Putin Punches Above His Weight

Russian president’s global strategy keeps Moscow’s tentacles in enough places that the Kremlin is ensured a seat at every table that matters

You’ve got to give Vladimir Putin his due: The man knows how to play a weak hand well.

With relatively little investment, the Russian leader is expanding his toehold in the Western Hemisphere and potentially getting access to giant oil and uranium supplies by backing a dictator in Venezuela.

With relatively little investment, he has expanded his base of operations in the Middle East by propping up a dictator in Syria and by trying to send some sophisticated Russian military equipment into Turkey. (For the latter effort, he’d actually turn a profit.)

And with relatively little investment, and little notice from a distracted international community, he has kept up a low-level war against those fighting a Russian takeover in eastern Ukraine, holding on to a bargaining chip he might find useful someday.

He does all this while overseeing an economy roughly the size of South Korea’s, which produces little or nothing the world wants to buy, outside of oil and military gear.

It’s an audacious strategy—and it is working. Never was that more clear than last week, when Secretary of State Mike Pompeo and national security adviser John Boltoncited Russian support as the only reason Venezuelan dictator Nicolás Maduro remained in his country in the face of an organized uprising by his opponents and elements of his own military.

.. In short, Mr. Putin appears to recognize the moment he is in, and what to do about it. After almost two decades of a focus on combating terrorism and Islamic extremism, the world is evolving into a new era of big-power competition. The U.S. and China are the two big competitors now, of course, but Mr. Putin is making sure Russia is the third.

His problem is that Russia doesn’t have the economic might of the U.S. and China. So he brings to the table what he can, which is basically the ability to make trouble and thereby insert himself into the global mix.

Thus, Russia became an early world leader in the 21st-century tool of unconventional combat—cyber warfare. The Kremlin combined that skill with its traditional willingness to engage in the dark arts of covert action to interfere with the 2016 election in the U.S., as well as other elections in the West.

As the U.S. tries to maintain economic pressure on North Korea, Russia provides just enough economic relief to Pyongyang to ensure that Moscow has to be a player in how the standoff over North Korea’s nuclear program plays out.

Meanwhile, Mr. Putin is wedging himself into the space between East and West by offering to sell Russia’s S-400 air-defense system to Turkey, which happens to be a member of the American-led North Atlantic Treaty Organization. After members of Congress declared that Turkey couldn’t both buy the American-made F-35 jet fighter and have a Russian air-defense system geared toward shooting down that same jet, Russia stepped up and said it also would sell its own jet fighters to Turkey instead.

What is Russia’s goal in all this? Probably, in the first instance, it’s simply to keep Russia in the global game. By ensuring that Moscow’s tentacles are in enough places, Mr. Putin can win a seat at every table that matters. Thus does he maneuver to restore the global importance of Russia, which he thinks was unjustly stolen by the combination of the Soviet Union’s collapse and the West’s maneuvers to marginalize a once-great power.

Only in the second instance, most likely, is the Putin goal to gain some particular advantage or asset. Russia fishes in troubled waters. One day it may catch something that turns out to be valuable.

Venezuela may be the best current example of this strategy. Asked why Russia seems to want a beachhead in Venezuela, a senior U.S. official replies simply: “Why not?”

Venezuela has the world’s largest oil reserves and uranium reserves second only to Canada’s, the official notes. The world markets for oil and uranium matter greatly to Russia, whose economy is based almost entirely on such commodities, so having a hand on such big parts of the world supply can’t hurt.

And preserving a base of operations in Venezuela helps strategically in the continuing effort to keep the U.S. off balance and reactive. Russia already has plenty of influence in Cuba, but Venezuela may be a safer location for a Western Hemisphere foothold. “Cuba is too close to the U.S.,” the senior official says. “Venezuela is a better base of operations.” As noted: Why not try?

Donald Trump Is Bad for Israel

As usual, the president makes his predecessors look better.

Suppose you’re the type of smart conservative reluctantly inclined to give Donald Trump a pass for his boorish behavior and ideological heresies because you like the way the economy is going and appreciate the tough tone of his foreign policy, especially when it comes to Islamic fundamentalism.

These last few weeks haven’t exactly validated your faith in the man, have they?

.. The president has abruptly undermined Israel’s security following a phone call with an Islamist strongman in Turkey. So much for the idea, common on the right, that this is the most pro-Israel administration ever.

.. Contrary to the invidious myth that neoconservatives always put Israel first, the reasons for staying in Syria have everything to do with core U.S. interests. Among them: Keeping ISIS beaten, keeping faith with the Kurds, maintaining leverage in Syria and preventing Russia and Iran from consolidating their grip on the Levant.

.. Powers that maintain a reputation as reliable allies and formidable foes tend to enhance their power. Powers that behave as Trump’s America has squander it.

.. But leave that aside and consider the Trump presidency from a purely Israeli standpoint. Are Israelis better off now that the U.S. Embassy is in Jerusalem? Not materially. The move was mostly a matter of symbolism, albeit of an overdue and useful sort. Are Israelis safer from Iran now that the U.S. is no longer in the Iran deal and sanctions are back in force? Only marginally. Sanctions are a tool of strategy, not a strategy unto themselves.

.. What Israel most needs from the U.S. today is what it needed at its birth in 1948: an America committed to defending the liberal-international order against totalitarian enemies, as opposed to one that conducts a purely transactional foreign policy based on the needs of the moment or the whims of a president.

.. From that, everything follows. It means that the U.S. should not

  • sell out small nations — whether it was Israel in 1973 or Kuwait in 1990 — for the sake of currying favor with larger ones. It means we should
  • resist interloping foreign aggressors, whether it was the
    • Soviets in Egypt in the 1960s, or the
    • Russians and Iranians in Syria in this decade. It means we should
  • oppose militant religious fundamentalism, whether it is
    • Wahhabis in Riyadh or Khomeinists in Tehran or Muslim Brothers in Cairo and Ankara. It means we should
  • advocate
    • human rights,
    • civil liberties, and
    • democratic institutions, in that order.

Trump has stood all of this on its head.

He shows no interest in pushing Russia out of Syria. He has neither articulated nor pursued any coherent strategy for pushing Iran out of Syria. He has all but invited Turkey to interfere in Syria. He has done nothing to prevent Iran from continuing to arm Hezbollah. He shows no regard for the Kurds. His fatuous response to Saudi Arabia’s murder of Jamal Khashoggi is that we’re getting a lot of money from the Saudis.

He speaks with no authority on subjects like press freedom or religious liberty because he assails both at home. His still-secret peace plan for Israel and the Palestinians will have the rare effect of uniting Israelis and Palestinians in their rejection of it

.. If you think the gravest immediate threat to Israel is jihadist Hezbollah backed by fundamentalist Iran backed by cynical Russia, the answer is no.

.. If you think the gravest middle-term threat is the continued Islamization of Turkey under Recep Tayyip Erdogan — gradually transforming the country into a technologically competent Sunni version of Iran — the answer is no.

.. If you think that another grave threat to Israel is the inability to preserve at least a vision of a future Palestinian state — one that pursues good governance and peace with its neighbors while rejecting kleptocracy and terrorism — the answer is no.

And if you think that the ultimate long-term threat to Israel is the resurgence of isolationism in the U.S. and a return to the geopolitics of every nation for itself, the answer is more emphatically no.

 

 

Investors Fret Over Khashoggi Killing but Still Maintain Saudi Ties

Virgin founder Richard Branson announced he was pulling out of talks on a $1 billion deal with Saudi Arabia over the killing of a Washington Post columnist. State involvement in the killing, “if proved true, would clearly change the ability of any of us in the West to do business with the Saudi government,” Mr. Branson said.

Days later in a text message, Mr. Branson counseled the Saudi crown prince, Mohammed bin Salman, to release female activists his country had imprisoned.

“If you were to pardon these women and a number of men too, it would show the world the Government is truly moving into the 21stCentury,” Mr. Branson texted the crown prince. “It won’t change what happened in Turkey but it would go a long way to start and change people’s view.”

Mr. Branson was one of the first in a parade of CEOs, fund managers and bankers who scrambled to figure out how to preserve their relationships with Prince Mohammed after the murder of the journalist Jamal Khashoggi in Saudi Arabia’s Istanbul embassy in the fall.

Mr. Branson urged Prince Mohammed to change his ways. Others adopted a dual strategy of public condemnation while trying to continue to do business as usual. Some shunned the formality of Saudi Arabia’s high-profile investment conference but pursued informal gatherings instead.

The reason: Many have tied their companies’ future to Saudi money and Crown Prince Mohammed’s wide-ranging economic overhauls.

This whole Khashoggi thing doesn’t mean anything,” said hedge-fund manager John Burbank, who has been one of the U.S.’s most prominent investors in Saudi stocks. “It means much less than the big, sweeping liberalization that’s happening in the kingdom.”

MBS, as Prince Mohammed is known, politely thanked Mr. Branson for his input. A few days later, the crown prince publicly denied involvement in the murder, calling it a heinous crime. The U.S. Central Intelligence Agency has since concluded that he likely ordered the killing.

American investors in Saudi stocks, besides Mr. Burbank, include Peter Thiel and hedge fund Bienville Capital Management, among others. Roughly 4% of the total Saudi market is held by foreigners.

One person’s life doesn’t matter unless it’s MBS’s,” Mr. Burbank says. “Khashoggi doesn’t matter.” He adds that investors who have steered away from Saudi Arabia are hypocrites, because some of them also invest in Russia and Turkey.

Mr. Burbank was among the dozens of Western executives and investors who showed up at the home of Yasir al Rumayyan—chairman of Saudi Arabia’s sovereign Public Investment Fund, which the crown prince oversees—on the eve of the investor conference in October. Over platters piled high with roast lamb, towers of sweets in golden birdcages and champagne flutes of fruit juice, they toasted their relationship beneath palm trees tinted by purple spotlights, attendees said.

SoftBank CEO Masayoshi Son backed out of the conference, but he still showed up at the lamb feast. Uber CEO Dara Khosrowshahi also pulled out of the conference, but Uber co-founder and board member Travis Kalanick was at the party, along with former congressman and current banker Eric Cantor and his boss, banker Ken Moelis, and venture capitalist Jim Breyer. Thiel Capital portfolio manager John MacMahon also appeared at the dinner, and the chief executive of Silicon Valley construction startup Katerra, Michael Marks, attended the investment conference.

Matt Barnard, the CEO of Plenty—an indoor-farming startup with $200 million in backing from a Saudi-backed SoftBank fund—flew to Saudi Arabia for the conference. But he returned home without attending, a Plenty spokeswoman says.

The cost of shunning Saudi Arabia could be high. Some business partners fear losing access to the kingdom in the future if they pull out of Saudi deals now.

Ari Emanuel, the CEO of Hollywood talent agency Endeavor, is negotiating to return a $400 million investment that the Saudi sovereign-wealth fund made in his company earlier this year, people familiar with the company’s plan say.

In the wake of Mr. Khashoggi’s disappearance, Mr. Emanuel said he was “really concerned about it.”

.. “Were there mistakes made? Absolutely there were mistakes made,” said Matt Michelsen, an associate of John Burbank and a Silicon Valley investor. “But this place is changing. I saw Starbucks opening on multiple corners. There are women walking around without abayas. It’s a fundamental shift that’s occurred.”

The Strengthening Case Against Trump

Two days earlier Trump had to sit alongside three past presidents through the funeral of President George H.W. Bush. With Bush lauded as almost his exact opposite in style and manner, Trump looked throughout as if he wished he were anywhere else. Meanwhile, the stock market’s entire gains for the year were wiped out as Trump’s supposed trade truce with China fell apart.

It also became clear just how badly Trump has lost control of Congress. The Democrats’ gain in the House of Representatives continued to rise (the latest number is a stunning 40 seats), as closely fought, undecided races in last month’s midterm election continued to fall the party’s way. And some Republican senators are finally breaking ranks with Trump over the role of Saudi Crown Prince Mohammed bin Salman (a pet of both Trump and his son-in-law, Jared Kushner) in the grisly murder of the dissident journalist Jamal Khashoggi at the Saudi consulate in Istanbul. Unlike Trump, the senators refused to subordinate the moral and real-world implications of permitting a foreign government to murder a US-based journalist to the president’s exaggerated claims about the Kingdom’s future arms purchases and its supposed strategic role in curbing Iran’s regional ambitions.

.. At long last, we learned what embarrassing information Russian President Vladimir Putin had on Trump, after Cohen told prosecutorsthat Trump had long sought to build a grand, highly lucrative hotel in Moscow, permission for which had to come from the Kremlin. (Russia also stood to gain significant revenue from the project.)

.. Cohen’s testimony also highlighted the likelihood that various aspects of US foreign policy, including favorable statements about or treatment of certain autocratic leaders, have been influenced by Trump’s private business interests – existing or desired – in those countries, which include Turkey, the Philippines, and Saudi Arabia, as well as Russia. Meanwhile, Trump’s hotels, especially his expensive new one near the White House, received business from various countries. This is especially significant because, unlike his predecessors, Trump refused to detach himself from his private business when he took office

.. The corruption extends to Trump’s immediate circle. His daughter Ivanka was awarded trademarks from China for her clothing line (now defunct, though she has retained the trademarks and sought new ones). Her husband, Kushner, is believed to have used his position to try to find funds to pay off excessive debt incurred by his family’s real-estate business. And Cohen literally sold his supposed access to Trump to businesses for a reported $4 million (though how much, if anything, he delivered is open to question).

.. Trump’s ever-stranger behavior of late – including more frequent and more hysterical tweets – has been widely attributed to his growing realization of what the Democrats’ takeover of the House of Representatives means for his presidency.