Part Two: Northernmost Border On Security Roundtable
Pre-Briefing Materials for the August 28, 2019 Roundtable PART TWO: NORTHERNMOST BORDER ON SECURITY ROUNDTABLE
You are invited to attend and participate in a roundtable discussion Wednesday, August 28, 2019, from 1-5pm, followed by a small reception.
This discussion is Part Two of the Northernmost Border on Security Roundtable event that was held on June 6 at Joint Base Elmendorf- Richardson. We will focus on Russia, and the U.S. National Energy Policy.
For questions or to RSVP, please contact Julie Kitka, President, Alaska Federation of Natives at [email protected]
special guests Lt. General Thomas A. Bussiere, Commander, Alaskan Region, North American Aerospace Defense Command; Commander, Alaskan Command, U.S. Northern Command; Commander, Eleventh Air Force, Pacific Air Forces, Joint Base Elmendorf-Richardson, Alaska
Featured Speaker, Rodger Baker, Senior Vice President, STRATFOR
sponsored by Alaska Federation of Natives
PART ONE: NORTHERNMOST BORDER NATIONAL SECURITY ROUNDTABLE
Materials from this event can be found at: nativefederation.org/military-partnerships Northernmost Border Security Roundtable: Part Two Pre-reading material for the August 28, 2019 roundtable Sponsored by the Alaska Federation of Natives and the Alaska Domain Awareness Center, University of Alaska, Anchorage
Dear Presenter or Participant:
The attached articles are pulled together for your review prior to our upcoming roundtable. If you have a chance to review, especially the content from the U.S. Senate Energy and Natural Resources Hearing on July 11, 2019 on the Important Role of U.S. LNG in Evolving Global Markets, you will get a sense of the intersection of the varied issues raised in our first roundtable on China.
We thank our Alaska Congressional Delegation for their commitment to the U.S. and Alaska, and for the way that they are factoring in security considerations in every step of their work. We look forward to welcoming Senior Military Leaders, Oil Company Executives and Alaska Native Leaders to gather once again to continue these important discussions. A big thank you to Rodger Baker, Senior Vice-President at STRATFOR in Austin, Texas for joining us again to begin the briefings.
This second part of the roundtable will be a deeper dive on Russia and U.S. National Energy Policy. We will also bring these discussions home to possible impacts on Alaska and the people who live here. Special Guest U.S. Senator Lisa Murkowski will be joining us in-person for the roundtable and reception, and Mr. John Babbar, Vice President of Federal and State Government Relations, ConocoPhillips, will address the National Energy policy.
We will have a written briefing document available at the Roundtable which will include further information. AFN invites you to send any additional critical information you would like included in the roundtable materials. Please email additions to me directly at [email protected].
Thank you for your time and efforts.
Sincerely,
Julie Kitka, President Alaska Federation of Natives July 26, 2019
3000 A STREET, SUITE 210 | ANCHORAGE, AK 99503 | PHONE: 907.274.3611 | FAX: 907.276.7989 | WWW.NATIVEFEDERATION.ORG Index of Articles
Alaska's Geopolitical Significance for the United States 3 Rodger Baker, Stratfor (June 24, 2019) (https://bit.ly/2JXo9V2)
The Ever-Shifting 'Strategic Triangle' Between Russia, China and the U.S. 6 Stratfor (June 7, 2019)
The Geopolitics of Rare Earth Elements 13 Stratfor (April 2019)
U.S. LNG Exports Are About to Reshape the Global Market 22 Stratfor (November 2018)
Russia 28
What Does the End of the INF Treaty Mean for Europe? 29 Stratfor 2019
Russia's Migrant Shortage is Bigger Than Anyone Could Have Imagined 36 Stratfor 2019
Joint Interests Against the U.S. Deepen the Sino-Russian Embrace 43 Stratfor 2019
The West Fears Russia's Hybrid Warfare. They're Missing the Bigger Picture. 50 Carnegie Endowment for World Peace (July 3, 2019)
The Primakov (Not Gerasimov) Doctrine in Action 54 Carnegie Endowment for World Peace (June 5, 2019)
Russia establishes a new Arctic Air Squadron to protect the Northern Sea Route 66 Published in Arctic Today (July 19, 2019)
Russia, China Are Key Close Partners 69 Carnegie Endowment for International Peace (June 5, 2019)
Russia: Rosneft CEO Asks Government for Tax Break to Spur Investment in 72 Arctic Region Stratfor 2019
The U.S. Zeroes in on Russia's Borderlands 74 Stratfor 2018
1 China 79
Northernmost Border National Security Roundtable, Part 1 80 Alaska Federation of Natives, June 6, 2019 (https://bit.ly/32Ks0gA)
Bluster, Cooperation Mark China's Arctic Summit 81 Anchorage Daily News (July 17, 2019)
U.S. Energy 85
With Powers so Disposed, America and the Global Strategic Energy Competition 86 U.S. Senator Lisa Murkowski (https://bit.ly/2XWJacn)
Full Committee, U.S. Senate Energy and Natural Resources Committee Hearing 94 On the Important Role of US LNG in Evolving Global Markets July 11, 2019 (https://bit.ly/2XWJacn)
Alaska Upstream Slides 135 Wood Mackenzie (May 2019)
Alaska Gas Pipeline 152 Wood Mackenzie (April 2018)
2 Alaska's Geopolitical Significance for the United States Rodger Baker, Stratfor June 24, 2019
https://bit.ly/2JXo9V2
3 Field Notes June 24, 2019 | 17:48 GMT
Sitting in my hotel room in Anchorage on a recent business trip, I was drawn to the window by the unmistakable sound of military aircraft — in this case a pair of F- 22 Raptors carrying out maneuvers in the nightless skies of the Alaskan summer. In addition to the F-22s, Alaska is preparing to host the F-35, and will soon boast the largest concentration of U.S. fifth-generation military aircraft on the planet. For those in the lower 48, this may seem an odd location for such a collection of military firepower, but as the Alaskans are fond of reminding their southern countrymen, the "father" of the American Air Force, Billy Mitchell, once told Congress that "he who holds Alaska will hold the world."
On flat maps of the United States, Alaska is either stretched out of shape on the top left quadrant, or shoved in a tiny box (next to Hawaii) in the lower left. Its distance from the contiguous continental United States leaves it an outlier; a distant frontier known for gold prospecting, ice road trucking, salmon fishing, cruise ship tours and oil. The strategic significance of Alaska is often overlooked, even compared to that other distant state, Hawaii. But a simple look at a globe, rather than a flat map, quickly emphasizes just why Alaska's situation is so important.
During his 1935 comments to the House Military Affairs Commission, Mitchell, a long-term advocate of air power in an era of land and sea power, reminded his
4 listeners of the realities of a round, rather than flat, world:
"Alaska is the most central place in the world for aircraft, and that is true either of Europe, Asia, or North America."
We may be taught that the shortest distance between two points is a straight line, but Euclid lived on a flat earth. As any aviator of seafarer knows, the shortest distance between two points is an arc. And in aviation, it is the plotting of great circle routes that shows the quickest flight path to any destination.
In that sense, Alaska sits at the intersection of North America, Asia and Europe, a critical intersection for U.S. strategic security. Washington may be closer to Western European capitals, but Anchorage is close to both Europe and Asia. By air, Anchorage is 825 miles further from London than DC and 360 miles further from Berlin, but it is 500 miles closer to Moscow, nearly 3,000 miles closer to Beijing and more than 3,000 miles closer to Tokyo. In short, when we remember we live on a globe rather than a flat map, Alaska's strategic location becomes readily apparent. There is a reason Alaska is also a central component of U.S. ballistic missile defense.
An added significance of Alaska's location is its position in the Arctic, an area of increasing strategic importance as new maritime routes are opening up, energy and mineral resources are becoming more accessible and maritime food resources are shifting location and patterns. During the Cold War we were often reminded of the strategic significance of the Arctic when seeing pictures or movies depicting a U.S. nuclear missile submarine busting through the ice — a show of U.S. power on the Soviet doorstep. Today, it's more than submarines moving through the inhospitable frozen North. As we think of the changing world around us, and the revival of focus on great power competition, it may be a good time to dust off those old Polar projection maps — or maybe even dust off that globe. After all, the world is far from flat.
Article Search
5 The Ever-Shifting 'Strategic Triangle' Between Russia, China and the U.S. Stratfor June 7, 2019
6 ARTICLE June 07 2019 05:30:00 GMT The Ever-Shifting 'Strategic Triangle' Between Russia, China and the U.S.
The U.S. trade war with China and Washington's prolonged standoff with Russia — over matters from Iran to Venezuela to arms control — are increasingly driving Moscow and Beijing toward each other. Chinese President Xi Jinping is attending the St. Petersburg International Economic Forum June 6-7, but not before meeting with Russian President Vladimir Putin in Moscow earlier in the week. China and Russia have signed economic deals that span everything from 5G networks to hydropower plant construction to establishing a joint research and technology innovation fund. The deals come in the wake of Moscow's recently indicated desire to collaborate with China in the Arctic's Northern Sea Route [1] as part of Beijing's Maritime Silk Road initiative, while the massive Power of Siberia pipeline [2] is completing the final phase of construction and is set to begin pumping ever-larger volumes of Russian natural gas to China by the end of this year.
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These developments are simply the latest in a broader trend of Russia and China strengthening political, economic and security ties. Such developments raise the question of how deep an alignment between Russia and China can go, and to what extent their relationship is forming in direct opposition to and competition with the United States. To begin to answer this question, it is important first to frame it in the appropriate strategic context, and then to look at how ties between Russia, China and the United States have evolved within this context. Doing so points to many more constraints than opportunities in a sustained elevation of the Russia-China relationship, one that will be shaped heavily by the United States.
The Postwar Evolution of the 'Strategic Triangle' The end of World War II marked the emergence of the United States and the Soviet Union as the two primary global powers, while also marking the founding of the People's Republic of China in 1949. This development ushered in an inherent "strategic triangle" relationship among the three countries, meaning that relations between any two of these powers would necessarily shape and be shaped by the strategic interests of the third power. These strategic interests include neutralizing and dominating their respective peripheries while projecting outward and pushing their own respective vision of global order, producing inherent contradictions and driving the so-called great power competition [3] between them.
In the initial years of the postwar era, China was the weakest of the three powers from an economic and military standpoint. Nevertheless, under Mao Zedong, China was able to use its size and political and diplomatic heft to maintain independence and balance between the United States and the Soviet Union. In the early years of the People's Republic, Beijing aligned with the Soviet Union, partly because of their shared communist ideology but just as importantly because of their shared interest in rivaling U.S. power and influence. However, this alignment almost immediately became strained over issues such as the Korean War, border disputes and the succession from Josef Stalin to Nikita Khrushchev, with the latter pursuing policies like "peaceful coexistence" with the United States that Mao deemed as dangerous to China's interests.
These differences ultimately led to the Sino-Soviet split, which in turn paved the way for a strategic rapprochement between the United States and China beginning in the early 1970s, as both countries shared an interest in limiting the power and influence of the Soviet Union. But the U.S.-China rapprochement also proved to have its limits once Soviet power was effectively constrained and began weakening by the 1980s.
The end of the Cold War fostered a new phase in the strategic triangle by effectively marginalizing the Soviet Union (now Russia) as a global player. The United States became the only global superpower, while China entered a period of economic and geopolitical ascension. Though Russia experienced internal turmoil and its global power projection weakened substantially, it was never fully removed as a regional power, as demonstrated by the emergence of the Commonwealth of Independent States and its continued engagement in former Soviet politics and security affairs [4].
These developments recalibrated the power dynamics between the three countries, with the United States expanding its power projection globally, while China and Russia began to improve bilateral relations as the former ascended and the latter began to recover after the chaotic 1990s. China's rise as a global power has put it in greater competition with the United States over a wide range of issues, from trade disputes to the South China Sea to the Belt and Road Initiative [5]. Meanwhile, Russia's regional resurgence in the mid- to late 2000s on the back of high global energy prices and a domestic political consolidation by Vladimir Putin also put it in greater contention with the United States and the West, culminating in the 2008 Russia-Georgia War [6] and the 2014 Euromaidan uprising in Ukraine [7] and leading to the standoff between Moscow and
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The Limits of a Russia-China Alignment At this point, the United States remains the strongest global power, but one whose position — whether political, economic or military — is increasingly challenged by China and Russia in various ways. U.S. tensions with China and its standoff with Russia have pushed Moscow and Beijing closer together to recalibrate the strategic triangle once again. Russia and China have in recent years expanded economic ties and political coordination, and their level of military cooperation is at the highest level since the end of the Cold War [8].
However, this rising cooperation between Russia and China has both challenges and limitations. While economic ties between Russia and China have indeed grown significantly in relative terms — witnessing double-digit growth every year since 2011 — they are still quite limited in absolute terms. And despite the recent trade dispute between the United States and China, overall U.S.-China trade ($737 billion in 2018) is still much higher than overall Russia-China trade ($108 billion).
The limitations of economic ties between Russia and China were also relayed to me on recent visits to both countries. For example, a financial journalist at a leading business paper in Moscow said that China is not seen as a major partner for Russia, adding that a lot of the large economic deals the two countries agree to don't pan out, with significant economic ties mostly limited to the energy sector. In the same vein, a businessman from St. Petersburg said there is not a lot of economic activity between Russia and China besides energy and raw materials, claiming that only 5-10 percent of deals previously signed between the two countries at the St Petersburg economic forum actually materialized — and that the same is true for the Eastern Economic Forum in Vladivostok. Indeed, information from the Ministry for the Development of the Russian Far East shows that less than half of priority projects in the region enter the implementation phase, making the announced agreements at this week's St. Petersburg forum a much less important indicator of ties than the concrete results they will — or will not — produce.
The public view of China within Russia is positive, but when it comes to the specific issue of China's rise as a global power, a different picture emerges.
Similar skepticism was raised on security cooperation between Russia and China. A retired Russian diplomat in Moscow explicitly said that he doesn't trust the Chinese, claiming that they are after Russian land and noting that there are more Chinese spies operating in Russia than there are Western spies. In the meantime, a Chinese foreign policy expert noted that while Beijing feels the need to cooperate with Moscow on certain issues like trade, China's support for Russia goes only so far on security matters, such as the conflict in Ukraine. For example, China hasn't supported Russia's claim to sovereignty over Crimea, and Beijing generally views Russia's military deployments abroad with skepticism. While security ties have indeed grown between Russia and China in recent years, such concerns could explain why their cooperation has largely been limited to joint military exercises and Russian weapons sales, the latter of which have been curtailed by China's own advancements in weapons technology and manufacturing [9].
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In general, it is important to consider that the public view of China within Russia is positive, especially compared to that of the United States: A survey taken by the independent Levada Center at the end of 2018 found that 75 percent of those polled viewed China in a positive light, while 54 percent viewed the United States negatively. However, when it comes to the specific issue of China's rise as a power, a different picture emerges. Nearly 60 percent of Russians living in Eastern Siberia polled in another survey considered China's ascent as a threat to Russia's interests, and more than half opposed a visa-free regime with China.
This dichotomy is important when considering the general level of cooperative relations between Russia and China and a deeper sense of concern and mistrust that lurks beneath the surface. As one analyst with a government-affiliated think tank in Russia put it, China doesn't challenge Russia's political model in the manner that the West does in terms of promoting democracy and human rights, but China does challenge Russia's survival in a way the West does not. Another Russian working in the tech sector in Beijing (and who formerly had worked at the Huawei offices in Moscow) recounted a conversation with a former professor at a well-respected university in Moscow who said there is a secret agreement with Beijing in which China gets a small piece of Russian land every year. Such impressions are anecdotal, of course; nevertheless, these kinds of conspiratorial perceptions among educated Russians in the private and education sectors show that there are deep concerns about China's rise at the social level and signal the potential pushback that strengthening ties between Russia and China could face at the political level.
Looking Ahead So, what does all this spell for Russia-China relations down the line? Relations between Moscow and Beijing have been on an upward trajectory in recent years, and Russia and China have until now been careful to downplay their differences while emphasizing the shared opportunities of their cooperation. However, from the standpoint of the strategic triangle, it can be deduced that as China continues to grow as an economic and military power, tensions will likely increase between Russia and China and undermine the trajectory of cooperation that the two countries are currently on. Thus, while increased Chinese economic involvement in areas such as the Arctic, Eastern Siberia and Central Asia [10] can produce economic benefits for Russia for now, at a certain point this involvement can pose a more direct strategic threat to Moscow, whether in the form of increasing Chinese control over key infrastructure and shipping lanes, having greater access to Russia's remote regions or overwhelming Russia from an economic and demographic standpoint.
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China has been careful to downplay any notion that its rise presents a threat to Russia, and it was often emphasized to me in China that Beijing wants peaceful coexistence with its neighbors. However, as Henry Kissinger writes: "Strategists rely on the intentions of the presumed adversary only to a limited extent. For intentions are subject to change. And the essence of sovereignty is the right to make decisions not subject to another authority. A certain amount of threat based on capabilities is therefore inseparable from the relations of sovereign states." This means that China, like other powers, must be judged by its capabilities rather than its current intentions when it comes to projecting power.
Such capabilities have clearly served as a concern for the United States, but they may be even more worrisome for Russia — which has a tenth of the population of China (147 million people vs. 1.4 billion) and an economy that is a tenth of its size ($1.6 trillion vs. $12.2 trillion) while sharing a long and direct border with China. This is where Russian fears over Chinese expansionism come from. While the two countries have been able to manage and mitigate tensions over such matters, for now at least, the underlying issues are likely to grow more contentious. China seems likely to increase its economic, political and (potentially) security involvement in areas that matter to Russia — with signs of this already taking place in the border areas near Tajikistan and Afghanistan [11].
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Because of this, there may be room down the line for Russia and the United States to find common ground on selective issues, which in turn could pave the way for the United States and Russia to pursue a rapprochement of their own to curb China's power. But like the U.S.-China outreach in the 1970s, such an effort would be limited even as their deeper competition endures. Thus, the growing alignment between Russia and China is part of a fluid global power competition dynamic, with further shifts in the strategic triangle inevitably to come in the years ahead.
Referenced Content: [1] why-china-wants-expand-its-arctic-footprint [2] russian-rivalries-tale-two-energy-firms [3] where-does-iran-fit-world-defined-great-power-competition [4] russias-path-another-resurgence [5] china-changes-gears-belt-and-road-initiative [6] looking-back-russian-georgian-war-10-years-later [7] softer-iron-curtain-falls-ukraine [8] rise-not-so-new-world-order [9] chinas-military-modernization-push-remains-work-progress [10] central-asia-china-russia-trade-kyrgyzstan-kazakhstan-turkmenistan-tajikistan-uzbekistan [11] chinas-increasing-security-buffer-its-western-frontier
worldview.stratfor.com | (512) 744-4300 | [email protected] P.O. Box 92529, Austin, TX 78709 PDF created for [email protected] 12and not intended for redistribution. The Geopolitics of Rare Earth Elements Stratfor April 2019
13 The Geopolitics of Rare Earth Elements
(Ed Jones/AFP/Getty Images)
14 This report cannot be shared or copied without express permission from Stratfor. Copyright Stratfor 2019.
The Geopolitics of Rare Earth Elements April 2019
• Demand for rare earth elements will grow in the The rare earth elements are already critical to the next several years as the world undergoes an en- U.S. defense sector, but rare earth mining, pro- ergy transition, but the supply chain is vulnerable. cessing and fabrication capabilities will even more strongly influence geopolitical dynamics in the com- • China is the top supplier in the market, but ing years as the world undergoes its nascent energy its own growing domestic demand may lessen transition and transportation evolution. In the near its dominance by driving increased production term, China will benefit from its near-monopoly, but outside its own borders. ultimately its own growing domestic demand will limit the duration of its control over the sector and • The U.S. defense industry makes up a small eventually force production diversification. portion of the total demand for rare earth ele- ments. To ensure supply alternatives from China, The Same but Different the U.S. government will likely need to proactively intervene in the market to shift production depen- Though they are often discussed as a group, rare dence away from China. earth elements have individual qualities that funnel them into specific use cases and markets. From Tucked into the sixth row of the periodic table, lighting and optics to electronic displays to perma- often represented by a single square expanded nent magnets and guidance systems, each use re- like a footnote at the bottom of the table, are the quires a different element or different combination 15 lanthanides. When combined with yttrium and of elements. Additionally, not all rare earth elements scandium, these materials are better known as the are found in the same types of deposits; they occur rare earth elements. Though they are used in very in different places and in different concentrations. small amounts, their significance to the U.S. defense These different types of minerals are typically cat- sector and to emerging and potentially disruptive egorized into two subgroups based on weight: light technologies, combined with China’s control over rare earth elements (LREE) and heavy rare earth the majority of the market, has given the rare earth elements (HREE). China’s policy adds an additional elements outsized geopolitical relevance. subgroup, medium rare earth elements (MREE).
King of Rare Earths THE BIG PICTURE China contains roughly a third of the world’s re- Each element on the periodic table tells a serves of rare earth elements, and it has only geopolitical story. The rare earth elements, in- come to dominate the sector recently. After China dividually and as a whole group, are the quintes- discovered new reserves in the 1960s, it took until sential symbol for the emerging, shifting global the early 1990s for it to overtake the United States order, as China and the United States engage in as the world’s premier rare earth elements pro- both a trade war that may soon be resolved and ducer. China’s production of rare earth elements a tech war that will continue for decades.
STRATFOR • 2
15 U P R E E Unique magnetic and lighting properties, among others, make rare earth elements key in the production of a range of devices. For instance, magnets made with neodymium are far lighter than other magnets, allowing for more efficient motors.
T R E E
Scandium Neodymium G Gadolinium E Erbium Yttrium P Promethium T Terbium T Thulium Lanthanum Samarium Dysprosium Ytterbium C Cerium E Europium H Holmium Lutetium P Praseodymium
C E E C
H C R C P
P Source: China Water Risk Copyright Stratfor 2019
Light Rare Earth Elements (LREE) Heavy Rare Earth Elements (HREE)
16 G R E E Mine, deposit or occurrence location Reserves (metric tons of rare earth oxide equivalent)
RU I 12 million
U ITE T TE 1.4 million CHI 44 million
Atlantic Ocean I I 6.9 million IET 22 million Indian Ocean Pacific Ocean BR I 22 million U TR I 3.4 million Countries with the largest reserves of rare earth elements are annotated with their corresponding reserves value in metric tons of rare earth oxide equivalent content. Source: USGS Note: Top producers annotated Copyright Stratfor 2019
is both geographically divided by type and highly which imports many of the final products that Japan concentrated in a handful of mines. Inner Mongolia produces with rare earth elements, felt a second- accounts for nearly 70 percent of China’s LREE ary impact. Though the ban was temporary, it sent production, with a single mine — Baotou Bayan shockwaves through the global community and Obo Mine — producing more than 50 percent of all prompted countries and producers to scramble to Chinese rare earth elements. Southern China, where try and find, develop or reopen alternative rare earth HREEs were first discovered in the 1960s, accounts element sources. for most of the country’s HREE production. Jiangxi province alone produces roughly 50 percent of The United States, in part due to wariness of its China’s MREE and HREE, and Ganzhou city accounts defense technology relying so heavily on China, for the majority of that production. launched and won a World Trade Organization case against China, and in 2015 Beijing removed export Even though China has ample resources and large quotas on rare earth elements. But in the years mines, it has only gained its near monopoly on the since the export ban on Japan, the rest of the world global supply of rare earth elements by controlling has had only marginal success in seeking sources the processing steps that remove the elements from outside of China. Australia was able to increase its the rest of the rock in which they are found. This production of LREEs with a new, environmentally control has presented a global supply risk, which be- controversial processing facility in Malaysia. And came painfully evident in 2010 when China abruptly the United States’ Molycorp mining company re- halted the export of rare earth ores, salts and metals opened Mountain Pass mine in California in 2012, to Japan, a primary consumer. The United States, only to declare bankruptcy and shutter the location
STRATFOR • 4
17 R E E P Over the last 30 years, China has solidified its dominance over the global rare earth sector. Looking to move up the value chain and with domestic electric vehicle and renewable consumption increasing, China’s domestic consumption of rare earths will only grow. This threatens to reduce China’s total exports, but could also tie China more closely to the global market as it seeks more imports, slowly diversifying the market.
China limits exports of China lifts quotas and taxes on rare earth elements to Japan exports of rare earth elements 160 THOUSAND TONS Other 140 Brazil
120 India Russia 100 Australia United States 80 China
60
40
20
0 Source: USGS ‘94 ‘96 ‘98 ‘00 ‘02 ‘04 ‘06 ‘08 ‘10 ‘12 ‘14 ‘16 Copyright Stratfor 2019 just three years later. China still controls the vast costly to contain and can draw criticism from envi- majority of all rare earth production, and for some ronmental groups and local populations. key medium and heavy rare earth elements such as dysprosium and terbium, which are necessary to As part of China’s broader efforts to curb the en- produce permanent magnets in electric vehicles and vironmental damage and consolidate inefficient wind turbines, China’s control is virtually complete, industries, Beijing has tightened the reigns on with more than 98 percent of global supply. the rare earth refining sector. For example, it has cracked down on illegal mining in the country; illegal After all, prices for many of the rare earth elements production of dysprosium oxide decreased by 34 have remained relatively stable since 2015 (changes percent from 2013 to 2017, according to Adamas in China’s policy toward rare earth production per- Intelligence. And as part of consolidation efforts petuated a small spike in 2017), meaning new proj- associated with its 12th Five Year Plan, Beijing in- ects are rarely economically feasible or attractive. tends to cap production of all rare earth elements at Moreover, the refining process produces environ- 140,000 metric tons no later than 2020. This would mentally damaging byproducts that are extremely still represent a 20,000 metric ton increase from
STRATFOR • 5
18 current levels. 2018’s final quota was 120,000 met- for only a roughly estimated 5 percent of total U.S. ric tons, and the first half of 2019 is already showing rare earth elements demand — is not big enough to a production increase. A key moment in China’s single-handedly drive the market to prioritize alter- continued efforts to combat illegal mining will come native production sources. in May when Beijing decides whether to continue allowing rare earth element imports from Myanmar, However, on a global level, demand for rare earth a location long suspected of being along a launder- elements is increasing. Cerium and lanthanum are ing route for minerals such as dysprosium, terbium the rare earth elements that are consumed at the and gadolinium that have been illegally mined within highest volume, but neodymium, dysprosium and China’s borders. terbium — all used in the aforementioned perma- nent magnets (also known as NdFeB magnets) — A New Balance are among the group members set to receive more attention in the coming years as demand for electric In an attempt to drive innovation and rely less vehicle motors and wind turbines increases. This on China, the most recent National Defense demand growth is further supported by ambitious Authorization Act (NDAA) prohibited U.S. defense plans in Europe, China and some U.S. states to agencies from purchasing permanent magnets from ban the sale of fossil fuel-powered vehicles and hit China. But the U.S. defense sector, which accounts renewable energy targets.
P R E E China threw a wrench into the rare earth elements market in 2010 when it temporarily cut off exports to Japan. Prices spiked and countries and producers scrambled to find, develop or reopen alternative sources. As prices stabilized in the years since and the threat became less immediate, it was no longer economically viable to keep certain mines open or pursue many new projects.
PRICE PER METRIC TON 350,000 USD
Neodymium 300,000 Metal
Neodymium 250,000 Oxide
Praseodymium- 200,000 Neodymium Oxide
150,000 Praseodymium Oxide
100,000 Lanthanum Oxide
50,000
0 Source: Bloomberg 2008 2010 2012 2014 2016 2018 Copyright Stratfor 2019
STRATFOR • 6
19 China not only mines and produces most of the environmental regulations and containment require- world’s rare earth elements, but it also produces ments in certain nations. In fact, Australia’s Lynas, close to 90 percent of the world’s permanent one of the few companies enabling global diversifi- magnet alloys, and Chinese manufacturing of the cation away from China’s production in LREEs since permanent magnets themselves is on the rise. As 2010, still battles with the Malaysian government magnet demand grows, so too will Chinese domestic over processing facilities there. consumption (due to both the country’s own electric vehicle demand and its exports of the value-added Recycling and technological adjustments to reduce product). Indeed, after controlling the world supply the amount of rare earth elements needed or a of rare earth elements for the better part of three move to an entirely alternative technology are other decades, China has now become the world’s largest options. Substantial amounts of material are lost importer as well. In 2018, China exported 53,000 during purification processes, and additional steps metric tons of rare earth elements and imported during purification or fabrication could potentially 41,400 metric tons. In fact, a planned expansion of recover additional material from what is now waste. the Lynas facility in Malaysia and the Mount Weld Additionally, since rare earth elements do not mine in Australia will be at least partially supported degrade substantially during the lifetime of their by Chinese demand. products, used products could also provide recycla- ble material. Since most applications demand such a Alternative Solutions small amount of the elements, companies may begin to explore ways to increase supply through recy- Growing demand for rare earth elements and cling. But at present any recycling efforts are too potentially reduced Chinese exports driven by small in scale or will take too long to develop to offer rising domestic demand logically should prompt realistic supply chain protection in the near future. countries to prioritize efforts to find alternative sources and bring them online. But at present, the Should the threat to the rare earth elements supply prices of many rare earth elements make such become too great or the metals or magnets too advancements difficult. costly, electric vehicle makers may look to other engine types. However, though not every electric New rare earth element production operations often vehicle model on the market uses permanent mag- struggle to succeed because of the high environ- net motors, a large portion do. Changing product mental costs associated with containing the caustic lines is a time intensive and costly decision that not and polluting materials needed to remove rare earth all companies are willing to make, meaning that the metals from their ores. Japan, keenly aware of the death of permanent magnet motors is unlikely any vulnerability to its high-end manufacturing sector, time soon. continues — sometimes successfully — to scour the seafloor looking for rare earth supplies in territorial With few immediately viable alternatives, the global waters, but economically viable exploitation of those rare earth supply chain will remain vulnerable in the reserves remains years away. near term — and potential future undersupply now even threatens the elements’ greatest producer, The few new potential mining operations that have China. Now that China is more intimately tied into the greatest potential for success are in Australia the rare earth elements supply chain through its and Greenland, but they do not fully address the own imports and as a manufacturer of value-added unattractiveness and environmental cost of hosting products, it is less likely to risk the economic rami- processing facilities, including adhering to stricter fications of employing a ban for political purposes,
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20 but that doesn’t mean its monopoly is any less threatening to countries such as the United States and Japan. Ultimately, shifting global energy priori- ties will eventually increase demand enough that the market must make real, concerted progress in devel- oping new resources. But both the United States and Japan will remain especially vulnerable during the gradual diversification process — that is, unless their governments, at the behest of their defense departments, directly subsidize the development of alternative resources. □
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21 U.S. LNG Exports Are About to Reshape the Global Market Stratfor November 2018
22 U.S. LNG Exports Are About to Reshape the Global Market
(COR LAFFRA/Shutterstock)
23 This report cannot be shared or copied without express permission from Stratfor. Copyright Stratfor 2019.
U.S. LNG Exports Are About to Reshape the Global Market Nov. 2018
• By the end of 2019, the United States will be- more processing and liquefaction facilities are ex- come one of the world’s three largest exporters of pected to come online the following year. Producers liquefied natural gas. are also considering additional final investment de- cisions to construct new facilities beyond that. The • Qatar, which has been the globe’s biggest LNG consequences of rising U.S. — as well as Australian producer until now, will begin implementing a — LNG exports have already begun to make waves more aggressive strategy next year in the face of throughout the market, meaning the geopolitical competition from the United States and Australia. battle over LNG will be front and center next year, particularly among four countries: Qatar, China, • U.S. trading partners could promise to pur- Russia and the United States. chase American LNG as a way to reduce their trade surpluses.
• China is unlikely to purchase LNG from the THE BIG PICTURE United States because of their trade war, choos- ing instead to buy Russian gas from Siberia. While the U.S. shale revolution has had a major impact on global oil markets, its effects on • The United States will ramp up its pressure on global natural gas markets have been more the European Union to buy more U.S. LNG and muted. In 2019, however, the United States to improve its infrastructure so it can reduce the will finally reap the rewards of its investments bloc’s reliance on Russian energy. in liquefied natural gas when gas exports are expected to increase significantly and have The U.S. shale revolution has had a major impact global ramifications. at home, but its echoes have reverberated less elsewhere around the world, at least where natural gas is concerned. That, however, is about to change. By the end of 2018, the United States will launch Qatar: Protecting nine liquefied natural gas export projects that will have a collective liquefaction capacity of 36.7 mil- Itself from the World lion tonnes per annum (mtpa). The expansion will The United States and Australia are likely to be boost the country’s capacity to roughly 63 mtpa — a joined by others as countries around the world big step up from the mere 1.5 mtpa that existed look for an increase in global natural gas demand before 2016. in the 2020s. Last month, Royal Dutch/Shell and its partners made a final investment decision on its It all adds up to a big year in 2019. And growth in large LNG Canada project, which was its first such U.S. LNG exports will continue beyond that because decision on a such a project in more than five years.
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24 G C 100 MILLION METRIC TONS
80 60 40 20 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
100 MILLION METRIC TONS
80 60 40 20 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020
U 100 MILLION METRIC TONS
80 60 40 20 0 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Copyright Stratfor 2018
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25 For years, Qatar has been the globe’s LNG export ral gas prices, instead of traditional oil prices. This leader. In 1997, the tiny Gulf state exported no LNG, has forced Qatar to explore ways to reorganize its but by 2011, it led the world, with an installed ca- energy sector to compete. The all-important Qatar pacity of 77 mtpa. But in 2005, Doha implemented Petroleum merged its two natural gas companies — a moratorium on developing new parts of the North Qatargas and RasGas — earlier this year. And after a Field, the world’s largest gas supply, due to concerns Cabinet reshuffling on Nov. 3, Qatar Petroleum CEO about oversupply and overproduction. Saad al-Kaabi became the country’s new energy minister and will oversee some of the changes he’s But increasing pressure from Australia (in parallel been pushing. At the same time, Sheikh Abdullah with U.S. growth, the country also hiked its LNG ca- bin Hamad al-Thani, the brother of Emir Tamim bin pacity by 62.3 mtpa from 2015 to 2018), the United Hamad al-Thani, has also become the new chair of States and elsewhere forced Doha to announce in Qatar Petroleum. April 2017 that it would lift that moratorium in an effort to boost its export capacity from 77 to 100 The World: Protecting mtpa. But just two months later, three of Qatar’s neighbors — Saudi Arabia, the United Arab Emirates Itself from Trump and Bahrain — imposed an economic blockade in anger over its independent streak in foreign pol- One fly in the ointment for the U.S. LNG industry is icy. That diplomatic course was made possible by the country’s new trade wars. Before making final in- Doha’s windfall from LNG, which gave it the eco- vestment decisions on LNG export facilities — which nomic freedom to politically distance itself from its can cost more than $10 billion and as much as $50 neighbors, especially Riyadh. billion to $60 billion, in extreme cases — investors want a degree of certainty about long-term con- Since 2017, pressure from its global LNG compet- tract and destination opportunities. Washington’s itors and local political rivals has prompted Doha trade war with Beijing has made this more difficult, to become more aggressive in the energy sector especially for LNG exporters, because China is the and enact reforms to make it more nimble. Qatar’s world’s second largest LNG importer (trailing only problem has never been that its LNG exports and Japan) and will be the major driver of LNG import natural gas developments are expensive; by con- growth over the next five to 10 years. trast, production is relatively easy in the North Field. But Doha must take advantage of its comparatively China imposed a 10 percent tariff on U.S. LNG in cheap production costs to entice international oil September after the United States slapped tariffs and gas companies to invest in Qatar instead of on $200 billion worth of imports on Chinese goods. more expensive markets, even if the latter includes And with the United States promising to levy tariffs more politically stable countries such as Australia on more goods, investors are growing skittish over and the United States. And in order to meet its new how long the tariffs might remain in place; indeed, export growth targets, Qatar must find new desti- there is no guarantee that the United States and nations — and the conclusion of a number of long- China will ever actually remove them. The uncer- term LNG contracts in the first half of the 2020s will tainty has already resulted in some delays to final compound its task. investment decisions on U.S. LNG projects. On Oct. 29, LNG Ltd. announced that it would delay its The U.S. emergence has also kick-started a gradual decision on the Magnolia LNG export terminal in shift in Asian LNG markets, as well as a more rapid Louisiana until 2019 because of the trade spat, even trend toward short-term contracts and gas-on-gas though it had originally aimed to settle the matter pricing, in which contracts are based on spot natu- by the end of this year. In the short term in 2019,
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26 China can easily ignore the U.S. LNG market be- and other Eastern European countries, opposes the cause Russia is preparing to pump more natural gas Nord Stream 2 natural gas pipeline, which is under to Asia through the new Power of Siberia pipeline. construction. To the United States, the pipeline, In the long term, China may need to turn to Qatar, along with a similar pipeline through Southern or to more Russian natural gas, in order to avoid Europe called TurkStream, is a clear indication of U.S. LNG exports. Europe’s increased reliance on Russian gas. Instead, Washington will pressure Berlin to build more LNG Avoiding U.S. LNG, however, might not be so easy. terminals. Amid the pressure, Germany has been As the United States embroils itself in trade wars, playing both sides, launching construction on Nord other countries are considering the purchase Stream 2 earlier this year while also pledging finan- of more U.S. LNG as a means of appeasing U.S. cial support to domestic LNG import facilities. President Donald Trump in their trade discussions. After all, given that 2019 is expected to be a bumper 2019 will also be crucial in the natural gas disputes year for U.S. LNG, importing more of the resource surrounding Ukraine. For the United States, Nord from the United States offers the country’s trading Stream 2 will not only increase Berlin’s dependence partners a quick, obvious and tangible way of reduc- on Russian energy but also imperil Kiev, since Russia ing their trade surpluses. More than that, U.S. LNG will be freer to turn off the tap to Ukraine for polit- represents a potential investment opportunity that ical reasons if there are no downstream markets in could placate the United States. South Korea, Japan Central Europe that would otherwise suffer from a and even China — all countries that must import shut-off. Russia’s Gazprom has argued that Nord LNG — were mulling investments in the U.S. LNG Stream 2 makes more economic sense than rehabil- industry even before experiencing pressure from the itating the pipelines that traverse Ukraine due to the White House. cost of modernizing Soviet-era pipelines. Moreover, Gazprom has noted that most of Russia’s new natu- The U.S.: Protecting ral gas developments are in the Arctic, which would put them closer to a pipeline in the Baltic Sea. Until Europe from Russia this year, Germany had viewed the Nord Stream 2 pipeline in purely economic terms. Over the course U.S. preparations to export large amounts of LNG of 2018, it has begun grappling with the political will ratchet up the pressure on Russian natural gas ramifications of the project, and Washington is exports — as well as Moscow’s customers — in certain to increase the political heat on Berlin over Europe. The United States views Europe’s depen- the project in 2019. dence on Russian natural gas as a strategic risk in Washington’s global power competition with From competing with Russia in Europe and Qatar Moscow. As a result, the United States will turn up elsewhere to becoming a bone of contention in trade the pressure on European customers next year to wars with China — as well as a few American allies purchase what it views as a politically safer alterna- — U.S. LNG exports are about to finally make their tive to Russian natural gas: American natural gas. big splash on the global stage, more than five years after discussion first began about the impact that An abrupt switch to U.S. natural gas might not be the U.S. resource would have on geopolitics. The a realistic option for many European countries, yet U.S. shale gas revolution might have been slow in the Trump administration is still likely to press the coming, but its impact might well shake the world in argument, especially in two areas: Eastern Europe the year to come. □ and Germany, which is Russia’s largest European customer. The United States, along with Poland
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27 Russia
28 28 What Does the End of the INF Treaty Mean for Europe? Stratfor 2019
29 What Does the End of the INF Treaty Mean for Europe?
(JEROME DELAY/AFP/Getty Images)
30 “What Does the End of the INF Treaty Mean for Europe?” is republished with permission from Stratfor Worldview. Copyright Stratfor 2019.
What Does the End of the INF Treaty Mean for Europe? February 2019
• Though the INF Treaty has collapsed, the stip- ulations of another arms treaty, New START, are THE BIG PICTURE likely to prevent Russia from altering its nuclear posture toward Europe much in the near future. On Feb. 1, the United States formally suspended the Intermediate-Range Nuclear • However, the continued erosion of arms control Forces Treaty after accusing Russia of treaties, especially New START, could result in violating the treaty by developing missiles nuclear proliferation in Europe. with longer ranges than permitted by the treaty. In so doing, Washington — which • Countries in Western Europe are likely to balk at is likely to completely withdraw from the the increased deployment of nuclear-armed U.S. deal — has delivered a significant blow to missiles in their countries, but NATO members in the framework to maintain control over Eastern Europe could be more amenable due to strategic arms. The INF Treaty’s looming their greater fears of the Russian threat. demise comes amid the erosion of a series of Cold War-era arms treaties, due in part to Editor’s Note: This assessment is part of a series technological developments and the great of analyses supporting Stratfor’s upcoming 2019 strides made by countries like China. Second-Quarter Forecast. These assessments are designed to provide more context and in-depth analysis on key developments over the next quarter. A Treaty for Europe
The Cold War ended in Europe almost three de- The INF Treaty was a bilateral commitment between cades ago, but many on the Continent are none too the United States and Russia to limit ground-based happy about the end to one of the last vestiges of missiles possessing a range between 500 and 5,500 that battle, the Intermediate-Range Nuclear Forces kilometers — a range that put all of Europe in peril (INF) Treaty. The treaty between the United States but which posed no credible threat to either the and the Soviet Union (and, subsequently, its Russian United States or any of Russia east of the Urals. successor) imposed limits on the destructive nu- (That, by contrast, was the preserve of intercon- clear strength that Moscow could train on Europe’s tinental ballistic missiles, or ICBMs.) The concern NATO members, as well as the force with which the over this class of missiles first raised the alarm in West could threaten Russia. But now that the United Europe in the late 1970s, when Russia developed States has suspended the treaty, proliferation — as new nuclear missiles, the SS-20s, that governments well as more instability in Europe — might be on the perceived as a much greater threat to the nuclear cards again. balance in comparison to their less-capable pre-
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31 Kara R SS-12/22 Sea Scaleboard I R 900 km Barents Sea E SS-4 Sandal A large number of 2080 km SS-23 Spider nuclear-armed 500 km intermediate-range SS-20 Saber Norwegian GLCM missiles were present 5500 km* Sea 2500 km on both sides of the Iron Curtain when the United States and the Soviet Union signed the North Pershing II INF Treaty in 1987. In Sea 1800 km line with the agreement, Baltic Moscow Sea the countries destroyed London all classes of missiles East shown on this map, Brussels Berlin Pershing Ia greatly reducing 750 km tensions in Europe. Atlantic Ocean Paris Caspian Sea
Black Sea NATO Warsaw Pact
*Due to scale, the SS-20 Saber missile's range cannot be shown on this map. Mediterranean Sea Persian Gulf Copyright Stratfor 2019 decessors. Moreover, the 1972 Strategic Arms treaty in a variety of ways, eventually leading to Limitation Talks (SALT) treaty, which imposed limits the United States’ formal suspension of the treaty on the number of ICBMs that either the United earlier this month. But beyond the INF Treaty itself, States or Russia could maintain, did not cover the there has been a general erosion in the strategic SS-20s. As a result, these intermediate-range arms stability framework since the turn of the missiles posed an additional nuclear threat almost century. In 2001, the United States announced its exclusively to Europe — in addition to the ICBM withdrawal from the Anti-Ballistic Missile (ABM) force that Russia could deploy against both the Treaty, after which it further developed its own United States and Europe. Europe’s concerns, voiced missile defense capabilities. In such an environment, in particular by West Germany, forced NATO into there are now significant doubts about a possible a dual strategy of increasing the deployment of extension to the New Strategic Arms Reduction U.S. intermediate-range nuclear-armed missiles in Treaty (START), which limits the number of war- Europe as a deterrent and, at the same time, offer- heads and delivery platforms the United States and ing the Soviet Union a treaty to mutually limit the Russia can maintain. deployment of such weapon systems. The latter element of this strategy eventually led to the INF One of the reasons for the volatility in this strategic Treaty in 1987. arms framework is technological advancement, which has resulted in the development of missile de- After the end of the Cold War and the emergence fense technologies or hypersonic glide vehicles, for of other challenges, the INF Treaty gradually lost instance. Another reason is a general redrawing of relevance, even becoming a burden for the United the global landscape when it comes to nuclear capa- States and Russia. For reasons largely unrelated to bilities. The treaties in question solely included the the European theater, both actors challenged the United States and Russia due to their pre-eminent
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32 roles in the Cold War; since then, however, China came into effect, but its collapse will still impact has become a formidable nuclear power in its own the Continent deeply. For starters, the dividing line right. It may lag far behind Russia and the United between NATO and Russia and its allies has shifted States in the total number of nuclear warheads in about 1,000 kilometers to the east due to the Soviet its inventory, but the country has made major gains Union’s breakup and NATO’s subsequent expansion. in missile technology that could ultimately threaten In addition, the two sides have not massed their Russia and the United States. Because it was never armies along a dividing line as they did during the a signatory to the INF Treaty, China has been able Cold War. Instead, the greatest concentration of to field as many intermediate-range missiles as it forward-deployed troops are several brigade-sized wishes. What’s more, Beijing has never had any units around the Baltic states and in Kaliningrad. interest in negotiating a deal to scrap these missiles, Accordingly, there are fewer immediate Western as they provide China with an important means of military targets that might elicit Russian missile defending its periphery. And, naturally, the United strikes in the event of an escalation. States and Russia have had little recourse to counter China’s challenge with deterrents of their own, as Though Russia’s larger strategic goal is ultimately doing so would have required either of them to to maintain a balance with China in terms of mis- ignore or scrap the INF Treaty at an earlier date. sile capabilities, it could divert some of its missiles toward Europe now that it is free to develop inter- A Changing Environment mediate-range missiles. Already, the disagreements between the Kremlin and the West on the Continent In Europe, the situation has changed dramatically have prompted Russia to flex its military capabilities; since the end of the Cold War when the INF Treaty according to some reports, Russia has deployed several of the first missiles the country produced in
Kara R Sea I
Barents R Sea E The INF Treaty was suspended in February 2019, and its SSC-8 Screwdriver Norwegian ultimate cancellation 2350 km Sea appears imminent. As a result, the United TLAM/N States and Russia 2500 km could station new North intermediate-range Sea missiles in the Baltic Moscow Sea European theater. London While Russia has reportedly been Brussels Berlin working on the SSC-8 cruise missile in Atlantic Paris Crimea violation of the INF Ocean (disputed) NATO Caspian Treaty, the United Sea Russia and States could deploy a Black Sea annexed land-based variant — Crimea perhaps even the retired nuclear-armed TLAM/N — of the Tomahawk cruise missile to Europe.
Mediterranean Sea Persian Gulf Copyright Stratfor 2019
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33 As the security environment changes in Europe, many in the Continent’s west are unlikely to be particularly receptive to the idea of hosting nuclear-armed missiles. violation of the INF Treaty, the 9M729 (also known fact, nuclear capable (Moscow, naturally, says by its NATO designation, SSC-8 “Screwdriver”), to they are not). its western border. The collapse of New START would end any limits In terms of the nuclear balance in Europe, however, on the number of nuclear warheads Russia can Russia is not fully unencumbered just because maintain in its inventory, allowing Moscow to rapidly the INF Treaty has failed. Moscow is still bound bolster its arsenal of nuclear-armed intermediate- by the New START agreement, which limits both range missiles aimed at Europe at a time when it the number of delivery platforms (ICBMs, heavy can also maintain its nuclear pressure on the United bombers) and the number of nuclear warheads States through its ICBM arsenal. And even if New that both sides can maintain in their inventories. So START doesn’t collapse, Russia could redeploy its while Russia may be able to develop and field new nuclear warheads through the development of new intermediate-range missiles, it cannot arm them strategic arms technologies, such as the Russian with nuclear warheads unless it reduces the number “Avangard” hypersonic glide vehicle. That’s because of such weapons it is using elsewhere in its strategic these new weapons systems — even when armed forces. New START meanwhile also grants both the with mere conventional warheads — would have the United States and Russia extensive rights to inspect capability of striking facilities that had previously each other’s nuclear arsenals, meaning Washington only been pervious to nuclear strikes. As a result, would likely spot any attempt by Moscow to deploy Russia could conceivably replace a number of the new intermediate-range missiles as part of its nuclear warheads that it is currently training on U.S. nuclear posturing in Europe. nuclear missile silos with conventional hypersonic glide vehicles before redeploying the atomic This, of course, hinges on the continuation of the weapons elsewhere, such as its intermediate- New START agreement. This treaty itself, just range missile arsenal — all while remaining faithful like the ABM and INF treaties before it, has come to New START. under considerable pressure. The current deal will expire in 2021, and attempts to negotiate a five- New Proliferation in Europe? year extension as envisioned in the original treaty have proven unsuccessful so far. Unsurprisingly, As the security environment changes in Europe, the present standoff between the United States many in the Continent’s west are unlikely to be and Russia is not facilitating talks on an extension particularly receptive to the idea of hosting nuclear- to New START or the creation of a follow-on armed missiles, both because the prospect is treaty. And then there’s the potential stumbling electorally unpalatable and because it could make block of whether the Screwdriver missiles are, in the region a bigger target for Moscow. NATO’s
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34 newer members in Eastern Europe, however, are developed any new intermediate-range missiles, much more concerned at the Russian military threat but it could reintroduce nuclear-armed Tomahawk on their borders, meaning they would be much more cruise missiles and deploy them in Europe if likely to welcome such a U.S. deterrent on their soil. circumstances dictate. For example, Poland and Romania, which already host some elements of the U.S. missile defense Europe’s initial concerns following the collapse of system like the ground-based Mk-41 universal the INF Treaty — namely, that the United States launcher systems, could be prime candidates could once again deploy nuclear missiles in Europe for a deployment. It was these previous missile — may have been an overreaction, but amid the deployments, however, that contributed to Russia’s prospect that the strategic arms stability framework decision to cease adhering to the INF Treaty, since could deteriorate further, such deployments are the U.S. launcher systems could theoretically fire not completely out of the question. Nevertheless, sea-based Tomahawk cruise missiles (whose range the United States and its European allies are likely was banned by the INF Treaty) from a ground- to tread carefully, given that such actions would based facility. The United States has not yet inevitably trigger a Russian reaction. □
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35 Russia's Migrant Shortage is Bigger Than Anyone Could Have Imagined Stratfor 2019
36 Russia's Migrant Shortage Is Bigger Than Anyone Could Have Imagined
VIKTOR DRACHEV\TASS via Getty Images
37 “China Changes Gears on the Belt and Road Initiative” is republished with permission from Stratfor Worldview. Copyright Stratfor 2019.
Russia’s Migrant Shortage Is Bigger Than Anyone Could Have Imagined
• The drop in Russia’s net migration is com- pounding the country’s poor demographic THE BIG PICTURE trends and could seriously threaten Russia’s economic viability. Russia’s demographic decline stands in the way of Moscow’s efforts to achieve its • In addition to the emigration of young and economic and security goals. With a dimin- educated Russians, current migration trends ishing population, Russia will have less ability indicate that Russia will continue to face trouble to project its power externally, while ethnic in attracting workers from target countries to plug and religious pressures could destabilize its demographic gaps at home. the country internally. Ultimately, the lack of people will place significant, long-term limits • Growing competition with emerging regional on Moscow’s ability to sustain its economic destinations for migration in Central Asia, as well and military power. as geopolitical disputes in Eastern Europe could scuttle Russia’s efforts to reverse negative demo- numbers suggest the country faces an even starker graphic trends. challenge in its effort to hit a net migration target of 300,000 a year — the figure that is necessary That Russia is facing a significant demographic to sustain a zero-growth population. But if Moscow fails to achieve this base target, not only will it have challenge is a surprise to no one — but the extent of to wrestle with the reality of a shrinking labor force, the problem might be. According to Russia’s state but its population decline could turn out to be much statistical service, Rosstat, migration in and out of steeper than anyone expected. Russia added only 124,900 people to the country’s population last year. The drop stems both from a Russia has long struggled to maintain healthy popu- decline in the number of arrivals (which fell 4 per- lation numbers, both because of limited birth rates cent in 2018 over the previous year’s figure) and an and high levels of emigration, particularly among increase in departures (which rose 16.9 percent last young and educated people who would otherwise year compared with 2017). The figure is the smallest bear more children and contribute to the national rise in net migration since 2005 — and because economy. Ultimately, the prospect of a significant of recent changes in reporting methodology that population decline will not only hamper Russia’s occurred in 2011, the population numbers may be industrial activity but also hurt its ability to collect even more dire now than they were 14 years ago. tax revenues, maintain its pension system and Whatever the case, the figures are disconcerting mobilize the military. To help alleviate the situa- for Russia, whose demographic downturn is just tion, Russia has turned to migration as a means to one factor clouding the country’s economic future. boost its population numbers and recruit workers. Citizens might already be leaving the country in Even that strategy, however, presents problems: greater numbers than reported, but Rosstat’s latest
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38 Many of the newcomers lack education, while their Projections Meet Reality predominantly Muslim faith and ethnic differences from Slavic Russians has created cultural tensions The United Nations has provided a single population in the country. forecast for Russia, while Rosstat has published three separate forecasts with high, medium and low According to the Russian Presidential Academy benchmark scenarios to help Moscow track how of National Economy and Public Administration migration trends align with its expectations of popu- (RANEPA), an institute of higher learning, the lation size. Because Russian net migration has been drop in net migration accelerated in the final three falling toward 100,000 since 2014, the different sce- quarters of 2018. In each of these quarters, net narios would require that trend to change direction migration totaled only half as much as the same — either upward for the more positive outlook or respective quarters in 2017, RANEPA reported. at least toward stagnation for the most pessimistic While the academy expects net migration to rise forecast. The recently reported migration numbers slightly in 2019 — albeit below the 200,000 mark suggest that Russia will struggle to fulfill any of the — the underlying trajectory suggests that Russia will projections — including the most negative outlook. struggle to reverse the net migration trends, which Accordingly, if Russian migration continues to follow causes a more profound population decline than ex- a trend similar to the reported numbers, the country pected. According to the Institute of Demography at could be set for an even bleaker demographic future. Moscow’s Higher School of Economics, these more recent developments in migration figures could Such trends are likely to continue since their un- leave Russia with just 128 million inhabitants by derlying causes are not temporary but systemic; 2030, rather than the 140 million or more assumed after all, Russia is a less-than-enticing destination by currently accepted forecasts. for would-be migrants because of its poor wages and living conditions, as well as racism that makes Of course, reports of an impending decline in it dangerous for non-Russian and non-Orthodox Russia’s population are nothing new, as noted by migrants. To this point, there is a major distinction in Rosstat itself (in addition to the United Nations). migration trends between the movement of Russian While those forecasts have already pointed toward and foreign nationals. While net migration figures a possibly grim future, Russian migration trends in for Russian nationals — citizens leaving Russia or re- recent years now indicate that the trends might not turning to it — has actually increased marginally, the even fulfill such pessimistic models. These forecasts net migration of foreign nationals has fallen sharply. are built on much more than just migration trends, Rosstat has not released any net migration data for and in the case of the United Nations, migration is non-Russians since 2017, but the trends from 2012 only modeled in a crude way. Much more complex to 2017 — as well as the total migration figures from models of birth and mortality rates define portions 2018 — suggest that the net migration of foreign of these forecasts, but migration still has an import- nationals might have fallen to close to zero. ant effect on the ultimate trajectory.
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39 Russia’s Migration Woes Based on Moscow’s long-term plans, Russia needs up to 300,000 net migrants a year to maintain a bare, zero-growth population. In 2018, however, just 124,900 more migrants arrived in the country than departed.
T R 800 THOUSAND
600
400 Immigration Net migration 200
200 Emigration
400
600 2012 2013 2014 2015 2016 2017 2018
T R R 700 THOUSAND 600 500 Russian immigrants 400 300 200 Foreign immigrants 100
100 Foreign emigrants 200 300 Russian emigrants 400 2012 2013 2014 2015 2016 2017
Sources: UN, Rosstat Copyright Stratfor 2019
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40 The Trouble with Russian Population Projections Current migration trends suggest that Russia’s population decline may be greater than anticipated.
R R R 500 THOUSAND High 400
300 Actual Medium
200
100 Low U 2015 2020 2025 2030 2035
Population forecasts use a number of underlying assumptions and statistical models. Small changes can affect underlying assumptions, such as birth rates, resulting in increasingly inaccurate projections over many years.
T R P Based on actual migration, Russia’s population decline will likely be steeper than the forecasts below suggest.
160 MILLION R High 150
Medium 140 Low U 130 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036
Note: U.N. migration assumptions come in five-year blocks, which have been distributed according to their annual averages for this graphic. Source: UN, Rosstat Copyright Stratfor 2019
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41 Searching for Willing Newcomers for a better life. And while Russia welcomed a higher number of pro-Moscow Ukrainian citizens But more than Russia’s failure to attract newcomers, in the wake of the Euromaidan uprising in 2014, perhaps the strongest factor in dragging down the this surge was only a temporary blip whose end country’s net migration figure is the departure of will highlight the Kremlin’s difficulties in attracting foreign nationals, a factor that indicates that Russia necessary workers. is having trouble retaining the foreign laborers working in the country — in addition to the difficul- In the end, these migratory trends stem in part from ties of attracting new recruits. One potential reason geopolitical splits between Russia and the West — which RANEPA has raised, as have a number of and economic trends, which will make it difficult other relevant scholars and experts on the region for Russia to right the ship. Naturally, that doesn’t — is the possible growth of employment opportu- entail that Russia is completely devoid of solutions nities in countries like Kazakhstan and Azerbaijan. to promote immigration, such as reforms to the Although there is no detailed data available to de- migration service, though the effect of such mea- finitively confirm this suggestion, Russia’s economic sures may be limited. With the odds of reversing the woes may have led many migrant workers to seek downward net migration rate appearing dim, Russia opportunities in the two former Soviet states. For could eventually consider going beyond its comfort one, both these countries exhibit less xenophobia zone of appealing to Russian-speaking populations toward foreign workers, according to regional ex- in Eastern Europe and Central Asia to woo workers perts on migration, something that further enhances from the likes of Afghanistan and Pakistan. Doing so, their attractiveness. however, would complicate the integration process even more given that the culture of the South Asian In addition to Central Asia, Eastern Europe has also countries is even more foreign that those from traditionally been a major source of immigration the former Soviet space. If Russia fails to attract to Russia, but many from that region now appear migrants to compensate for its labor shortages at to be turning west, rather than east, in the search home, it could face a future of even more dramatic population loss than previously expected. □
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42 Joint Interests Against the U.S. Deepen the Sino-Russian Embrace Stratfor 2019
43 Joint Interests Against the U.S. Deepen the Sino-Russian Embrace
ALEXANDER ASTAFYEV/AFP/Getty Images / ONUR AKKURT/Shutterstock
44 “China Changes Gears on the Belt and Road Initiative” is republished with permission from Stratfor Worldview. Copyright Stratfor 2019.
Joint Interests Against the U.S. Deepen the Sino-Russian Embrace
• The strategic convergence between Russia and China has deepened in most arenas — the THE BIG PICTURE continuation of a long-term trend as both powers seek to reverse the U.S.-led dominance of the For the past year, Stratfor has been following global order. the great power competition among the United States, Russia and China, and has • Besides energy, Russia and China’s economic written about the emerging coalition be- relationship remains below its potential. Moscow tween Russia and China in its 2018 Annual and Beijing are misaligned in the geoeconomic Forecast. This bilateral relationship, which plane because of core differences in their respec- is crucial to the great power competition, tive integration initiatives. continues to deepen as we enter 2019.
• The convergence between these two great powers will continue to deepen in 2019. Most fears of greater Chinese migration into its Far East). crucially, security cooperation will gain traction, In September, participants in the annual Eastern driven in part by Washington’s growing squeeze Economic Forum in Vladivostok signed 175 agree- on both Moscow and Beijing. ments totaling about $42 billion. Most of the deals came from China, though it is unclear how many • The Russian-Chinese relationship is crucial of them will actually materialize. Russian terms in the evolution of the global order as the great are often not attractive enough for investors, and power competition among the United States, Moscow’s implementation track record leaves much Russia and China heats up. Assessing the relation- to be desired from Beijing’s perspective. ship’s path in the coming year involves analyzing its many facets: economic, political and military. The misalignment is revealed more in the area of geoeconomics. China’s Belt and Road Initiative and Russia’s Eurasian Economic Union are their major Other areas of their economic relationship haven’t geoeconomic plays. The two sides have made much reached their complementary potential as much of “harmonization” between these two initiatives. as energy has. The Russian economy is far smaller Though both projects aim to give their sponsors a than China’s and rests on a narrow base — arms strategic advantage, they have fundamentally differ- and commodities are Moscow’s only major export ent approaches to getting there. The Belt and Road offerings. Russia has not been particularly suc- Initiative is a vast global connectivity project that cessful at attracting Chinese investment in its Far can create win-wins for multiple actors; the Eurasian East region. Some transport connectivity projects Economic Union aspires to seal off a Russian sphere are moving forward. Chinese firms have also taken of influence. Another barrier to integration is that stakes in Russian agribusiness (which indicates neither initiative is strongly institutionalized. Russia has prioritized its economic interests over its
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45 China’s Belt and Road Initiative and Russia’s Eurasian Economic Union are their major geoeconomic plays.
Regional Dexterity This management of areas of potential tension ex- tends to India, a rival of China’s but with historically Central Asia is where Russia’s and China’s interests close ties to Russia. Russia was key in pushing China substantially overlap. The region is rich in resources, to accept the accession of India to the Shanghai abuts both powers and is a bridge to zones, such as Cooperation Organization, though China ensured Afghanistan, that are a security concern to Moscow Pakistan’s inclusion in return. The growing Russian- and Beijing. Pakistani thaw and the ongoing Indo-Chinese reset in relations, however, mean that both Russia and China and Russia have established a modus vivendi China are in a position to exert influence in South in Central Asia. The arrangement involves a division Asia collaboratively rather than as rivals by engen- of labor, with Russia focusing on providing security dering further competition between arch-adversar- and China serving as the region’s key economic ies India and Pakistan. Similarly, in Vietnam, Russian player. The Shanghai Cooperation Organization defense sales have not fundamentally altered the (a regional organization dominated by Beijing) balance of power in Asia. Vietnam is a case where provides an institutional framework and its recent Moscow and Beijing can simply agree to disagree expansion strengthens the chances of continued without altering their strategic dynamic. Russian-Chinese cooperation in Central Asia in the near term. In the Arctic, where Russia traditionally claims dom- inance, Moscow has to deal with growing Chinese Competitive impulses, though, are always present. interest. Thus far, China’s interest in the Arctic has Both Russia and China sell arms to Central Asian been limited to research missions, digital connec- states, for example. While this competition so far tivity and a few energy investments — some, such has not proved detrimental to the practical com- as the Yamal liquefied natural gas project, in coop- promise Moscow and Beijing have worked out, eration with Russia. Moscow and Beijing have also increased Chinese defense transactions in Central stated their intention to cooperate on the “Polar Silk Asia have steadily undercut Russia’s traditional Road,” a part of the broader Belt and Road Initiative. dominance in arms sales. The reported plans for a Sino-Russian friction over the Arctic will not lead to Chinese military base in Afghanistan’s Badakhshan a security competition between the two in the re- province (adjoining Tajikistan) could be the begin- gion, though there is a level of political competition ning of a clearer Chinese security footprint in the in play. The Arctic is much more in Russia’s aspira- region, which could worry Russia. tional sphere of influence than China’s, and Beijing will, in any case, be hard-pressed to move significant
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46 military assets there considering its more urgent sustained joint operations in Syria to guarantee the security priorities in Asia. survival of President Bashar al Assad’s government. This cooperation opens up the possibility of a more active Russian military role in defending Iran — for Camaraderie at the High Table example, in air defense. If the Iranian leadership survives a military crisis, Moscow could also forge Russian-Chinese cooperation is at its most ad- formal security ties with Tehran in the aftermath of vanced in global politics and diplomacy. The two any such conflict. China has more complex stakes countries have been aligned on most major issues in the Middle East — ensuring the free flow of oil concerning the global order, from casting double is a key one. But Russia and China likely see Iran as vetoes in the U.N. Security Council on U.S. interven- an issue of preserving the global order more than tions in the Middle East to pursuing greater power in pursuing their individual national interests. international financial institutions to taking positions strongly critical of the United States in cyber gover- Russia and China are also strongly opposed to the nance and missile defense. current model of global cyber governance favored by the United States and the European Union. Both Normally sovereignty-sensitive China has refrained have floated “cyber sovereignty” proposals that from criticizing Russia’s intervention in Ukraine. And would enshrine principles at odds with an open Russia has demonstrated implicit support for China internet, including in-country data storage, facilita- in its maritime disputes by joining it in conducting tion of surveillance and much greater state control military exercises in the South China Sea and in the over online content and hardware. The core princi- Sea of Japan. Both powers have long had a com- ples of their proposals are gaining traction in Asia mon position on North Korea, supporting a “double and Africa, and this trend is likely to continue in the freeze” and opposing U.S. missile defense in the coming year. region. But Russia plays second fiddle to China on the Korean Peninsula. Moscow’s recent outreach to South Korea and its push to play a major role in Vostok as Bellwether inter-Korean infrastructure projects are attempts to increase its influence on the peninsula. Hard security is where developing Russian and Chinese ties have the greatest consequences for the Growing tensions between the United States and great power competition. Russia recently wrapped Iran — a critical global issue that could come to a up its largest military exercise since the end of the head in 2019 — have also been a key factor in bring- Cold War. Named Vostok 2018, the exercise in- ing Moscow, Beijing and Tehran closer together. volved 300,000 troops, 36,000 tanks, more than Should the United States take military action against 1,000 aircraft and components from two naval targets in Iran — a plausible scenario — expect fleets. (Outside observers have said the exercise Moscow and Beijing to attempt to build a coalition involved about half these numbers.) with the European Union to isolate the United States diplomatically and in the arena of global More than 3,000 Chinese troops participated in public opinion. Vostok 2018 — the first time a country that is not a treaty ally of Moscow joined a military exercise Russia has emerged as Iran’s biggest ally in the in significant numbers on Russian soil. (Mongolia Middle East. The two countries have conducted also sent a small contingent.) It was also China’s
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47 R C China's burgeoning defense industry means that Beijing is increasingly self-reliant in producing its own weapons. Russia remains a key partner, however, providing China with equipment that the Chinese have yet to fully master, like aircraft engines.
C H E
1987-1991 23 24 1992-1996 45 30 2 4 1997-2001 79 55 4 4 2002-2006 145 72 8 4 70 2007-2011 11 106 16 202 2012-2016 4 62 424
* Surface-to-air missile Note: Number of items delivered in selected weapon categories Source: Stockholm International Peace Research Institute (SIPRI), Shutterstock Copyright Stratfor 2019 largest overseas military exercise to date. The pleted. Multiple naval exercises have been held simulated combat was not against terrorist groups as far ashore as the Baltic and the Mediterranean or organized crime (well-established areas of seas. Joint cyberdefense drills have been conducted, Russian-Chinese security collaboration) but against though the scope and extent of these drills is un- the conventional forces of an unnamed state actor. clear. Several space-cooperation agreements have Chinese participation turned Vostok’s objectives been signed. Joint research and production are on its head: What traditionally had been a Russian ongoing for a heavy-lift helicopter project. military exercise aimed at Beijing became this year an exercise in which Beijing was an integral partner. But there is much greater potential for cooperation here. China is steadily catching up to Russia in On other fronts, arms sales to China of big-ticket defense technology. So, it makes sense for Russia Russian offerings such as the S-400 air defense to enter partnership agreements in this area sooner system and the Su-35 fighter jet have been com- rather than later, when its value as a partner will
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48 diminish significantly. Russia and China could also Even as the United States turns steadily more hostile deepen military interoperability, including in cy- toward Russia by imposing secondary sanctions berdefense, aimed at specific common foes, if they through the Countering America’s Adversaries decide to do so. Through Sanctions Act (CAATSA) (and by the intended withdrawal from the Intermediate-Range Military cooperation — especially in deepening Nuclear Forces Treaty), the Trump administration’s interoperability against conventional state threats trade war with China threatens to turn the complex — is of great importance in strategic affairs. Vostok U.S.-Chinese relationship into an outright rivalry. and other exercises have major strategic signifi- cance, and they are likely bellwethers of an emerg- Russia and China have their own interests, and ordi- ing Russian-Chinese entente. narily those separate interests would cause as many frictions as alignments. But in a highly asymmetric great power competition, their differences turn Axes of Asymmetry out to be much smaller than their differences with the United States. It is hardly surprising that every The competition that involves the world’s three great step Washington takes to increase the squeeze on powers is anything but symmetric along its three Russia and China ratchets up strategic cooperation axes of interstate relationships. Most fundamentally, between Beijing and Moscow. Thus, the Sino- it pits the United states against two Eurasian chal- Russian embrace will continue to deepen in most lengers. China is a rising potential peer competitor, arenas, most crucially in the security sphere, at least while Russia has reasserted itself in the global arena. throughout the coming year. □
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49 The West Fears Russia's Hybrid Warfare. They're Missing the Bigger Picture. Carnegie Endowment for World Peace July 3, 2019
50 The West Fears Russia’s Hybrid Warfare. They’re Missing the Bigger Picture.
Nicole Ng, Eugene Rumer July 03, 2019 Commentary In 2013, General Valery Gerasimov, Russia’s chief of the General Staff, published an article in a relatively obscure Russian military policy journal. In it, he outlined his observations on a new, whole-of- government style of warfare—one that blurs the line between war and peace. It would come to be known in the West as the Gerasimov doctrine.
A year later, Russia annexed the Crimean Peninsula, deployed “little green men” to eastern Ukraine, and launched a massive worldwide disinformation campaign.
Since then, this so-called hybrid warfare—the use of proxies, disinformation, and other measures short of war—has dominated discussion of Russia’s newly assertive posture on the world stage. These tactics have been classified as a distinct, special form of warfare. Russia has used them in the Middle East, in the United States, and in Europe. This has reinforced the perception that Russian foreign policy is entering a new chapter of bold and risky adventurism, guided by the Gerasimov doctrine.
But this perception is incorrect.
The Gerasimov doctrine does not drive Russian foreign policy. The military has never been the architect of Russian or even Soviet national security policy. It has always been its implementer.
What’s more, Russian foreign policy has been on this course for over two decades. The major shift in Russian foreign policy did not occur in 2013 with the publication of Gerasimov’s article. Nor did it occur in 2014 with Russia’s annexation of Crimea. It occurred in 1996, when Yevgeny Primakov, then the director of Russia’s foreign intelligence service, was elevated to the post of foreign minister.
Up to that point, post-Soviet Russia had largely sought accommodation and integration with the West. But Primakov put forward the argument that a unipolar world dominated by the United States was unacceptable to Russia. He envisioned a multipolar world managed by a concert of major powers, with Russia as an indispensable actor with a vote and veto on key issues. Securing Russia’s primacy in the post-Soviet space and opposing NATO enlargement were also crucial to Primakov’s vision.
51 In this context, the so-called Gerasimov doctrine is better understood as just one manifestation of the Primakov doctrine in action. Rather than an overarching philosophy, it is an operational concept adapted to the strategic environment in which Russia has found itself.
The West’s preoccupation with the Gerasimov doctrine and Russia’s hybrid warfare also obscures the role of Russia’s military power in its foreign and national security policies. It risks creating the impression that hybrid tactics can exist separately from Russia’s military capabilities. Hard power underpins hybrid warfare. Although hybrid tactics can be used when the direct application of military power would be too risky or costly, Russia’s hard power capabilities are always looming in the background.
In Ukraine, where Russia’s gray zone operations were heralded as the Kremlin’s new way of waging war, traditional hard power ultimately proved decisive. The Russian military had undergone large-scale reforms in response to major shortcomings that were evident during the 2008 war with Georgia. Smaller, nimbler, and with upgraded capabilities, the new-look Russian military focused on asserting and protecting Russia’s so-called sphere of interest around its periphery, in line with the Primakov doctrine. The reformed military was critical to Russia’s seizure of Crimea and its operations in eastern Ukraine. Today, hard power helps the Kremlin keep the pressure on Kyiv.
Nuclear weapons also play a critical role in enabling Russian foreign policy. They are the ultimate guarantor of Russia’s independence and sovereignty, and the foundation of Moscow’s vision for its national security. Yet Russia has not used its nuclear insurance to pursue unduly risky behavior on the world stage. Instead, its nuclear capabilities are designed to ensure that other powers—like the United States—do not pursue such endeavors against Russia.
Indeed, the broader tendency to see Russia and its military as reckless is misguided. The record of the past two decades shows that the Kremlin has carefully implemented the Primakov doctrine to avoid undue risks.
For instance, Russia opposed the 2003 U.S.-led invasion of Iraq. Yet it lacked the economic and military capabilities, as well as the self-confidence, to forcefully push back against the United States. Russian leaders therefore resorted to limited forms of hybrid warfare—such as sharing intelligence with the Iraqi regime, reportedly providing equipment to the Iraqi military, and launching a propaganda campaign to rally international opposition to the invasion.
The war with Georgia in 2008 was a low-risk, high-payoff operation for Moscow. Russia relied on cyber attacks, disinformation, and the use of proxies in the run-up to the war. But it was hard power that reestablished Russia’s primacy in the former Soviet space and showed that the Kremlin would go to war for that goal.
In Europe, Russia’s military posture since 2014 has reflected the view that confrontation with the West is the new normal. Russia has engaged in a broad range of activities that rely critically on hard power— such as deploying nuclear-capable Iskander missiles to Kaliningrad, conducting extensive military exercises, harassing NATO aircraft over the Baltic and Black Seas, and violating Baltic airspace.
These maneuvers have been widely perceived in the West as reckless. But they are, in fact, deliberate actions, specifically calibrated to Russia’s sense of its own vulnerability. They are intended to demonstrate Russia’s military power, undermine the credibility of the NATO Article V security guarantee, and unnerve the Western public. When it comes to NATO, Russia is realistic about its own limitations and aims to deny NATO its advantages in size, funding, and technology. Without the backing of hard power, Moscow’s hybrid activities in Europe would not be nearly as effective.
In Syria, Russia’s intervention was also a calculated risk, rather than the result of rash ambition. Moscow’s gains there far exceeded the operation’s risks. Defying Western predictions of overextension, Russia achieved a decisive outcome in its first major military operation beyond its periphery, stood up to
52 the United States, and reasserted itself as a major power. It was a clear demonstration of the Primakov doctrine in action.
For all of the noise and commotion around Russia’s hybrid warfare capabilities, it is essential to recognize that these tactics are not emblematic of a new foreign policy doctrine. They are an extension of Primakov’s vision for Russia’s role in the world. There is little indication at present that the Kremlin is prepared to act on a more muscular set of ambitions. the United States, and reasserted itself as a major power. It was a clear demonstration of the Primakov doctrineFrom this in perspective, action. Russia’s activities in Venezuela, the Central African Republic, and Libya say more about Russia’s knack for seizing opportunities than about a new sense of adventurism. The risks Forfor Russia all of the in noisethese andregions commotion so far appear around modest Russia’s and hybrid calculated, warfare though capabilities, the benefits it is essential have yet to to be recognizerealized. Rather that these than tactics panicking are aboutnot emblematic Russian footprints of a new acrossforeign thepolicy globe, doctrine. Western They analysts are an shouldextension ofstrive Primakov’s for a clear vision assessment for Russia’s of Moscow’s role in the ambitions, world. There capabilities, is little indication and propensity at present for thatrisk. the Kremlin is prepared to act on a more muscular set of ambitions. End of document From this perspective, Russia’s activities in Venezuela, the Central African Republic, and Libya say more about Russia’s knack for seizing opportunities than about a new sense of adventurism. The risks forRelated Russia in these Topics regions so far appear modest and calculated, though the benefits have yet to be realized. Rather than panicking about Russian footprints across the globe, Western analysts should striveRussia for a clearDefense assessment and Security of Moscow’sForeign ambitions, Policy capabilities, and propensity for risk.
End of document
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53 The Primakov (Not Gerasimov) Doctrine in Action Carnegie Endowment for World Peace June 5, 2019
54 The Primakov (Not Gerasimov) Doctrine in Action
Eugene Rumer June 05, 2019 Paper The Return of Global Russia Summary Since 2014, Russian “hybrid warfare” has been at the center of attention of Western security analysts. The Kremlin’s reliance on proxies, disinformation, and measures short of war has created the impression that its hybrid capabilities are distinct and separate from its military and can serve as a substitute for hard power. That impression is incorrect. Russian military and hybrid activities and tools are inextricably linked.
Hybrid warfare has been associated with Russian Chief of the General Staff General Valery Gerasimov, the author of the so-called Gerasimov doctrine—a whole-of-government concept that fuses hard and soft power across many domains and transcends boundaries between peace- and wartime. Rather than a driver of Russian foreign policy, the Gerasimov doctrine is an effort to develop an operational concept for Russia’s confrontation with the West in support of the actual doctrine that has guided Russian policy for over two decades: the Primakov doctrine.
Named after former foreign and prime minister Yevgeny Primakov, the Primakov doctrine posits that a unipolar world dominated by the United States is unacceptable to Russia and offers the following principles for Russian foreign policy:
Russia should strive toward a multipolar world managed by a concert of major powers that can counterbalance U.S. unilateral power.
Russia should insist on its primacy in the post-Soviet space and lead integration in that region.
Russia should oppose NATO expansion.
The record of the past two decades reveals several key themes about the role of hard power in Russia’s foreign and military policy:
Military power is the necessary enabler of hybrid warfare. Hybrid tools can be an instrument of risk management when hard power is too risky, costly, or impractical, but military power is always in the background.
55 Nuclear weapons are the foundation of the country’s national security and the ultimate guarantee of its strategic independence. But they are not an instrument for risky endeavors—they ensure that other powers do not engage in such endeavors against Russia.
The implementation of the Primakov doctrine has been anything but reckless. Russian uses of hybrid warfare and military power—against Georgia in 2008 and Ukraine since 2014, as well as in Syria since 2015—have been calibrated to avoid undue risks.
Yet the intervention in Syria has also highlighted the limits of Russian hard power and hybrid warfare. Russian hard power is insufficient to impose the Kremlin’s preferred version of peace on Syria, and Moscow lacks the vast economic and military resources to become a hegemon in the Middle East.
The key question for the Kremlin is whether to push for greater capabilities and take additional risks in pursuit of a more ambitious set of global aspirations, or to continue to follow the Primakov doctrine and the careful practice of calculating the risks and benefits of a given course. New generations of Russian leaders—less mindful of the Soviet experience of overextension than the current generation of leaders —may be more influenced by the successes of Crimea and Syria, more inclined to take risks, and more ambitious in their vision for Russia. How they address these ambitions and exercise Russian hard power will have major consequences for the future of Russia, Eurasia, and the world. Introduction When the Russian Federation occupied and then annexed the Crimean Peninsula in 2014, the specter of major interstate conflict returned to the heart of Europe for the first time since the end of the Cold War. In the United States and Europe, discussions about this new standoff between the United States and Russia (or the West and Russia) have focused a great deal of attention on the idea of “hybrid warfare,” or gray zone operations.
The concept of hybrid warfare has been associated with Russia’s current chief of the general staff, General Valery Gerasimov. In a 2013 article, published in a relatively obscure Russian defense industry journal, he outlined the key elements of what has become known as the Gerasimov doctrine. In it, Gerasimov described a version of whole-of-government warfare that transcends boundaries between peace- and wartime, best described as a fusion of various elements of soft and hard power across various domains. The Gerasimov doctrine is, in other words, permanent conflict.
Russia’s seizure of Crimea and undeclared war in eastern Ukraine—Russian covert operatives and entire military units played critical roles in both—have reinforced the impression that hybrid warfare is the new Russian way of war and even a major driver of Russian foreign policy. Subsequent Russian use of information and disinformation to shape public opinion in Europe and the United States— including Russian interference in the 2016 U.S. presidential election, the Kremlin’s courtship of fringe political parties and movements, and Moscow’s use of social media platforms to create and inflame societal divisions in countries deemed hostile to Russia—has reinforced the impression that the Gerasimov doctrine is a major driver of Russian foreign policy. That impression is wrong. The Continuation of Politics The notion that a military doctrine could drive Russian national security policy runs counter to the long- established traditions of civil-military relations in Russia and the Soviet Union. The military has never been the driver of Russian or Soviet national security policy; it has always been its implementer. On those rare occasions when senior military leaders appeared to pose a challenge to the political leadership of the country—Marshal Georgy Zhukov in 1946 and 1957 and Marshal Nikolai Ogarkov in 1984—they were removed from their posts.
56 The same pattern of civil-military relations has persisted in post-Soviet Russia. While some senior military figures attempted to play a more prominent role in the country’s domestic politics during the chaotic tenure of president Boris Yeltsin, they were never able to gain the upper hand in their dealings with the Kremlin. General Alexander Lebed was brought into Yeltsin’s inner circle when the political circumstances required it, but he was quickly shunted aside to a provincial post once his services were no longer needed.
General Gerasimov is no different in this respect from his predecessors. His so-called doctrine is hardly a driver of Russian national security policy. Rather, it is an effort to develop an operational concept for the Russian national security establishment to support its ongoing confrontation with the West. Instead of a new doctrine, Gerasimov offers a strategy to implement the actual doctrine that has guided Russian foreign and defense policies for over two decades: the Primakov doctrine.
The Primakov doctrine, named after former foreign and prime minister Yevgeny Primakov, which Russia’s current Foreign Minister Sergey Lavrov extolled as a concept that will be studied closely by future historians, posits that a unipolar world organized by a single global center of power (the United States) is unacceptable to Russia. Instead, Russian foreign policy should strive toward a multipolar world managed by a concert of major powers—Russia, China, and India, as well as the United States. According to this vision, Russia should not try to compete with the United States single-handedly; rather, Moscow should seek to constrain the United States with the help of other major powers and to position itself as an indispensable actor with a vote and a veto, whose consent is necessary to settle any key issue facing the international community. A further argument in favor of multipolarity was that a unipolar world was inherently unstable, whereas multipolarity would provide checks and balances on unilateral and arbitrary uses of power by the hegemon.
Primakov’s elevation to the post of foreign minister in 1996 marked a major shift in Russian foreign policy. Prior to that, Russian foreign policy had largely sought accommodation with the West, following the outlines of Mikhail Gorbachev’s late-Soviet foreign policy. According to Lavrov, Primakov implemented a radical departure from that course: “Russia left the path of our Western partners . . . and embarked on a track of its own.” Russia has stayed the course since then—a choice vividly demonstrated by Primakov’s decision to cancel his visit to Washington in mid-air and order his pilot to fly back to Moscow, to protest the North Atlantic Treaty Organization’s (NATO’s) impending bombardment of Serbia in March 1999.
One of the key elements of the Primakov doctrine is its insistence on Russia’s primacy in the post- Soviet space and pursuit of closer integration among former Soviet republics with Russia in the lead. Opposition to NATO expansion and, more broadly, persistent efforts to weaken transatlantic institutions and the U.S.-led international order are another. Partnership with China is the third fundamental component. All three remain major pillars of Russian foreign policy today.
Moscow’s adherence to the Primakov doctrine has varied depending on Russian capabilities. With Russia’s economy still reeling from the financial crisis of 1998 and its foreign policy arsenal weakened by a decade of turmoil, Primakov’s options were limited: he chose not to follow the U.S. lead. But as the Russian economy recovered and Russia’s foreign policy toolkit expanded, Russian policymakers’ options expanded too, marking a gradual transition from passive to increasingly active opposition.
Russia’s seizure of Crimea in 2014, undeclared war in eastern Ukraine, use of disinformation, and interference in Western elections have reinforced the impression that the Gerasimov doctrine is the new Russian way of war and even a foreign policy driver. That impression is wrong.
Primakov Doctrine (1996) Gerasimov Doctrine (2013)
!e de%ning concept of Russian foreign and defense policies for Effort to develop an operational concept for over two decades ongoing con8ontation with the West
57 View of Russia as an indispensable actor with an Whole-of-government warfare independent foreign policy Fusion of elements of hard and soft Vision of a multipolar world managed by a concert of power across various domains major powers Permanent conflict transcending the Insistence on Russia’s primacy in the post-Soviet boundaries between peace and war space and the pursuit of Eurasian integration
Opposition to NATO expansion
Partnership with China
Hard Power Rules The current preoccupation with Russian hybrid warfare risks creating the impression that the so-called hybrid toolkit is somehow distinct and different from Russian hard power, or its military toolkit. That is incorrect. The record of the past two decades points to a tight linkage between Russia’s military capabilities and its practice of gray zone operations. Indeed, Russian hard power is the critical, necessary enabler of Russian hybrid warfare; without the former, the latter would not be possible. The scale and scope of Russian hybrid warfare operations have expanded with the growth and improvement of Russian hard power capabilities. Taken together, Russian hybrid warfare and hard power capabilities have been developed and employed to implement the Primakov doctrine.
Hybrid warfare is also an instrument of risk management in the service of the Primakov doctrine, employed when hard power applications are to be avoided—either due to excessive risks or costs—or are otherwise impractical. And though hybrid tools can serve as a substitute for hard power, military force is always in the background when hybrid tools are deployed. A Pattern of Calculated Risk-Taking Russia’s record of using hybrid and hard power tools over the past two decades suggests that the image of the Russian military as reckless is far from true. The Kremlin’s use of both capabilities has been carefully calibrated to avoid undue risks, let alone the risk of escalation and military confrontation with NATO.
Perhaps the riskiest action taken by the Russian military in the past two decades was the June 1999 incident at the Pristina airport in Kosovo, a tense standoff between a detachment of Russian paratroopers and NATO troops that could have escalated into an outright military confrontation. But even that dramatic episode, which occurred when Russian military power was at its nadir, suggests that Russia’s actions were deliberate and calculated. Notwithstanding the poor condition of the Russian military at the time, the underlying calculus of the Russian deployment to Pristina is obvious—NATO allies would not risk a nuclear confrontation with Russia. This was especially salient at the time, because Russia’s conventional capabilities (its weapons of first resort) were so inadequate that the distance between them and the nuclear deterrent (its weapons of last resort) on the escalation ladder had narrowed significantly. Nuclear Weapons: The Ultimate Insurance The Pristina crisis highlighted the fact that nuclear weapons are Russia’s ultimate guarantee of independence and sovereignty. According to the Primakov doctrine, that means being able to chart an
58 independent course in the international arena rather than following someone else’s lead. The foundational role of nuclear weapons in Russian national security has manifested itself on numerous occasions since the end of the Cold War. It has been affirmed in successive iterations of the country’s military doctrine, in an ambitious program of nuclear modernization launched and sustained by the Russian government despite the sluggish—at best—pace of the economy, and it has been reflected in official statements about Russian defense policy from the highest levels, including, most notably, President Vladimir Putin.
One of the most striking aspects of these statements is their emphasis on the invincibility of Russia’s nuclear arsenal and its ability to penetrate even the most robust defenses developed by the United States. Putin and other Russian spokesmen have made repeated references not just to the traditional nuclear triad—land-, air-, and sea-based weapons—and its upgraded capacity to defeat U.S. missile defenses, but also to an array of “weapons of revenge” that promise to inflict devastating blows upon the United States in the—unspoken but presumed—event that the triad fails to penetrate U.S. missile defenses or is destroyed by a devastating U.S. first strike. Taken together, this and other official positions and statements highlight the unique importance of nuclear weapons and the way they enable Russian foreign policy.1
Despite Russia’s status as a nuclear superpower, Russian leaders have not used their nuclear insurance to pursue unduly risky behavior on the world stage. Their posture over the course of many years suggests that the risks they take are carefully calculated and calibrated to match their capabilities.
In 2003, Russia opposed the U.S. invasion of Iraq. But at the time, Russia’s economic recovery was still new, the Kremlin had not yet regained its self-confidence, its military capabilities had not yet recovered from the implosion of the 1990s, the insurgency in the North Caucasus had not yet been suppressed, and the United States still projected the image of an invincible superpower that just a year earlier had achieved a swift victory in Afghanistan—something the Soviet Union was unable to achieve over an entire decade. Thus, faced with a combination of massive U.S. military power, the firm resolve of then president George W. Bush’s administration to go to war, and overall U.S. superiority, Russian leaders chose to remain on the sidelines and let a longtime client, Iraq’s Saddam Hussein, fall. They resorted to relatively limited forms of hybrid warfare—such as sharing intelligence with the Iraqi regime—reportedly provided some equipment to the Iraqi military, and engaged in a vigorous propaganda campaign to mobilize international opposition to U.S. war plans. But neither Russia’s stake in Iraq nor its capabilities were sufficient for the Kremlin to intervene more aggressively and face the risk of a military confrontation with the United States.
The situation was fundamentally different five years later, in August of 2008, when the Russian army defeated the Georgian army. By then, the Kremlin had regained its self-confidence—enough for Putin to draw a so-called redline around the former Soviet states, warning NATO to stay away in a speech at the 2007 Munich Security Conference. The Kremlin had a major stake in Georgia: as a former Soviet republic, it is a priority area for Russia under the Primakov doctrine; it borders the troublesome North Caucasus region and thus, from the Kremlin’s point of view, could serve as a springboard for hostile powers to exploit this key Russian vulnerability; it was actively seeking and had been promised membership in NATO; it was the United States’ favorite laboratory for democracy promotion in the former Soviet Union—a major source of friction between Moscow and Washington; and it was the perfect target for the Kremlin to demonstrate the United States’ limited reach—hardly the global superpower it aspired to be—and undermine the unipolar world.
Russia also enjoyed a number of important advantages in its war with Georgia. Geographic proximity to Russia made Georgia an easy target. The long Russian campaign against the Chechen insurgency in the North Caucasus had resulted in a major permanent Russian military deployment just across the border; the United States, by contrast, was far away. The Georgian military was tiny and no match for the Russian army. And although it had been promised future membership in NATO, Georgia lacked the security guarantee of the alliance. For the Kremlin, it was a low-risk, high-payoff undertaking.
59 Russia resorted to hybrid warfare in its campaign against Georgia, including cyber attacks, disinformation, and the use of proxies in the breakaway South Ossetia region in the run up to the war. However, it was Russian hard power that proved decisive and necessary in accomplishing the Kremlin’s goals: reestablishing Russian dominance in the former Soviet space and demonstrating that Russia was willing to go to war to assert regional primacy while the United States and NATO were not prepared to respond with force. Hybrid warfare alone could not have delivered Russia’s central message—hard power confirmed the Kremlin’s willingness to go to war in pursuit of its goals.
While successful in many respects, the war with Georgia also demonstrated major shortcomings in Russian military power. Nearly two decades after the fall of the Soviet Union—and after multiple failed attempts at military reform—the Russian military was a shadow of the Soviet military that was organized around a mass mobilization concept. The Russian military was top-heavy, with general officers commanding hollow divisions equipped with obsolete hardware and manned by poorly trained conscripts. A far-reaching military reform was launched.
The old military Russia inherited from the Soviet Union had been designed and built for a large-scale conflict with the West, a mission that neither the Soviet economy could ultimately sustain nor the Russian economy could support. The new-look Russian military was reduced in size with much less ambitious goals in sight—to assert and protect the so-called privileged sphere of interests around the periphery of the Russian Federation. The 2010 Russian military doctrine noted “the decline in the likelihood of a large-scale war” but zeroed in on NATO’s expansion close to Russian territory and foreign troop deployments in countries along Russia’s periphery as “external military dangers” that could lead to armed conflict.
Unlike earlier attempts at reform, Russia’s post–Georgian war military reform proved to be a credible, far-reaching undertaking and a major commitment on the part of the Kremlin. The reform entailed significant and politically sensitive reductions in the size of Russia’s armed forces, including cuts in the senior echelons of the military. The Kremlin committed resources to purchase equipment and provide training, even as the Russian economy suffered a major contraction in 2008–2009. The major effort reflected the Kremlin’s resolve to upgrade its hard power capabilities—for the first time since the fall of the Soviet Union—to fulfill the critical mission mandated by the Primakov doctrine and reasserted by Dmitry Medvedev in 2008: ensuring Russian primacy in the post-Soviet space. 2014: A New Chapter The results of Russia’s military reform manifested themselves in 2014, when the Russian military swiftly occupied Crimea, launched an undeclared war in eastern Ukraine, inflicted significant losses on the Ukrainian military, and threatened a massive invasion beyond eastern Ukraine. Whereas the 2008 war with Georgia demonstrated—notwithstanding its strategic accomplishments—the shortcomings of the Russian military, the 2014 war with Ukraine was widely perceived as Russia’s return to the ranks of major military powers.
Despite the seismic shifts in European security and relations between Russia and the West triggered by the annexation of Crimea and the war in eastern Ukraine, the invasion itself, from a purely military perspective, was a relatively low-risk undertaking. Although it was promised NATO membership in 2008 and given separate security assurances in 1994 by the United States and UK—as well as Russia— Ukraine is not a member of NATO and lacks NATO’s security guarantee. In fact, one of Russia’s principal goals for the invasion of Ukraine, same as the 2008 war with Georgia, was to prevent a country in the post-Soviet space from getting that security guarantee. NATO’s inaction beyond public statements as the crisis escalated sent a clear signal to Moscow that the West would not intervene militarily on behalf of Ukraine.
The Ukrainian military, while larger than the Georgian military, had suffered from the same kind of systemic neglect and corruption as the country’s other state institutions and economy. And it had not
60 undergone beneficial reforms, like the Russian military. The circumstances surrounding the Russian invasion of Ukraine were also highly adverse to the Ukrainian military’s ability to mobilize to repel an aggressor—a revolution sweeping the country, the fall of the government, a massive disinformation campaign by the Russian state propaganda machine targeting all segments of the Ukrainian population, the presence of a large Russian population in Crimea, including many active duty and retired Russian military personnel, as well as a significant ethnic Russian population in eastern Ukraine all left the Ukrainian military at a major disadvantage.
Taken together, the military, political, and geopolitical circumstances surrounding Russia’s aggression toward Ukraine made it a relatively low-risk undertaking for the Kremlin. Moreover, from the perspective of Russia’s national security establishment, the war with Ukraine was a war of necessity rather than a war of choice—even more so than the 2008 war with Georgia had been. The potential loss of Ukraine to the United States and NATO, as the Kremlin leadership perceived the Euromaidan revolution to portend, would be fraught with far-reaching, unacceptable strategic consequences for Russia, and it warranted decisive action.
While hybrid operations against Ukraine received a great deal of attention as Russia’s new way of war, it was traditional hard power that proved decisive. It was the decisive factor that enabled the Russian military and other instruments of national power to be employed against Ukraine, it was decisive in seizing Crimea and in the conduct of the military operation in eastern Ukraine, and it remains decisive as the Kremlin’s tool for keeping the pressure on the government of Ukraine.
Despite the preponderance of Russian military power vis-à-vis Ukraine, the Kremlin’s actions suggest that it still carefully calculated and calibrated the risks. Having inflicted heavy losses on the Ukrainian military, the Russian army was expected to continue its offensive and seize the port city of Mariupol in 2015 (and again in 2018) or push deeper into southern Ukraine. However, a large-scale invasion and subsequent occupation of Ukraine would have amounted to a far more ambitious and risky undertaking for Russia, requiring a much greater mobilization of military resources and associated costs than the operation and maintenance of separatist regimes in eastern Ukraine entails. This suggests that the limits of Russian hard power are carefully calculated in the Kremlin.
The invasion of Ukraine was a watershed moment in Russian security policy. The new Russian military doctrine published at the end of 2014 echoed the 2010 doctrine, acknowledging that the “unleashing of a large-scale war against the Russian Federation becomes less probable.” That statement was most likely intended to reassure readers that the deterrent capabilities of the Russian military were more than up to the task. However, the new doctrine was permeated by a sense that the overall international environment had grown more dangerous. Whereas the 2010 doctrine referred to “a weakening of ideological confrontation,” the 2014 doctrine warned of “the strengthening of global competition, tensions in various areas of inter-state and interregional interaction, rivalry of proclaimed values and models of development, instability of the processes of economic and political development at the global and regional levels against a background of general complication of international relations.” And whereas the 2010 doctrine seemed to acknowledge—even if only implicitly—the possibility of peaceful coexistence, the 2014 doctrine points to a long-term confrontational relationship with the West.
Russian military posture since 2014 has reflected that view—that confrontation with the West along the line of contact between NATO and Russia is the new normal.2 Russia has engaged in a sustained military buildup along its western border.3
Russian military posture in the European theater since 2014 also illustrates the critical, indispensable role of hard power in Russia’s application of hybrid warfare. The broad range of Russia’s military activities—from violations of its Baltic neighbors’ airspace and harassment of U.S. aircraft in international airspace over the Baltic and Black Seas to the Zapad exercises and the deployment of new weapons systems to Kaliningrad—is equal parts a manifestation of Russian hard power and hybrid abilities. The obvious intent behind these activities is not only to demonstrate Russian military
61 capabilities but to undermine the credibility of NATO’s Article V security guarantee, especially among new NATO members. Absent hard power insurance, the Kremlin’s hybrid warfare would not be nearly as effective.
However, even these activities—widely perceived in the West as reckless and destabilizing—represent a pattern of deliberate, calculated Russian risk-taking. The most notable Russian hardware deployments have been designed to have a deterrent effect on an adversary equipped with a number of important advantages. Thus, Russian deployment of air defense systems in Kaliningrad and Crimea is intended to deny NATO, and particularly the United States, the advantage of superior air power that the United States has traditionally enjoyed in the European theater. Deploying nuclear-capable Iskander missiles to Kaliningrad is intended to both hold at risk critical targets in frontline states and psychologically intimidate Europe, where most people have written off the threat of nuclear war on the continent.
Often overlooked in Western discussions of Russian military policy is how close the line of contact with NATO is to major Russian cities—less than a two-hour drive from St. Petersburg—and the effect that proximity has on Russian threat perceptions. The disappearance of the buffer that existed between NATO and the Soviet heartland during the Cold War has instilled a new sense of vulnerability in the Russian national security establishment. Russia and the INF Treaty Russian military and civilian leaders have long expressed dissatisfaction with the Intermediate-Range Nuclear Forces (INF) Treaty and have threatened to withdraw from it for over a decade. The treaty, negotiated in 1987, banned land-based, but not sea- or air-based, intermediate-range missiles, leaving Russia at a perceived disadvantage vis-à-vis NATO, which had superior sea- and air-based capabilities.
The rationale behind the Kremlin’s decision to develop, test, and eventually deploy the new, treaty- breaking 9M729 (or SSC-8) cruise missile can only be guessed. Its underlying logic likely had to do with the deteriorating relationship between Russia and the West, and some combination of a perceived new geographical imbalance, NATO’s arsenal of intermediate-range sea- and air-launched missiles, and NATO’s deployment of missile defenses in Europe, which Russian analysts maintained would eventually put Russia at a further disadvantage. Although the actual date of the 9M729 missile’s deployment is not publicly known, its development path likely followed the downward trajectory of Russia-NATO and Russia-U.S. relations.
The new missile, with a reported range of nearly 2,500 kilometers (km), can hold at risk virtually the entire European continent. It vastly exceeds the capability of the Iskander missile, with its reported range of 400–500 km. It fills a major perceived gap in the Russian military’s arsenal—between short- range and intercontinental missiles—that is critical to its posture in the all-important European theater.
However, the hybrid effect of the new missile is just as important: its impact on public opinion in Europe, a perceived return to Cold War–era competition, and renewed public fears of war—especially nuclear war—on the continent. As Washington and Moscow prepare to withdraw from the INF Treaty amid accusations that both sides violated it, European NATO allies are caught in the middle, and the long- standing Russian goal of undermining the alliance is coming closer to fruition. Map 1 Range of Select and Prospective Russian Missiles
Sources: “SS-26 (Iskander),” Missile Threat, Center for Strategic and International Studies, September
62 27, 2016, last modified May 13, 2019, https://missilethreat.csis.org/missile/ss-26/; “SSC-8 (Novator 9M729),” Missile Threat, Center for Strategic and International Studies, October 23, 2018, last modified January 23, 2019, https://missilethreat.csis.org/missile/ssc-8-novator-9m729/. Map 2 Range of Select and Prospective U.S. Missiles
Sources: “Tomahawk Cruise Missile,” United States Navy Fact File, April 26, 2018, https://www.navy.mil/navydata/fact_print.asp?cid=2200&tid=1300&ct=2&page=1; Michael Gordon, “After Treaty’s Demise, Pentagon Will Develop Two New Midrange Weapons,” Wall Street Journal, March 13, 2019, https://www.wsj.com/articles/after-treatys-demise-pentagon-will-develop-two-new-midrange- weapons-11552517630.
The new geography of the NATO-Russia standoff, combined with long-standing Russian concerns about U.S. superiority in precision-guided systems, underscores that sense of vulnerability. Putin, in his February 2019 address to the Federal Assembly, warned the United States that new Russian weapons would let Russia hold the United States at risk the same way U.S. systems in Europe threaten Russia. Gerasimov, in a recent address to the Academy of Military Sciences, voiced the same concerns about U.S. precision weapons that Russian and Soviet military theorists have been raising since the 1980s.
The same sense of vulnerability accounts for the Kremlin’s focus on Belarus. Both Russian and Western analysts agree that Belarus would play a critical role in a conflict between NATO and Russia. To NATO analysts, it constitutes a springboard for Russian aggression against Poland or the Baltic states. For Russia, it is a source of critical vulnerability. Historically, Belarus has been the gateway for foreign invasions and—in the Kremlin’s worst-case scenario—it could be the site of another color revolution that, like in Ukraine, installs a government that switches sides from Russia to the West.
In this context, Russia’s military posture vis-à-vis NATO appears to be a calculated mix of hard power and hybrid warfare designed to deny NATO its advantages—the numerical superiority of allied militaries, technological superiority, an edge in air power, economic potential, and a long record of political cohesion and commitment to shared principles. Russia’s posture suggests a country that is realistic about its limited prospects to achieving superiority and is instead focused on denying its opponent’s advantages—consistent with Primakov’s vision. The Syrian Deployment The year 2015 marked another milestone in the development of Russian hard power. For the first time since the end of the Cold War, Russia engaged in a major military operation beyond its periphery, intervening in the Syrian war. The move stunned observers in and outside of Russia, who were long accustomed to the idea that the Russian military had neither the resources nor the political will necessary to intervene in a theater where it did not enjoy the advantage of proximity to Russia. The news of the Russian deployment was met in Russia and abroad with predictions of overextension, major casualties—reminiscent of the invasion of Afghanistan in the 1980s and the Chechnya campaign in the 1990s and early 2000s—and undue risks. In retrospect, none of those predictions proved accurate. Instead, Russia reemerged as a major actor in the Middle East for the first time since the end of the Cold War. Again, it was an example of the Primakov doctrine in action—intervening to prevent a U.S.-sponsored regime change, behaving like a major power alongside the United States, and checking Washington’s unilateral ambitions.
In keeping with the established pattern of Russian military activities over the past two decades, the Syrian operation was a calculated risk rather than an example of reckless great-power ambition. By
63 2015, the risk of a military confrontation with the United States over the fate of Syrian President Bashar al-Assad’s regime had greatly diminished, as then president Barack Obama’s administration had made it clear it would not intervene in Syria beyond what was necessary to combat the self-proclaimed Islamic State.
The risk to Russian military personnel was relatively small as well, since the deployment of ground troops was quite limited, with Russian air power playing a crucial role. Russia’s high-altitude, indiscriminate bombing campaigns put its air forces out of reach of the limited air defenses that anti- Assad forces had at their disposal. The use of private military contractors—such as at Deir Ezzor in February 2018, when several hundred Russian contractors were killed in U.S. artillery strikes—enabled the Russian military to minimize the loss of active duty personnel.
Russia’s gains in Syria far exceeded the operation’s risks. As a result of the deployment, Russia saved a client regime and established itself as a major actor in the Middle East, using its success in Syria as a springboard for outreach to other actors from Saudi Arabia to Egypt. Moscow has positioned itself as Washington’s antithesis—a major power that is willing to use military force to support its clients.
Russian hard power again proved indispensable in Syria. Russia has established itself as a military presence in the eastern Mediterranean that no other major military power—not the United States, not Israel, not Turkey—can ignore. Russia’s deployment of air defense systems in Syria, missile strikes launched from the Caspian Sea, operations in the congested Syrian air space that forced the United States to deconflict its operations with Russia, and presence—however limited—on the ground have created the effect of a Russian military presence in the Middle East that far exceeds its modest— relative to the United States—naval, air, and ground military assets. What Next? The Syrian operation is a perfect example of the Primakov doctrine in action. With limited resources, Russia accomplished a series of very important but limited objectives and established itself as an “indispensable nation,” guaranteeing a seat at the table of major powers. Moscow has stepped into the vacuum left in the wake of the United States’ stepping back from the Middle East.
But the involvement in Syria also highlights the limits of Russian hard power and the irrelevance of hybrid warfare in this conflict, as well as of Russia’s ultimate weapon—its nuclear arsenal. Russian hard power has not been sufficient to impose the Kremlin’s preferred solution on the Syrian civil war, its hybrid tools have had little utility in the conditions of primitive sectarian warfare, and its nuclear weapons may deter other major powers but have not deterred Syria’s warring factions.
The United States, for most of the post–Cold War period, aspired to be the hegemon in the Middle East, with vast economic and military resources and a major commitment of political capital. Russia lacks the economic and military resources, and is apparently so invested in its role as the “indispensable nation” capable of conducting dialogue with all major actors in the region that it constrains its ability to conduct effective diplomacy, which would require it to take sides. The leap from the “indispensable nation” to hegemon is too much for Russia to cover even with its improved “hybrid” and “hard power” resources.
In Europe and Eurasia, geography, history, and politics present Russia with undisputed advantages that effectively serve as force multipliers for its hard and hybrid capabilities; in more distant locales, their utility is diminished. In many such situations—like Syria or Libya—Russia has been able to insert itself as a party whose interests have to be taken into account. But it has so far been unable to impose its preferred solutions.
The key questions for the Kremlin now are whether to push for greater capabilities and a bigger role in the Middle East and on the world stage or to be content with remaining an “indispensable nation”; to take greater risks or to continue the practice of carefully calculating the risks and benefits of a given
64 course; to follow the Primakov doctrine or to pursue a more robust set of global ambitions.
There have been occasional hints that some in the Russian national security establishment are harboring such ambitions, but there is little concrete evidence to suggest that the Kremlin is prepared to act on them. Russia’s far-flung engagements—in Venezuela, in the Central African Republic, in Libya— are more indicative of its agility and ability to seize opportunities when they arise than of a long-term muscular pursuit of a global agenda. The risks, thus far, have been modest and appear calculated, while the long-term benefits have yet to be realized.
The older generation of Russian leaders, like Putin, cannot help but be mindful of the experiences of the Soviet Union—its arms race with the United States, the quagmire in Afghanistan, and ambitious schemes that reached far-away corners of the map. However nostalgic they may be for the former glory of the Soviet Union, their posture so far has been careful, calculating, and risk-averse. But new generations of Russian leaders may be less mindful of Soviet history and, instead, may be more heavily influenced by the successes of Crimea and Syria, more inclined to take risks, and more ambitious in their global vision. How they handle their ambitions and their challenges will have major consequences for the future of Russia, Eurasia, and the world.
!is publication is based on research supported by the United States European Command. !e views and conclusions contained in this document are those of the author and should not be interpreted as representing the official policies, either express or implied, of the United States GoGernment. Notes 1 Russian concerns about the effects of missile defenses and deeper cuts to nuclear arsenals were reflected most vividly in the preamble to the New START Treaty: “Treaty Between the United States of America and the Russian Federation on Measures for the Further Reduction and Limitation of Strategic Offensive Arms,” U.S. State Department, April 8, 2010, https://www.state.gov/documents/organization/140035.pdf.
2 This theme—that the confrontation with the West is the new normal—has permeated not only Russian military policy but Russian foreign and domestic policy as well. The Kremlin has made a push to insulate Russia from hostile ideological, political, and economic influence, to hedge against the prospect of more Western sanctions, to assert sovereign control over the Internet inside Russia, etc. One of the most telling examples of its preparations for the long haul is the accumulation of reserves worth nearly $500 billion—at a time when oil prices have remained relatively low and the Kremlin has faced multiple demands to increase social welfare spending.
3 It is not the purpose of this paper to describe in detail the military buildup, which has been covered extensively in specialized literature. For examples, please see: “The Military Balance 2018,” International Institute for Strategic Studies, 2018, https://www.iiss.org/publications/the-military- balance/the-military-balance-2018; Ryan Pickrell, “New Photos Show Russia’s Building Up Its Military on NATO’s Doorstep, but the Alliance Says It Won’t Be Intimidated,” Business Insider, October 18, 2018, https://www.businessinsider.com/it-looks-like-russias-building-up-its-military-on-natos-doorstep-Carnegie Endowment for International Peace 2018-10.
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ShareTweet this selection Tweet Facebook Facebook Russia establishes a new Arctic Air Squadron to protect the Northern Sea Route Published in Arctic Today July 19, 2019
66 Russia establishes a new Arctic air squadron to protect the Northern Sea Route The squadron, with a core of Su-34 fighters, could be based on the Kola Peninsula, near Finland and Norway.
By Atle Staalesen, The Independent Barents Observer - July 19, 2019
Sukhoi Su-34 bombers drop bombs during the Aviadarts competition, as part of the International Army Games 2018, at the Dubrovichi range outside Ryazan, Russia August 4, 2018. (Maxim Shemetov / Reuters file photo)
The Northern Sea Route needs better protection, Russia argues, as it boosts its military presence in the region. New armament and military infrastructure has been made operational across the country’s vast Arctic coast. Radars and other radio-electronic equipment have been installed and missile systems and other advanced armament deployed. More is on its way.
The Northern Fleet has been given the leading role in the development and a new strategic command, the Sever, was officially established in 2014. At its disposal are several new and updated bases, a string of new powers and some of the country’s most advanced armament.
Including air capacities.
A new Arctic air squadron is now in the making, which is also to be managed by the Northern Fleet. The core in the new squadron will be the Su-34, a multi-purpose fighter, newspaper Izvestia reports.
The new aircraft, officially included in the Russian Air Force in 2014, has a range of up to 4,500 kilometers without refueling and can consequently take practically the whole Northern Sea Route under efficient control, the military planners argue.
The Su-34 is believed to be able to operate autonomously over large areas and hit targets with high precision at distances up to 260 kilometers. It will be equipped with the Kh-35U, a powerful turbojet supersonic cruise missile capable of eliminating major ships.
67 The new Arctic fleet of the Su-34 might be based in Monchegorsk, a military expert tells Izvestia. The town, located in the central part of the Kola Peninsula just about 100 kilometers from Finland and Norway, already houses a fleet of aircraft Su-24M and Su- 24MP.
Several more airstrips across the Arctic will be at the disposal of the new squadron. Over the last years, Russia has invested in a number of new bases along the Arctic coast and in the Arctic archipelagos.
When fully developed, the Northern Fleet will have a well-developed network of military air bases in the region, stretching from the Kola Peninsula in the west to the Chukotka Peninsula in the east. The high Arctic bases includes also Nagurskoye in Franz Josef Land, Rogachevo in Novaya Zemlya, Temp in the New Siberian Islands and Tiksi on the Laptev Sea coast.
The air bases are supported by the best of Russia’s radars and surveillance early-warning systems. In May this year, the Northern Fleet reportedly confirmed that it has completed its new Center for Radio-Electronic Warfare. The center includes two Murmansk-BN systems, as well as the Krasukha and Divnomorye systems.
The powerful Murmansk-BN system has been deployed in Severomorsk, Kola Peninsula, and in Kamchatka, and is capable of covering the whole area of the Northern Sea Route. The range of the Murmansk-BN is 5,000 kilometers and up to 8,000 kilometers in good weather condition. In addition comes the Krasukha-2 and Krasukha-4 systems that have been deployed in new military bases in Novaya Zemlya, Severnaya Zemlya, New Siberian Islands and in Chukotka.
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68 Russia, China Are Key Close Partners Carnegie Endowment for International Peace June 5, 2019
69 Russia, China Are Key and Close Partners
Dmitri Trenin June 05, 2019 China Daily President Xi Jinping’s visit to Russia comes exactly 30 years after Moscow-Beijing relations were normalized after a period of discord and confrontation. This normalization has turned out to be one of the most productive foreign policy investments for both countries.
By 2018, Sino-Russian trade exceeded $100 billion. Private citizens’ cross-border visits are now measured in millions. Driven by real and compelling interests, the Sino-Russian relationship in the last five years has reached the level of an "entente": basic compatibility of worldviews supported by practical collaboration in a large number of areas.
As Beijing and Moscow look to the future, they understand not only the potential of their cooperation, but also its safe limits. Both countries insist on full sovereignty and freedom of maneuver. They see each other as a key and close partner. All this provides each party with a combination of reassurance and flexibility.
The essence of the Sino-Russian relationship can be summarized thus: Russia and China will never be against each other, but they will not necessarily always be with each other.
In fact, Moscow and Beijing have designed a new model of “major country relationship”. While China and Russia are very different in many measurements of power, they have managed to preserve an essential equality in their relationship. It is this equilibrium that is crucial for the continuation of the Sino- Russian partnership.
Recently, China and Russia have stepped up policy coordination on a broad number of issues. In the United Nations Security Council, Chinese and Russian representatives cooperate closely. On some issues such as the Democratic People’s Republic of Korea nuclear issue, Beijing takes the lead, while on others such as Syria, Moscow does.
The strong bond between President Xi Jinping and his Russian counterpart Vladimir Putin acts both as the driver and-if need be-the shock absorber in the relationship. Many in the West have been waiting for decades for a Sino-Russian clash in Central Asia. Their wait will never end.
The strong Russia-China link is an important factor in the evolution of the world order. The 2014 Ukraine crisis provoked the US-Russian confrontation, and the entry of Donald Trump into the White House in 2017 exacerbated the US-China competition. By pushing back against Moscow and Beijing simultaneously, the White House has broken with a longstanding strategic maxim of preventing Russia
70 and China from forming a close relationship. This has probably resulted from many Americans’ disdain for “declining” Russia, their belief that this disdain is secretly shared by the Chinese, and their wishful thinking about a coming Sino-Russian split.
Washington’s current pressure on both Beijing and Moscow may not be the prime cause of the growing rapprochement between Russia and China, but it has certainly contributed to both its speed and depth.
andEconomic China dynamismfrom forming remains a close positive. relationship. Russia This has has been probably selling resultedincreasing from volumes many Americans’of oil to China. disdain forSoon, “declining” it will sell Russia, China theirlarge belief volumes that of this natural disdain gas, is secretlytoo. It has shared allowed by theChinese Chinese, State-owned and their wishful thinkingenterprises about access a coming to its Sino-Russianrich energy reserves. split. It now provides more sophisticated military technology to China and invites People’s Liberation Army units to participate in major Russian military exercises. And Washington’sthe Russian Central current Bank pressure has tripledon both (to Beijing 15 percent) and Moscow the share may of notits yuanbe the holdings. prime cause of the growing rapprochement between Russia and China, but it has certainly contributed to both its speed and depth. Besides, Russia has vowed to “harmonize” the China-proposed Belt and Road Initiative with its own Economiceconomic integrationdynamism remainsproject, thepositive. Eurasian Russia Economic has been Union, selling and increasing has offered volumes its own of vision oil to ofChina. a "Grand Soon,Eurasian it will Partnership". sell China largeMore volumes is to follow of naturalin the fields gas, oftoo. energy, It has agriculturalallowed Chinese trade, State-owned military and defense enterprisesindustry cooperation, access to andits rich transit energy of Chinese reserves. goods It now to providesEurope. Ofmore course, sophisticated a lot needs military to be technology done to to Chinarealize and the invitestrue potential People’s of LiberationSino-Russian Army economic units to participaterelations, but in majorthe dynamic Russian remains military positive. exercises. And the Russian Central Bank has tripled (to 15 percent) the share of its yuan holdings. In the wake of the Ukraine crisis, Barack Obama, then US president, imposed severe economic Besides,sanctions Russia on Russia, has vowedwhich wereto “harmonize” massively theexpanded China-proposed by Trump. Belt Later, and Trump Road launchedInitiative witha trade its own war economicagainst China, integration pressuring project, the theUS’ Eurasian allies to supportEconomic him Union, so he andcan hasgain offered the upper its own hand vision against of aChina. "Grand Eurasian Partnership". More is to follow in the fields of energy, agricultural trade, military and defense industrySome observers cooperation, say theseand transit are signs of Chinese of a new goods US-China to Europe. bipolarity Of course, emerging. a lot Which needs is to probably be done wrong.to realizeGlobalization the true as potential “one world” of Sino-Russian dominated and economic led by the relations, US and but the the West dynamic is already remains behind positive. us. And instead of a new technological and financial divide reminiscent of the 20th century “Iron Curtain”, there Inis likelythe wake to be of a the much Ukraine more crisis,diversified Barack environment Obama, then of several US president, independent imposed players, severe both economic competing and sanctionscollaborating. on Russia, which were massively expanded by Trump. Later, Trump launched a trade war against China, pressuring the US’ allies to support him so he can gain the upper hand against China. This year marks the 70th anniversary of the founding of the People’s Republic of China, as well as of Somethe establishment observers say of diplomaticthese are signsrelations of a between new US-China China andbipolarity the Soviet emerging. Union. Which And Chinais probably and Russia wrong. Globalizationhave learned aslessons “one world”from history: dominated great and powers led by lead the or US abstain, and the they West don’t is already jump on behind the bandwagons us. And of insteadothers, andof a innew bilateral technological relations, and great financial powers divide seek reminiscent to maintain ofequilibrium-they the 20th century may “Iron come Curtain”, close thereto iseach likely other to be if interestsa much more or circumstances diversified environment demand, but of notseveral so close independent as to become players, followers. both competing and collaborating. This article was originally published in China Daily This year marks the 70th anniversary of the founding of the People’s Republic of China, as well as of theEnd establishment of document of diplomatic relations between China and the Soviet Union. And China and Russia have learned lessons from history: great powers lead or abstain, they don’t jump on the bandwagons of others, and in bilateral relations, great powers seek to maintain equilibrium-they may come close to eachRelated other if interests Topics or circumstances demand, but not so close as to become followers. ThisForeign article and was Security originally Policy publishedChina’s in China Way Daily 瞭華
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72 Russia: Rosneft CEO Asks Government for Tax Break to Spur Investment in Arctic Region 7/24/19, 11)53 AM
Russia: Rosneft CEO Asks Government for Tax Break to Spur Investment in Arctic Region
Situation Report
Jul 15, 2019 | 17:49 GMT 1 min read
What Happened: The chief executive officer of Russian oil giant Rosneft has asked the Russian government for tax breaks worth 2.6 trillion rubles ($41.3 billion) in a private letter obtained by Russian newspaper Vedomosti, the paper reported July 14. According to the letter, the tax breaks are necessary to facilitate investments of up to $135.2 billion in Arctic energy projects. Why It Matters: The Russian government has already suggested potential tax incentives to encourage companies to invest in the Arctic region as it considers the area essential to its geostrategic plans. If implemented, however, large-scale tax breaks could put significant pressure on Russia's government budget. Background: Russian President Vladimir Putin expects cargo volumes on the Northern Sea Route to rise to 80 million metric tons per year by 2050, while Rosneft's chief executive officer has said the region could produce up to 100 million tons of oil by 2030. Read More:
The U.S. Stakes Its Claim in the Arctic Frontier (Sept. 4, 2015)
Russia's Plans for Arctic Supremacy ( Jan. 16, 2015)
https://worldview.stratfor.com/situation-report/russia-rosneft-ceo-asks-government-tax-break-spur-investment-arctic-region Page 1 of 2
73 The U.S. Zeroes in on Russia's Borderlands Stratfor 2018
74 ARTICLE November 15 2018 10:00:00 GMT The U.S. Zeroes in on Russia's Borderlands
Editor's Note: This assessment is part of a series of analyses supporting Stratfor's upcoming 2019 Annual Forecast. These assessments are designed to provide more context and in-depth analysis on key developments in the coming year. The standoff between Russia and the West has shown little sign of abating throughout 2018, and recent U.S. efforts to ramp up the pressure on the Kremlin signal that such tensions are only going to increase in the year to come. In an effort to alter Russia's foreign policy, the United States has imposed sanctions on the Russian economy [1] amid threats to impose more next year. And now that the United States has announced its intentions to withdraw from the Intermediate-Range Nuclear Forces (INF) Treaty, new military buildups by both sides are inevitable [2].
75 worldview.stratfor.com | (512) 744-4300 | [email protected] P.O. Box 92529, Austin, TX 78709 PDF created for [email protected] and not intended for redistribution. Stratfor Global Intelligence page 2/5 The U.S. Zeroes in on Russia's Borderlands
Another key element of U.S. pressure on Moscow centers on Washington's ties with former Soviet countries on Russia's periphery, from Eastern Europe to the Caucasus and Central Asia. Because of Russia's lack of geographic barriers, these territories form buffer states that protect the country's core from foreign powers while also providing a conduit for the Kremlin to project influence outward. Indeed, Russia's rise and fall as a regional and global power has historically depended on its ability to control these territories; as a result, these states have naturally played a crucial role in the United States' containment strategy against Russia [3] in the post-Soviet period. And as tensions grow between Moscow and Washington, these borderland states will become an increasingly central theater for the competition between the United States and Russia.
Eastern Europe: Battleground Ukraine At the heart of the two powers' rivalry in Eastern Europe is Ukraine, which is currently in its fifth year of conflict. Washington has played an important role in backing Kiev from a political, economic and security perspective in its war against Russia-backed separatists in eastern Ukraine. The United States already provides security support to Ukraine by conducting joint military exercises and delivering limited amounts of lethal weaponry, most notably the Javelin anti-tank missile systems. The United States is likely to increase its weapons sales to Ukraine in the coming year and assist Kiev's efforts to bolster its navy in the Sea of Azov [4], which has emerged as a new potential flashpoint in Ukraine's standoff with Russia. The developments will undermine the negotiation process held in Minsk, Belarus, to end the Ukrainian conflict, making a resolution to the conflict and a U.N. peacekeeping deployment to eastern Ukraine unlikely in the coming year.
Elsewhere in Eastern Europe, the prospective withdrawal of the United States from the INF Treaty will lead Washington to strengthen U.S. military assets and conduct more joint military exercises in frontline NATO members like Poland, Romania and the Baltic states. In addition, the United States will move forward in its negotiations to establish a permanent military base in Poland [5], though an actual deployment will not take place this year. Russia will respond with its own military buildups in areas like Kaliningrad, western Russia and Crimea while also pursuing its own talks to build an air base in Belarus. In this battle for Russia's periphery, Washington is expected to offer Belarus economic incentives in an effort to dissuade it from increasing its military ties with Moscow. Belarus will be receptive to the U.S. overtures, yet it will remain strategically aligned with Russia when it comes to security.
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The Caucasus: Wooing Armenia In the Caucasus, Washington will focus its attention on strengthening ties with the Armenian government. Armenia has traditionally been one of the closest and most loyal allies of Russia — the country is a member of the Moscow-led Eurasian Economic Union and the Collective Security Treaty Organization military bloc — but political tensions have emerged between Armenia and Russia in recent months following the rise to power of opposition leader Nikol Pashinyan in April's Velvet Revolution [6]. The United States hopes to exploit these tensions by driving a wedge between Armenia and Russia — something it has already tried to do, as evidenced by U.S. national security adviser John Bolton's visit to Armenia last month, when he expressed the United States' interest in selling weapons to Armenia. Moscow has viewed Bolton's offer as a direct challenge, as Russia currently has a monopoly on weapons sales to Armenia, as well as 5,000 troops in the small republic. While Armenia is ultimately unlikely to abandon its strategic alignment with Russia, political frictions between the two could offer the United States an opportunity to chip away at a key ally on Moscow's periphery.
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Armenia's major adversary, Azerbaijan, will also attract U.S. attention, particularly when it comes to pressuring Iran. Azerbaijan's relationship with its southern neighbor will come under strain as the government seeks to maintain its foreign policy balancing act by switching gears to participate in the U.S. containment strategy against Tehran. Indeed, Azerbaijan already stopped purchasing natural gas from Iran before U.S. sanctions came into effect against the Islamic republic on Nov. 5, and it is likely to decrease economic ties with Tehran further this year. At the same time, the United States will also increase security support and conduct more military exercises with Georgia, the only country in the region that is actively pursuing European Union and NATO integration.
The United States' efforts to make inroads into Russia's borderlands will, in turn, shape Moscow's own actions against the West.
Central Asia: Uzbekistan Comes in From the Cold To the east in Central Asia, the United States is likely to increase its initiatives to counter terrorism and drug smuggling in the region, especially in countries bordering Afghanistan like Tajikistan and Uzbekistan. But Russia and China will also conduct their own counterterrorism efforts, creating the potential for a rise in tensions in the great power competition between Moscow and Beijing on one side and Washington on the other.
On the economic front, Washington will also strive to foster better economic ties throughout Central Asia in countries like Kazakhstan and, especially, Uzbekistan. The latter's president, Shavkat Mirziyoyev, has slowly brought his country out of the shadows [7], creating opportunities for external powers to increase economic and security ties with the Uzbek government — something that has naturally piqued the interest of Russia and the United States. Wary of Moscow's growing economic ties with Uzbekistan, U.S. officials have explicitly stated their desire to compete with Russia in terms of economic and investment deals. As a result, Uzbekistan is likely to solicit as much economic support as possible from both countries while maintaining a delicate balancing act between the two that stops short of entering any formal alliance.
The United States' efforts to make inroads into Russia's borderlands will, in turn, shape Moscow's own actions against the West. Intent on exploiting Europe's divisions and undermining EU and NATO unity, Russia will be active in its hybrid warfare campaign against the West [8] by meddling in others' politics, disseminating propaganda, launching cyberattacks and staging covert operations against Western and Western-leaning countries like Ukraine and the Baltic states. Though Russia might not succeed in offsetting the United States' overtures to the states in the former Soviet periphery, it could foment greater instability in the borderlands, thereby making those areas a key battleground in the broader U.S.-Russian standoff this coming year.
worldview.stratfor.com | (512) 744-4300 | [email protected] P.O. Box 92529, Austin, TX 78709 78 PDF created for [email protected] and not intended for redistribution. China
79 79 Northernmost Border National Security Roundtable, Part 1 Alaska Federation of Natives June 6, 2019
To read this document, visit: https://bit.ly/32Ks0gA
80 Bluster, Cooperation Mark China's Arctic Summit Anchorage Daily News July 17, 2019
81 Gov. Dunleavy calls lawmakers to Juneau in bid to end budget deadlock
Opinions Bluster, cooperation mark China’s Arctic summit
Author: Anita Parlow | Opinion Updated: 21 hours ago Published 21 hours ago
FILE - This July 22, 2006 file photo, provided by the U.S. Coast Guard, shows the Coast Guard Cutter Healy breaking ice in the Arctic Ocean near Barrow, Alaska. The U.S. will assert its sovereignty in the Arctic, Defense Secretary Chuck Hagel warned Friday, even as Russia, China and other nations stake claims and expand their use of the icy waters for military exercises and transit. (AP Photo/U.S. Coast Guard, Prentice Danner, File)
Two major events occurred in or about the Arctic last month. The first was the ministerial meeting of the Arctic Council held in Rovaniemi, Finland in early May. The second was the Arctic Circle China Forum held in Shanghai, China, a self-described ‘near-Arctic nation.’ At both events, the Arctic activities of the United States, Russia and China dominated the headlines, making now a good time to look at how these three powers are jockeying for influence on the international stage.
82 According to several persons present at the Finland-hosted Arctic Council Ministerial who flew directly to Iceland’s Arctic Circle meetings conducted in Shanghai several days later, the U.S. Secretary of State “shocked” the typically diplomatic biannual Ministerial by hurling bullying and cantankerous remarks on the eve of the Ministerial. Secretary Mike Pompeo reserved his particular ire for Russia, China and even, Canada. Whether his remarks reflected envy of China’s growing Arctic presence, or a spillover of the U.S. ‘trade war’ to demonize China while being “tough on Russia” is not clear. However, the Secretary did refer to China’s massive multi-billion dollar Polar Belt and Road investments as a prelude to “territorial aggression.”
The U.S. Secretary also objected to the use of the phrase, “climate change” in the Arctic Council’s Ministerial Statement. Pompeo’s objection meant that for the first time, no joint statement was issued by the Arctic Nations since the Arctic Council’s 1996 founding as an intergovernmental forum dedicated to cooperative Arctic science, environmental protection and related activities among all Arctic states, indigenous peoples and, now, “observer states,” such as China.
The effects of Pompeo’s lashing out at U.S. Arctic allies, even adversaries – certainly, not enemies – in a region long known as a “zone of peace,” resonated at the Shanghai-Arctic Circle meetings several days later. Opening remarks by Wang Hong, Director of China’s State Oceanic Administration of the Chinese Ministry of Natural Resources and other high-level officials, may have been hitting back as they described China’s interest in the science of Arctic warming that is impacting Chinese weather patterns. The high levels officials insisted that China’s massive investment across Russia’s Northern Sea Route, environmentally controversial Polar Belt and Road initiative, would “be green,” irrespective of sessions with titles such as “Paving the Belt and Road.”
Arctic Circle Founder, former Iceland President Olafur Ragnar Grimsson, expanded upon the Chinese representatives’ pledge to address climate change to the some 500 delegates from more than 20 countries in what he heralded as an “historic meeting" – the first dedicated exclusively to Arctic issues in China. With his seeming Gorbachev-Reagan-in-Reykjavik sensibility, President Grimsson thanked the Chinese officials for their concern about Arctic climate matters. Then, he proceeded to describe the changes in climate and weather patterns, particularly experienced in the Arctic region, as being accelerated by the burning of carbon fuels. The President remarked that “China’s reliance on” coal-fired generator plants contributes to a “circular pattern” of Arctic warming, that then contributes to destructive weather patterns worldwide.
The “bluster” on climate from Secretary Pompeo, flies in the face of most recent reports that express concern about climate change ranging from the U.S. Department of Defense, the Congressionally required Fourth National Climate Assessment, the IPCC Global Warming Special Report 2018, and, sufficient concern to the convening of a coalition of 39 central banks, about half the global economy, study on the effects of climate change on financial markets.
The former President thanked the Chinese officials for working with Iceland for, thus far, installing some 70 geothermal plants across China to replace coal-based electricity. Given the memorandum of understanding signed between Iceland and China suggests the possibility of more conversions from coal to geothermal – such as occurred in Iceland some 70 years ago, is likely. Iceland’s Director General of Orkustofnun, the nation’s National Energy Authority,
Gudni A. Johannesson, told this observer that “the air quality situation is quite serious in China” – more than 200,000 people reportedly die annually of respiratory diseases caused by a combination of pollution by coal-fired electrical plans and petro-chemicals, often located in the outskirts of communities.
83 Sen. Lisa Murkowski, flying in from Finland to Shanghai, was well received in her remarks that promoted a spirit of cooperation in the region. The senator, who has noted the U.S. need for functional icebreakers, deep-draft ports and other Arctic infrastructure, expressed concern for climate impacts and responded to a question from a panel presenter, noting that she would bring the issue of geothermal energy development to Washington to determine any congressional interest.
The Arctic Circle China meetings seemed to stand for the twin principles of coexistence and cooperation. President Grimsson’s ethic – that of a small Island nation unafraid to face the largest Arctic, or near Arctic- nations and demand, perhaps by the power of presence, the maintenance of a stable and environmentally protected region, irrespective of new rules, different governance models of nations operating in the Arctic, or conventional notions of security. If nothing else, the Arctic Circle – China meeting offered an option of no–one being left outside of the Arctic discourse where explosive growth is unfolding in a region where a new Mediterranean-sized ocean is opening at the top of the world at the North Pole.
Despite the bombast by the U.S. Secretary, U.S. Ambassador David Balton, former representative of the United States to the Arctic Council, expressed an optimistic view. The former Ambassador said in a telephone interview that “efforts to strengthen international governance of the Arctic will continue.”
Whether or not the cooperative model will continue to evolve raises a series of unfolding and vital questions, not the least of which is to keep external geopolitics from seeping in. And, climate, in all of its meanings, in check.
Anita L. Parlow is a recent Fulbright scholar in Iceland, Team Lead for the inaugural Woodrow Wilson Polar Code Roundtable Project, and advisor for the Harvard–MIT Arctic Fisheries Project. Parlow has advised corporations, NGOs and international agencies on Corporate Social Responsibility and Environmental and Community Risk.
The views expressed here are the writer’s and are not necessarily endorsed by the Anchorage Daily News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)adn.com. Send submissions shorter than 200 words to [email protected] or click here to submit via any web browser. Read our full guidelines for letters and commentaries here.
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Anita Parlow
84 U.S. Energy
85 85 With Powers so Disposed, America and the Global Strategic Energy Competition U.S. Senator Lisa Murkowski
https://bit.ly/2XWJacn
86 “WITH POWERS SO DISPOSED” AMERICA AND THE GLOBAL STRATEGIC ENERGY COMPETITION
U.S. SENATOR LISA MURKOWSKI
116TH CONGRESS JULY 11, 2019
87
“[O]ur commercial policy should hold an equal and impartial hand . . . diffusing and diversifying by gentle means the streams of commerce, but forcing nothing . . . establishing (WITH POWERS SO DISPOSED, IN ORDER TO GIVE TRADE A STABLE COURSE, TO DEFINE THE RIGHTS OF OUR MERCHANTS, AND TO ENABLE THE GOVERNMENT TO SUPPORT THEM) conventional rules . . . the best that present circumstances and mutual PRESIDENT GEORGE WASHINGTON opinion will permit . . . temporary, FAREWELL ADDRESS and liable to be from time to time SEPTEMBER 19, 1796 abandoned or varied, as experience and circumstances shall dictate . . . . ”
88 INTRODUCTION
A Central Position
The President’s National Security Strategy accurately refers to “America’s central position in the global energy system as a leading producer, consumer, and innovator.”1 Previous generations strived to achieve the status we now enjoy, using all types of fuel to propel the economic growth of a superpower. Logistical networks and world-class infrastructure enabled this expansion.
Source: U.S. Energy Information Administration
The Competitive Environment
Some countries may generate or utilize more units of a particular type of energy than we do, but no nation delivers as much energy to as many people, as efficiently, safely, and cleanly – with as much productive effect – as the United States. Despite our dominant place, other countries – allies, trading partners, great powers, rivals – are working hard to secure their own positions of strength within that global energy system. Markets are dynamic and rankings are not static. Americans must compete every day for our prosperity.
1 National Security Strategy of the United States of America (The White House, December 2017), p. 22: https://www.whitehouse.gov/wp-content/uploads/2017/12/NSS-Final-12-18-2017-0905.pdf.
1
89 ASSESSMENT
A Signal to the World
Over the past decade, the United States energy sector has sent a “signal to the world.”2 Executive and legislative action renovated the architecture of American energy – streamlining the regulatory review of natural gas exports, lifting the de facto ban on crude oil exports, opening up new areas in Alaska and the Outer Continental Shelf for development, investing in innovative advanced nuclear reactors, and much else. We produce (96 quadrillion Btu), consume (101 quadrillion Btu), and trade (46 quadrillion Btu) more energy than ever before.3
This revolution has occurred as regions outside of North America dominate worldwide energy consumption growth, a trend which suggests a global approach to the nation’s energy future may be required.
Source: U.S. Energy Information Administration
2 U.S. Senator Lisa Murkowski, A Signal to the World: Renovating the Architecture of U.S. Energy Exports (January 7, 2014). See also the following reports prepared by the Republican staff of the U.S. Senate Energy and Natural Resources Committee: Cross Currents: Iranian Oil and the U.S. Export Ban (June 23, 2015); Rendering Vital Assistance: Allowing Oil Shipments to U.S. Allies (June 9, 2015); A Ban for One: The Outdated Prohibition on U.S. Oil Exports in Global Context (June 26, 2014); Crude Pro Quo: The Use of Oil Exchanges to Increase Efficiency (May 22, 2014); License to Trade: Commerce Department Authority to Allow Condensate Exports (April 2, 2014); and Past is Precedent: Executive Power to Authorize Crude Oil Exports (March 3, 2014). 3 U.S. Energy Information Administration, Table 1.1 Primary Energy Overview, Monthly Energy Review (June 2019). “Trade” includes the gross sum of imports and exports.
2
90
Long-Term Relationships
The signal our nation sends to the world must be followed by tangible results. Memoranda of understanding can be important, but tangible deals with secured financing, offtake agreements, and delivered cargoes are what guarantee jobs for Americans. Trade in raw commodities provides considerable economic benefit, and building terminals, processing plants, ports, and other infrastructure – domestically and internationally – offers innumerable cumulative gains.
Source: U.S. Energy Information Administration
Case Studies: Natural Gas and Civil Nuclear
Energy-based prosperity requires long-term investments and relationships, which ultimately form the basis for any enhancement to our national security. For example:
(1) Natural gas liquefaction and regasification facilities require decadal contracts, billions of dollars, and years of permitting and construction. Potential customers with which strategic relationships are critical abound in the Indo-Pacific region.
3
91
Source: U.S. Energy Information Administration
(2) Civil nuclear projects are impossible without diplomatic (“123”) agreements and often require substantial government-backed financing. The relationships that develop from such projects provide decades of further partnership.
Source: U.S. Energy Information Administration
4
92 THE STRATEGIC ENERGY INITIATIVE
In his Farewell Address, President George Washington extolled the virtues of free trade and noted the natural industriousness of the nation. He cautioned that such trade should follow a “stable course” within a flexible set of rules. This adaptive architecture would change “as experience and circumstances” warrant. It is time for the United States government to refine its instruments of national power, “with powers so disposed,” to strengthen the ability of the American people to compete fairly in the global energy system.4
The Strategic Energy Initiative will sharpen and direct our tools of energy- related economic statecraft to enhance the geopolitical posture of the United States. These tools include federal departments and agencies, such as the Department of Energy, and trade and finance-related institutions such as the Trade Development Agency, the Export-Import Bank, and the Development Finance Corporation (as it evolves from the Overseas Private Investment Corporation). Congress is uniquely positioned to provide strategic direction through its constitutional responsibilities of oversight and legislation. By focusing on long-term relationships, tightly within the nexus of raw commodities and infrastructure domestically and internationally, the nation will enhance its security, improve its balance of trade, and secure America’s position at the center of the global energy system.
CONCLUSION
The strategic environment is a competitive environment. Expanding the global reach of American energy requires a robust strategy that harnesses our Nation’s vast means in effective ways to achieve secure and prosperous ends. The Strategic Energy Initiative seeks to accomplish just that.
ACKNOWLEDGMENTS
The cover image is a portion of a photograph taken by Carol M. Highsmith, “Dusk view of the Valero Energy Corporation's refinery in Port Arthur, Texas.” Dated February 27, 2014, it is provided by the Library of Congress: https://www.loc.gov/item/2014633835/. The official engraved portrait of President George Washington is provided by the United States Mint.
4 Farewell Address (1796), United States Senate Historical Office (Senate Document No. 106-21).
5
93 Full Committee, U.S. Senate Energy and Natural Resources Committee Hearing On the Important Role of US LNG in Evolving Global Markets July 11, 2019
https://bit.ly/2XWJacn
94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 Alaska Upstream Slides Wood Mackenzie May 2019
135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 Alaska Gas Pipeline Wood Mackenzie April 2018
152 153 154 155 156 157 158 159 160 161 162 163 164 Alaska Federation of Natives 3000 A Street, Suite 210 Anchorage, AK 99503 907-274-3611 nativefederation.org
Materials including PowerPoints are included at: http://www.nativefederation.org/military-partnerships
165