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01.12.2014. 2014: INTERIM RESULTS

The year 2014 will likely to go down in the history of Russia as a time when its foreign policy course was hardened and its internal and economic policy guidelines started to change.

 

Russian Motives

The main reason for Russia’s turn is the West’s refusal to recognize the place in European and global politics, which Moscow considers natural and legitimate. The West has been trying to act as a victor while refusing to accept this position of Russia, and to pursue Versailles policy de facto, albeit in “velvet gloves,” that is, avoiding direct annexations and contributions but continuously limiting Russia’s freedom, spheres of influence and markets and at the same time expanding the area of its own political and military zone of control through NATO enlargement, and its political and economic zone of influence through EU expansion.

I believe that many members of Russian elites needed this crisis, consciously or not, to justify the idleness of the last seven or eight years when, blessed with a favorable market situation, the country had basically given up reforms and, while lazily swearing at those in power or chattering about modernization, was sliding into stagnation.  Some needed it in order to consolidate their positions in the government; others, to make themselves and those around them “nationalize themselves”, that is, return to home turf and stop fooling around, taking their money, stolen or earned, out of the country and wasting it away abroad, but rather focus on national development; or to get rid of those who did not want to or could not do so.

One of the reasons for Russia’s deliberate aggravation of the lukewarm confrontation was its understanding that with a clear downward trend set to continue in the national economy in the next three to four years and with a vulnerable Western flank, it could not have hoped for strong positions in Asia. Attempts to turn this flank into a foothold and a firm base have failed so far.

 

American Roots

Having achieved by the 2000s what it thought to be the strongest international positions in its history, the United States, intoxicated by its own success,  then took a dramatic plunge after two inept military operations in Iraq and Afghanistan lost because of the emergence of weaknesses of the political system and the dwindling appeal of the economic model following the 2008-2009 crisis; but most importantly, because of the arrival an alternative model of more or less authoritarian or semi-democratic capitalism that was so enticing for many countries and nations. China has become its symbol and Russia is its foreign policy flagship, invincible from the military point of view, equipped with skillful diplomacy and steered by a person who is the strongest leader in the present-day world, even though fifteen years ago the country was humiliatingly begging for help.

When part of the American elites, using the hopeless situation in Ukraine and acting together with their European minions, engineered a crisis in that country, and Russia responded in a very harsh way, Obama’s enlightened and postmodern administration invoked Reagan-era plans to ruin the Soviet Union. At that time there was Poland with Western-backed Solidarity and an almost inevitable intervention of Soviet troops, which was avoided owing to Wojciech Jaruzelski. Now it’s Ukraine. Back then efforts were made to upset the construction of gas and oil pipelines; now there are intrigues over South Stream and attempts to reduce the positive gas interdependence between Russia and Europe and push down oil prices as before. In the early 1980s there was hysteria over the South Korean Boeing (presumably sent purposefully and brought down by mistake); now there is frenzy over the mysteriously downed Malaysian one. Reagan called the Soviet Union an “evil empire” and imposed sanctions against it; now America is going out of its way to demonize Putin, not bothering to hide its goal of either changing the top leadership in Russia or inciting popular dissent. It seems Obama is going to be outlived by this policy as its goal is not only and not so much to punish Russia – there are more fundamental reasons, the main of which is to try to stop the growing influence and boldness of the “non-West,” primarily China.

 

European Reasons

While for the U.S. the conflict over Ukraine is part, albeit important, of a geopolitical game to restore its positions and prevent the rise of its competitors, for Europe the future of the European integration project itself is at stake. Like the U.S., Europe has been growing increasingly nervous about the rise of the non-West.

But the main reason is that the European project is bursting at the seams. Most European countries, except Germany and some northern nations, no longer want to work hard enough to be able to successfully compete in the new world. Europe is experiencing a long demographic decline, brain drain, sometimes even worse than in Russia, and an innovation gap. It took tremendous effort to bring the euro crisis under control, but its root causes are still there. Some countries hastily admitted to the EU are stagnating down. Most importantly the European project is losing its appeal to people.

Faced with all these challenges, the successful German elites have begun to adapt the European project to their own needs and leadership, giving it a more pronounced German slant. However, the underlying principle of the project is peaceful development since Europe and Germany cannot and do not want to protect their interests by force.

Drawing Kiev over was not a priority for the majority of Europeans and they never thought about the risks involved, hoping that the virtual engagement of Ukraine through association would pep them up and pour new wine into old wineskins.

When, after the coup in Kiev, Russia began to flex muscles openly, some in European capitals panicked. They had hoped to continue the ritual ten-against-one fencing game, where their opponent was expected to retreat all the time, but suddenly he threw the foil away and snatched a shaft, which they had long forgotten how to use.

Russia’s forceful response to the Ukrainian issue challenged yet another fundamental principle of the crumbling European project that is turning more and more into a German one. I believe this is the main reason why Germany is leading the way in pushing the European policy of pressure.

The very existence of Europe, as we know it, is now at stake for European and German elites; in other words, it is a matter of their own survival.

But at the same time, Europeans more than Americans are interested in settling the situation and resuming peaceful European life.

The driving forces of the crisis also include the shared interest on both sides of the Atlantic to unite in the face of new competitors.

 

Russian Policy: Prospects

That confrontation was unavoidable became obvious in 2012 and especially in 2013 when practically any Russian action met with increasingly hostile and almost totally negative rhetoric. This left Russia virtually no incentive for constructive behavior. The last remaining doubts had dissipated before the Sochi Olympics which the West nearly unanimously wished to see failing.

Most members of the Russian elites began to understand that if Moscow wanted to pursue its own policy, which is only natural for a country that claims to be a great power, their partners had to be taught to get used to that.

Russia is entering a new stage of confrontation with a smaller territory and fewer assets, especially technological and intellectual ones. But it has preserved its nuclear weapons and natural resources, which it could have lost as well. Russia has got rid of numerous liabilities and no longer has to subsidize socialist countries and most of the former Soviet republics or to keep the monstrous military behemoth that was devouring the country before.  With the new identity, shaky as it is, Russia is drawing much more strength from state nationalism than from the communist idea that has been withering since the 1970s. The Russian economy is still rather weak, but the market and private ownership have forever swept away the factor that played a key role in the collapse of the Soviet Union – inability of the socialist economy to feed the people.

The international situation has also improved immensely. The Soviet Union had to confront both the rising West, which was prevailing economically, morally, militarily and politically, and China.

Nowadays Russia is confronted by the West that is still quite strong and trying to countersattack, and yet weakened and largely demoralized by its own mistakes, and no longer a source of moral supremacy and appeal for most people in the world.  

Sided with Moscow is the rising “non-West” that comprises the majority of countries and most dynamic economies. It won’t be hard to find financial resources and alternative technologies, even though less effective, elsewhere – the world has changed dramatically, giving more economic and political freedom to all countries.

Russia’s policy is rapidly changing, primarily to the East. Russian-Chinese relations have reached an unprecedented level of trust in 2014. The purpose of this is not to replace but to supplement the previous one-sided European economic orientation.

Also emerging is a new transportation pattern based on the integration of the land section of China’s Silk Road with Russia’s Trans-Siberian Railway, Baikal-Amur Mainline and Northern Sea Route. The Shanghai Cooperation Organization, which is likely to admit India, Pakistan and ultimately Iran, seems to be the core of an evolving Eurasian structure with an increasingly strong security component.

Russia has no more illusions about partners but ample experience of survival which many, including myself, think was nothing short of a miracle. Ideological blinders have dropped. There is an understanding that attempts to persuade lead nowhere but only whet appetite. At stake is the survival of not only the ruling regime but of the whole country amid attempts to weaken, if not ruin, it. And this raises the bets much higher than those of Western partners. A failure is possible in these circumstances but it’s highly unlikely. As Leo Tolstoy wrote in his “War and Peace,” “A battle is won by those who firmly resolve to win it” It seems the majority part of Russian society is resolved to do so.

Russia’s policy in the Ukraine crisis has been quite successful so far despite high costs. Crimea’s incorporation has caused an upsurge of self-respect and patriotism. The reunification and sanctions created a sense of real threat have consolidated the majority of people and elites around the Kremlin. But what is even more important is that Russia’s policy in the West has become active rather than reactive as it was before, even though it cannot control the information background which remains negative.

Russian leaders have repeatedly stated that they are not seeking confrontation and, contrary to the national character, are even avoiding impertinent action their Western counterparts sometimes engage in.

Sanctions have raised natural concerns among some members of the bourgeoisie and bureaucracy but they cannot change Russia’s policy. Some of the ruling circles have also welcomed the sanctions as helping to consolidate and “nationalize” the Russian elites.

No one knows what impact the sanctions can have on the Russian economy in the medium and long term. In the meantime, the economies of several European countries are already suffering from the effects of export cuts and declining trust in business amid disheartening stagnation.

So there is room for compromise with the Europeans in the medium term. And yet, one must not disregard the abovementioned deep and systemic reasons for the rejection by European elites, especially German ones, of Russia’s firm actions. Americans are interested in further confrontation and will keep pushing for it. And the situation in Ukraine will continue to fan the flames.

Most importantly, emphasizing Russia’s economic weakness, trying to exacerbate it and accentuating the absence of a viable long-term development strategy seem to be the key elements of the West’s strategy in the current crisis. If Russian elites, the leadership and the president are not prepared to undertake drastic economic reforms, even by way of mobilization, this strategy may prove successful.

 

What’s Next?

Such a deep crisis involving the vital interests of its main participants is unlikely to end in the medium term.

I see no possibility for Moscow to make serious concessions. But I do hope that the confrontation and sanctions will wake up the Russian leadership, elites and society from their languid reveling in wealth and affluence, long desired and finally obtained after a hundred years of deprivation, or in modest consumerism. History proves that Russian people never wake up until they get hit by hard times. The sanctions target the country’s weaknesses. But, like the finger of God, they also point to the need to redouble efforts in order to overcome these weaknesses. If Russia fails to listen to this “voice of God” and carry out drastic economic modernization, it will run out of luck it has had over the past fourteen years.

Conditions for a decisive turn are building up, and the first signs of it can already be seen. The unprecedented fall of the ruble against the dollar and the euro, partly forced by circumstances but largely plotted, is a step in the right direction as it reduces the immensely widened gap between the average salary and labor productivity. Almost everyone lived beyond his means. Such turn in the national economic policy has been advocated by almost everyone except for a certain part of the incumbent economic elites linked to the previous policy that has proved ineffective.

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Russia’s foreign policy success achieved in 2014 will either be driven further or frittered away by the economic policy. Russia is like a boxer with a bright head, a quick reaction and strong arms but weak legs. If we don’t firm them up, we may lose the battle. 

// Originally published in Russian in Rossiiskaya Gazeta (federal issue) N 6544 of November 28, 2014