A turn in the affairs of the world

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Kiev is losing its desperate gamble to show the world that its war with Russia is no lost cause. The Zelensky team has been under intense Western pressure to launch its long-mooted counter-offensive on Kherson. Back in July, Richard Moore, the head of MI6, speaking at the Aspen Security Forum, was predicting that the Russian forces were ‘about to run out of steam’ and that the stalled Russian advance gave Ukrainian forces the “opportunity to strike back with the increasing amounts of good weaponry they have received”. 

It was a clear prompt from British Intelligence that some counter-attack was expected from Zelensky.

Well... that was in July. And a few days ago, the Kherson counter-offensive finally was launched amidst considerable pre-launch ‘hype’ in the Anglo Media. Reports and corroboratory photographs suggest, however, that not only has the offensive begun as a grisly failure - with the Ukrainians pushed back from the few villages they initially took in a tactical thrust - but significantly, Ukrainian forces suffered severe losses. More than 1,700 men were lost in this first clash.

How quickly contexts shift in these tumultuous times: The Russians were never stalled; it just suits Moscow to ‘slow walk’ their military operation in Ukraine. The extended military timeline simply offers more scope for Moscow’s energy squeeze on Europe to bite. Incrementally advancing, classical artillery warfare also limits Russian casualties, whilst inflicting bigger losses on their enemy.

That is the narrow context. The wider context reveals the ground shaking beneath Zelensky’s feet: European public opinion has begun to cascade in criticism of Europe’s sanctions on Russia, and amidst deepening war fatigue as the slow, calibrated steamroller of Russian artillery fire trundles onwards. Zelensky is at risk of seeing his Western support subside or disappear.

Ukraine notably has been unable to reinforce besieged positions, or counter attack, and then hold re-conquered territory. Consequently, we have seen the EU financial contribution to Ukraine increasingly questioned as its public face an inflation-led austerity -- together with fewer EU weapons systems being shipped. Even the Americans are shrinking the weapons’ deliveries as their own (explicitly insufficient) inventories sink towards critical.

Europeans are in crisis faced with huge bills for energy usage; with small and medium-sized businesses simply priced into bankruptcy, they are turning on their leaders. This is why the West sees it as so critical to show the electorate at least some tangible, sustained result from its war in Ukraine -- even if that ‘victory’ would be more optics and PR than substance. The Kherson counter-offensive was supposed to be ‘it’, but it’s not going to work. And the consequences will ripple through the American and European polity.

The anxiety in the West touches on deeper layers. It is not just rooted in Ukraine. The global structure is changing. Trade as we know it - a system that depended on an interconnected world, and on long complicated supply lines - is already gone, and is not returning any time soon.

Furthermore, the disruption to those complex ‘just in time’ supply lines through sanctioning Russia is the reason why soaring inflation will not be tamed any time soon, either. Complex supply chains work only in peacetime, but not when the world is at war, be it a hot war or an economic war. 

Yet more significant is the ‘mega picture’ that is worrying the West -- which is that the former inter-connectedness that now is palpably fracturing into separate trade spheres very simply underwrote Western low inflation (Chinese cheap manufactured goods, and Russian cheap energy). And contingent upon that low inflation flowed the companion piece of a decades-long era of low-interest rates. These together comprised the very ‘stuff’ of the Western global economic success, and also defined its vulnerability: top-heavy debt loads.

The West became very rich by ‘printing’ money to buy many more consumer goods than the value of the output made warranted. But that ability to ‘print’ arose from unique circumstances of low inflation - that was, in turn, enabled by cheap exports coming from Russia and China.

Naturally, the West crucially doesn’t want the low inflation paradigm to end, but in this conflicted era where commodities, factories, and fleets of ships are dominated by states (Russia and China) that are in conflict with the West, the low inflation world has reached its end.

In today’s paradigm -- of a Kherson counter-offensive ‘flop’ -- Western leaders will be, at the least, forced to test the viability of continuing their policy framework as the reality hits home that energy supply inexorably limits the extent to which these "Save Ukraine" policies can be pursued (without provoking popular revolt at home).

This unfolding ‘reality’, of course, similarly limits by extension, the derivative Western geo-strategic objective associated with Ukraine --which is the saving of the ‘liberal rules order’ (so central to Western care); an order that is already threatened by geo-strategic structural change.

What is paradoxical to this affair are reports that Zelensky was warned by his Chief of Military Staff, Zaluzhny, and the High Command, that attacking the Russians in the Kherson region might lead the Ukrainian forces into a trap -- a lure, in other words. They warned him against the Kherson offensive (on flat steppe land with few fortified trenches and little forest cover), as likely to lead to substantial losses in manpower, as well as to the demoralization of troops. They proposed an offensive centered around Izium in the Kharkiv Oblast, instead.

But they were overruled. Zelensky, to be fair, has a dilemma: The British and the Americans are pushing adamantly for the Kherson operation -- they have been talking about it for months, and it is they who ‘pay the piper’. It will be ironic, however, should this turn out to be the error of judgment by the West that pulls the first thread out from their Ukrainian project.