In the wake of the presidential election in Russia, the DER-Advisory Board discussed its economic and political consequences, possibilities to reach better relations between Russia and Europe even in times of the sanctions-politics of the US administration and possible steps toward an enhancement of the situation in Eastern Ukraine.
April 24th, 2018
By Andrey Kortunov
Andrey Kortunov is Director General of the Russian International Affairs Council, RIAC member.
Surveys suggest that most Russian people view the country’s foreign policy as successful and, indeed, something to be proud of. This opinion is shared, in differing measures, by all social strata, from the destitute to the political and business elite. Even many of those who have been extremely critical of the economic and social situation in the country have heaped praise on the Kremlin’s international achievements over the past few years. Two achievements in particular appear to be a source of pride for Russian society: the “reinstatement of national sovereignty” and the “re-emergence of Russia as a great power.”
Indeed, if we are to interpret sovereignty as independence, i.e. a country’s right to determine its relations with global political players free from restrictions and free from the control of other countries and international organizations, then few powers can compete with Russia. Likewise, there is hardly another country on the planet which, while possessing material resources comparable to those of Russia, could afford such an ambitious and broad foreign political agenda. In this sense, Russia has truly managed to outdo itself – to the amazement of its foreign partners and to the shame of numerous experts.
Such breakthroughs, however, are always fraught with risks and sometimes end in tears. The ordinary Russian may not care all that much about this, but the Kremlin should be worried. The Russian leadership’s incessant fixation on protecting Russia’s sovereignty, and the irrational fear of losing that sovereignty overnight, indicate a measure of uncertainty.
For most countries, sovereignty is an asset that can and should be exploited. For Russia, it is more of an icon to be worshipped.
This is exactly the reason why the price of Russia’s sovereignty is so very high: like in the times of Emperor Alexander III, the country’s only true allies are its army and its navy (plus its Aerospace Forces, the latest addition in the past 150 years).
Russia’s influence on the international arena, which has been increasing in recent times, is not that straightforward either. Moscow does have considerable potential to influence events both regionally and globally. However, this influence is exerted primarily in the political and military spheres. Russia’s impact on economic, social, financial and technology processes is negligible and does not exceed the statistical margin in many important and rapidly developing areas. The situation is reminiscent of a Soviet-era joke, which goes like this: Mongolia is the most independent country in the world, because virtually nothing depends on it.
As soon as the focus of global politics starts shifting to non-military dimensions, Russia’s influence will inevitably begin to decline. For example: when the civil war in Syria finally comes to an end and economic revival becomes the key objective of the ravaged country, Moscow’s importance to Damascus will begin to shrink, regardless of who will have come to power in Syria. The Syrian leadership will start turning towards other partners – those capable of offering large-scale economic assistance programmes, investments, new social practices and cutting-edge technologies.
As has repeatedly been the case in the past, even if Russia wins the war in Syria, it may still lose in terms of bringing peace to the country.
It may be true that, for the most part, Russia’s foreign policy, which is characterized by the choice of political and military solutions, an extremely centralized decision-making process, and unique traditions of “classic” diplomacy and foreign policy intelligence, is congruent with current international needs. However, these current needs will not last forever, nor even long enough. It is quite possible that we will soon enter a new era of global politics, when a country’s might will be assessed using totally different criteria.
Let us suppose, however, that this current moment will last for several more years, or even decades, and political and military solutions will continue to prevail for a certain period of time. Will this secure Russia’s current status and clout? Unfortunately, it will not. It would appear that this time around, the Kremlin’s geopolitical opponents are serious in their attempts to depreciate its international assets and drive it into a corner. And, seeing as the combined resources of Moscow’s opponents are far greater than those of Russia – not only in terms of economics, finance and technology, but also in terms of military technology – it will be increasingly difficult for Russia to counter the external pressure.
Whatever the case, the next six-year cycle of Russia’s foreign policy does not promise any easy victories. The previous six years could be likened to a breakneck cavalry charge against a complacent (read: poorly prepared) enemy. This new cycle will most likely resemble a drawn-out trench warfare, with either side periodically trying to break through the enemy defences and impose a peace on its own terms.
In a protracted conflict, it is usually the side with the stronger rear that fairs the best. Russia thus faces the vital issue of selecting a development strategy, primarily with regard to its economy. Moscow could go with its habitual pattern of mobilizing the economy, just like the USSR did during World War II. Back then, Nazi Germany had virtually all the economic resources of Europe at its disposal, which significantly exceeded the Soviet Union’s economic potential. Nevertheless, the USSR managed to create a defence industry that was, on the whole, superior to that of Germany, thanks to a more consistent, encompassing and, ultimately, more effective economic mobilization.
It is hardly possible to build a workable mobilization economy today, however. Not only because it would take an enormous toll on the quality of life of the Russian population. And not even because, unlike back in the 1940s, Russia must now compete against the entire Western world, rather than just Germany. The main reason is the extremely complicated nature of modern economic relations; modern technology chains are globalized, and contemporary Russian society differs radically from the Soviet society of the 1940s. An all-to-arms model might still be useful for creating a successful equivalent of Henry Ford’s automobile plant, but not of Silicon Valley.
An alternative route would involve profound structural reforms of the Russian economy, accelerated economic diversification, a dramatic increase in investment in human capital, the strengthening of institutions, an overhaul of the state administration system, a technological leap and the development of entrepreneurial and social initiatives.
What would the benefits of this be to Russia’s foreign policy?
To begin with, the effect of sanctions against Russia would drop dramatically. Targeting thousands of small and medium-sized businesses is far more difficult than taking out a dozen major private companies and state-run corporations in one go. Entirely new opportunities will emerge for circumventing the sanctions, mitigating their negative consequences and strengthening the country’s actual economic sovereignty, rather than its imaginary sovereignty.
More importantly, implementing structural reforms and achieving above-worldwide-average growth rates would help Russia to finally reverse the ongoing trend towards a reduction of its share in the global economy. Even the political and psychological effect of such an achievement would be a boon: Russia would finally see a perspective that has been beyond the horizon for the past decade. It would also give those in the West who consider the anti-Russian sanctions to be senseless and even harmful new and convincing arguments.
To paraphrase Russian philosopher Konstantin Leontiev, creating an economy of “blossoming complexity” would provide Russia’s foreign policy with new opportunities in relations with its closest neighbours, who are for the most part unwilling to accept the Russian economic model as something to be imitated. It is highly unlikely that any of these neighbouring countries will be eager to replicate a mobilization economy model should Russia embrace one, meaning that any integration processes within the former USSR would inevitably stall.
A “blossoming complexity” would improve the situation no end by creating multiple opportunities for the implementation of integration processes. Russia’s leadership of the former Soviet republics would be determined not only by Moscow’s readiness to guarantee their security or provide them with inexpensive hydrocarbons, but also by the appeal of its socioeconomic model. This, in turn, means that the “blossoming complexity” would serve as an alternative to any “colour revolutions” in the region.
Finally, the “blossoming complexity” of Russia’s economy would significantly expand the toolkit of Russia’s foreign policy. Russia would stop acting exclusively as a global firefighter rushing from one hotbed to the next. It would acquire the different, no less demanding roles of a global builder, engineer, teacher and doctor.
If this happens, every Russian citizen will have so many more reasons to be proud of Russia’s foreign policy, and even to directly contribute to that policy.
The purpose of this Memorandum is to propose a strategy to reframe the discussion of the conflict in the Donbas and prepare a political foundation for post-war stability in Ukraine. This might be done by moving the focus of the Normandy Group from military de-escalation to economic reconstruction. The Minsk Process has succeeded so far in stopping the war, but it offers no framework for the reconstruction of those parts of Ukraine which were heavily damaged during one of the worst military conflicts in Europe since decades. De-escalation has so far not led to a lasting peace and restored prosperity. The Minsk Process is missing this last chapter: a credible Plan for Ukraine’s Reconstruction in the East.