National Defence Committee on Nov. 6th, 2018

[John Herbst]

Within the limits of Moscow's current military operations, Ukraine is fighting the Kremlin to a tie, to a standstill.

It's true if Moscow unleashed all its conventional forces it could beat Ukraine in a war. More precisely, the Kremlin could seize any territory in Ukraine it wants, but even if it did that, it would be hard for the Kremlin to occupy and hold it because it would face a guerrilla war.

I don't think the Kremlin is going to escalate to that extent. If they do, there will be much larger sanctions and this will be an earthquake, geopolitically. Not only will there be much higher sanctions, but there will be much greater NATO deployments to the east, and Kremlin security will be diminished.

My sense is Moscow is waiting to see the results of Ukraine's presidential and Rada elections. Putin is hoping there will be a more flexible leadership as a result of those elections, and that the new Ukrainian government will make concessions that Mr. Poroshenko and the current Rada would not.

Putin will be disappointed in this. No matter who wins the elections, Ukraine as a political entity has consolidated around the position of moving to the west. Once this becomes clear, the Kremlin is going to have to make peace on terms that are consistent with Ukraine gaining back all of Donbass.

When this happens, I am not sure. It could be three years from now, it could be 10 years from now, but we can expedite this process. We can make it come sooner by one, strengthening sanctions on the Kremlin, and two, giving Ukraine the military weapons that ensure that even an escalation by the Kremlin will be bloody for the Kremlin.

[Dr. Anders Aslund]

Let me add on the economic side, Russia does not have the economic might to do everything it does now. Its military expenditures have increased in real terms from 3.3% of GDP in 2008 to 5.3% of GDP in 2016, according to the Stockholm International Peace Research Institute, which offers the best statistics on military expenditures. That's an extra 2% of GDP each year devoted to his wars.

On top of that, as Ambassador Herbst mentioned in his initial statement, the cost of the financial sanctions according to the IMF is 1% to 1.5% of GDP each year. This is 3.5% of GDP; add a bit for the administration of Crimea and Donbass, and you're at 3.5% to 4% of GDP extra because of war and sanctions on Russia.

This means that Russia is doomed to stagnation as long as it performs this way. This is also the reason we are seeing Russia now doing, as Ambassador Herbst said, so much Gerasimov doctrine, hybrid warfare, because it's cheap. It's cheap to assassinate people, for example, and hybrid cyber is the cheapest way.

Therefore, we are seeing a different kind of warfare, but it also means that Russia does not have the economic strength to let the tanks roll into Ukraine.

[The Chair, Liberal, Stephen Fuhr]

Just as a reminder to members, when you see this paper, I need you to wind down your comments in 30 seconds so I can make sure that everyone has enough time.

The floor goes to MP Spengemann.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Mr. Chair, thank you very much.

Thank you, all, for being here.

You're talking to politicians. Politicians love the short game, love tactics and strategies that are focused on a two- to four-year horizon. You spoke of the three- to 10-year horizon.

Dr. Aslund, on the Russian economy, what are the prospects of a prosperous, peaceful, stable Russia without a rapprochement either to Europe and/or to the other entity we haven't discussed this afternoon, which is China?

I'm wondering if you could paint your vision of the long game for the committee. Where is this going to go, assuming that we are with you on what you've said on a short-term time horizon and tactics to make this more expensive to the Russians?

[Dr. Anders Aslund]

I think the economy is going nowhere. It will be stagnant as long as this situation continues. I don't think Putin will choose anything else. Russia has not had real economic growth since 2009. There has been an average growth rate of about a half of a per cent per year. This is a miserable situation. You can see all forecasts now suggest 1.5% per year, going forward. I suspect that they are even too high. There are absolutely no reforms even being discussed in Moscow today. They think they can devote a bit of extra money to investment. They don't have this money. Western sanctions have tied up money.

During the last four years, the real disposable income of the population has fallen by a total of 17%. Investment has fallen. You can't develop an economy like that. The question is: How long can the Russian people take it?

I lived in Moscow as a Swedish diplomat from 1984 to 1987, and the atmosphere in Moscow now is very much the same. People do nice things, like culture. They don't think about discussing the economy, because they see there is nothing they can accomplish.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Dr. Aslund, do you have a comment on China, Russian-Chinese relations? Is it a factor in this equation at all?

[Dr. Anders Aslund]

An old friend of mine, who was the deputy minister for foreign affairs in Russia, has said that Russia has refused to become a junior partner of the United States; therefore, it has become a junior partner of China. Russia is very junior in all regards in relation to China. Think of it. The Russian economy today is $1.5 trillion. It's rather less than the Canadian economy. It's the 12th biggest economy in the world. The Russian leadership doesn't understand that's where they are.

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Thank you very much.

Mr. Chair, I'm going to delegate the rest of my time to my colleague Mr. Wrzesnewskyj.

[The Chair, Liberal, Stephen Fuhr]

How much time is there?

[A voice]

There will be four minutes, or a little less.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

I have three topics I'd like to touch on. I will go through those three, and perhaps you can decide how to address them.

On the first topic, you talked about Russia grabbing territory through a “creep”, and you briefly discussed the Sea of Azov. In fact, Russia is attempting a territorial grab of sea as opposed to land in the Sea of Azov. You talked about ships originating out of Rostov-on-Don as potential sanctions. Could you expand on what other types of sanctions you would suggest if Russia continues to act the way it is currently acting in the Sea of Azov, or at the entry into the Sea of Azov? That's number one.

Number two, as we come up to the elections, Kharkiv, Odessa, Mariupol and Zaporizhia are all places where that particular interest is being paid. Would any of you like to comment on Zakarpattya, and what appears to be a Kremlin-Orbán tandem at play?

Finally, I travelled through Georgia during their first civil war, and I saw how, behind the scenes, Russia created the circumstances of civil war. You don't necessarily need to send armies to occupy. You can create destabilization and then feed that destabilization to the point of a failed state. Could you talk to that potential scenario, and what we can do to help Ukraine in preventing that scenario from potentially playing out?

Thank you.

[Daniel Fried]

On sanctions, the west in general needs to go through its sanctions escalatory options for either new Russian aggression in the Sea of Asov or in other places. We don't know where that aggression is going to be.

We do have escalatory headroom. It is possible to find escalatory steps that are tough enough to hurt the Russians and restrained enough that you can actually use them. There's a bracket here, and it is possible to fill that bracket.

One of the complexities of the sanctions tool against Russia is that in 2014, 2015 and 2016 there was one major area of Russian aggression, and that was against Ukraine. Now there are additional areas of Russian aggression, for instance, in the cyber area and against our elections.

It is complicated keeping the lines of sanctions straight; nevertheless, we shouldn't shrink from searching for escalatory options. I see two ways, two basic models. One is to escalate our sanctions against selected sectors of the Russian economy—finance and cyber, and to a lesser degree, energy. The second is to go after Putin's leadership structure, his cronies, and in any event—and this is in Anders Aslund's area—to go after and dry up the channels of corrupt Russian money flowing into our countries.

[The Chair, Liberal, Stephen Fuhr]

Thank you.

The last couple of minutes go to MP Robillard, if he wants to continue. There were some more questions that were asked, but I'll leave the floor to you, MP Robillard.

[Yves Robillard, Liberal, Marc-Aurèle-Fortin, QC]

Thank you, Mr. Chair.

I thank the witnesses for their excellent presentations. I am going to ask my questions in French.

Could you give us an update on the current situation in the Donbass region, which has been in conflict since 2014? Are there relevant aspects of this conflict you have not had the opportunity to share with us during your testimony?

[John Herbst]

The basics are that there has been a standstill now for well over a year. Ukraine has set up strong defensive lines. In fact, there are several strong defensive lines, so if the Russians were to break through one, they'd face another.

While there's been a standstill, literally every day there are scores of fire incidents. The OSCE monitors suggest that about two-thirds of these originate on the Russian side of the line, and Ukraine has deaths every month, as well as many injuries. We know that the Kremlin does too, although we don't have access to that information the way we do to the Ukrainian information.

I think that means we should be looking at ways to impose additional penalties, additional sanctions, on the Kremlin for these ongoing ceasefire violations, but this is, frankly, a hard sell in Europe. They like to think there's nothing really going on there, when in fact there are firings every day.

[Adrian Karatnycky]

Can I say something more broadly on the issue of the peripheries? The question of Transcarpathia was raised. In my view, Mr. Orbán, for all of his difficult behaviour, is not coordinating with Russia; he's playing his own internal nationalist game. Only 10% of the population of Transcarpathia is Hungarian. There are small Hungarian enclaves where there might be an optical problem, but there is no problem in terms of stability.

There is clearly effort by Russians to maintain agents and agency in areas like Odessa and in the areas of Ukrainian-controlled Donbass. Nevertheless, the security services are quite effective on that dimension. They are, as Anders has mentioned, a problem on the economic side, but those people who are dealing with counter-intelligence are meeting the challenges. Also, the local elites are not interested in playing the Russia card because they saw what happened in the Donbass. The local elites who played with Russia initially when Russia was fomenting unrest in the Donbass before the Russian aggression were pushed out of power and Kremlin puppets and outsiders came in. There is absolutely no incentive, even for people who may have treason in their hearts, to collaborate with Russia, because it has ended badly. It has ended with the destruction of wealth, etc.

So I don't think the Russian capacity to create massive, violent instability is on the agenda. Ukraine has a lot of resilience.

[The Chair, Liberal, Stephen Fuhr]

I'm sorry, we have to—

Mr. Bezan.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Chair, our witnesses have travelled a distance to be here with us. Originally when we planned this meeting, it was to be until two o'clock. We were doing a different number of witnesses beforehand, and then a second panel with our friends from the Atlantic Council.

I would ask that we extend the sitting of this committee so we can continue asking questions of the witnesses.

[The Chair, Liberal, Stephen Fuhr]

Fair enough. That's a good question. I will need unanimous consent for that. How long?

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Even half an hour.

[The Chair, Liberal, Stephen Fuhr]

Do I have unanimous consent?

[Sven Spengemann, Liberal, Mississauga—Lakeshore, ON]

Subject to [Inaudible—Editor] being able to stay in my place. I have to chair a caucus meeting, so if he's able to get that permission....

[The Chair, Liberal, Stephen Fuhr]

Let me suspend for a minute.

[The Chair, Liberal, Stephen Fuhr]

Can I get everyone to take their seats, please.

When we were in suspension, we agreed to continue. I'm sensitive to the fact that you have another meeting at 1:30 p.m., and you probably have to move to get to that meeting. We will go for another 15 minutes or so. I want to thank you for your patience.

I'm going to yield the floor to Mr. Bezan, for five minutes.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Thank you, Mr. Chair. I thank the witnesses for staying around and my colleagues for agreeing to extend the meeting.

Ambassador Herbst, you were listing off a number of things we need to do to strengthen the Ukrainian military. I agree with you 100% that Putin is provoked by weakness.

You mentioned a number of things on anti-tank, anti-missile, anti-air and anti-ship missile systems that are required. I noticed earlier this week that the Ukraine military did the first test in 19 years of their S-300, which is a predecessor of the S-400 anti-missile system. It was conducted successfully.

What other weapons do we need to provide to Ukraine? I know Canada is now selling them sniper rifles. You mentioned the Javelin anti-tank missiles that the Americans have been giving them.

Ukraine has a lot of tanks. I know they would like to have more technology on those tanks, and modernize them so they can do proper targeting.

What else would you suggest is required? I invite the opinions of other panellists on this as well, in terms of the weapons systems required for the Ukraine armed forces.