Cables From The Diplomatic Frontlines

Putin’s Russia: Express lane from superpower to pariah

• It has only been a week since Putin decided to take a huge gamble in invading Ukraine.

• He hasn’t reached any of his grand strategic & political goals.

• In the meantime however, he did manage to push Russia to the brink of a default.

• More specifically, the costs of Russia’s military campaign can be grouped into three buckets: financial & economic, diplomatic/soft Power, and direct military costs

• Economic:

• a) Rubble fell 30% against the USD, and the Russian Central Bank (CBR) had to raise the interest rates to an astonishing 20%.

• b) Putin was forced to introduce capital outflow restrictions.

• c) Major shipping companies shunned Russia, aircraft leasing companies stopped working with Russian airlines (who cannot even operate anywhere lucrative - with the EU/US air space shut to them), and Russian manufacturers face crushing import restrictions on key semiconductors.

• d) Large investors and multinationals (like BP) started to divest their capital from Russian assets, and major brands (like Apple) shut down their sales operations in Russia.

• e) Russian stock market is shut - and in the meantime, the Dow Jones Russia GDR Index, tracking London-traded Russian companies, has plunged 98% in two weeks - in essence, wiping out $572 billion from the market value of 23 stocks, including Gazprom PJSC, Sberbank of Russia PJSC and Rosneft PJSC.

• f) If this wasn’t enough, President Biden hinted at the possibility of an oil-embargo, and the US Senate is about to introduce a legislation banning Russian oil exports into the US.

• Diplomatic:

• Russia continued to suffer from an overwhelming diplomatic isolation.

• a) Turkey took a strong stance and (under the Montreux convention) blocked Russian warships from entering the Black Sea - this is a remarkable turning point in Turkish/Russian relationship (one that opens up a host of opportunities for the US administration - more on that in the upcoming cables).

• b) At the time when President Zelensky’s EU speech was greeted with standing ovations (against the background context of Ukraine applying for an expedited - even if still unlikely - EU membership), the Russian Foreign Minister’s UN speech drew an opposite reaction of contempt and dismissal - with delegates demonstratively walking out when Lavrov was delivering his remarks.

• c) Then there was the UN General Assembly vote: where 141 countries voted to condemn Russian invasion.

• The only countries that voted in line with Russia were North Korea, Syria, Belarus, and Eritrea….

• Even Iran and China didn’t vote with Russia.

• d) In the meantime, Russia’s primary ally started to display stronger hints of displeasure: Chinese diplomats called for a de-escalation - expressing ‘‘extreme’’ concerns about civilian casualties in Ukraine.

• Direct Military Costs

• As more Turkish drones and American/NATO (even German) anti-tank/anti-aircraft missiles arrive in Ukraine, Russian casualties mount.

• According to the Russian Ministry of Defense, 498 Russian troops were killed in action and further 1,597 sustained injuries.

• Now, the true number is probably in thousands, but even by Russia’s own admissions, their current death toll in Ukraine exceeds the combined total death toll experienced in Georgia (2008), and during the entirety of the Syrian campaign.

• And it is only the first week of action - with major (and surely, significantly bloodier) urban battles yet to be fought.

• Against the context, it is imperative to dive in deeper into how the Russian military fought so far, how they have adapted and changed their tactics.

• We shall then explore Putin’s potential exit strategies.

Russian military adapts, resorts to brutal tactics & the paradox of Putin’s options

• In previous cables, we discussed how the Russian military leaders were likely to change tactics after seeing their initial operational & tactical plans crash against the reality of tougher than expected Ukrainian resistance.

• Now, it is important not to overstate the underperformance of the Russian military - they acquired some notable territory in the south/north of Crimea (and the first major city of Kherson), and their 40 mile long (even if stalled - due to logistical issues) military convoy is on the way to Kyiv.

• But, the quick and overwhelming Blitz did not take place.

• And now (and in terms of a larger strategic shift in combat operations), Russians are resorting to siege warfare - in addition to Kyiv, other major cities like Kharkiv, Mariupol, and Odessa are also about to be fully encircled.

• Some specific tactical & operational changes within the Russian military campaign require a closer look:

• 1. Fixing early mistakes.

• The first observation - both available through satellite imagery and Twitter/Youtube video posts, is the change in the hitherto inexplicable practice of parted columns of BTG units launching assaults with no/minimal air cover.

• We still see some unsupported VDV/Spetsnaz units charging with no heavy armor/air support - but the instances of these early mistakes have reduced dramatically.

• This is a trend that will most probably strengthen quite naturally - as the bulk of the Russian army gets closer to major metropolitan areas, the instances of unsupported units being left (and unguarded) on their own, would also reduce.

• This is of course bad news for the Ukrainian military - that to date, managed to capitalize on early Russian mishaps.

• On the other hand, the Russian supply chains getting longer, will also present more opportunity for hit & run drone strikes and guerrilla style counter-attacks.

• 2. Messaging change.

• Early in the campaign, the Russian military refrained from sharing any battlefield footage - ostensibly (and expecting the war to be over soon), the Russian top brass miscalculated that hiding the combat operation footage from public, would produce less domestic resistance (and anger/desire for revenge amongst the Ukrainian public).

• Naturally, once the initial blitz was over, this policy backfired significantly.

• The Ukrainian army filled the social media space with videos of burning and abandoned Russian tanks and BTRs.

• In the absence of video rebuttals, the narrative that the Russian military is hapless and extremely incompetent, began to crystallize.

• This in turn highlighted the viability of a successful resistance, and thus inspired Ukrainians to take up arms.

• On the other hand, the videos of abandoned and destroyed Russian tanks couldn’t have helped to improve the already low morale amongst the Russian soldiers.

• This too is now changing: realizing that they are here to stay for much longer (than the initial and overly optimistic estimations), the Russians are now confidently sharing their own combat footage.

• Of course, the part where the civilian population gets shelled indiscriminately is conveniently skipped in favor of videos of the Russian Mi-24 attack helicopters demolishing targets with relative ease.

• The change in the messaging/PR operations, also help to signal to those potentially wavering Ukrainian military leaders - “face it, you cannot resist against us, this is your fate - switch sides now, before it is too late”.

• 3. Indiscriminate attacks against the civilians.

• We have indeed predicted this scenario in the previous cables.

• Blitz did not happen - Putin now changed his strategy and displayed willingness to be ruthless in pursuance of his military objectives.

• But how does this affect his grand strategic political goals? Did they change? Is he no longer interested in imposing a viable and lasting regime change?

• Surely, he must realize that doing so is much harder now - with the Ukrainian public in rage over civilian deaths?

• More on that later below, but in the meantime, there is also a legitimate question around Putin’s decision-making capabilities: whether his military decisions are guided by rational analysis or by mere reactive anger and frustration?

• Indeed, there have been many rumors around his mental health - some analysts point out to his unreasonably long table conversations with his underlings as evidence of his paranoia - that his alleged immunocompromised state has led to unreasonable precautions, and general background hum of raised agitation and anxiety.

• There is little concrete evidence for these root cause allegations around his mental health.

• But there is however some solid US intel to suggest that he has indeed been acting out.

• In particular, there is some intel that “Putin is expressing unusual bursts of anger at people in his inner circle over the state of the military campaign so far.”

• Now, the question is whether these ‘‘unusual’’ bursts of anger are really that unusual or simply adequate (given the lack of progress to date)?

• Perhaps Putin is justifiably angry that his military leaders have sold him a bill of goods?

• Perhaps he is angry at them for overpromising quick and clean victory?

• One hopes that these ‘‘bursts of anger’’ are not caused by some underlying mental illness/paranoia.

• Because if Putin really does suffer from some mental ailment, (and that this was the cause for his decision to inflict pain & suffering on civilians), then we are dealing with a very bad situation - since his potentially unstable state of mind would make it that much harder to de-escalate the crisis, and create opportune and face-saving off-ramps that a reasonable leader (trying to cut his losses) would take.

• But then again, the rumors of his mental health may in fact be just that.

• Spreading such rumors however, may not necessarily be in the interests of Ukraine.

• This is because, in combination with his nuclear threats, having a mad man in charge of Russia is a really bad situation - one that reduces the risk appetite of NATO members that (to date) have been willing to be more proactive in their aid to Kyiv.

• It is one thing to provide weapons to Ukraine that is fighting a ruthless yet sane invader - quite another to help against a mentally unstable psycho, whose fingers are dancing above the nuclear launch codes.

• It is therefore, primarily in Kyiv’s interests to reduce the risk of helping Ukraine - and spreading such rumors therefore, may not necessarily help.

• But then again, there is no definitive evidence that Ukraine is behind these rumors - in origin, if not in later amplification.

• Could it possibly be someone in the Kremlin? Laying down some context to justify Putin’s removal?

• In other words: could the rumor spreaders be the potential coup plotters?

• We don’t know - we don’t have intel/evidence on that, and neither would it necessarily be in the US interests to reveal the motivation behind these rumors - since there is an argument that DC should be interested in encouraging the possibility of a palace coup at the Kremlin.

• On the other hand, the more likely cause of a switch in tactics, is Putin facing the reality that the quick regime changing blitz is no longer a possibility, and that doubling down on compellence strategy may in fact be the way forward - inflicting a lot of pain to force Kyiv into offering Putin some face-saving and strategically significant concessions.

• But compellence strategy works better when the military, and not the civilian population is the target - civilian losses make it significantly harder for the ruling government to offer politically costly concessions.

• It may in fact be politically impossible for Zelensky to offer significant sovereignty-restricting concessions - especially at the time when Ukrainians are united in opposition against Putin.

• So then, the natural question is why Russia still not targeting the Ukrainian air force/air defense forces/major military bases?

• There could be endless speculations around this, but two possibilities seem more likely than the rest:

• 1) As mentioned above, Putin may want to secure the loyalty of certain military leaders to overthrow Zelensky - and even if they don’t end up switching sides, Russia would still want them to passively accept the politically costly concessions imposed by the central government.

• Killing too many soldiers may make that harder - securing loyalty of military leaders will become much more difficult if their subordinates are reeling from Russian strikes.

• But the above possibility, however, is not sufficient in explaining this strange phenomenon.

• Since the Russian army could always choose to target idle/unmanned MIG-29s of the Ukrainian Air Force.

• It is thus possible that the Russian cruise/ballistic missiles have proven inadequate in accomplishing this goal - it may be that they are not as accurate as initially expected, or that the remaining Ukrainian S300 SAMs have been deployed strategically to protect the remaining MIG-29s - and that they are (thus far) doing a decent job.

• But surely, the Russian air force could deploy SU-34s, or even more advanced SU-35s to destroy these bases/MIG-29s?

• Which leads us to the second possibility:

• 2) Russia is extremely reluctant to use its fighter aircrafts.

• This could be for a number of reasons: a) possible lack of PGMs (precision guided munitions), and Russian fighter pilot’s inexperience to face a conventional air force whilst resorting to unguided munitions, b) lack of combat training against a conventional air force, and/or worry about demonstrably failed missions (that would then reveal the incompetence to the NATO states), c) saving the aircrafts for a potential escalation with NATO - that has an overwhelming advantage in air combat.

• Whatever the reason, Russia is clearly reluctant to utilize its combat air force superiority.

• 4. Encircling Ukraine - cutting-off the possibility of help.

• Russian military planners realize the importance of cutting off additional military aid from reaching the Ukrainian army.

• As such, there are already reports that Russian helicopters are running interdiction flights along the Polish/Ukrainian border - and that there are further plans of troops moving in from Belarus to cut off supply routes from Poland.

• This is one of few demonstratively smart strategies implemented by Russia.

• One that presents corresponding dilemmas for Ukraine - how many units should Ukraine devote to the protection of these routes?

• Ukrainian troops are already stretched thin between three different axes of attack: 1) Kyiv axis, 2) Kharkiv/Northeast axis, and 3) Southern/Crimean axis.

• No matter what tactics Kyiv decides to utilize, one thing is clear: keeping the supply lines operational is crucial for survival of the overall Ukrainian resistance.

• On the bright side, Russia too, doesn’t have unlimited resources here - any additional troops assigned to the supply lines (a vast geographical region), will detract from their number one objective: the siege and eventual takeover of Kyiv.

• Putin’s options going forward