Inside the intricate Saudi Arabian palace in the capital Riyadh, over jokes and a hearty meal lasting four hours on Tuesday, Feb. 18, senior officials of the United States and Russia decided on three things:
1) The longtime Cold War rivals will be friends again and resume normal and formal diplomatic and business relations;
2) Their companies will do business with each other again and
3) They will end the three-year war in Ukraine, whether Ukraine likes it or not, and with Moscow’s Vladimir Putin getting what he has always wanted since invading Kyiv on Feb. 24, 2022: a) keep Ukrainian territories it captured in Crimea in 2014 and in the current war (about 50,000 hectares) and b) Ukraine cannot join the 32-nation North Atlantic Treaty Organization (NATO) led by the US. The three-year Ukraine-Russia war has resulted in over one million casualties on both sides and both countries are running out of firearms and fighters.
NATO is the trans-Atlantic military alliance that guarantees an attack on one by third parties is an attack on all the other members and thus must be met collectively with force to defeat the invader. Combined, NATO has 3.5 million soldiers, population of 973 million and a defense spending of 54 percent of the global total.
US President Donald Trump’s officials have told NATO’s European members that if they want security guarantees for Ukraine (meaning, make sure that Russia won’t invade Ukraine again), they must spend their own money by raising their defense spending from less than two percent of their GDP to an ideal five percent, immediately. Raising their defense spending to five percent of GDP means Canada and the 30 European NATO members must increase their combined defense spending from the current $401.7 billion yearly to $1.122 trillion, a jump of $720.3 billion or 2.87 times (almost triple).
Currently, the US shoulders most of NATO’s defense spending, 66.66 percent of NATO’s total, or $880.0 billion which is 3.36 percent of US GDP in 2023. If Europe lifts defense spending to five percent of GDP, the US share of total NATO firearms spending will be reduced to 53.83 percent.
With Western Europe economic growth sluggish (1.3 percent growth in 2025; 1.1 percent for Canada) and debts of 86.4 percent of their GDP of $29.75 trillion, where will Europe get the $1.12 trillion yearly, just for what? Be the security guard of Ukraine which has 37 million people and GDP of $189 billion.
It’s like spending an additional $6 – yearly – for every $1 of the value of Ukraine’s economy. Western Europe and Canada might as well use the $1.12 trillion to retire their $25.7-trillion debts and save their own people from their current economic misery.
However, the fear is that US abandoning Ukraine now will be like the US abandoning South Vietnam in 1974, a humbling defeat. America’s enemy then, North Vietnam, gobbled up the South in 1975 to form what is now Vietnam. But having cobbled the end of the biggest land war in Europe since World War II, Trump may be looking for a Nobel Peace Prize.
Russia is bleeding economically for its Ukraine invasion. BBC estimates Russia spends 43 percent of its budget for the war, even while its inflation rages below 10 percent and interest rates have hit 21 percent.
In Riyadh, US and Russian officials agreed to explore the “economic and investment opportunities” from an end to the Ukraine war. When US companies left Moscow three years ago to sanction Russia for invading Ukraine, they lost an estimated $300 billion. Neither Ukraine nor Europe were represented in the Riyadh talks.
At the Saudi capital, Secretary of State Marco Rubio, National Security Adviser Mike Waltz and Trump dealmaker Steve Witkoff faced off with three Russians – Foreign Secretary Sergei Lavrov, Putin foreign policy adviser Yuri Ushakov, a former Russia ambassador to the US, and Kirill Dmitriev, head of Russia’s Direct Investment Fund.
BBC said Dmitriev has close connections to Putin’s family – his wife is close to one of Putin’s daughters, and few Russians know America’s finance and business sector better than Dmitriev, a former investment banker at Goldman Sachs and a graduate of Harvard Business School.
“We need to make joint projects, including, for example, in the Arctic Region, and in other areas,” Dmitriev said of future US-Russia economic ties.
The Feb. 18 meeting came less than a week after what Trump described as his “lengthy and highly productive” Feb. 13 phone call with Putin. The President said his phone call lasted three hours. “Putin wants to end the (Ukraine) war,” Trump said.
Before reporters at his Mar-a-Lago estate in Florida after the Riyadh meeting of his officials, Trump dismissed Ukrainian concerns about being excluded from the talks. Sarcastic at Ukraine President Zelensky, Trump said: “Today I heard, ‘Oh, we weren’t invited’. Well, you’ve been there for three years. You should have ended it three years [ago] – you should have never started it. You could have made a deal.”
“We weren’t just listening to each other, but we heard each other,” Sergey Lavrov, Russia’s foreign minister, said. “I have reason to believe that the American side started to better understand our positions.”
Rubio told AP the two sides agreed broadly to pursue three goals: to restore staffing at their respective embassies in Washington and Moscow, to create a high-level team to support Ukraine peace talks and to explore closer relations and economic cooperation.
Rubio stressed, however, “more work needs to be done.”
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Item: Who is the distributor of The Economist magazine in Manila? I get my weekly copies one week late, and with two issues of the weekly in one delivery. If a subscriber wants to complain, he needs to call Singapore.
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