Welcome to Cold War II

This is what it will look like.

The West and Russia have sailed into uncharted waters. Crimea has de facto declared independence from Kiev. Russia has intervened to effectively secure the new entity without, so far, a shot being fired. The Ukrainian police, security, and military forces on the peninsula have been neutralized, many of them pledging allegiance to the Autonomous Republic of Crimea. In Kiev, the new government talks about Russia's aggression and orders mobilization -- even as it loses control over some of the key cities in the country's east and south. Meanwhile, the West has responded with suspension of preparations for the G-8 summit in Sochi. The U.S. president has talked about Russia paying a high price for its actions, and the U.S. secretary of state has laid out a menu of possible sanctions and other measures.

Thus, the post-Cold War may now be seen, in retrospect, as the inter-Cold War period. The recent developments have effectively put an end to the interregnum of partnership and cooperation between the West and Russia that generally prevailed in the quarter-century after the Cold War. Geopolitically, this period saw a massive reduction of Russian power and influence in Europe and Eurasia, along with the arrival of new states, many of them carved out of the historical Russian Empire. Instead, the United States became the dominant power in Eurasia, and the European Union, while no great power or even a strategic actor itself, turned into an economic magnet for its eastern neighbors. The Russian Federation, the core of the former empire, was essentially left out of the new system, mired in an increasingly awkward, uneasy relationship with the United States and Europe.

The system had been fraying on its eastern edge for almost as long as it had been in existence, but it took a crisis in Ukraine to lead to its clear breakdown. The successful, Western-supported revolution in Kiev in February fatally undermined the delicate balance in the key state between Russia and the West, leading to domestic turmoil in Ukraine. But perhaps more importantly, it also marks the end of Russia's post-Soviet passivity. Make no mistake: Putin's actions in Crimea and the powers he received over the weekend from the Russian parliament -- allowing him to using military force in Ukraine writ large -- return Moscow as an active player in Europe for the first time since 1989.

In 1991, Russia agreed to the dismantlement of its historical empire and accepted the ex-Soviet administrative lines as international borders, which left some 25 million ethnic Russians in the "near abroad." Even if one adds the painful and bloody Chechen wars, this was the most peaceful dissolution of any empire in the 20th century. Russia's "gas wars" with Ukraine, roundly lost by Moscow in Western public opinion, were no more than heavy-handed attempts to make that country pay more for the natural gas it received from Moscow. Even the 2008 war against Georgia was fought by the Russians in response to the Georgian shelling of South Ossetia, which killed Russian peacekeepers deployed there. But all these events, as well as the ramifications they caused vis-à-vis the West, pale compared with what's coming now.

What follows will be "interesting" in the Chinese sense -- i.e., fraught with dangers. The geopolitics of the new Eastern Europe will be fundamentally altered. It will be some time before Ukraine is reconstituted in some new shape -- almost certainly without Crimea -- and with a new structure, probably taking account of its ethnic and cultural complexity, apparent between its western and southeastern regions. The entire former Soviet Black Sea region, from Moldova/Transnistria to Abkhazia/Georgia will look markedly different from how it looks today. Georgia, once deemed too much of a pressure point in the Kremlin's backside, will be back on the fast track for NATO's Membership Action Plan, while Moldova might succumb to instability as the governing pro-EU coalition faces a challenge from pro-Russian opposition. As to Transnistria, it will gravitate to Russian-speaking southeastern Ukraine. Farther north, one can safely forecast pressure building for permanent, if symbolic, U.S. troop deployments in Poland and the Baltic states, as well as for Finland's and Sweden's membership in NATO.

Meanwhile, relations between Russia and NATO will assume a more familiar, adversarial nature. A military standoff in Europe will not be as massive as that during the Cold War, but there will be more certainty than in recent years as to just who is the potential adversary. There would be no need, for example, to talk about Iran when upgrading NATO's missile defenses from bases in Romania and Poland or those at sea. The Organization for Security and Cooperation in Europe (OSCE) could actually be brought back from the closet where it has languished since the end of the Cold War and become a prime venue for Russian-Western security dialogue. Indeed, the recent agreement between Russian President Vladimir Putin and German Chancellor Angela Merkel to use the OSCE to form a contact group with regard to Crimea already points in that direction.

When it comes to Washington, Russia's relations with the United States will eschew any warmth that may still remain. There will be no return to the eyeball-to-eyeball Cold War confrontation, though; on the contrary, the relationship is likely to grow even more distant. Elements of U.S.-Russia cooperation might survive where the two countries' interests clearly meet, but doing anything together in Syria or Iran would become much more difficult. Trade and investment will be restricted as a result of U.S. government sanctions, and the Russian equity market, owned largely by foreigners, will collapse. By contrast, however, EU-Russia trade, worth almost $500 billion a year, will continue by and large, due to economic interdependence between the two.

As Russia's relations with the West deteriorate, its ties with China will need to grow stronger. With more problems in store for Gazprom in the European market, the Russian gas company may have to agree to sell gas to China. Significantly lower prices offered to Beijing would be compensated by the emergence of an alternative market. With Russia likely to be excluded from the G-8, Moscow will have to make more use of the world's remaining global platforms, such as bilateral summits with China or forums with fellow BRICS countries or with Shanghai Cooperation Organization countries. In all these forums, however, Beijing, rather than Moscow, will be the senior power. As a result, Moscow will lose its unique position of being present in all major multilateral organizations, both Western and non-Western.

It's not a pretty picture. Thankfully, some of the worst things of the first Cold War will never likely be resurrected. Officially sanctioned Russian patriotism, even with an anti-American bent, will not be tantamount to a new ideology. The state-dominated capitalism that controls the economy will be more like its more distant czarist -- rather than its immediate communist -- predecessor. Political liberties will continue to be curtailed by an authoritarian government, but personal liberties will remain. Russia will stay mostly open to the outside world, and Russians with some means will continue traveling around the world. The superrich, however, might have to park their assets in Russia -- or stay with those assets, away from Russia. In terms of historical analogies, in other words, the internal situation in Russia would resemble the early 1850s under Emperor Nicholas I rather than the 1950s under Joseph Stalin.

U.S.-Russia geopolitical competition will not be confined to Ukraine, but a string of proxy wars is also not in the offing. However, U.S.-Russia collaboration on Syria, Iran, and Afghanistan will suffer. The United States might use economic sanctions against Russia in an effort, Iran-style, to split the Russian elite and provoke the resentment of ordinary Russian people against their government. Although the static military confrontation is unlikely to be resurrected, nuclear deterrence will be reaffirmed, and competition in the military sphere will spread to other areas, from cyberspace to conventional prompt global strike.

This will be the dawn of a new period, reminiscent in some ways of the Cold War from the 1940s to 1980s. Like with the two world wars, the failure to resolve the issues arising out of the imperfect peace settlement and the failure to fully integrate one of the former antagonists into the new system are leading to a new conflict -- even if a large-scale war will again be safely avoided. This new conflict is unlikely to be as intense as the first Cold War; it may not last nearly as long; and -- crucially -- it will not be the defining conflict of our times.

Yet, it will be for real. Competition between two unequal parties carries additional risks of underestimating the other side or overreacting. Keeping the world safe in the uncertain times ahead will be a bigger challenge than many thought only two weeks ago.

Photo: Sean Gallup/Getty Images


Mission Impossible

With two-thirds of Iraq’s provinces in open conflict with the capital, Nouri al-Maliki is resorting to Saddam Hussein’s playbook to keep the country together.

When extremists from the Islamic State of Iraq and al-Sham (ISIS) took over parts of Fallujah and Ramadi in Iraq's western Anbar province in January, the crisis was largely interpreted as an isolated event -- the product of spillover from the Syrian civil war and Prime Minister Nouri al-Maliki's heavy-handed response to a growing Sunni protest movement. Zoom out, however, and the unraveling of Anbar is just one part of a much broader breakdown in center-periphery ties. Of the 18 provinces in Iraq, 12 are in open conflict with Baghdad, including the three Kurdish ones. All are -- or hope to be soon -- oil or gas producers. With 93 percent of Iraq's revenue derived from hydrocarbon sales, the country could pay a high price if relations deteriorate further.

Fraught relations between Baghdad and its provinces is, at least in part, a result of the U.S. occupation -- and of Washington's inability to decide whether to support a decentralized federal state or try to rebuild a strong center so that Iraq would not disintegrate. U.S. advisors favored the impossible: federalism, decentralization, Kurdish autonomy, but also a strong central government. Instead, the Kurds in 2005 forced through a constitution that gave their region considerable autonomy and severely restricted Baghdad's authority. The Kurds were elated, but American fears of a break-up of the country increased. As a result, the United States welcomed Maliki's growing assertiveness, backed him again after the 2010 elections, and ignored his growing authoritarianism. Iraqi provincial officials, on the other hand, grew resentful of Baghdad's heavy-handedness and increasingly envious of Kurdish autonomy.

The unresolved problem of the relative power between the central government and the provinces is being played out now in the increasingly open conflict between Baghdad and the provincial authorities. The future structure and stability of Iraq will be determined as much by that conflict as by the battle against ISIS in Anbar.

Contrary to conventional wisdom, the tension between Baghdad and the provinces is not predominantly sectarian. Nor is it the result of the machinations of terrorist organizations supported from outside Iraq. Both Sunni and Shiite provinces increasingly question the central government's control -- particularly over finances -- and a growing number of elected governors and members of provincial councils openly advocate transforming their provinces into regions with Kurdistan-like autonomy. Although the constitution provides a mechanism for such transformation -- and the 2008 Law for the Creation of Regions spells out the process -- Maliki has so far refused to allow any province to change its status. As of the end of 2013, however, at least six provincial councils had voted in favor of becoming autonomous regions.

Tensions between Baghdad and the provincial councils are not new, although they have never been as high as they are now. Elected provincial councils have been chafing for years under Baghdad's control, accusing the central government of hindering the reconstruction process by withholding money owed to them and channeling projects through inefficient ministries in the capital. The provinces may not have the administrative capacity and technical expertise to do any better, but under the present system of centralized control, a substantial portion of Iraq's investment budget has gone unspent every year, while citizens continue to suffer without sufficient electricity, water, and other essential services.

Part of the problem is that the constitutional division of power has never actually been settled. An attempt in 2008 to clarify the powers of the provinces and the nature of their relationship with Baghdad prior to the country's first provincial elections failed to settle the issue. The 2008 Provincial Powers Law, passed by the national legislature is ambiguous on many points and, like the constitution, subject to conflicting interpretations. Provincial councils believe the law gives them legislative powers -- which would make the Iraqi system a federal one -- but Baghdad insists that the provinces are simply components of decentralized administrative system.

Increasingly, the provinces making a bid for regionalization are holding up the example of Kurdistan as an illustration of why they want the change. Kurdistan, they argue, is more stable, increasingly prosperous, and able to provide the services other provinces lack, particularly electricity. It is also signing contracts with international oil companies and seeking to export its oil directly, despite vociferous opposition from Baghdad. Remarkably, among the politicians who cite Kurdistan as a model to emulate is Atheel al-Nujaifi, governor of Nineveh province, which is embroiled in its own territorial dispute with Kurdistan. Like most Sunni politicians, Nujaifi used to fulminate against the autonomy of Kurdistan and the independent contracts it signed with oil companies. Now he openly advocates working jointly with Kurdistan and ExxonMobil to develop the oil blocs in the contested territory.

Major Shiite provinces, particularly those rich in oil, also want to follow the example of Kurdistan. Although some Shiite leaders toyed briefly in 2005 and 2006 with the idea of forming a large Shiite autonomous region embracing nine provinces, they quickly dropped the plan because the numerical majority of Shiites in Iraq allowed them to become the dominant political force in the entire country. Indeed, the Maliki government is widely seen to be dominated by Shiites and to represent their interests. But the idea of Shiite autonomy is now being revived by provincial officials who do not believe Maliki represents the interests of the provinces. Basra's Shiite governor, Majid al-Nasrawi, for example, has been a particularly vocal advocate for provincial powers, demanding the right for Basra to sign oil contracts and convening a conference of the rebellious oil-producing provinces in January.

In this atmosphere of growing discontent, Maliki has made no effort to appease the provinces. Instead, he has taken steps to antagonize them further. On Jan. 15, he presented to his cabinet a budget for 2014 that reduces the bonus oil-producing regions are supposed to receive in addition to the normal budgetary allocation based on population size. Since 2013, hydrocarbon-producing provinces have been entitled $5 for each barrel of oil or every 150 cubic meters of gas they produce. The proposed 2014 budget would reduce the payment from $5 to $1.

The official explanation for the drastic reduction is that Iraq is experiencing budgetary difficulties. There is little doubt that Baghdad will face a budget deficit in 2014 -- as it did in 2013 -- because of stagnating oil exports and mounting expenditures, particularly on weapons. But that is not the entire story. Paying the provinces the amount stipulated by law would not increase the bottom line if Baghdad decreased the share it spends directly. The issue is primarily one of control.

The cabinet approved Maliki's budget and in response, representatives from seven oil-producing provinces held an emergency meeting in Basra on Jan. 25. There, the provinces agreed to demand that Iraq's legislature refrain from passing the budget until the $5-per-barrel payment is reinstated. The governor of an eighth province, Kirkuk, joined in their demands two days later.

If the legislature caves to these demands, Iraq civil servants could go unpaid and numerous projects will run out of funds, further adding to the tensions. 

But it's not all about control over the purse strings. A proposed increase in the total number of provinces in Iraq is also feeding the center-periphery tensions. In a move reminiscent of Saddam Hussein -- who frequently redrew provincial boundaries to punish or reward certain population groups and to strengthen his own control -- Maliki has set about creating several new provinces.

The government is seeking to carve two new provinces out of the northern Nineveh province, punishing its governor for suggesting cooperation with Kurdistan and courting the support of Christian and Turcoman minorities, who dominate, respectively, the proposed Nineveh Plain and Tal Afar provinces. Likewise, Maliki's cabinet has proposed forming another province with a large Turkoman population in Tuz Khurmatu, now part of Salahuddin, again punishing a Sunni province and favoring a non-threatening minority. For reasons that are less clear, Baghdad is also studying the possibility of carving a new Fallujah province out of Anbar.

Details concerning the boundaries of the new regions have yet to be released and there remains disagreement about the legality of the decision, with the speaker of Iraq's parliament, Osama al-Nujaifi, contesting the government's power to create new provinces. (A new province, Halabja, was officially formed on Jan. 1, 2014 on Kurdish territory, with little controversy because the move was initiated by the Kurdistan Regional Government, not by Baghdad.) The provinces that would lose territory under the proposed scheme have not been consulted and are bound to see the changes as yet another example of Maliki's disregard for their interests.

The centralized Iraqi state Maliki has attempted to consolidate is being challenged from many directions. ISIS is occupying parts of Fallujah and Ramadi, and the tribal militias to which Maliki has turned for help have made it clear that they are fighting against ISIS, not for Maliki and the central government. If the fight to dislodge ISIS is successful, Maliki will be forced to give more control to tribal leaders and their militias. The prime minister has also alienated oil-producing provinces by withholding payments to which they feel entitled and is inviting confrontation with governors and provincial councils by forming new provinces. Making matters worse, Baghdad remains at loggerhead with Kurdistan over control of oil and gas in the region. The question is no longer whether a new model of governance will replace the failing one created under the U.S. occupation, but whether it will emerge from negotiations or from further conflict. In short, Maliki's effort to maintain the old, centralized Iraqi state appears increasingly to be mission impossible.