America failed to grasp Russian goal in Black Sea

Russian land grab was the real cause when she fought Ottomans. Similarly the real cause for Russia to unleash massive attack over Odessa & Southern Ukraine is to grab the entire Black Sea coastline rendering Ukraine a landlocked country. Details follow:

On March 29, 2022, one month after Russian invasion into Ukraine, I wrote my blog post titled “Russia extending Black Sea coastline” (Read) wherein I stated that the real cause is to extend the coastline Russia officially has in the black Sea which is a meagre 800 km to be extended up to  app. 2,960 km a whopping 370% increase where the net gain for Russia tantamount to be the largest sea grab in history.

Here are the selected snippets of the blog post for your reading pleasure:

Indeed the fault lies on America led NATO, who bent upon eastward expansion to its logical conclusion made Bucharest Declaration in April 2008.  Much hype was placed on Ukraine and Georgia as star entrants to the Alliance. Evidently, alarm bells rang in the halls of Kremlin. Citing humanitarian concerns, Putin delivered the first salvo. Grabbing Abkhazia with an estimated 160 km sea-front plus four airports in good working order: Gogra, Sokhumi, Gudauta and Ochamchire.

NATO handed over one more plate to Putin, this time engineering a colour revolution in Ukraine unseating Yanukovych in 2014 and gradually bringing Nazi & Rightist group to rule Ukraine. Right from the beginning Putin wanted Crimea badly which was earlier ceded to Ukraine by Khrushchev in 1954. Already having the army oiled and ready Putin sent his shock troops that took Crimea almost bloodlessly. Subsequent referendum held in Crimea, as expected, endorsed it as part of Russia. Gain another coastline length of 760 km, with plums in the form of well-maintained ports including coveted Sevastopol, Yalta and Theodosia.

Present conflict engulfed the Sea of Azov with 360 km coastline originally shared by and between Russia & Ukraine falling in its entirety under the control of Kremlin. Port city of Mariupol is already in the hands of Russian forces and another Port city Berdyansk is just a low hanging fruit. Kerch Port, straddling Crimea and Sea of Azov as the entry point, is in Russian possession.

The matrix is now very clear. Russia is contesting the entire black Sea coast line of Ukraine beyond Crimea. Kherson is flipped in a quick foray. Mykolaiv is next to fall and Odessa is under bombardment.

I tallied the extent of Black Sea coast line. Russia originally had 800 km. part of which facing the Azov Sea. Adding the acquisition from Abkhazia and Crimea it extended to 1720 km. Azov victory lands another 240 km. (Originally belonging to Ukraine) jacking up the total to 1960 km. My presumption is Russia will gain further 1,000 km before hostilities cease. By then Russia emerges the largest coast line holder of Black Sea with close upon 2,960 km. This is tad more than half of the entire Black Sea coast line of 5,800 km.

Presumably Russia is beating America by implementing a successful business strategy.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

 

 

What is Singapore export model?

Undoubtedly, the driving force behind Singapore export model is fine-tuning of external trade, as it is the key vector for the city state. Without much of physical resources, Singapore by and large has embraced Entrepot trade in addition to trade inventorizing. But then there is a looming geoeconomics risk that could throttle her in near future. More for now:

One third of entire external trade hinges on entrepot consisting of machinery, equipments and refining of oil. Brokering & indenting of raw material supplied by neighbours Indonesia and Malaysia in the form of rubber, timber, spices pearls and many others constitute almost one third of the exported goods.

For this there is a backbone of well-developed sea port in Singapore city and Changi airport that function as trade and passenger hubs. Causeway connecting Singapore with Johor State across the sea lane dividing between the two is vital for the smooth functioning of trade and passenger transit to and fro.

The major tipping points are specified below:

1.  Multinational companies whose branches and go-downs straddle across the entire coast line is the hive of export activity. From the last count there are 3000 odd companies accounting for almost 2/3^rd export volume due to fact these companies are provided with facilities at affordable cost and enjoying taxation rate of 17% which is, lower than personal taxation at 20%.

2. Most of Singapore domestic population of 3.2 million are either professionals or skilled workers standing as the backbone for the management & marketing fields, while semi-skilled and blue collar workers are mainly immigrants numbering around 2.5 million out of which around 36% are from Malaysia alone. The non-citizens holding permanent residency is low compared with the daily travellers across the causeway. This latter figure is steadily climbing due to the increased cost of living within Singapore despite the fact that inflation is tightly controlled by a combination of monetary & fiscal policy

3. Four countries namely, Hong Kong, China, Malaysia and Taiwan in that order accounts for 67% of the export by Singapore. The bottom line is that Singapore cannot alienate any of these countries without exposing herself to geoeconomics risk

4. Structure of exports is skewed in favour of three sectors. Machinery & equipments which include integrated circuits cover up 37% of total exports giving approximately US$ 140  Billion, followed by refined petroleum products at 19% amounting to US$ 76 Billion. Chemical product ranks third at 13%. In addition to bunkering services of 7% there are host of other items exported such as gold which is estimated to be in the region of US$ 19 Billion and ticking.

5. Last but not least is the strategic location of Singapore in the west of the Southern tip of Malaysian peninsular. Cargo ships & oil tankers plying from the West to East has to pass Singapore port.

The crucial fact is that all five points enumerated above have associated geoeconomics risk. So far Singapore business strategy has managed to neutralise these. What about future?

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

 

 

 

Republishing, Montreux Convention hanging by a thread

I wrote this blog post “Montreux Convention hanging by a thread”, on August 3, 2021. As Lausanne Agreement is about to lapse and being a topical interest I am republishing this. The original reference is:

https://strbiz.blogspot.com/2021/08/montreux-convention-hanging-by-thread.html

Come August 2023, Lausanne Agreement lapses, along with it, up goes in the air, Montreux Convention executed as a corollary to Lausanne Agreement. Hanging by a thread Turkey has the liberty to choose whether to give Montreux Convention new lease of life or administer its last rites!

When the Lausanne agreement was ratified in August 1924 by Turkey, it did not contain any clause re expiry date. Under international law & convention all such agreements lapse after the period of 99 years. Hence come August Lausanne Agreement lapses in Toto. Incidentally under the terms of agreement contracting parties agreed by Article 23 “To recognize and declare the principle of freedom of passage and navigation by sea and by air in the time of peace”. There are two salience:

1) This freedom of passage is restricted to innocent passage (Read: civilian travel)

2) This is related to Bosporus and Dardanelles, called collectively as Turkish Straits

Montreux Convention of 1936, driving legitimacy from the Lausanne Agreement went on to deal with military related passage. Consequently, several restrictions were placed as regards to number, tonnage, size and other specifications of the military vessels in transit. The right to close Turkish Straits was granted to Turkey, under Article 20 & 21 if Turkey faces anytime, “imminent threat of war against it”

What was significant is that unless Lausanne Agreement, Montreux Convention   stipulated the expiry date after ten years from 1936. However after this Convention lapsed in 1946 it was renewed several times since then, to facilitate and regulate military movement via the Turkish Straits. Hence it is still in force at the time of writing.

Although Turkey is bound to honour the terms of the Convention, she has the right to leave it anytime she wishes. That said, once the Lausanne Agreement Lapses in August 2023, Montreux Convention is rendered ineffective. This event frees Turkey out of any voluntary or involuntary bondage to honour any terms of understanding that arises either as follow-up of Montreux or any other that could be put in its place. As a result both Bosporus & Dardanelles transform into unencumbered properties of Turkey.

Turkish straits are important & vital conduits to countries bordering Black Sea out to Mediterranean. Pointedly it is doubly significant for Russia which does not have all weather outlets elsewhere. Evidently, Russia and other Black Sea nations have to live with Turkey as she would be transformed into a geoeconomics giant in 2023 and in an unenviable position to call the shots regarding passage thru Turkic Straits.

Presumably, Turkey is free to impose transit fees and any other restrictions over the movement of both civilian and military traffic via the Straits. Precisely, two more years are left for Russia and Black Sea nations to come to terms with and enter into some short of entente cordiale with the emerging geoeconomics power.

 

Cheers!

 

Muthu Ashraff

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist