Column: A fragile, volatile world

Written by Meghnad Desai | Updated: Mar 3 2014, 07:25am hrs
Indias concerns are about elections, opinion polls (doctored or not), something called inclusive growthwhich everyone seems to advocate and perhaps even pretend to know its meaningand the sad state of the Indian Navy. Out there, in the rest of the world, the situation is extremely fraught. If at the beginning of January 2014, we only had the Syrian war, the US-Iran standoff and the China-Japan spat about some obscure islands, we now are as close to the brink of a hotting-up of the Cold War as we ever have been since Ronald Regans presidency.

Except for some thaw in the US-Iran relations, thanks mainly to EU diplomacy, nothing has changed on the other three fronts. Syria is getting no better and Lakhdar Brahimi did not succeed in getting the various sides in the Syrian dispute together. Along the way Iraq, Lebanon, Turkey and Jordan are suffering collateral damage of the Syrian dispute. Egypt has in the meanwhile gone through a convulsion but may get a duly-elected government. But dont take any bets on that.

The developments in the Ukraine are the most worrying. The Orange Revolution of 2004 was much hailed as a belated freedom from the Soviet Empire for its nearest neighbour. Ukraine has been the corridor through which armies have passed back and forth during the two World Wars. For centuries, Russia has regarded it as a sort of protective belt against German aggression. The latest upheaval has come about because Ukraine wanted to align with the EU and Russia felt threatened by the incursion of the EU into its neighbourhood. Putin offered bribes of $15 billion to persuade the government to renege on the EU agreement and reconfirm its Russian connections.

As we all know now, the citizens got angry and after three months of demonstrations, they have finally thrown out President Viktor Yanukovich and installed a caretaker government. Ukraine is broke; so, it has also asked the IMF and EU for a standby loan of $15 billion. Putin has retaliated by putting his troops and air force on a war alert basis. In addition, the autonomous region of Crimea, which is a part of Ukraine but with a continued Russian Naval presence in Sevastopol, is threatening secession. This is seen as a Putin move to dismember Ukraine. The eastern parts of Ukraine are Russian-speaking and may also demand separation if the instability continues.

Ukraine, with its location and its historic role in many wars, is a tinderbox. It is difficult to say as of now what the EU or NATO will do. The EU has always had plans to extend to the borders of Russia and already has the Baltic statesformer USSR dependencies Latvia, Lithuania and Estoniaas members. Putin has ambitious plans to revive Russias influence mainly using its energy resources. Putin could engineer the secession of Crimea (which was a part of USSR till 1954, when Khruschev gave it to Ukraine) and perhaps a break-up of Ukraine itself.

It is hard to see what the US or the EU will do. The EU has no armies to speak of other than the British and French forces. NATO has taken interest in the developments and could be the agency which may defend Ukraines integrity if its government asks. We then have a classic confrontation on the eastern edges of Europe for the first time since 1945. The US has been passive about intervening more recently as its stand in the Syrian chemical weapons showed. Nor is the UK eager to send out its troops. Yet if Russia tries to dismember Ukraine, then the attitude could change and we could have a war on the Ukraine-Russia border.

Let us hope not. The most worrying aspect of the situation is that the EU, which was good mediator in the US-Iran case, is here a party to the dispute. Since the Ukraine economy is also fragile, only the EU can help restore it to solvency. Income per capita has been rising less fast in Ukraine than its former CIS partners since 2005. The Orange Revolution has been a disaster economically. The new regime which came to power in 2004 has robbed the country. The palaces of the President, when opened to the rebels, revealed excessive wealth. Like in some African decolonisation episodes, the first victors proved to be robbers.

A war in Ukraine will send the oil prices through the roof but also encourage other conflicts, most worryingly the China-Japan one, to take a more violent form. Sadly, when Russia and the West are in dispute, there are no third parties powerful enough to mediate. (No one credits NAM with any influence outside India.) The UN can hardly help when two, if not all five, of its P5 members are in one conflict or another. Welcome to the multi-polar world.

The author is a prominent economist and Labour peer