The Pandemic Depression
The Global Economy Will Never Be the Same
At first, it might seem surprising that Ukraine, a country on the fringes of Europe, is suddenly at the turbulent center of American politics and foreign policy. With an impeachment inquiry in Washington adding further detail to the story of the Trump administration’s efforts to tie U.S. security assistance for the country to Ukrainian cooperation in investigating President Donald Trump’s Democratic opponents, Trump’s presidency itself hangs in the balance. And the repercussions go even further, raising questions about the legitimacy and sustainability of U.S. power itself.
In fact, that Ukraine is at the center of this storm should not be surprising at all. Over the past quarter century, nearly all major efforts at establishing a durable post–Cold War order on the Eurasian continent have foundered on the shoals of Ukraine. For it is in Ukraine that the disconnect between triumphalist end-of-history delusions and the ongoing realities of great-power competition can be seen in its starkest form.
To most American policymakers, Ukraine has represented a brave young country—one that, despite the burden of history, successfully launched itself on a path of democratic development as part of a new world order after the fall of the Berlin Wall. To the Kremlin, meanwhile, it has remained an indispensable part of a long-standing sphere of influence, one that operates largely according to old rules of power. The difference between these two views goes a long way toward explaining why post–Cold War hopes have given way to the strife and uncertainty of the world today.
U.S. and other Western policymakers have long skirted hard questions about both Ukraine’s place in the Eurasian order and its role in the fraught relationship between Washington and Moscow. Although the end of the Cold War may have marked the end of one geopolitical competition, it did not mark the end of geopolitics. Nor did the dissolution of the Soviet Union mean the disappearance of Russian anxieties, ambitions, and abilities. The Soviet Union may have ceased to exist on paper in December 1991, but its influence did not. Empires do not simply vanish. They die long and messy deaths, denying their decline when they can, conceding their dominions when they must, and launching irredentist actions wherever they sense an opening. And nowhere are the consequences of the still ongoing Soviet collapse clearer than in Ukraine—a country that has wrecked attempt after attempt at establishing a durable order on the Eurasian continent.
The story of Ukraine over the past quarter century is a story of magical thinking’s remarkable persistence and ultimate price—paid not just by Ukrainians but more and more by Americans, too.
In 1991, after the fall of the Berlin Wall and the subsequent crumbling of the Warsaw Pact, both the last Soviet leader, Mikhail Gorbachev, and the first Russian president, Boris Yeltsin, thought that they could reshape the Soviet Union rather than dissolving it. They promoted the idea of a new form of union, one that would turn itself into a looser federation, via treaty, of the 15 republics that had composed the Soviet Union. They thought they could achieve this without giving citizens a real choice about whether they wanted to stay within a reformed empire or not.
As often happens in an empire’s political center, Gorbachev and Yeltsin badly misjudged sentiment on their imperial periphery. The large majority of Ukrainians had no interest in propping up the vestiges of empire; they wanted outright independence. Yet without the second most populous Slavic republic, neither Gorbachev nor Yeltsin could see any viable path forward to a new union—partly because they did not want the non-Slavic republics gaining greater importance in a rump union and partly because it would be difficult for Russia to bankroll and police such a union without Ukraine.
In the face of this effort, U.S. President George H. W. Bush fell prey to magical thinking. Although he was the leader of a country born out of revolt against empire, Bush also hoped to persuade Ukraine to remain part of the Soviet Union. He feared that if it collapsed, the Soviet Union could become a nightmare version of Yugoslavia: disintegrating into ethnic violence, with nuclear weapons in the mix. In August 1991, on his last trip to the dying Soviet Union, Bush delivered his infamous “Chicken Kiev” speech as a result, hoping to prevent Ukraine from pulling out. “Freedom is not the same as independence,” Bush lectured the Ukrainian parliament. “Americans will not support those who seek independence in order to replace a far-off tyranny with a local despotism.” The irony of the speech was sharp: a U.S. president was actively trying to prolong the existence of the country that had been, until recently, the United States’ greatest foe.
George H. W. Bush hoped to persuade Ukraine to remain part of the Soviet Union.
Bush failed to convince the Ukrainian parliament, which seized on weakness in Moscow in the wake of a failed coup to declare its intent to become fully independent. Kyiv called for a dual election in December 1991, enabling Ukrainians both to vote on that parliamentary declaration and to choose a new president. More than 90 percent of those who went to the polls endorsed independence, including 54 percent of voters in Crimea, a largely Russian-populated peninsula containing the major Black Sea port of Sevastopol. In the Donbas region of eastern Ukraine, support for independence exceeded 80 percent.
Yeltsin, who by then had edged out Gorbachev as the preeminent leader in Moscow, belatedly realized how much he had misjudged Ukrainian desires to break free from the collapsing Soviet empire. After the failed coup, he had been trying to keep Ukraine in the union by threatening Kyiv with the annexation of Crimea and the Donbas. The December vote proved, however, that Yeltsin’s threats had backfired; they had instead stiffened resistance in Kyiv and alarmed the rest of the Soviet republics (and Washington, as well).
Yeltsin saw himself forced to change tack dramatically. He decided to meet the leaders of Ukraine and Belarus a week after the Ukrainian vote for independence at a Belarusian hunting lodge near the Polish border. Recognizing that he could not keep Ukraine in the union, and realizing that many other republics would follow Ukraine’s example and pull out as well, he decided to destroy the union—the only political order he had ever known—rather than be stuck mainly with non-Slavic republics. The three leaders agreed to announce the end of the Soviet Union, telling Gorbachev only after calling Bush.
On independence, Ukraine immediately became a direct threat to the West: it was “born nuclear.” The new state had inherited approximately 1,900 nuclear warheads and 2,500 tactical nuclear weapons. To be sure, Ukraine had physical rather than operational control over the nuclear arms on its territory, since the power to launch them was still in Moscow’s hands. But that did not matter much in the long run, given its extensive uranium deposits, impressive technological skills, and production capacities, particularly of missiles; every single Soviet ballistic missile delivered to Cuba in 1962, for example, had been made in Ukraine.
Ukraine instantaneously became the world’s third-biggest nuclear power, with an arsenal larger than those of China, France, and the United Kingdom. (Two other new countries—Belarus and Kazakhstan—also inherited nuclear weapons, but not nearly as many.) Ukrainian strategic weapons could destroy American cities. Determining who, exactly, would have both launch command and practical day-to-day control over the weapons became an immediate priority of the Bush administration.
U.S. Secretary of State James Baker provided a stark assessment of the significance of these developments to Bush. Baker told Bush, “Strategically there is no other foreign issue more deserving of your attention or time” than the future of the Soviet nuclear arsenal in the wake of the country’s breakup. “A Yugoslavia-type situation with 30,000 nuclear weapons presents an incredible danger to the American people—and they know it and will hold us accountable if we don’t respond.”
Baker thought that there was no value, and much risk, for the United States in nuclear rivalries among former Soviet states. Only one nuclear power could be allowed to emerge out of the Soviet Union: Russia. In part, this preference was due to the fact that Washington had a long history of dealing with Moscow on issues of arms control. Better to stick with the devil you know, Baker believed, than deal with a whole new set of nuclear powers. As a result, Washington’s and Moscow’s interests suddenly became identical: both wanted all the nuclear weapons of the former Soviet Union destroyed or relocated to Russia. The Bush administration and its successor worked hard in cooperation with Yeltsin to make that happen, using a series of inducements and diplomatic arm-twisting.
On independence, Ukraine became the world’s third-biggest nuclear power.
Scarred by the horrors of the Chernobyl nuclear catastrophe—which irradiated sizable areas of Belarus, Ukraine, and other European countries—the Ukrainians initially seemed inclined to go along with U.S. and Russian plans for Ukraine’s denuclearization. But the ongoing imperial contest with Russia, particularly over the status of Crimea, led to rethinking in Kyiv. In May 1992, Moscow and Kyiv clashed over the fate of the Soviet Union’s Black Sea Fleet, which was based in Sevastopol. A dispute over the division of the fleet and control of the port would drag on for the next five years. As tensions flared, the Ukrainian parliament began making new demands in exchange for giving up the formerly Soviet missiles: financial compensation, formal recognition of Ukraine’s borders, and security guarantees.
At an international summit held in Budapest in December 1994, more than 50 leaders were scheduled to create the Organization for Security and Cooperation in Europe out of a preexisting conference of the same name. British, Russian, and U.S. leaders used the occasion to offer Kyiv the so-called Budapest Memorandum in an effort to assuage Ukrainian concerns. The memorandum’s goal was to get denuclearization back on track and to finalize the removal of nuclear weapons from Ukraine. In exchange for parting with all its weapons, Ukraine would get assurances of territorial integrity—not guarantees, a meaningful difference, but one that seemed not to matter so much in the heady, hopeful post–Cold War world.
Washington had by then also spearheaded the establishment of a NATO-related security organization called the Partnership for Peace. This partnership was open to post-Soviet states—meaning that it offered a security berth to Ukraine, thus providing it with a further inducement to give up its nukes.
Ukraine decided to sign the memorandum, despite not getting firmer guarantees. Kyiv did so because it had a weak hand; the country was on the verge of economic collapse. But with the United States and Russia allied against it on this issue, Ukraine faced the prospect of international isolation if it did not sign. Signing the agreement seemed to be a way to escape isolation and get badly needed financial assistance.
The Budapest Memorandum initially seemed to represent a significant moment of shared triumph and unity between Washington and Moscow. As U.S. President Bill Clinton advised Yeltsin, they were jointly engaged in a worthy cause: “We have the first chance ever since the rise of the nation state to have the entire continent of Europe live in peace.” Clinton rightly emphasized that Ukraine was the “linchpin” of that effort.
But recently declassified documents show that the triumph was incomplete—something that Ukraine recognized at the time but could do little about. As a Ukrainian diplomat confessed to his U.S. counterparts just before signing the Budapest Memorandum, his country had “no illusions that the Russians would live up to the agreements they signed.” Kyiv knew that the old imperial center would not let Ukraine escape so easily. Instead, the government of Ukraine was simply hoping “to get agreements that will make it possible for [Kyiv] to appeal for assistance in international fora when the Russians violate” them.
And in a sign that there was worse to come, Yeltsin blindsided Clinton at the same conference with an attack on U.S. plans to enlarge NATO, saying that Clinton was forcing the world from a Cold War into a “cold peace.” Newly available documents reveal that this broadside triggered a showdown in Washington just before Christmas 1994. U.S. Secretary of Defense William Perry insisted on an audience with the president to warn him that a wounded Moscow would lash out in response to NATO expansion and derail strategic arms control talks between the United States and Russia.
But Perry’s efforts were to no avail. As the removal of nuclear weapons from Ukraine resumed after the signing of the Budapest Memorandum, Ukraine became much less of a priority for Washington. Meanwhile, opponents of the Partnership for Peace, who wanted to expand NATO proper as soon as possible to a few select states rather than build another, looser security alliance from the Atlantic to the Pacific, gained new momentum thanks to the midterm election victory of the Republican Party, which was in favor of NATO enlargement, in November 1994. Despite Perry’s efforts, Clinton made clear to his secretary of defense that the United States would now proceed with NATO enlargement into central and eastern Europe.
Ukraine thus found itself increasingly, and dangerously, stranded: it was both on the border of a truncated Russian empire forging dreams of a comeback out of the humiliation of its recent defeat and outside the emerging Western post–Cold War order. It had neither a berth nor any clear path to one in either the main post–Cold War security organization, which turned out to be NATO rather than the Partnership for Peace, or the EU. As a result, it struggled to democratize and fight corruption and its own internal demons, as it languished in a kind of gray area, a situation that became an invitation to Russian irredentism.
Ultimately, Ukraine’s struggle had repercussions beyond Ukraine—indeed, repercussions for the post–Cold War order itself. Having helped denuclearize Ukraine, Washington thought it could largely stop worrying about the country, believing its independence to be an accomplished fact. The reality was that Moscow never truly accepted that independence, in part because it viewed Ukraine not only as a key element of its former empire but also as the historical and ethnic heart of modern Russia, inseparable from the body of the country as a whole.
The Budapest Memorandum could not paper over that disconnect forever. Had the memorandum provided the guarantees of their country’s territorial integrity that the Ukrainians sought instead of mere assurances, Russia would have met with much greater obstacles to violating Ukraine’s borders, including in Crimea and the Donbas. (Another policy alternative would have been to strengthen the Partnership for Peace, of which Ukraine was a member, instead of marginalizing the partnership and promoting NATO’s expansion to a small number of countries.) Before long, the consequences of going without such supports would become clear.
Washington’s magical thinking was again on full display when a former KGB agent named Vladimir Putin suddenly became acting president of Russia on December 31, 1999. In the wake of what appeared to be a secret deal (trading power for protection in retirement), Yeltsin made a surprise television announcement on that New Year’s Eve that he was resigning, effective immediately, and that Putin was in charge. The strategic environment became, at a stroke, much less permissive of Ukraine’s ongoing efforts to assert its independence. In contrast to Yeltsin, Putin made a concerted effort to reassert Russian influence in the post-Soviet space, first through political and economic means and then by using military force. Western policymakers, however, clung to the belief that Putin had been installed to continue the domestic and international course established by Yeltsin.
The flaw in this thinking was not immediately apparent, as Putin at first seemed willing to cooperate with the West, most notably after the 9/11 attacks. Putin saw this cooperation not as a reflection of shared interests, however, but as a concession that should earn Moscow concessions from the West in return. Yet Washington refused to do what the Kremlin expected in exchange for its backing of the U.S. invasion of Afghanistan, namely, allow it a free hand in the post-Soviet space. Instead, the United States maintained its support for the sovereignty of the post-Soviet republics and refused to acknowledge what Putin considered to be Russia’s ongoing right to dominate its former empire.
Problems worsened when further expansion by both NATO and the EU into eastern Europe put an effective end to the short-lived honeymoon between Putin and U.S. President George W. Bush. In March 2004, NATO accepted into its ranks the three Baltic states—Estonia, Latvia, and Lithuania—which were once part of the Soviet Union, and four other states. The accession of the Baltics signaled that NATO enlargement would not halt at the former border of the Soviet Union. The EU followed suit in May 2004, extending its border eastward to include a number of former Soviet republics and allies, including the Baltic states, the Czech Republic, Hungary, Poland, Slovakia, and Slovenia. Since Putin, a leader of an empire denying its own decline, still considered Soviet borders significant, he viewed such moves as a massive affront.
Few people in Kyiv could imagine Russians and Ukrainians shooting at each other.
These expansions highlighted Ukraine’s vulnerability. As one of a handful of fully functioning democracies remaining east of NATO’s and the EU’s borders, Ukraine suddenly found itself in a particularly painful form of limbo between the East and the West. Partly in response came the so-called Orange Revolution, through which Ukrainians made their aspirations to join the EU clear. Crowds flooded the streets of Kyiv in November and December 2004 in the wake of a presidential election of questionable legitimacy and succeeded in demanding truly free new elections. These resulted in the success of the pro-European candidate Viktor Yushchenko.
For Putin, the Orange Revolution was a double defeat. Not only did his candidate lose (despite the Russian president’s having traveled personally to Ukraine to campaign on his behalf), but the democratic protests in Ukraine deepened anti-Russian sentiment in the two other states that had “color revolutions,” Georgia and Kyrgyzstan. Putin was peculiarly sensitive to popular movements that could provoke widespread street demonstrations. (He had served as a KGB agent in East Germany when similar protests destabilized the country’s pro-Soviet leadership in 1989.) And because he refused to accept that Ukraine had truly removed itself from his domain, he viewed the street demonstrations as inseparable from protests against his authority inside Russia. In his eyes, they were all one and the same: direct threats to the stability of his personal regime.
Yet the Bush administration concluded that this was the moment to push for NATO to expand further, to include Georgia and Ukraine. The timing was terrible, as became clear in retrospect. The United States had missed out on two earlier opportunities to promote Ukrainian security at a lower cost: it could have given Kyiv the guarantees it had sought as part of the Budapest Memorandum in 1994, or it could have prioritized the more inclusive Partnership for Peace over NATO. Instead, the Bush administration was pushing for NATO’s expansion just as Russia’s postimperial trauma was on the verge of violence. The administration wanted to use the 2008 NATO summit in Bucharest to sanction the start of accession procedures for Georgia and Ukraine. But after last-minute interventions, especially on the part of French and German policymakers, the summit instead merely announced that Georgia and Ukraine “will become members of NATO”—keeping the promise of membership alive but the door to the alliance closed. Yet the damage was done.
Shortly afterward, Putin decided to invade Georgia, a signal whose full significance the West failed to recognize at the time. The invasion was not a one-off, caused by Georgian recklessness; rather, it showed the extent of Russian trauma resulting from both the ongoing imperial collapse and resentment of the United States and its policies in the region. But in its own instance of magical thinking, most of the political class in Kyiv agreed with Westerners that such a fate could not befall Ukraine, since war between the two largest post-Soviet states had (they thought) become a virtual impossibility in the post–Cold War world. Given the historical and cultural ties between the two Slavic nations, few people in Kyiv could imagine Russians and Ukrainians shooting at each other.
The Russo-Georgian war was viewed at the time as a mere bump on the road to a “reset” in U.S.-Russian relations under a new Russian president, Dmitry Medvedev. Relations briefly improved, making possible the signing of the New Strategic Arms Reduction Treaty, or New START, under President Barack Obama in 2010. Yet this new agreement, like the Budapest Memorandum of 1994, while promoting nonproliferation generally, contributed little to the security situation in the post-Soviet space specifically.
In 2014, 20 years after the signing of the Budapest Memorandum, violence resulted again when Kyiv, its NATO ambitions dashed, tried to strengthen its relations with the EU instead by negotiating a trade agreement. This renewed effort by Ukraine to assert its independence once again angered Putin. Russia also sought to preserve a sphere of influence in the post-Soviet space by stopping NATO and EU expansion at the western border of Ukraine. Putin successfully pressed Ukraine’s president, the pro-Russian politician Viktor Yanukovych, to reject the proposed trade association—only to be shocked by the virulence of the Ukrainian people’s response: the Maidan protests of late 2013 and early 2014.
Furious at these demonstrations, Putin gave full vent to his imperial instincts. In violation of the Budapest Memorandum, Russian regular and paramilitary troops took control of the Crimean Peninsula. Putin sought openly to reintegrate the post-Soviet space in a new Eurasian military, political, and economic alliance to balance against both the EU and China. Russia also launched hybrid warfare in the Donbas region of eastern Ukraine. Moscow’s goal was to make the “federalization” of Ukraine necessary, with each of its provinces deciding foreign policy issues on its own, because that would spell the end of Ukraine’s pro-Western aspirations.
Ukraine fought back with all the means available to it, including the help of volunteer battalions and its own existing armed forces, which were quickly rebuilt after years of neglect. As a result, Russia turned its hybrid war into a conventional one by sending regular units into battle. European leaders stepped in to negotiate the Minsk agreements in September 2014 and February 2015, thereby providing at least a framework for dialogue. But the fighting continues, and it has claimed close to 13,000 lives, including soldiers, members of paramilitary units, and civilians. Millions have become refugees, and around four million people are now stuck in unrecognized separatist republics, financed and backed militarily and politically by Russia but barely surviving economically.
Having succeeded in gaining territory and destabilizing Ukraine, Putin has felt emboldened to expand elsewhere. His regime has projected military power beyond the post-Soviet space, into the Middle East, Africa, and Latin America. It has also stepped up its cyberwarfare significantly, most notably in the United States in 2016, when, in the year that marked the 25th anniversary of the event that caused Putin’s bitterness—namely, the collapse of the Soviet Union—Russia used social media and other online tools to interfere in the U.S. presidential election. Given that Putin views the Soviet Union’s collapse as the “greatest geopolitical catastrophe” of the twentieth century (despite much competition for that tragic title), he was hardly going to organize a parade for the anniversary. Instead, he decided to avenge himself on former U.S. Secretary of State Hillary Clinton, the Democratic presidential nominee—whom he viewed as having masterminded many of the protests in the post-Soviet space from the State Department—by meddling in the U.S. election in favor of her opponent, with fateful consequences. The misunderstood grievances of the old imperial center had yet again dashed hopes of durable a post–Cold War order.
Leaving the issues of Ukraine’s security and its place in the new international order unresolved for decades had the effect of turning the country into a dangerous arena. It became a space where the interests of the great powers clashed and yet no conflicts were resolved. It also became a place where there was money to be made by outside consultants advising the locals on how best to outmaneuver their opponents.
One American distinguished himself particularly in this regard: Paul Manafort. Yanukovych became president of Ukraine in 2010 in no small part thanks to Manafort’s management of his campaign. In exchange, Manafort earned more from Yanukovych than the American ever bothered to admit to American authorities. Trump’s fateful decision to ask Manafort to manage his own presidential campaign brought Trump and his advisers onto the shoals of Ukraine, as well.
“Ukrainegate” began soon thereafter, when documents revealing illicit payments to Manafort were leaked to the Ukrainian newspapers. Manafort’s close ties with Yanukovych became the subject of an FBI investigation, leading to his removal from the helm of Trump’s presidential campaign. Manafort was put on trial in 2018 for tax evasion and fraud and was sentenced by two U.S. district courts to 90 months in jail. Before disappearing behind bars, however, Manafort and his pro-Russian Ukrainian associates appear to have planted in Trump’s head the notion that corrupt Ukrainian officials were out to undermine him and his presidency.
Putin has effectively enlisted Trump in his irredentist efforts against Ukraine.
The president soon developed his own magical thinking about Ukraine. He decided, despite the consensus of the U.S. intelligence community, to believe not that Russia had hacked the election on his behalf but that Ukraine had hacked it on behalf of Clinton. He also seized on a conspiracy theory that former U.S. Vice President Joe Biden—now a candidate for president—helped fire a corrupt Ukrainian prosecutor general not, as was actually the case, to advance U.S. anticorruption policies but to protect his son Hunter Biden. Hunter had joined the board of Burisma, Ukraine’s largest gas-producing company, which was at the time under investigation for money laundering. The practical result of Trump’s magical thinking was the suspension of U.S. military aid, which could not have been more pleasing to Moscow and more damaging for the reputation of the United States in the region. Putin had effectively enlisted Trump in his irredentist efforts.
Now, Trump’s delusion threatens to undermine American voters’ already shaky confidence in the U.S. democratic system—and the rest of world’s already eroding faith in the U.S.-led order that was supposed to bring decades of peace and prosperity in the wake of the Cold War’s end. Past impeachments in the United States have focused on either immoral behavior or illicit domestic political activities, but the impeachment process underway now centers on a president’s misuse of American power abroad. Decades after they supposedly disappeared, Moscow’s imperial ambitions—which Putin pursues through the network that runs from the Kremlin through Ukraine to the White House—have now unsettled American democracy itself.
Meanwhile, the question of Ukrainian security remains open. The past decades have made clear that as long as Ukraine’s status is unsettled and insecure, the consequences will continue to reverberate beyond its borders. Washington believed that it could ensure Ukraine’s control over its own destiny without major effort and at low cost. The reality is that it could not. What is worse, the best means for promoting Ukrainian security are in the rearview mirror. Expanding NATO to include Ukraine now would most likely result in more, not less, conflict with Russia. Washington’s best option at this point is to strengthen its bilateral political and security ties with Ukraine while working closely with its European allies to ensure Ukraine’s ability to protect its sovereignty. And although he is unlikely to do so, Trump should stop playing games with the aid he has promised to Ukraine; he should prioritize security assistance and diplomatic engagement over ad hoc dealings. Above all else, Washington must protect the impeachment process from Russian interference and get past the illusion that it can promote a stable political order either at home or abroad without successfully navigating the shoals of Ukraine.