June 3, 2015: In another effort to avoid blame for the July 2104 destruction of a Malaysian airliner (flight MH17) flying over eastern Ukraine the Russian manufacturer of the missile believed responsible admitted that it was their missile. At a press conference a company rep showed how the pattern of fragments found in the aircraft hull could only have been made by one version (now out of production) of the missile used by their BUK M1 system. Less convincing was the company theory that the missile was not fired from territory controlled by pro-Russian rebels. The aircraft was shot down as it passed over territory controlled by pro-Russian separatist rebels in Donbas. All 298 passengers and crew were killed. The airliner was at an altitude of 10,000 meters and the rebels were known to have some captured anti-aircraft systems (BUK M1s) that can hit targets as high as 14,000 meters. For three days the rebels allowed only limited access to the site for international airline accident investigators. For a year Russia had officially denied responsibility and blamed the incident on a Ukrainian combat jet or, as the evidence from the reassembled aircraft fragments grew, that it was an ground launched missile but not Russian. The latest admission by the missile manufacturer was part of this media campaign to shift blame but appears to have backfired. Russia will never admit that the missile was fired with their assistance by rebels under their orders.

Despite the sanctions and low oil prices Russia continues to maintain high military spending. This is hidden from the Russian public by increasing the size of the classified (“black”) budget. This has doubled since 2010 to $60 billion a year. Much of this is believed for defense related items. Thus Russia (with or without the black budget) has the third highest defense spending budget in the world (after the U.S. and China). But while the U.S. spends 18 percent of its government budget on defense, Russia is spending about a third (or more). As a percentage of GDP the Russian defense budget is close to five percent, versus less than two percent for China and less than four percent for the United States. Russia is still below previous peak defense spending. For example, World War II cost the U.S. over 33 percent of U.S. GDP. World War II cost Russia more than half its wartime GDP, and they continued spending over 20 percent of GDP during most of the Cold War. The U.S. was able to spend much less of the national wealth on military matters. As a percentage of GDP American military spending continues a decline that has been going on since the 1960s. Back then because of the $686 billion cost of the Vietnam War, defense spending was 10.7 percent of GDP. That went down to 5.9 percent of GDP in the 1970s and, despite a much heralded defense buildup in the 1980s, still declined in the 1980s (to 5.8 percent.) With the end of the Cold War, spending dropped sharply again in the 1990s, to 4.1 percent. For the first decade of the 21st century, defense spending has stayed below four percent of GDP. Russia still has domestic needs resulting from economic mismanagement during the Cold War. But now the Russian government is trying to convince Russians that they are at war again and military spending must take priority. The government also stresses that the damage done by sanctions and low oil prices is not as bad as earlier thought. Earlier in the year the government admitted that the military operations in Ukraine had cost Russia over $100 billion so far and would probably cost more before it is all over. It was also admitted that the sanctions made it very difficult to borrow abroad. Russians also know that over $150 billion in cash held by Russian businesses has left the country because the owners felt this money would be safer abroad. All this meant a continued contraction of GDP into 2016. But now the government believes the contraction for 2015 will be 2.7 percent instead of 3.8 percent and maybe no contraction at all in 2016. The opinion polls, many of them kept secret (as all were during the Cold War) indicate that the public is less convinced that Russia is “at war” with NATO or anyone else and more interested in more non-military spending.

Russia has other internal problems which add up to a resumption in population shrinkage. For centuries Russia (rebranded as the Soviet Union in the early 1920s) was considered a threat to its neighbors in part because of its larger population. But since the Soviet Union fell apart in 1991 (and half the population broke away to form 14 new nations) the remaining Russian population has been in decline. Twenty years after the Soviet Union collapsed, the Russian population implosion was getting worse. While in the 1990s the population was shrinking at a rate of .1 percent a year, in the first decade of the 21st century that increased to .2 percent a year. This was because the non-Slav Russians are having fewer children, just as the Slavs have been doing (or, rather, not doing) for decades. The Russian population had declined three percent since 1989, from 147 to 142.9 million. The proportion of the population that is ethnic Russian (Slav) declined from 81.5 percent to 77 percent in that same period. The Russian slide could have been worse had it not been for the fact that millions of ethnic Russians in the 14 new states felt unwelcome with government controlled by the locals, not Russians in far off Moscow. Often the locals wanted the ethnic locals in their midst gone and Russia made it easy for ethnic Russians to return to the motherland. This prevented the Russian population decline from being closer to ten percent. Until the recent invasion of Ukraine, sanctions and lower oil prices, the Russian birth rate was growing again. That has stopped since the invasion of Ukraine and more Russians are seeking to emigrate as are many foreigners working in Russia. The extent of this can be seen in Moscow where rents for high-end (“Western”) apartments (for wealthy Russians and foreign professionals) have declined over 40 percent in the last year.

Since the Soviet Union fell apart many Russian neighbors have feared a revival of the traditional Russian aggression. Thus in 2004 Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia and Slovenia joined NATO, putting parts of the former Soviet Union (Estonia, Latvia and Lithuania) within NATO and on Russia’s border. Many Russians do not like this, for Russian policy since 1945 has been to establish a "buffer" of subservient countries between Russian territory and Germany and the rest of Western Europe. This attitude is obsolete in a practical sense but old habits die hard. The Russian government said it was willing to work with NATO in areas of mutual benefit but that did not work out. Now there is a state of undeclared war between Russia and NATO. These new NATO members are more worried about the renewed Russian aggression than the original NATO members (the U.S. and Western Europe). The nations of “east NATO” are asking for more presence by troops from “west NATO.” Some of the eastern members (especially Poland) have called for the permanent basing of U.S. troops on their territory. Some of the smaller states (like the Baltic States of Estonia, Latvia, and Lithuania) believe Russia could overrun them in two days and senior NATO military commanders openly agree. Russia considers such talk more evidence of NATO aggression against Russia.

The nervousness over Russian aggression is spreading west in part because of increased Russian military activity in West Europe. It’s not just the sharp increase in Russian bombers and recon aircraft over the Baltic, North Sea and Atlantic, but increasing activity of Russian submarines off the coasts of Baltic States and those bordering the North Sea and Atlantic. While Russia admits the aerial activity it is quiet about the submarine operations.

The UN believes that over 6,400 people have died in eastern Ukraine (Donbas) since early 2014 and more than 16,000 wounded. More than a million people have been driven from their homes. Worse, the UN openly agrees with the growing evidence that Russia is responsible for all this, not a spontaneous uprising by disaffected Ukrainians. Russia, as a founding member, has a lot of clout in the UN but not enough to reverse the UN accusations regarding Ukraine. The UN blames Russia and the Russian backed rebels for continued violations of ceasefire agreements and firing on civilians. NATO analysts note a buildup of Russian forces on the eastern borders of Ukraine and other indications that the February ceasefire is about to be broken (as the one before it was) by another major attack in Donbas, led by Russian troops who, officially, are not there. Violations of the ceasefire are increasing, another indicator of a new offensive.

Over a thousand Russian soldiers have been killed or wounded in Donbas during the last year and the Russian government is finding it impossible to manage the news about how those soldiers ended up in combat In late May the government enacted a new law that made it a crime to discuss or reveal any information about Russian military deaths in peacetime. This is mainly in response to the continued political problems with the Russian personnel losses in Ukraine and the fact that many of the dead are conscripts. Even before the Cold War ended in 1991 conscription was becoming more unpopular in Russia. That dissatisfaction grew rapidly after 1991. One government response to that was the reduction of conscript service to twelve months and a law forbidding sending conscripts into combat during peacetime. In response to this media mess the Russian military began carefully screening who it sent into Ukraine to eliminate those who might change their minds. This means more conscripts from less affluent parts of Russia (Siberia and the Far East), to whom the extra pay means more and the danger is not as daunting, are selected. The rebel controlled areas of Donbas are not heavily policed and many of the civilians there don’t want to be ruled by Russia but keep their mouths shut and their cell phone cameras active. With the addition of commercial satellite photos and military grade satellite photos released by the United States it has been possible to identify the extent of the Russian effort. Russia still pushes the official line that they have no troops in Ukraine and call any evidence to the contrary another example of how clever and insidious the NATO plot against Russia is. So far this is gaining some traction inside Russia but not so much anywhere else.

As much as Russia tries to hide the presence of Russian troops in the Donbas those troops have become more and more visible to the general public. Some commanders believed that if conscripts volunteered (and signed a document attesting to that) they could be sent into Donbas. Apparently some conscripts, caught up in the nationalist “NATO is conspiring against us” propaganda the government has been pumping out with increasing frequency and intensity, really did sign the document willingly. They were also encouraged by the much higher pay offered for those serving in a combat zone. But as it always happens in the military, some volunteers were acting under duress or were deceived when told signing the contract was a formality to justify the extra money for some “special training exercises inside Russia”. Some of these volunteers later figured out where they really were and deserted inside Ukraine and have been sharing details of their experiences with Ukrainians and others outside Russia. This sort of thing is officially denied and denounced by the Russian government via the government controlled mass media. But the Internet is another thing and there are a growing number of Russians who call out their government for lying about what is going on in Ukraine and for forcing conscripts into combat zones. Some of those conscripts have been sent back to their families in sealed coffins with the explanation that it was because of a training accident. But soldiers who served with some of the dead soldiers, especially those who were also conscripts, are providing more accurate and embarrassing (to the Russian government) versions of what went on.

On another front Russia and Iran are both reconsidering their support for the Assad government in Syria. This is part of a new Russian-Iranian call for a peaceful, political settlement of the Syrian civil war. Considering the ISIL (Islamic State in Iraq and the Levant) attitude towards the rest of the world, that is not likely. Russia and Iran are both having financial problems (because of low oil prices) at home and support for the Assads is very unpopular. Russia and Iran now appear willing to take the political hit at home for abandoning the Assads because less cash for the Assads means more money spent on the needs of Russian and Iranian civilians. Already Russia has pulled over a hundred technical advisors out of Syria.

May 27, 2015: The U.S. has pledged another $18 million in humanitarian aid for Ukraine raising the total for such contributions since early 2014 to $61 million. A lot more American cash goes to Ukraine via the UN. All this is to assist the victims of Russian aggression in eastern (Donbas) and southern (Crimea) Ukraine.

May 24, 2015: The government enacted a new law meant to shut down or curb the activities of foreign NGOs (Non-Government Organizations, like the Red Cross, pro-democracy and anti-corruption groups). Since 2013 the government has carried out raids (“inspections) on many of the 2,000 NGOs in Russia to check their financial records and remind these organizations that they are not welcome. The government is angry at the NGOs and Russian pro-reform groups for publicizing corruption among pro-government politicians and senior officials. In 2012 a new law was enacted that declared foreigners working for NGOs as "foreign agents" who must register with the government and be subject to taxation and constant supervision. The FSB (the Russian FBI/CIA) has long accused Western nations of working with pro-democracy Russian NGOs to spy on Russia. Western states deny it. The government has been campaigning against NGOs and foreign influences in general since 2006. Since 2012 more NGOs were not allowed to register and were being ordered out. Western countries see this as part of an effort to turn Russia back into a paranoid police state, as it was during the Soviet and Czarist periods (as in the last thousand years). China is fine with this and would prefer Russia be more like the Soviet Union than a Western democracy.

May 23, 2015: In eastern Ukraine a rebel leader and six of his bodyguards were ambushed and killed by members of a rival rebel group they had been feuding with. Russia and the rebels blamed Ukraine and/or NATO but it was widely known that the dead warlord had been openly feuding with other rebel groups for months. The dead man was also accused (by Ukraine the U.S. and others) for war crimes. The dead warlord had escaped a similar ambush in March.

May 22, 2015: Norway has surpassed Russia as a supplier of natural gas to Western European nations. Russia still supplies about 40 percent of the natural gas used in West Europe but the continued aggression in Ukraine and accusations that Western European nations are planning an invasion of Russia has European customers for Russian natural gas anxious about the reliability of those supplies.

May 20, 2015: Finland sent out letters to its 900,000 military reservists informing them of where to report for duty in the event of a national emergency. This is in response to increasingly aggressive and threatening statements and military moves by Russia. Finland has 16,000 troops on active duty but has organized units and equipment for another 285,000 who would be called up in the event of an imminent military threat. The other 600,000 reservists are intended as replacements for casualties or for forming new units. The letters specify where everyone must go if mobilization is declared, something that had not been done for a long time. The government admitted that it had been drawing up plans for the reserves for the last two years.

May 19, 2015: Ukraine announced that it would like some help from the United States in creating anti-missile defenses. There are currently no programs under way to do this and Russia has indicated that Western anti-missile systems in Ukraine might be considered an act of war by Russia. In 2009 the U.S. dropped plans to install such missile defenses in Poland and the Czech Republic, in part because of the Russian opposition. This decision demoralized East European nations, who had been looking to the U.S. for help in keeping the Russians away. Russia then said it would not install 60 Iskander ballistic missiles in Kaliningrad (weapons designed to destroy anti-missile missiles). Russia feared that the anti-missile system would interfere with Russian ballistic missiles aimed at Europe. The cancellation of the American anti-missile effort was so popular in Russia that Iran was criticized and Russia said that it might even back harsher sanctions against Iran (for its nuclear weapons and ballistic missile program). This was meaningless, as China also has a veto in the UN, which is enough to stop any sanction effort.

Ukrainian officials are being more public in discussing their fears that Russia will eventually launch a full scale invasion and seek to reincorporate Ukraine into Russia.

In Syria the Russian embassy was hit by two mortar shells. There were no casualties and little damage.

May 17, 2015: Two Russian soldiers were wounded and captured in eastern Ukraine on the Ukraine side of the front line there. While hospitalized in Kiev the soldiers admitted that they were members of the Russian armed forces and stationed in Donbas to carry out missions to collect information for Russia. In response to this Russia denied the two were on active duty and insisted they had been discharged from the military years ago and were in Donbas on their own. But the two Russian soldiers gave lots of details of how they were supplied with a cover story and told that Russia would take care of them (and their families) if they were killed or captured. Ukraine announced in late May that the two would be put on public trial in July.

May 16, 2015: Another satellite launcher (a Proton M) failed, leaving a foreign customer (Mexico) disappointed. The billion dollar satellite was insured but each time there are losses because of a Russian rocket failing, insurance rates increase for all users of Russian launchers. This makes Russian launchers less competitive. There was another Proton M failure in 2014 but six successful launches since then, until this one. The government ordered a full investigation.