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Can Hope Emerge From The MH 17 Tragedy?

March 19th, 2015
Comments Off on Can Hope Emerge From The MH 17 Tragedy?

A brief reprieve from the rising tensions and outrage over the missile attack that destroyed MH 17 and killed nearly 300 hundred innocent people occurred when Ukrainian separatists allowed international authorities to inspect the plane’s wreckage, and the remains of the dead and the aircraft’s black boxes were turned over Malaysian officials in an area controlled by the Poroshenko government.

There is little doubt that the Ukrainian separatists were responsible for the missile attack. The Obama Administration put on public display the results of the classified technology used by the American intelligence services that showed the missile was fired in territory held by Ukrainian separatists, and evidence of monitored conversations between Ukrainian separatists about shooting down the plane.

While the Ukrainian separatists shot the plane out of the sky, it was Russia who supplied the missile, and whose government has now become the focal point of anger over MH17. Russia will likely face more economic sanctions, as well as other possible consequences, such as losing the 2018 World Cup and getting booted out the G20. Russia’s global reputation is in tatters, as is its economy and business climate. Capital flight is already at record levels, and growing concern over the government’s policy on Ukraine among the business community.

President Putin has not wavered in his support for the Ukrainian separatists, and nor has the flow of anti-western, nationalistic rhetoric on Russian media subsided. However, he has given some indications that the downing of MH 17 has shifted the political calculus and provided a brief opportunity for meaningful discussions between all parties.

I hope all parties recognize this opportunity and not let it slip away. The alternative is to have already hardened positions held by all parties to become unmovable, and elevate the risk of war between Russia and Ukraine.

In the short-term, the goal needs to be a ceasefire and multilateral talks between all parties. The fighting needs to stop. Two things must happen first. The Ukrainian government needs to stop the military offense against the separatist rebels and Russia needs to stop supplying weapons to the separatists. One cannot happen without the other.

Next, all parties must immediately enter into negotiations under the UN’s supervision and station UN peacekeepers between the Ukrainian separatist rebels and Ukrainian government’s armed forces – The presence of UN peacekeepers would reduce the risk of more violence, which would undoubtedly have a negative influence on the negotiations. The talks will likely last a long time and be frustrating for both sides. At least, however, the bloodletting will stop, and the possibility of achieving some kind of consensus for a way forward that addresses the needs of the Ukrainians, the pro-Russian separatists and Russia, with the involvement of the EU and the US.

Unfortunately, solving Ukraine’s troubles will not be easy and will require patience and a long-term commitment by all sides. In the process, Russia could also address some its own long-term problems. Some of the most pressing issues are:

Rebuilding Ukraine’s economy – The rebellion that ousted former President Yanukovych and the conflict between the Poroshenko government and the Ukrainian separatists has totally ruined Ukraine’s economy, which was already on the verge of collapse under President Yanukovych. Financial support from the IMF, The World Bank and the international investment community will be needed to reinvigorate Ukraine’s economy and must include eastern and southern Ukraine, which suffered greatly under Yanukovych’s crony capitalism.

Establish normal trade relations between Russian and Ukraine – The unavoidable fact is the Russian and Ukrainian economies are inextricably linked. If Russia chooses a trade war over a revised trade agreement, they risk more economic sanctions and further damage it already sinking economy, as well as stoking political unrest at home. The better choice would be a negotiated bilateral trade agreement that addresses the national interests of Russia and Ukraine, and relies on the WTO to settle trade disputes rather than the arbitrary gas wars of the past.

Europe needs to get serious about reducing its dependence on Russia for energy – The Ukraine crisis is a grim reminder of how perilous Europe’s economy and standard of living is when you depend on one major source for your energy. How many times does a disagreement between Russia and Ukraine that results in a stoppage of gas supplies to Europe will it take for Europe to grasp the reality that a long-term strategy to diversify it sources of energy is overdue.

Russia needs to get serious about becoming less dependent upon foreign imports and build up its domestic production capabilities and diversify Russia’s economy – Like the Europeans, the Russians have been equally remiss in not building its domestic manufacturing base. The Russian government has positioned policy initiatives to jumpstart local manufacturing of goods and technologies as counter measures to US and EU sanctions. To the contrary, expanding Russia’s domestic production will help to modernize Russia’s economy. It will provide jobs and exports, while reducing Russia’s reliance on the price of energy on the global market for its economic security.

This is just a start….

I am hopeful the MH17 tragedy will be enough of a wakeup call to all parties that the momentum of events in Ukraine can be interrupted long enough to keep them from descending into all out war, and to recognize the dangerous long-term consequences to all parties if it doesn’t.

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