Weekly Overview Cables - Ukraine war updates, US-Russia prisoner exchange and forcing Maduro into resignation.

Ukraine war updates.

• 1) Last week started with Ukrainian strikes deep in Russian territory, including an attack on a Russian airbase near Murmansk, about 1118 miles from Ukraine.

• A Russian Tu-22 bomber was reportedly damaged in the attack.

• This strike marks a new benchmark for deep strike operations in the ongoing war between Ukraine and Russia.

• 2) Ukraine scores significant wins against strategic assets.

• Ukrainian forces reportedly struck four Russian S-400 air defense missile launchers, an S-500 air defense system, and the Russian Black Sea Fleet's Rostov-on-Don Kilo-class submarine in occupied Crimea on August 2.

• These strikes represent significant hits to Russian military assets in the region.

• 3) Ukraine announces deployment of F-16s.

• A monumental event - this is the first batch of F-16s to be deployed: around 65 in total have been committed by the NATO members (a significant figure - fully 70% of UK’s total combat aircraft fleet.)

• We will take a separate and longer look and analyze their potential impact on the battlefield: a lot depends on what ammo they come with - will they carry sidewinder AMRAAMs (looks like it) to take on Russian fighter jets beyond visual range or will they primarily launch surface-to-air cruise missiles/carry standoff range bombs or both?

• 4) German startup tests a new jam-proof drone in Ukraine.

• First-person view (FPV) drones have been a game-changer for Ukraine.

• They have helped Ukraine compensate for artillery shortages - with more precise weaponry too.

• In addition, they have added an extra layer of live view of the battlefield - it is now hard for Russia to accumulate troops to achieve any meaningful operational breakthrough.

• But unfortunately for Kyiv, they have their limit: most of them get jammed and miss the target/fail to return.

• Indeed, according to the French Army Chief of Staff Gen. Pierre Schill, 75% of Ukrainian drones lose to EW/Jamming.

• Some of the anecdotal data from soldiers on both sides puts this number at an even higher percentage.

• This is why the following news could be significant: a German drone startup is testing a jam-proof Fly-By-Fibre drone that can apparently fly largely undetected too (since no radio waves are being emitted).

• The downside is range (only 15 km/9 miles) but if this works, Ukraine could improve its rate of precision-strikes in contested frontlines.

• Of course, it is too soon to tell whether this would translate into a meaningful advantage over no-man’s land - and Russia is also likely to adapt and find a possible solution (e.g. counter drones that detect even slightest heat/sound emissions in air - but doubtful if such a technology a) exists b) in large numbers.)

Prisoner exchange with Russia

• Couple of things: great events and very important people (Wall Street Journal reporter Evan Gershkovich, former US Marine Paul Whelan and Russian American journalist Alsu Kurmasheva) have been rescued - this is clearly a political boon for Biden and Harris.

• But it is also for Putin - perhaps even more so.

• Think of what this actually is: Russian hitmen, actual criminals, and spies (straight out of the tv show “The Americans”) are being returned home. Effectively, Putin is securing a free pass for murder on Western soil.

• For the Kremlin, this is an epic political win.

• Relatedly, a lot of GOP members were right to raise an alarm that this was a bad deal; the US gave away far too much for actual criminals.

• Was it possible to secure a similar release based on other tactics?

• Perhaps trade away something else?

• Or introduce a new pressure angle? Perhaps…

• But that might have required a lot of Western powers to coordinate their efforts to do this.

• For example, assets and villas of close family members who reside in places like Switzerland etc could be placed under sanctions/frozen.

• Far too many of them are evading sanctions still.

• But if such moves weren't going to be utilized, then it is hard to see how else Putin could be swayed not to press his advantage.

• In addition, there is a major risk of bad precedent.

• An incentive for Putin to capture more Americans to trade against his criminals/ assassins in the west.

• Moreover, this is a bad example and a precedent for other nefarious regimes - they too can copy the playbook.

• With that said, it is unlikely in practice - there aren't many regimes like Putin's that would dare risk a significant confrontation with the US by utilizing the same means.

• A regime that would be capable and confident enough to do that and rogue enough to join the club of few pariah states is very rare.

• There is North Korea and Iran that could pull similar moves going forward.

• But then again, how many westerners can they get their hands on?

• Which leads us to the next point.

• All Americans currently in Russia and Belarus must be urged to leave.

• All of them are potential targets for a kidnapping - if they are not a part of a consular team, then they should leave.

• There is very little business need to be in Russia - western assets are being confiscated in any case.

• Overall then, there is a bad precedent and risks associated with future incentives (for Russia to repeat the same tactics) will surely remain.

• But these are risks that can be mitigated.

• And sometimes, short-term wins are good enough.

• This is a political win for Biden and Harris for sure.

• Of course Trump was quick to point out that this only happened due to Putin's desire to avoid doing this deal with Trump himself - since the latter would apparently be a tougher negotiator.

• And there is probably some truth to this.

• And not just because Trump himself was going to (at least that is what is implied) rule out releasing murderers and spies in return for Americans trapped in the hostage crisis, but also because based on last week's indications, Mike Pompeo is likely to return as a secretary of state - and he is no friend of Russia: the overall vibe and relationships could get even more tense in the short-term.

Maduro clings onto power in Venezuela: why Washington needs to help Venezuelans kick him out - and what could push the needle.

• Following brazen electoral fraud in Venezuela, nationwide protests have now been ongoing for a week - quickly turning deadly as recently as on Monday.

• Initially, the Venezuelan electoral authority pronounced Maduro as the winner with 51% of the vote, while declaring that the opponent Edmundo González got only 44%.

• They did not however provide the usual detailed breakdown, and their own tally was so blatantly falsified that the total for all candidates ended up being higher than the 100%…

• And the Carter Center in the US and opposition poll watchers disputed the official tally, with claims showing the opposition won 70% of votes at 73% of polling places.

• Opposition leaders urged Maduro to step down, leading to clashes between the police, National Guard, and pro-government paramilitary groups.

• In the meantime, pro-Maduro organizations have been volunteering to commit acts of violence on behalf of the regime: social media has now documented violent actions by paramilitary ‘colectivos’ against the protesters.

• The US has thus far acted in a largely inadequate way: waiting and hesitating for too long to declare González as the winner (which Washington eventually did), and not signaling resolve to see things through and confront Maduro if he 1) resorted to violence and 2) decided to stay in power illegitimately.

There are a number of good reasons for the US to help Venezuelan people.

• Beyond the obvious point - that this is a good ethical decision to help a nation fighting to free itself from a corrupt dictator driving the country into ruins - there are a number of pragmatic and strategic reasons as well:

• 1) First of all, pure pragmatism: the country is on the brink and another wave of confrontation and civil war could lead to major societal breakdown and yet another border crisis to deal with on the southern US border.

• (side note: already, around 7.7 million Venezuelans have left the country)

• It is in the interests of Washington and of governments all across the region that stability be restored and that stability can now only be restored with a change of government.

• Maduro staying in power will simply not work - definitely not in the medium or long-term, but potentially not even in the short-term either.

• 2) US credibility is on the line.

• Washington took the lead on this issue with the Barbados agreement of October 2023: where there was a deal to provide relief from US sanctions in exchange for a commitment to conduct free and fair elections.

• Now, in itself this package of sanctions relief was likely inadequate - only focusing on carrots on zero sticks (More on that later below).

• But even within only the parameters of the agreement too, there are already major deficiencies: Washington didn't insist on guarantees that all reputable election observers (including those from the EU) must be in attendance, and there was little cost inflicted on Maduro when he decided to bar the main (and more popular) opposition leader Maria Machado from running in the elections.

• This deficient combination most likely affected Maduro's calculus that Washington wasn't going to be all too serious to see this through and that he could potentially still get away with it all.

• The whole world is watching now and if Maduro turns out to be right, then this would turn into yet another credibility loss for Washington.

• The future conduct and influence campaigns with other dictatorships would also be undermined.

• Once again, dictators all over the world (including the partner ones in Saudi Arabia and the UAE) will arrive at undesirable conclusions that Washington can be taken for a ride.

• 3) As a corollary to the previous point - helping Venezuelans get rid of Maduro will establish a great positive precedent.

• It will create a playbook that can be used against other dictators.

• 4) It will deny space to Russia and China in America's backyard.

• Since the very first moment that sanctions against Venezuela had been lifted, the Chinese purchase of Venezuelan oil has been a major lifeline to the Maduro regime.

• And Maduro will clearly try to deepen that relationship.

• And let's not forget about Wagner - Putin would be all too happy to stick it to the US by sending Wagner mercenaries to prop up the Maduro regime in exchange for share in spoils.

• 5) It would be a major foreign policy win for the Biden admin.

• And if Harris has good advisers then they should press the importance of helping Venezuelans to get rid of Maduro.

Tactics that can push the needle of deal/no-deal balance.

• Essentially ,Venezuelan opposition, Washington, and other regional powers (most of the South American states - forcing Maduro to end diplomatic relations with countries like Argentina and Chile. But few key countries like Colombia, Brazil and Mexico are yet to be swayed into a decisive action against Maduro.) want a deal where Maduro will leave office without bloodshed - Maduro resists this deal.

• The fundamental objective therefore, is to create a mix of incentives and disincentives to convince and ultimately compel Maduro to take the deal.

• And for this to happen: all other alternatives to this deal must be considerably less attractive - due to unacceptably high costs, little potential upside and realistically, a bit of both.

• 1) Offer a comprehensive amnesty.

• Maduro should be offered a comprehensive amnesty and a commitment that a) he will not be prosecuted and b) he can self-exile and enjoy his ill-gotten gains somewhere else.

• Crucially, this amnesty offer should be extended to all of his major allies in the military/security services - otherwise they will not agree to this and will keep him as a hostage: since they wouldn’t want to face criminal investigations when Maduro himself evades it.

• Is this justice? No.

• But it is the most pragmatic way to prevent further injustice and bloodshed.

• If a democratically elected opposition takes power without further bloodshed - then it is most definitely worth the trade.

• 2) Divide and conquer.

• If Maduro refuses, still offer his selective full amnesty to his inner circle to dump him and enjoy retirement into the sunset in exchange for an orderly transition to power.

• 3) Strong disincentives.

• Maduro should be warned that if he decides to refuse these incentives and generous offers, then his reign will be extremely difficult, unstable, and unprofitable.

• Not only should all suspended sanctions return, but Washington must also make it clear that even tougher sanctions will be imposed.

• (side note: and sanctions took a major toll already. Under Maduro, the GDP had hit the rock bottom of under $50bn (at the peak of Trump’s sanctions) from the highs of around $260bn when he first took over in 2013.)

• In addition, all of the regime leaders must be warned that they will be targeted individually and all across the world - wherever they go, they will not be able to hide.

• A lot of Maduro’s enforcers in the security services have family members that enjoy a quiet luxurious life in countries like Switzerland and Spain - they must be warned that Washington and Brussels will get together to put an end to this.

• Finally, Maduro should be warned against the use of force - and there needs to be an implicit warning that civilians will be protected and that if things escalate into a full-on civil war, the opposition would receive full support (unlike, unfortunately, those in Myanmar.)

• In other words, both Maduro and his closest inner circle must believe that staying in power will be increasingly difficult, and that even if they do manage to cling onto power, this reign would bring them less prosperity with more headache than ever before: that the alternative of leaving with their freedom and money intact is far more advantageous a proposition.

• All of this would require fast action and decisiveness from Washington: now is the time to make bold moves.