Full credit to European politicians: they know how to brief.
Latest in London’s Daily Telegraph is that “Keir Starmer and Emmanuel Macron have together pulled off a remarkable feat of high statecraft” in shaping the US – Ukraine minerals deal signed a few days ago. There are even some nice words for Boris Johnson’s contribution.
Who knows, it could even be true. But it’s perhaps more important that they’re thinking that way.
Because what is most important is the acceptance of fundamental changes in international norms, and then after that, the spread of understanding.
Admittedly, this risks being a little premature. Given the ambiguity necessarily baked in to the deal and the elements like governance still to be worked out, there is much scope to go off track. But at this stage, intent is everything.
At the simplest level, the Ukrainian government has agreed to conduct business with its American partners on agreed terms, namely that the Ukrainian government will invest 50% of new mineral development revenues in a joint fund to invest in – presumably – Ukrainian mineral development.
But what are the logical implications of this?
First, that Ukraine does actually bend its national arc to develop its minerals, principally its enormous shale gas reserves. Exceptionally fast and at grand scale (Operation Warp Speed would surely be Trump’s required template). With its US partners.
Secondly, that it does so with the fullest transparency and accountability to the US – and perhaps even to us outsiders. Hard to see the customary development model of interest groups demanding pay-offs and rents working in these circumstances – so perhaps a more transparent and jointly agreed pay-off schedule.
Thirdly, it provides a splendid cover for Europe to abandon, first its blockage of shale gas development, and secondly, its entire energy disarmament policy. Naturally, these things take a while to work through – a generation in Europe’s case – but it’s the turning point that counts.
Fourthly, it points towards a complete decoupling of Europe from its continuing dependence on Russian energy. And makes it harder to compromise on this goal.
Fifthly, judging by the US shale gas experience, the impact on Ukrainian and beyond that Western economic growth, income levels and return on capital could be quite material. While there appears to be no provision for the US to claim resource revenues to pay for past military contributions, there would seem to be a framework in which US capital and skills are given access to the sort of mutually-beneficial commercial opportunities which our current approach to free trade agreements promises but rarely delivers.
Moreover, that framework provides both leverage for – and an accounting of – future US contributions to Ukraine’s security and development. When one looks at the institutionalisation and acceptance of failure in the current government to government international development and aid model, one can only hope that this novel approach fulfils a fraction of its possibility.
So goes the best case analysis. Far fetched? Well, interesting to see the Daily Telegraph musing that “ … the tables have turned: it is suddenly Vladimir Putin who is in trouble, trying to hold together an exhausted war economy as the price of Urals crude crashes to $56 a barrel – from $77 in mid-January …”.
But then the real test of a politician is not how well he or she can brief sympathetic media, its whether they can achieve political objectives under the pressure of war, and whether in a democracy they can demolish an entrenched status quo and start building a new one without anyone quite seeing it at time.
Against that backdrop, speculation about sinister motives and quibbles over tactics are second order. Judge always on results.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
Admittedly, this risks being a little premature. Given the ambiguity necessarily baked in to the deal and the elements like governance still to be worked out, there is much scope to go off track. But at this stage, intent is everything.
At the simplest level, the Ukrainian government has agreed to conduct business with its American partners on agreed terms, namely that the Ukrainian government will invest 50% of new mineral development revenues in a joint fund to invest in – presumably – Ukrainian mineral development.
But what are the logical implications of this?
First, that Ukraine does actually bend its national arc to develop its minerals, principally its enormous shale gas reserves. Exceptionally fast and at grand scale (Operation Warp Speed would surely be Trump’s required template). With its US partners.
Secondly, that it does so with the fullest transparency and accountability to the US – and perhaps even to us outsiders. Hard to see the customary development model of interest groups demanding pay-offs and rents working in these circumstances – so perhaps a more transparent and jointly agreed pay-off schedule.
Thirdly, it provides a splendid cover for Europe to abandon, first its blockage of shale gas development, and secondly, its entire energy disarmament policy. Naturally, these things take a while to work through – a generation in Europe’s case – but it’s the turning point that counts.
Fourthly, it points towards a complete decoupling of Europe from its continuing dependence on Russian energy. And makes it harder to compromise on this goal.
Fifthly, judging by the US shale gas experience, the impact on Ukrainian and beyond that Western economic growth, income levels and return on capital could be quite material. While there appears to be no provision for the US to claim resource revenues to pay for past military contributions, there would seem to be a framework in which US capital and skills are given access to the sort of mutually-beneficial commercial opportunities which our current approach to free trade agreements promises but rarely delivers.
Moreover, that framework provides both leverage for – and an accounting of – future US contributions to Ukraine’s security and development. When one looks at the institutionalisation and acceptance of failure in the current government to government international development and aid model, one can only hope that this novel approach fulfils a fraction of its possibility.
So goes the best case analysis. Far fetched? Well, interesting to see the Daily Telegraph musing that “ … the tables have turned: it is suddenly Vladimir Putin who is in trouble, trying to hold together an exhausted war economy as the price of Urals crude crashes to $56 a barrel – from $77 in mid-January …”.
But then the real test of a politician is not how well he or she can brief sympathetic media, its whether they can achieve political objectives under the pressure of war, and whether in a democracy they can demolish an entrenched status quo and start building a new one without anyone quite seeing it at time.
Against that backdrop, speculation about sinister motives and quibbles over tactics are second order. Judge always on results.
Point of Order is a blog focused on politics and the economy run by veteran newspaper reporters Bob Edlin and Ian Templeton
1 comment:
A step towards peace, a solution to a nearly impossible situation, an endeavour to solve a crisis not caused by President Trump. "Thanks Trump!", "Bravo Trump!"(and of course his calm, experienced team), resounding from all the media outlets! No, just the negative consequences that could possibly happen. Do these people really want war? I shake my head.
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