A cure for the common Crimea

by Caitlin Cummings

While many disagree on the answer to Russia’s aggressive occupation of Ukraine’s Crimean territory, many in the West seem to agree on why it happened in the first place. WSJ’s Bret Stephens argues that Putin acted out of a lack of fear of retribution: “[t]he West could win a sanctions war with Russia, but it would take an iron political stomach. Mr. Putin knows Mr. Obama. He knows that the U.S. president has the digestive fortitude of a tourist in Tijuana.”

It’s a harsh statement, but it has proven a true enough explanation for Putin’s demeanor so far. Nothing the US and NATO-centered Europe has done has seemed to change his stance in Crimea, which is the only thing that would allow for the coalition in the West to back down.

We propose a two-part solution, which would create an opportunity for both sides of the conflict to leave feeling as if they had won. The US should take the steps necessary to sweeten a “100-year lease offer” of Crimea’s port, in order to maintain Ukraine’s sovereignty while giving Putin the win at home. By allowing Putin to “save face” while still backing down from his position, this would create a “golden bridge” by which a deal could be brokered. In order to get Putin’s attention for long enough to make a serious offer, Finland and Sweden should publicly seek entrance into NATO. This threat historically has gotten Putin in a considering, if not conciliatory, mood. While the above solution is risky, we believe it can alleviate much of the bias that has been barring any progress from being made.

State of Affairs: Re-examining the status quo

Crimea’s strategic importance has grown since Russia ceded the peninsula to Ukraine as a gift in 1947. Crimea serves as a home to Russia’s warm water naval fleet on the Black Sea port at Sevastopal, a variety of military bases, and arable land desirable for agricultural production. In 1997, Russia and Ukraine negotiated an agreement for the use of Crimea; Russia paid Ukraine—whose government needed funding—$526 million for the lease of Crimea and $97 million annually to use the Crimean military installations on the peninsula.

In February 2010, Ukraine elected Victor Yanukovych as its president. Russian President Vladimir Putin viewed Yanukovych as an ally, despite the country’s economic drift towards the West. When Yanukovych in November 2013 reneged on an economic trade negotiation with the European Union to support greater economic ties with Russia, protesters occupied the center square in Kiev for three months.

After Yanukovych decided to use force on the protestors in late February 2014, the unrest grew and he fled the capital. A week later on March 1, 2014, armed men with no identifying insignias on their uniforms began to invade Crimean military installations. On March 21, 2014, President Putin and the Russian parliament annexed Crimea after the Crimean residents voted in a controversial “referendum” to join Russia a week earlier.

The Russian annexation of Crimea led to condemnation from the United States, the EU, and the United Nations. The Obama administration sanctioned key individuals involved in the crisis, and has called for negotiations to end the hostilities. While at first unwilling to negotiate with Ukraine and the West, Russian Foreign Minister Sergei Lavrov has called for negotiations in recent days to end the crisis (despite a Russian troop buildup along its border to Ukraine).

The Stakeholders

A resolution to the Crimean crisis must involve multilateral negotiations between Ukraine, Russia, the United States, Western Europe and other European countries that may be threatened by the acts of Russian aggression.

Russia now views Crimea as a legitimate part of Russia. Russia will now be able to terminate its base-for-gas agreement with Ukraine and gain control of other natural resources stockpiled in Crimea. Minister Lavrov and President Putin will likely try to overturn the effects of the Western sanctions placed on high-ranking officials in the Russian and Crimean governments in any future negotiations with Ukraine and the West.

Oleksandr Turchynov, the acting Ukrainian President, will likely demand that Crimea be returned to Ukraine from Russia before further negotiations will take place. Ukraine’sdependency on Russian oil and other natural resources will be a consideration for Kiev in any negotiations with the Kremlin.

In turn, the United States (represented by President Barack Obama and Secretary of State John Kerry) must react to Russia’s “illegitimate referendum and annexation of a sovereign state.”  In a negotiation with Russia to restore Crimea to Ukraine, Secretary Kerry will likely continue to demand that Russia must allow the unimpeded democratic processes to resume in Ukraine. Beyond sanctions, Kerry must garner support from Western European allies, including the EU.

Biases at play

The first cognitive bias preventing a deal is the idea that the Crimean dispute is a zero sum game, or in Max Bazerman’s words, that “their gain is our loss.” Turchynov, Kerry, and Lavrov may be operating under the “myth of the fixed pie,” assuming that if Ukraine, the United States, or Russia negotiates on the future of Crimea, all parties who do not end the negotiations with Crimea will have “lost.” Despite being a complicated negotiation with many high-stakes decisions, there are areas for compromise where all parties could be better off, making the deal closer to Pareto efficient. Integrative negotiation elements in international relations—while sometimes extremely difficult to sell to domestic audiences—are possible in the Crimean crisis.

A second bias at play is that negotiators may be “living for the moment.” Decision makers often “overweigh” present conditions at the expense of the repercussions of the policy choice for future generations, or “discount the future,” as Bazerman says. The United States, European Union, and Russia have important mutual interests outside of Ukraine, including negotiating the future of the Iranian nuclear program and Syria’s chemical weapons and current humanitarian crisis. No party wants souring relations regarding the annexation of the Crimean peninsula to torpedo cooperation on those issues as well.

 
What’s in a name?  Russia should consider “leasing” Crimea for 100 years

The first negotiation package that could help policymakers diffuse the Crimean crisis would require Ukraine to extend the now-void lease that it gave to Russia for 100 years—so that the lease feels indefinite to Vladimir Putin. This would allow Ukrainian leadership to maintain to their constituents that they continue to “own” Crimea, despite having limited political, economic, and military influence on the peninsula. This option would be beneficial for Russia because they would not have to continue the gas-for-base agreements with Ukraine and would maintain military control over the peninsula. The United States, European Union, or NATO could work to export oil and natural gas to Ukraine to account for Ukraine’s lost business and economic incentives from Russia.

This option is new to the Crimean crisis negotiation because at this time the United States has limited capacity to export oil and natural gas at the quantities needed to assist Ukraine and the US’ European allies. Under a Presidential and Congressional mandate, the US oil export process could be expedited so that this deal could be made into a reality. Much of the conversation to date has been about the European Union filling the void of oil exports that Ukraine has lost as a result of its “debts” to Russia, but there have been limited discussions about the United States and NATO nations assisting on this front.

While not guaranteed, this deal has the potential to move negotiations forward. Russia would approve of the measure because it would be able to reduce Western sanctions on its high ranking officials. Russia would effectively own the peninsula, the natural resources, the military and civilian infrastructure, and the warm water sea port and pay nothing to Ukraine for it. Ukraine could approve of this option because it would allow Ukraine to nominally retain Crimea, which would satisfy its domestic constituents. The EU and the United States could support this deal because it reaffirms Ukraine’s sovereignty and deescalates the crisis on the peninsula. The United States and the EU would also benefit from this negotiation because it could improve Kiev’s affinity for western markets and economic trade agreements.

There are still several barriers to success, however. The first is whether or not Putin and Russia would even be willing to talk about leasing Crimea after the Russian parliament already officially annexed it. Increased Western sanctions could drive Putin to the negotiating table, but the leasing option might be off the table completely (the United States and the world have questioned Putin’s roles as a rational actor in recent months). Additionally, this option would be expensive to the West; it would have to subsidize its oil exports to Ukrainian markets. It relies heavily on the assumption that hydraulic fracturing will continue to be a viable energy alternative in the United States, and that the U.S. will be able to expedite its oil export industry.

There are a few ways each side could overcome potential barriers to the agreement. In order to ease the economic burden that would occur in the case of a unilateral export agreement between the United States and Ukraine, the United States could split up the cost of exporting oil among countries of the EU and the United States. Splitting up the costs would signal a unified international (Western) coalition of states willing to stand up to Putin’s unilateral annexation of a sovereign region. Additionally, the EU and the United States could double down on their sanctions on Putin. Increased sanctions—if applied to targeted individuals in Putin’s inner circle—could eventually nudge Putin to considering another “off-ramp” option to diffuse the Ukrainian crisis.

Making Putin pay attention: Finland and Sweden consider NATO  

Getting Putin to agree to the above deal—and realize it is a way for him to avoid sanctions and harm to his domestic standing—would mean first getting his attention. Fortunately, Russia has enough borders to make Ukraine one of many potential threats.

At 833 miles, Finland’s border with Russia is the second longest in Europe, after Russia’s border with Ukraine. It also serves as a buffer country between Eastern Europe and the NATO/EU dominated West. Putin has historically balked at losing another bordering country to the Western coalition. Finland has been a point of contention because Russia has already felt the loss of much of her Western flank after Poland joined NATO 15 years ago.

Finland, for its part, has always felt the looming presence of its eastern neighbor. When under duress, Finland has publicly considered joining NATO in order to bolster its independence from the post-Soviet bloc. Putin’s response to Finland’s “threat” was immediate and relatively aggressive. However, Putin displayed a desire to come to an agreement with Finland in uncharacteristically pragmatic statements to the Russian autocrat. He explained that Finland should certainly not want to join NATO, but that if they did, and if they deployed missiles to the Finnish borders, Russia would take retaliatory action. He appended his response, however, with: “But what would we need that for?” When has the world ever heard such couched terms from the Russian Bear before?

Herein lies the key to making Putin take negotiations over Crimea seriously. Even if he supposedly desires to, few think that Putin would ever take further steps to invade Finland without specific cause, and experts dismiss the idea that Putin is about to invade as preposterous. Because of this reason, Putin cannot apply unremitting pressure on his neighbor, but must stop a NATO/Finland partnership by appealing to Finland’s desire for sovereignty–Putin has been forced to reason with his neighbors.

If Finland were willing to publicly request a Membership Action Plan (“MAP”)–the first step towards membership in NATO—or even to express public interest in MAP, Russia would have to pivot its attention. Putin feels comfortable making threats about invading Ukraine, and has his boots comfortably situated in Crimea. Finland would immediately make Putin uncomfortable, if nothing else. It would introduce another player into the negotiations currently between Russia, Ukraine, and NATO/the West. And Putin has felt the need to respond to this player in the past.

Of course, Finland does not now have an interest in staking out an alignment with NATO. Its ideal goal, says Dick Zandee, a Senior Research Fellow at the Dutch Clingendael Institute, would be to create a regional defense coalition across the Nordic states. But, in stating a preference for NATO, Russia would be forced to respond to Finland’s aired fears and, ideally, accept the golden bridge of a leased Crimea. Finland could “compromise” by not joining NATO for 25 years—something that they were already planning on doing. Finland could even gain the chance to execute their first choice plan of a regional defense coalition under the guise of a conciliatory gesture on their part.

There are several barriers to this strategy, which might make it difficult to execute. First, Finland would be acting unilaterally and without explicit support from any other Western country against a very aggressive neighbor. They have already made a point of wanting to keep relations with Russia friendly. Without plans to join NATO in earnest, Finland might be hesitant to put their own border in the line of fire. However, Finland has been willing to make such threats in the past, and, as sanctions continue to fail and Putinbecomes more aggressive, Finland has every reason to act.

Furthermore, Sweden could act as a partner in requesting a MAP. Sweden, while it does not directly border Russia, has an island territory less than 200 hundred miles from Kaliningrad. Sweden knows that Russia has serious interest in it remaining neutral, and, like Finland, has expressed interest in NATO in light of Russia’s recent aggressions. Additionally, like Finland, it has also openly considered a Nordic defense pact instead. By acting as a partner, Sweden would be distributing the pressure on Finland, and would be ideally situating itself to join any defense coalition with Finland in the future. Russia would certainly have to pay attention if both countries expressed interest in NATO.

The second barrier to this strategy is Putin himself. Putin might easily see through such a strategy and call Finland and Sweden’s bluff. However, in the past he has done just the opposite—he’s been willing to have a conversation to allay his country’s fears of losing such a large border. This strategy is risky, certainly, but it has historical merit. And it would give Putin a double win when paired with our first strategy—he would “win” by both getting to stay in Crimea and in getting a promise from Finland not to join NATO for a long enough time that, in his lifetime, might as well be indefinite.

The West and Ukraine would have to depend upon Finland and Sweden to do much of the hard negotiating, but both countries have a history of conflict with the Russian empire. And, with so much riding on Russia arresting her movement, it’s a risk the West should be willing to take, especially since they would be losing nothing (as neither Finland and Sweden have actually taken steps to join NATO) in order for Russia to “gain.”

Curing the acute ailments could alleviate chronic conflict

Making Russia feel like she is gaining is the only way to stop Putin’s momentum. As Bret Stephens stated in his WSJ op-ed of “iron stomach” fame, Putin has two options: give up power, or impress the Russian people enough that they want to crown him their new emperor. By offering Putin an avenue through which to concede without actually conceding in extending the lease with Crimea, he will be able to end the sanctions and retain his people’s admiration. By recruiting Finland and Sweden to threaten NATO-alignment, the West will lose nothing and get Putin to take the negotiations seriously enough to see the golden bridge in the first place. Putin will concede nothing he cares about, and the West will win in its own mind by preserving the sovereignty of Ukraine and stopping Putin’s momentum—for now.

Of course, we realize this conflict is probably one of many, and history may one day see it as the beginning of a much larger game, says NYU’s Mark Galeotti, professor of Russian history and security issues. However, ending an acute conflict without having to wholly appease or aggravate Russia further might lead to a slightly calmer tide of history for Europe, and it will certainly provide the West with enough breathing room to consider its next steps. Either way, Putin isn’t going anywhere. It’s best to take a risk now, and remind him of the borders that his country lies within, than to have to use force to put him in his place later.

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Caitlin Cummings is a masters candidate in public policy at the Frank Batten School of Leadership and Public Policy. She currently serves as editor-in-chief of the Virginia Policy Review.