Trump’s mineral deal is like WWI Versailles reparations – but worse
Trump’s mineral deal is like WWI Versailles reparations – but worse
My old colleague and The Daily Telegraph leader writer Ambrose Evans-Pritchard dropped a bomb this morning. The Telegraph, known in the trade as “the reporter’s paper,” got hold of a copy of the US draft minerals agreement offered to Ukrainian President Volodymyr Zelenskiy last week and it’s a shocker.
Bottom line (read our piece) is that Trump was not offering anything concrete – especially not the genuine security deals that Zelenskiy is demanding with good reason – but wanted to effectively take control of all of Ukraine’s natural resources. The deal was supposed to cover $500bn that Trump wants as compensation for the last three years of support, but in effect the US takes control of all the natural resources worth north of $7 trillion dollars.
This is a deal that would make colonialists blush. Trump is clearly thinking: “Ukraine is over a barrel with its trousers down and so I'm going to take the lot.”
This is wrong on so many levels. First are the numbers. The deal is supposed to be worth $500bn in compensation for the $300bn that the US sent to Ukraine. So, the US takes some profit – fair enough. Except the total amount of Ukraine aid approved by congress was $177bn. Trump just made that $300bn number up. Moreover, the actual amount transferred to Ukraine was closer to $70bn. Zelenskiy was complaining just two weeks ago that $100bn of that money is “missing” and he doesn’t know where it is.
This is not the first time this has happened. From the $61bn aid package that was rushed through last April, after the US ran out of money for Ukraine completely last January in a disaster that led to all of Ukraine’s non-nuclear power stations being destroyed, only half of that money arrived too.
For all the bluster, the US is a terrible partner and it’s amazing that Ukraine has got this far living on these half measures. No wonder Zelenskiy is currently looking so bedraggled. As Marc Champion said in a Bloomberg column last week, if the peace plan is organised on mercantile lines there will only be “bones” left to deal with.
Zelenskiy has understandably iced the deal – and immediately left Munich for the Middle East. He was in the UAE on Monday, Turkey yesterday and due in Riyadh today – but not to attend the US-Russia the peace talks but to meet with MbS for a “chat”. What is he talking about do you think? In UAE he signed off on the first investment and trade deal and more of the same is expected in the Kingdom of Saudi Arabia (KSA) today. Clearly he is hawking his treasure trove of minerals about to see if he can get a more reasonable offer from the Arabs.
And I'm sure they will be interested. They are already heavily involved with Russia, thanks to the Russia Direct Investment Fund (RDIF) so actually this is not a bad idea. If the Arabs invest into Ukrainian minerals then they are actually in a strong position to stop Russian President Vladimir Putin attacking again as they are actually friends. They are all in OPEC+ for starters. The idea that if it was a US mine Russia won’t attack because the US will bomb the crap out of Russia is a lot wobblier proposition and less likely to deter Putin anyway because the US hasn’t sent Ukraine half the arms it committed to sending – not even promised, actually committed itself to providing – so the idea that Uncle Donald would go to war with Russia for the sake of protecting a mine worth a few hundred million bucks looks very unlikely to me.
As for the European leaders, they are running about headless chickens. French President Emmanuel Macron’s emergency meeting was a flop as nothing concrete has come out of it. They got bogged down in a discussion of who could send how many peacekeepers to police the mooted DMZ, but as I have said before this is a pointless discussion as Russia will never allow even one soldier from a Nato country onto Ukrainian soil. Russian Foreign Minister Sergei Lavrov said this again explicitly in Riyadh yesterday.
In lieu of any concrete solutions, or even a way to muscle into seats at the negotiating table, the EU is doing what it always does, and is throwing money at the problem. German Foreign Minister Annalena Baerbock announced that today EU foreign ministers will discuss a new plan to put together an extraordinary €700bn package for Ukraine on top of a more concrete €6bn package just announced that will actually go to Kyiv.
€700BN is a ridiculous sum and a complete pipedream. For starters she had a huge public fight with German Chancellor Olaf Scholz after he refused to send just €3bn to Ukraine. Second, no one in Europe has that kind of money. One of the reasons Scholz nixed the €3bn was the German budget doesn’t have €3bn spare and would have to cut social spending etc to fund it unless the “Schuldenbremse” limits on borrowing are lifted. And finally, to put that in context, €700bn is well over three times more than Ukraine’s entire economy is worth at its pre-war peak. Wars are an extraordinary waste of money and resources, but €700bn is an extra-extraordinary waste. Far better to simply give Ukraine to Putin and let him pay for it, as the EU needs that money for itself as it is in a very ropy state already.
What is wrong with the world? Everyone seems to have lost their minds. The irony is that Trump is already starting to look like the grown up in the room as, bull in the china shop he is, he will probably do a deal with Russia to stop the war and at this point that looks like by far the best option on any terms.
I'm now very curious about what the terms of this deal will be. The teams dropped a lot of very tantalising tips yesterday. Secretary of State Marco Rubio was talking about a “historic” opportunity for Russia to revive its “economic ties” with the US. What does this mean? What’s he hinting at? Trump likes Russia and Putin and I'm sure the deal maker he is, he is well aware that Russia has even more minerals than Ukraine and it can make you very rich if you are lucky. One thing that he has already made plain, is iconoclast that he is, he is capable of some out-of-the-box thinking, like his suggestion Brazil send peacekeepers to Ukraine if the Russians don’t want any Nato countries there.
But what really has me reeling is the fact that Trump has, in the space of three weeks, managed to smash the very unipolar order that has the US as the global hegemon. Breaking up this system and switching to what Putin calls a multipolar order has been the overreaching goal for the Kremlin. It lies behind everything that Putin has done – the creation of the Eurasian Economic Union (EUU), the objections to Ukraine joining Nato, the investment into energy transport infrastructure in all directions, the outlawing of foreign-backed NGO pushing someone else’s ideology – and he made little progress. Then in a few weeks Trump has done all these things for him.
Regardless of the deal Ukraine is eventually offered, Putin has already won. Everything has just changed. We now live in a multipolar world.