Why does Russia care about Ukraine, a country that's said to be "as poor as Paraguay and as corrupt as Iran"?
Vladimir Putin would like you to believe it's because he's ensuring the safety and well-being of the millions of Russians living there. And, to a certain extent, he has a case.
Look at the following map, which breaks down the demographics of Ukraine by ethnicity.
Significant portions of the country are populated by ethnic Russians -- which isn't a surprise, given that Ukraine was once a member of the Soviet Union. This is particularly true when you look at the Crimean Peninsula (the brownish area on bottom of the map jutting into the Black Sea) and the Eastern regions bordering Russia.
But this still doesn't explain why Russia felt the need to put boots on the ground in the wake of the recent revolution.
By all appearances, the ouster of now-former Ukrainian President Viktor Yanukovych -- who, as is well known at this point, was backed by the political establishment in Russia -- stemmed from his regime's widespread and deep-seated corruption. According to its new finance minister -- who is obviously not unbiased -- as much as $70 billion was embezzled out of the country over the past three years alone.
In this regard, the Ukrainian revolution is very different from conflicts in, say, Syria or Lebanon, where sectarian strife is often the cause of ethnically fueled humanitarian catastrophes. This simply doesn't appear to have been the case in Ukraine. The people there were just tired of being ruled by a regime that used state funds to, among other things, build a floating restaurant on the grounds of the presidential palace.
This brings me back to the main question: Why did Russia feel the need to physically invade Ukraine, and, specifically, the Crimean Peninsula?
Scholars of international relations predictably attribute the decision to geopolitics -- that is, the rote desire to attain and maintain influence throughout the world. As a recent column in Bloomberg Businessweek explains:
Russia, which straddles Europe and Asia, has sought a role in the rest of Europe since the reign of Peter the Great in the early 18th century. An alliance with Ukraine preserves that. "Without Ukraine, Russia ceases to be a Eurasian empire," the American political scientist Zbigniew Brzezinski wrote in 1998. Russian President Vladimir Putin wants Ukraine to join his Eurasian Union trade bloc, not the European Union. Russia's Black Sea naval fleet is headquartered in Sevastopol, a formerly Russian city that now belongs to Ukraine. Last year Russia's state-controlled Gazprom (OGZPY) sold about 160 billion cubic meters of natural gas to Europe -- a quarter of European demand—and half of that traveled through a maze of Ukrainian pipelines. Those pipelines also supply Ukrainian factories that produce steel, petrochemicals, and other industrial goods for sale to Mother Russia. "Ukraine is probably more integrated than any other former Soviet republic with the Russian economy," says Edward Chow, a senior fellow at the Center for Strategic and International Studies in Washington.
But is it possible that the true explanation is even simpler? Could it be, in fact, that Russia's decision to invade Ukraine had merely to do with a handful of natural gas discoveries off the coasts of Romania and Ukraine?
I ask this question somewhat rhetorically, because I think the answer may be "yes." As Bloomberg reported in the middle of last year, the Black Sea remains "almost untouched by the oil industry, with fewer than 100 wells drilled, compared with more than 7,000 in the North Sea."
To add fuel to the fire, moreover, ExxonMobil (NYSE: XOM ) recently discovered a massive natural gas field off neighboring Romania's shores. The find, according to that country's prime minister, may end up being so substantial that Romania could become a natural gas exporter by as early as 2018.
It's in this context, in turn, that the Russian invasion of Ukraine can arguably be best explained -- and particularly when you consider that Exxon was on the verge of signing an exploration agreement with the Ukrainian government until its now-former fuel and energy minister, Eduard Stavytsky, put the deal on hold in late January.
"We will sign it in February," Stavytsky told the media on Jan. 27. At the time, no reason was given for the delay. Perhaps now we know.
Do you want to get rich?
It's no secret that investors tend to be impatient with the market, but the best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.