I've been working with the Gaidar Institute in Moscow for the last three years helping their fine economists research Russia's fiscal policy. We've been studying Russia's long-run fiscal position, its projected demographic change, and its economic transition. Like the U.S., Russia faces major challenges in maintaining its fiscal programs and sustaining economic growth. These challenges have been greatly exacerbated by the decline in energy prices and the international sanctions.
During my trips to Russia I've talked with a wide range of people about Crimea, the Ukraine, Syria, NATO, and related topics. Two things come across loud and clear. First, the Russians are a very proud and patriotic people. Second, the Russians feel threatened by the expansion of NATO. This doesn't excuse their forceful annexation of Crimea or their participation in hostilities in Eastern Ukraine. But it does explain it.
Crimea became part of Russia in 1783, but was given to the Ukraine in 1954 by Nikita Khurshchev -- according to his daughter, as a present. Khurshchev presumably never dreamed that the Soviet Union would dissolve and that Crimea would become the property of an independent Ukraine. Russia is the world's largest country and doesn't need more land. But Russia's Black Sea naval base is located in Sevastopol, which is part of Crimea. Imagine that a U.S. president had handed Hawaii, including Pearl Harbor, to, say, the Chinese and you'll get a sense of Russian feelings about Crimea. The Ukrainians, no doubt, view the gift of Crimea very differently, perhaps as meager recompense for Stalin's murder, in the early 1930s, of a quarter of its population, including some 3 million children, via forced starvation.
Of course, Crimea was part of an independent Ukraine for the past 16 years. So why did the Russians wait till 2014 to retake it? This connects to NATO's expansion. When the Soviet Union broke up, the Russians believe they were given informal, but nonetheless firm assurances that NATO would not expand into the Baltic States, Poland, Bulgaria, Romania, and Bulgaria. All seven of these countries are now in NATO and four of the seven border directly on Russia.
NATO was, of course, established to defend the West against the Soviets. But large numbers of Russians worry that its current purpose is to encircle, threaten, weaken, and ultimately invade Russia. This seems paranoid until you consider Russia's long history, which includes invasions by Sweden, France, and Germany. Nazi Germany's invasion was assisted by tens of thousands of Ukrainians. Yes, far more Ukrainians ended up fighting with the Soviets, but the Russian people retain a real fear of "Ukrainian fascists."
In 2014, pro-Russian Ukrainian President Yanukovich was overthrown in what many/most Russians view as a Western-inspired coup. The Western view is quite different - that the overthrow was a populist uprising against a terribly corrupt leader. Either way, Russians viewed the loss of their guy as step one in Ukraine's joining both the European Union and NATO.
What followed in Crimea and Eastern Ukraine has established facts on the ground. Russia has guaranteed that NATO troops and armaments won't be stationed within feet of its Black Sea naval base. And it has established a relatively easy means to destabilize Ukraine if that country becomes too cozy with the EU or NATO.
But Russia is paying a heavy price for what it views as additional military security. The sanctions are very costly and will hurt more through time. In addition, Western Europe will increasingly wean itself off Russian gas to limit Russia's leverage. Furthermore, the just-announced decision by President Obama to send $3.4 billion in heavy tanks and other military equipment to NATO countries in Central and Eastern Europe will produce further costly rearmament by Russia.
So we now have the absurd situation of two major powers, Russia and NATO, squaring off as if they would actually go to war when both have nuclear weapons and would use them were either invaded. No rational U.S. President would order an invasion of Russia were it to have a single nuclear-armed missile, which could take out San Francisco, New York, or any other major U.S. city. And Russia has a vast number of such missiles. Equivalently, no rational Russian President would invade a NATO-member country for fear of losing Moscow, St. Petersburg, or some other major Russian city - all in the nanosecond it takes for a bomb to explode.
The danger of having two schoolboys shout threats in the playground is that one pretends to throw a punch and the other reacts by doing so. With Russian and NATO air, land, and naval forces positioned in close proximity, there is a growing danger of an accidental military encounter that quickly escalates into that Cold War acronym - MAD, mutually assured destruction.
There is a way for both sides to back away. There is a way to keep former allies, the U.S. and Russia, from turning into enemies. What's required is for both sides to cut a deal, the elements of which seem clear. The first element is a formal treaty precluding further expansion of NATO into countries that border on Russia conditioned on Russia having neither regular nor irregular troops in those countries. The second is payment by Russia to the Ukraine for Crimea combined with formal recognition by the West of Russia's ownership of Crimea. The third is an immediate distancing of armed forces. The fourth is cancelation of NATO's $3.4 billion rearmament in exchange for a proportional reduction in Russian rearmament. The fifth is a deal on Syria that respects Russian interests, but stops Russian bombing of moderate Syria opposition forces and replaces President Assad with a unity government acceptable to both Russia and the U.S. The sixth is an immediate mutual lifting of economic sanctions. The seventh is further mutual reductions in nuclear arsenals and an agreement not to upset nuclear parity via the installation of new defensive or offensive missile systems. The eighth is establishing a quick path to Russian membership in both the European Union and NATO. The ninth is the immediate formation of a joint Russian-US strike force to combat ISIS.
Would the Russians or we Americans make this deal? I have no idea. On my biannual trips to Russia, I meet with high-ranking Russian government officials, current and former. But I have never discussed such a grand bargain with any of them. Nor have I discussed this proposed deal with U.S. government officials, with whom I also meet on occasion.
I conceived this deal because I am deeply concerned about the direction in which the U.S.-Russian relationship is heading. I'm old enough to remember Nikita Khurshchev pounding his shoe on the UN podium shouting, "We will bury you." I remember the Berlin Wall being built. I remember the Berlin airlift. I remember the Cuban Missile Crisis. I remember crossing through Checkpoint Charley into East Berlin at age 15, while an exchange student, and seeing with horror the bleak city the Wall entrapped. I remember my uncle, a left-wing sociologist, telling me about Joe McCarthy and the Red Scarce, which cost many of his friends their jobs. I remember the Vietnam War, which killed and maimed so many on the pretext of stopping Communism, when it was really about saving political face. I remember President George H. Bush stupidly and falsely claiming, "We won the cold war."
All the miscalculations and all the reckless rhetoric by the Russian and American superpowers over all those years have achieved just one thing. They repeatedly brought civilization far too close to its termination.
It's time for both Russia and the U.S. to grow up and cut a deal - a big deal, which resolves all their conflicts.