What Kosovo (Not to Mention Western Business Interests in Russia) Reveals About the Crisis in Ukraine

There is a price to pay for backing a putsch. Hopefully that is a lesson that elites in Western capitals will have learned once the dust settles in Ukraine (though right now it is unclear when that will occur).

An important historic parallel for what is happening today is the 1999 NATO war against Yugoslavia. President Vlad Putin brought it up today in connection with Russia's defense of the Crimea: This from "Citing ‘Coup’ in Ukraine, Putin Reserves Right to Use Force" by Steven Lee Myers, Ellen Barry and Alan Cowell:

[Putin] said Russia is not considering annexing Crimea, but said Crimean citizens should be allowed to determine their own future, presumably as part of Russia or Ukraine. 

“We are not considering this possibility,” he said. “It’s up to people living in a certain territory, if they can exercise their free will, and determine their future. For example, if Kosovo’s Albanians were allowed to do that, self-determination, which according to U.N. documents is a right, but we will never instigate it, never support such trends.” 

“Only the people who live in a certain territory have the right to decide their own future,” he said.

Hence, one destabilizing U.S. precedent come home to roost, and not just in terms of international norms; Obama should be mindful of the fate of the Democrats post-Kosovo. Clinton took his high approval ratings coming out his Republican impeachment trial in the Senate and used them to mobilize support for bombing a European capital, Belgrade, on behalf of a criminal organization, the Kosovo Liberation Army. The result? Approval of Clinton quickly dropped and his vice president, Al Gore, lost to the scion of a none-too-popular conservative political family dynasty, and this despite Gore being able to boast of a leadership role in an administration that presided over the creation of a full-employment economy.

Obama should be very careful. He has neither the support of European allies nor the public that Clinton had. In terms of the former, consult this passage at the end of Peter Baker's story, "Top Russians Face Sanctions by U.S. for Crimea Crisis":

Russia is effectively the world’s biggest energy supplier, exporting more natural gas than any other country and more oil than any other nation after Saudi Arabia. Russia is also the biggest exporter of industrial metals and the fifth-biggest consumer market globally. 

“The biggest argument for severe economic sanctions not being imposed is that the European countries don’t have much of an alternative to Russian energy supplies,” said Jens Nordvig, the New York-based managing director of currency research at Nomura Holdings Inc. 

Several of the biggest Western energy companies have major investments in Russia, including B.P. and Royal Dutch Shell. 

It may also be difficult for Mr. Obama to sell sanctions to the American business community if it is being cut off while competitors still have access to Russian markets. Russia is Pepsi’s second-largest market and a significant market, too, for companies like Boeing, General Motors, John Deere and Procter & Gamble. 

ExxonMobil, the largest American oil company, has a joint venture deal with the state-controlled oil company, Rosneft, to explore what may be a very rich Arctic area called the Kara Sea. ExxonMobil is also working with Rosneft on drilling in the Baltic Sea and on other projects. 

But congressional leaders said they would move forward with sanctions as well as aid to Ukraine. A Senate Foreign Relations Committee bill would use $200 million in aid and loan guarantees to leverage $1 billion in international economic assistance. An additional $50 million would be steered from existing State Department accounts for electoral administration.

While governmental elites are immune to the entreaties of their constituents asking for an end to constant foreign wars, they do listen to their corporate benefactors, many of whom have their snouts in Mother Russia's lap. The PepsiCo and ExxonMobil connections lead one to draw the conclusion that for all of Obama's tough talk about economic reprisals nothing substantive will come of it. Maybe a few Russian officials will be banned from travel to the United States. Also, don't expect Europe to join the tough talk charade. Even if the EU embraces fracking immediately, it will still be dependent on Gazprom for decades to come.

I continue to believe that time is on Russia's side. Obama's approval will continue to drop. The putsch government will fracture as soon as the IMF austerity mandates are publicized.