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28.12.07
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Russia Profile Weekly Experts Panel: Country Of The Year
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Introduced by Vladimir Frolov
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Contributors: Stephen Blank, Ethan S. Burger, Eric Kraus, Ira Straus, Andrei Tsygankov
Last week, Russia’s President Vladimir Putin was named Time Magazine’s Man of the Year. The Time editors explained their decision by pointing out the fact that Putin had succeeded in “putting his country back on the map” after years of turmoil and decline.
Indeed, Putin has a lot to do with Russia’s coming back from the cold. As Andrew Kuchins wrote in the Moscow Times op-ed last week, the Putin presidency will be remembered for the country's economic resurgence, political stabilization and increasingly assertive foreign policy.
But the country and its people have also been working hard to make the painful transition from the Soviet state with its command economy marked by food shortages and fiscal distortions to a vibrant economic powerhouse. Since the financial meltdown of 1998, Russia’s gross domestic product has grown more than six fold, while incomes have increased by a factor of four in less than 10 years.
In 2007, Russia continued its march toward economic prosperity and international prominence. Putin and his team have engineered a smooth political transition that would transfer presidential power into the hands of Putin’s most trusted associate Dmitri Medvedev, while allowing Putin to continue guiding the nation as Medvedev’s prime minister.
On the international scene, Russia stood tall in defending its interests and vital international principles. Russia managed to block the Ahtissari plan for Kosovo’s unilateral independence arguing in favor of more diplomacy to achieve a regional settlement. On Iran, Russia provided both the sticks, when necessary to tighten the UN sanctions, and carrots in the form of reactor fuel shipments to persuade Iran to abandon its uranium enrichment program.
In the former Soviet Union, Russia improved relations with Latvia (by signing and ratifying the border treaty) and Moldova, while it continued applying pressure to Estonia and Georgia. Russia worked hard to outmaneuver the United States and the EU on alternative energy routes from Central Asia and courted the new leadership in Turkmenistan to maintain the lucrative gas buy out relationship with that country. In Ukraine, Russia sought to maintain a broad base of relationships with different political groups while exerting some pressure to neutralize Yuschenko’s drive to elevate Ukrainian nationalism to the top of the country’s political agenda. Russia has improved the relationship with Europe by demonstrating that anti-Russian policies of some EU states, like Poland, would have consequences for the broader Russia-EU relationship. Of course, by digging in its heels on US missile defense plans in Europe and withdrawing from the Conventional Forces treaty, Moscow succeeded in bringing the West’s attention to Russia’s long ignored security concerns.
Could Russia be named The Country of the Year? Has Russia proved to be the world’s most dynamic, vibrant and newsworthy nation in the world in 2007? Has Russia strengthened its international position? Has it gained more respect at the table of global politics and admiration at the kitchen tables of ordinary people throughout the world? In fact, has Russia become a genuine world leader in 2007?
Andrei Tsygankov, Professor of International Relations, San Francisco State University, San-Francisco, Calif.
The year 2007 has been of extreme importance, first and foremost, to Russia itself. During this year, the staying power of Russia’s strength as a major world player has been tested by a succession shake-up and exceedingly difficult relations with the West. The entire year can be evaluated against the backdrop of Vladimir Putin’s speech at the Munich Conference on Security Policy in February and the challenge it has presented in terms of Russia’s ability to sustain a new, assertive foreign policy. Accusing the United States of “unilateralism” and "disdain for the basic principles of international law" is one thing, but delivering on the course of assertiveness under the heavy pressures of energy competition, the expansion of Western military infrastructure to the Russian border, the United States’ global-regime-change strategy and constant media attempts to implicate Russia as a potential enemy is something entirely different.
In general, Russia’s foreign policy has been a great success, not because Russia is in such a position that it no longer expects economic and political pressures from Western (and non-Western) powers. Great power politics is not going to disappear, and there will always be those interested in controlling Russia and the key position it holds in shaping the world’s military, energy and cultural power balance. Russia’s foreign policy has been a success because the United States and Europe now understand that, in the 1990s, they lost the ability to cast Russia as a junior partner. Now, new, more equal relationships with Moscow have to be designed. With all the paranoia and lack of rational discourse on the part of Russian officials, the Kremlin managed to preserve basic qualities of a sovereign power while considerably expanding a space for international integration and interdependence. Testaments to this interdependence include skyrocketing foreign investments in the Russian economy, the willingness of Western governments to cooperate with the new Duma and executive power, the Time magazine recognition of Vladimir Putin as Man of the Year, and many other indicators.
In the future, it is important to prevent Russia’s successes from giving the country a big head. The noble foreign policy is not yet matched by the country’s internal great power status, and there is much work ahead to solidify and develop international accomplishments. Russia remains a nation in a deep crisis – demographic, spiritual, social, educational, military and administrative – and its political class would be well-advised to concentrate on leading the country out of the crisis and devising a viable long-term strategy of development.
Eric Kraus, Managing Director, Anyatta Capital, Investment Advisor, Nikitsky Russia/CIS Opportunities Fund
To become a “world leader” implies that one must have followers. There is little to suggest that the Russian power elite consider this a priority. After the catastrophic 1990s, Russia is still establishing her place in the world. This is not some sort of popularity contest – Russia will not be awarded her rightful place by benevolent Western states happy to anoint her a major power, taking Russia’s fundamental interests to heart out of the sheer goodness of their hearts. Great powers have no durable friends – they have durable interests. Having succumbed to the illusion of Western benevolence following the collapse of the USSR, Russia is now wary of promises.
Mr. Putin has been successful in reestablishing Russia as a country to be reckoned with. The fact that this week his face graces the covers of both The Economist and Time Magazine is a measure of this success. Russia can be loved or hated – feared or welcomed – but it can no longer safely be ignored.
Quite fortunately, Russia no longer aspires to be seen as the salvation of mankind – the Third Rome, the Bulwark of Monarchic Legitimacy, the New Dawn of the Proletariat. Instead, it is a major power playing in a highly competitive global game. The chips in play – wealth, influence, the ability to independently set policy – are no different from those coveted by others at the table.
It is not surprising that this transformation is unwelcome to many in the West. Surely, it was far easier to deal with the Yeltsin regime. Pat the bear on the nose, tell him how you loved him, let him dance, applaud politely. Steely eyed and sober, Putin must be a bit chilling. Perhaps they hoped he would go away and everything would go back to normal. But he is not going away.
Thus, the famously free and fair Western press – typically oblivious to the financial and political interests of its corporate owners and home governments – engaged in a multi-year barrage with a degree of coordination which might have been mistaken for a propaganda campaign. It was so futile. Putin has engineered his self-succession handily, while Russia defied the predictions of doom and gloom, and has prospered mightily.
There are still some in the West who imagine they can blunt Russia’s thrust by somehow imposing their own criteria and political models. The accompanying threats are laughable – diplomatic isolation, expulsion from the G8 – conveniently forgetting that the globe is a far bigger and more diverse place than it was just a decade ago. At best this hectoring is futile – at worst counterproductive. Russia is too rich to be bribed, too strong to be threatened. Lessons in governance from the West are seen as tainted with self interest, and thus increasingly treated with scorn.
Russia seeks not to lead the world – she has no single unifying idea of where she wishes for the world to go. Like China, Russia now aspires to further her own interests as a major player in a multi-polar game of shifting alliances and complex interactions. After the ideological 20th century, perhaps the 21st will be more like the 19th, nationalistic and mercantilist. Perhaps this is all for the better and – like men – nations are safest employed in the pursuit of wealth. It keeps them out of far worse trouble.
Ethan S. Burger, Adjunct Professor, Georgetown University Law Center and Scholar in Residence, School of International Service, American University, Washington, D.C.
Time Magazine's concept of Man of the Year looks at a person’s impact on the world in the same year that person wielded said influence – hence there is no opportunity for hindsight. While there were alternative candidates to Putin, he was probably the editors’ best choice. While Mr. Putin has benefited from high energy prices and not solved many of Russia's economic and social problems, he has reversed a good number of the negative consequences of Boris Yeltsin's presidency. Personally, I am disappointed that he has not fulfilled my hopes for his presidency in the areas of combating corruption, foreign policy, human rights and the rule of law – areas that I hope Dmitry Medvedev has more success (assuming he is elected Russian President, a fairly safe assumption). Positive changes in these areas will take time, of course. Undeniably, President Putin has succeeded in making Russia a country that matters on the world stage, and this has been an important psychological achievement in the eyes of the Russian population.
As for the question at hand, I would not name Russia as Country of the Year for 2007. Perhaps one of the Emirates might qualify for this “honor” as their leaders are diversifying their economies (in anticipation of running out of oil), making political and social reforms, playing important behind the scenes roles in reducing the influence of religious extremists and increasing the likelihood that the Arab-Israeli conflict will progress towards a satisfactory conclusion for both the Israelis and Palestinians. Still, I note that none of the Emirates rated in the top 30 of the UN Index discussed below.
It is premature to judge Russia's performance as a country in 2007. In recent months, the country's inflation rate is increasing, particularly in the area of food. Outside of the natural resource and defense sectors, the economy is not thriving. This is not a good sign, particularly since the current price of oil is unsustainable in the long term. Raising the standard of living of the Russian population to EU levels is still far off, and I think this is the key component of determining the Country of the Year. The United Nations tries to monitor “quality of life” in its member states. While its efforts are not perfect, they are generally well-done.
The Human Development Index (HDI), published annually by the UN, ranks nations according to their citizens’ quality of life rather than strictly by a nation's traditional economic figures. The criteria for calculating rankings include life expectancy, educational attainment and adjusted real income. The 2006 index is based on 2004 figures. Russia is not in the top 30 of this index while Russia’s G8 partners as well as smaller countries like Greece, Barbados and Iceland made the top of the list.
Needless to say, in the political and human rights realm, things tend invariably to be more subjective. This makes comparisons harder. Nonetheless, I would hope that conditions in Russia will improve in the future, but I am not confident that will occur.
The Freedom House (granted a subjective entity) provides a nonetheless instructive ranking of political and civic freedoms. In this collection of indicators, Russia falls clearly far behind those countries it is competing with on the global scale, its G8 partners.
I would be remiss if I did not say a few words about foreign policy and its impact on peace, security and the environment. Again, this area is highly subjective. I believe Russia could have made a greater contribution towards world peace, particularly with respect to Iran and it could have been more respectful of Estonia, Georgia and Ukraine's sovereignty. It is worth noting that the U.K. and the U.S. could have done better in the foreign policy area – but I believe it was not a matter of their objectives, but how they were executed and their arrogance in not consulting with other countries in an effective manner.
Professor Stephen Blank, the U.S. Army War College, Carlyle Barracks, Penn.
Mr. Frolov's characterization of Russian policy achievements is far too rosy a scenario. The sad fact is that while Russia has undoubtedly been more assertive on the world stage, it has also been more obstructionist in its policies. The country ends 2007 perhaps richer, but more self-isolated than before. The deliberate stoking of nationalist, chauvinistic rhetoric warning of enemies at the gates, generated for domestic purposes, is now exacting its cost.
It would be safe to say that while Russia has again demonstrated it has the capacity to obstruct many programs that it deems harmful to its interests, it has not the slightest interest in or idea how to play a responsible role in world politics. In this regard its conduct is very distinct from China, which is largely responsible for the six-party accords in Korea.
Indeed, in Mr. Frolov’s account, Asia does not fit in anywhere, signifying the Russian foreign policy elites’ disinterest in the most dynamic sector of the world economy. Instead, Russia is chasing phantasms like the missile defense issue and doing nothing to stop Iran’s nuclear program which would obviate the whole problem.
Russia’s reputation has also suffered greatly from its succession charade. The choreography reveals its state to be medieval in structure and hence, a risk factor to European, if not world, security. So while Russia is more assertive, more truculent, etc., its standing has probably suffered and it enters 2008 without any genuine allies on whom it can count. Putin’s purely utilitarian approach to Asia (He sees it as an adjunct to Russia’s European, American and CIS policies.) will not win any great admiration in China. At the same time, Moscow cannot count on either the new South Korean regime or Japan as friends.
Moreover, Russia’s political structure shows itself to be grossly dysfunctional, while its economy is already beginning to feel the pinch of inflation. A global recession would hit Moscow particularly hard despite its previous successes and excellent fiscal policy under Putin. For discerning observers, such unfounded optimism is a costly luxury.
Ira Straus, US Coordinator, Committee on Russia in NATO, Washington, D.C.
If Russia nominates itself Country of the Year, an innocent bystander might get the impression Russia is full of itself.
“Since the financial meltdown of 1998, Russia’s gross domestic product has grown more than six fold.” That would be more than a 20 percent annual growth rate. Yet Russia's annual growth rate claims are less than half that amount. What can explain such a huge discrepancy in Russia's statistical pretensions?
It recalls Mark Twain's saying: “There are lies, damned lies, and statistics.”
When misleading claims feed on one another and applause lines abound without correction, one has to wonder why. Putin's Russia has talked a good game. Its media have given an echo effect to its self-applause lines – an effect the people and regime were accustomed to in Soviet times, conspicuously absent in the Gorbachev-Yeltsin era. Perhaps some people find it helpful as a kind of therapy. Reality is a more painstaking matter.
A week ago in the Wall Street Journal (“Russia by the Numbers,” December 17, 2007), Stephen Sestanovic laid out an honest corrective to the nagging falsehoods perpetuated about the Russian economy. For one thing, much of the boasting is based on using purchasing power parity numbers (PPP), which are useful for approximating living standards, but tell nothing about international economic clout. In global trade, Russia remains insignificant except for its oil and gas. For another thing, even in PPP terms, Russian per-capita income under Putin “has gone from somewhat less than a third of the level of France and Italy to somewhat more than a third.” Putin used to bemoan that “it would take 15 years of 8 percent economic growth for Russia's per-capita income to equal Portugal's.” And today? “With all its growth Russia is gaining ground, but the absolute gap between the two countries is only modestly narrower than when Mr. Putin first compared them -- just over $12,000 then, just under $11,000 now.”
There is more change in the boasting and the spin than in the numbers.
The same fallacies abound in Mr. Putin’s endlessly-cited, endlessly-applauded Munich speech. He tried to find comfort in the argument that Russia doesn’t need the West so much for trade anymore, as India and China (taken together) are bigger economically than the EU or U.S. (taken separately). Quite true when counting in PPP terms – but quite irrelevant:
1) The EU and U.S. are, in fact, together, as in the phrase “the West;” they deserve to be counted together far more than do India and China, which are not together.
2) Even on Putin's numbers, the EU plus the U.S. is larger and more important than India plus China.
3) In PPP terms, the EU and U.S. amount to $13 to 14 trillion each, some $27 trillion together, in other terms 41 percent of world GDP. India plus China together account for $16 trillion. Then there are the rest of the First World OECD countries (Japan, Canada, etc., and the West at large). These countries plus the U.S. and EU amount to $35 trillion or 52 percent of world GDP. (For all figures in these paragraphs I am using the 2006 IMF statistics.)
4) In the more internationally relevant terms of ordinary exchange rates, the U.S. and EU account for some $28 trillion or 58 percent of world GDP. Add in their Western cohorts and the number increases to $36 trillion or 75 percent of world GDP. For their part, India and China add up to $3.5 trillion or 7.3 percent of world GDP.
Which is more important for Russia's economic future, the extended West at 75 percent of world GDP or India and China at 7 percent? It is a no-brainer. Russia's present course would appear to depend on feeding itself fibs and putting its brain on hold. For those of us who care about Russia and care about Russia-West relations, it is not a happy thing to see this kind of mindlessness spreading far and wide.
It recalls a time when Russia was going to “reach and overreach the United States.” Statistics were falsified in those days, too. Western media, scholars and intellectuals chimed in for reasons of their own. It took a rare dissident intellectual like Igor Birman to give an accurate estimate of the Soviet economy; he was ignored when it mattered but proved right with the end of the Communist regime and the opening of the records. Things are not that bad again, not yet at least. The cost of participating in world trade and investment is that honest counting and accounting has to be done. Today anyone can see the actual size of the Russian economy, the Western economy, the Chinese economy if only they want to. The interesting thing is that so few people want to.
When these sorts of chronic, massive, obvious, demonstrable distortions of the numbers occur, what needs to be asked is, “Why?” This is where serious political science analysis can be done. After all the time spent above correcting the misuses of numbers, we come to a question that really needs to be answered: Why so much nonsense? What purpose does it serve?
I suppose we'll have to leave it to the future to address this question. |
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