This is a an advance copy of a risk report that I co-authored with the Bulgarian Risk Management Lab…The full report can be read at RiskManagementLab.Com



KREMLIN: Facing A Fateful Decision

The downing of Malaysian flight MH17 over eastern Ukraine has created a new reality that is likely to cause long-term internal political and economic destabilization of Russia. Historically, the Russian political system has been stable and resilient to shocks but only under strict and hard-to-maintain balance of interests of the various representatives of the power-wielding elite – the security sector, media owners, oligarchs, Eurasia(“Greater New Russia”) ideologues , former putsch operatives from the 1991-1993 period, the military-industrial complex, as well as simply bigoted military commanders. Putin’s political longevity has been largely due to the skilful maintenance of this balance.

The elite has not been of a single mind in relation to the Ukraine conflict, and is still divided regarding the conflict with NATO and the EU. It comprises ideological moderates and extremists, as well as pragmatists with economic interests.

The shooting-down of MH17 exacerbated the internal tensions and challenged this elite to a degree that has caused a radical change in the behaviour of the Kremlin as a geopolitical entity and a factor of global equilibrium.

Propaganda goal: a parallel reality

Under the latter-day Putin, there has always been a tacit collusion of the Moscow power elite to maintain a common (consensual), coherent and ostensibly plausible parallel reality (PR), sold – by means of soft and hard propaganda tools – as actual reality to the Russian voters. In order to achieve the last condition (plausibility), a homeopathic dose of democratic social and political processes have been tolerated. The recipe is mandatory for maintaining such balance: the collapse of any of the three basic elements – “consensus”, “consistency” and “apparent plausibility”, would cause PR to crumble, along with the total internal political balance.

The domestic and foreign political discourse of the broad elite – comprising government, parliament, parliamentary opposition factions, media, entrepreneurs and opinion leaders (analysts, sociologists and pollsters, and cultural figures), have adhered to a disciplined and coordinated deviation from reality, as hinted by the Kremlin.

In the context of the Russian-Ukrainian conflict, a semantic analysis of this discourse reveals the following: 1) ” endogeneity ” of the centrifugal and separatist tendencies in Ukraine, 2) non-admission of Russian military involvement in the Crimea (until Putin himself breached the embargo on this topic), 3) public eulogy of the “volunteers” from Russia, and 4) categorization of a) the Euromaidan momentum as programmed and financed by the West, b) the change of President and the government as an illegal “putsch” that has not been truly remedied by the May elections, c) all official representatives of Kyiv authorities – as prone to neo-Nazism and fascism.

Deviations from such PR have been ventured by a small part of the media (radio “Echo of Moscow”, Dozhd’ TV, and the Nezavisimaya Gazeta newspaper). These exceptions, however, should not be seen as breaching the “consensus condition“; but rather as an escape valve for social tension amidst that minority of the electorate, which for one or another reason has acquired immunity against the Kremlin propaganda.

The Russian-Ukrainian conflict has turned into the most difficult test for the Kremlin’s PR strategy in the past 10 years. Indeed, there have been occasional drastic departures from the “plausibility condition” – e.g. the dissemination by Channel 1 and LifeNews of the “Slavyansk crucified boy” fake story, but such discredited blunders have been countered by a coordinated silence.

A new balance in the power elite

The deviations from the conditions of `consensus’ and ‘consistency’ became more difficult to contain when the conflict suddenly gave greater prominence to some of the subjects of the power elite which have coalesced, temporarily, in a new super-entity, whose interests do not always coincide with those of Putin. This newly formed extremist entity comprises:

The oligarch Konstantin Malofeev whose private army is the primary military factor in Eastearn Ukraine (Girkin and Boroday were, and likely still are his employees) The ideologist for the Russia-dominated Eurasian Union Alexander Dugin, and parliamentary “hawks” such as the chairman of the the Duma Economy Committee Evgeny Fedorov, and the spokesmen for the Russian military-industrial complex, deputy PM Dmitry Rogozin.

This new power center has been using a much more extreme rhetoric to define the context of the Ukraine conflict, preaching theses such as : 1) alleged secret military intervention of NATO troops on the Ukrainian side, 2) alleged planned genocide of the Russian-speaking population in Ukraine and its replacement by none than “Muslims[1]“, and 3) the necessity for immediate and open introduction of the Russian army into continental Ukraine. This new power center currently has no interest in causing a destabilization of the Russian political system, and therefore is not directly confronting Kremlin on its occasionally differing positions. Extremists try to mask the breach of the ”consensus condition’ by insisting that Putin thinks exactly like them but that he is handicapped in the actions. The parties guilty for his handicap are “the fifth column “- the Liberals and the Russian media, as well as by the neological “sixth column “- “the traitors”, who do not want to drag Russia into another world war.

Albeit forcing the boundaries of the conditions of consensus and coherence, this new internal face-off has not lead to actual internal destabilization, as Putin has agreed to pay a certain price to keep the balance (and to benefit fully from his own only half-earned glorification as the engineer of the new Russian greatness, the symptom of which the Russian population has recognized in the annexation of the Crimea. The price Putin agreed to pay are the periodic compromises that he grants to the extremists demands, as well as the acquiescence to their allegation that he thinks exactly like them, but is forced to act differently from his beliefs.

According to Dugin himself, “while refusing to send troops, the Kremlin at least has provided direct military assistance to the media and fighters for Novorossiya.” When Putin has acted directly against the interests of the extremist center – for example, when he tried to postpone the independence referenda in Donetsk and Lugansk, and later by refusing the recognize their outcomes – Dugin, Girkin and Boroday have all responded by implying that they could withdraw their confidence in him, and relegate him to membership of the Fifth, or at the very least, the “Sixth Column”. [UPDATE: as of July 24th, Dugin has introduced “the 7th column” into the semantic field, which apparently is meant to include everyone who is not actively pursuing a Russian expansionist agenda]



The balance achieved through such transactions has so far suited both parties: on one hand, Putin’s rating has reached unprecedented levels, without him taking directly provable responsibility for the actions of the separatists, on the other hand – the militant center has received free military, propaganda and diplomatic support from the State apparatus. Such balance has been critical to maintain internal stability.

The boiling point

for the Russian power elite was the downing of Malaysian Air flight MH17.

Following the tragedy, Putin has had a choice:

To force an end or at least suspension of the conflict with Ukraine, and terminate the confrontation with NATO and the EU, through neutralizing the extremist center’s power elite, (for which he has all the necessary legal and extrajudicial levers). To begin a new Cold War with the West by continuing to support the extremists’ lobby, as a trade-off for retention of the internal balance of power and stability.

This fateful choice for Russia will not be avoided, whether the crash investigation produces a smoking gun for the guilt of the Moscow-backed terrorists (which is what the world sees the separatists as now), or leaves this hypothesis as the “main but unproven theory”. The price that Putin will have to pay the second choice would be structural – in the form of long international isolation and categorization of the country into the “failed states” group. It is not by accident that Rogozin made ​a passing​ analogy between the “unsubstantiated” allegations against Gaddafi and Saddam Hussein, and Putin’s current situation.

Putin’s initial reaction to the dilemma has been half-baked. He has continued the propaganda and diplomatic support, as the Kremlin controlled media have not even for a moment hypothesized that the separatists might have shot down the plane; same preemptive protection of “the rebels” was provided ​​at the meeting of the UN Security Council on 21.7.2014. However, direct military support in the form of training of terrorists in southern Russia, and sending of weapons across the border was temporarily suspended. This was confirmed by public statements by Dugin where he hinted of “a possible betrayal” by Putin himself.

The rhetoric by Fedorov and Dugin grew into a crescendo in the days after 7/18/2014, the former declared “victory of fifth column” and the capitulation of the Kremlin, while the latter began to paint an apocalyptic picture of the demise of Russia unless the Kremlin undertakes an immediate preventive invasion of Ukraine – or at least resumes the supply of weapons to the separatists. On 22/07/2014 Dugin disseminated a prediction that the failure by Kremlin to launch a preventive invasion would lead to an invasion by Ukraine – with the support of NATO, both of the Crimean Peninsula, and of southern Russia.

The extraordinary domestic pressure, paired with Putin’s vane desire to live up to the heroic image that has been “lent” to him by the extremists’ lobby, pushes him towards the second choice. At the meeting of the Security Council of the RF and the subsequent extraordinary speech, Putin signaled to a compromise deal with extremists: 1) he denied their thesis of a direct threat to the territorial sovereignty of Russia, and thus refrained from direct invasion; 2) adopted their theses of “a fascist regime” in Kiev that came to power through an “unconstitutional coup”, and thus signaled that he will continue direct military support to the terrorists[2].

The compromises in PR that the Kremlin made ​​as concessions to the extremists lobby are already pregnant with the grain of near-term destabilization – as they have sacrificed irreversibly the”apparent plausibility’ condition. Thus, the Kremlin propaganda:

Categorically and irrevocably assigned the blame for the death of nearly 300 innocent passengers on MH 17 to Kiev; while at the same time absolutely and unconditionally exculpating the terrorists; Grandly announced “substantiated theories” for the cause of the tragedy, including: a) shooting down by a Ukrainian SU-25 aircraft b) shooting down by Ukrainian “BUK” installations; and c) the involvement of a secret U.S. experimental satellite which was allegedly registered by Russian intel systems just over the downed aircraft; Fostered conspiracy and conjecture that: a) the Ukrainian army may have attempted to shoot down Putin’s plane that flew about 1000 km from the site of the tragedy; b) the downing of the plane was staged by the CIA, and the corpses in plane had been possibly dead for several days before crash.

A complete collapse of the “apparent plausibility” of the PR will occur if the ongoing international investigation produces irrefutable evidence of the guilt of the terrorists, and in the worst case scenario for the Kremlin – for a direct Russian link. The response of the Putin regime will then have to be a complete denial, and withdrawal inside into the realm of its own PR, which may never cross the world’s perceived reality again. This is the policy used by North Korea, Venezuela and somewhat Cuba, but it requires complete information isolation from the outside world and legally enforced suppression of freedom of expression in Russia; this in turn would lead to political isolation, practically from the entire developed world. Such price will be too high for the Russian power elites, and this itself will cause the collapse of the balance of the political system.

The positions of Washington and Brussels

The West is trying to persuade Putin not to opt for second choice; buying time for him and for itself by delaying the verdict based on irrefutable evidence.

President Obama has said the U.S. investigation has concluded that the MH17 has been downed by an “earth-to-air” missile launched from an area controlled by the separatists. The U.S. has no interest in making a direct accusation at Russia of complicity in terrorism, as it does not want to brand this nuclear power a strategic enemy. By adopting this position, the White House allows the Kremlin to distance itself from the extremists.

EU leaders refrain from conclusive verdicts and most likely are trying to divert the Russian President from his course to the wrong fateful decision. The EU is in the process of an executive power shift, and is unable to focus on the subject, which is a very serious, but temporary weakness.

Still, it is not a foregone conclusion that the Kremlin will yield to the final demand of the extremists’s lobby – i.e. a direct invasion of Ukraine. The extortion on Putin will certainly continue, especially after he has made ​so many ​concessions thus far. The position of the Russian President is now strongly weakened. He did attempt to crack the door open towards a possible distancing from the terrorists with the thesis that “it is both parties’s fault”, because they have not ceased hostilities. This remains Putin’s only reserve position in the event of detection of compelling evidence for the terrorist’s role.

Risks to Bulgaria

….. (Read the full report at RiskManagementLab.com)

[1] Evgeny Fedorov, April 2014

[2] This interpretation is corroborated by information from the Ukrainian Security Service that during the night of July 22nd, 14 GRAD units were shipped across the border, as well as data provided by the Council National Security that the positions of anti-terrorist units of the Ukrainian army were fired upon from the Russian side of the border on July 23rd.