, but Putin seems wise to this dynamic and Russia has sent Syria about 100,000 tons of stolen Ukrainian wheat since the war began. As Moscow continues to weaponize energy and food, a combination of physical, economic, and diplomatic weapons will remain essential components of the Ukrainian arsenal.