The impact of the currency crash on Russian foreign policy

The Russian currency crash on Monday and Tuesday is likely to reduce the chances for Russian leaders to initiate new foreign adventures and may well result in efforts to make a deal on Ukraine. Vladimir Putin and his allies realize that in an economic downturn, they won’t have the financial resources to undertake efforts to destabilize other neighboring states. Instead, we should be looking for Russia to undertake some retrenchment, with Putin to try to calm things down a bit in the hope that he can persuade EU states to allow the sanctions they have in place against Russia to expire. This would allow for market sentiment to improve somewhat, which Russian leaders hope would allow the ruble to strengthen even if continuing U.S. sectoral sanctions mean that a corporate liquidity crisis is inevitable.

Russian leaders recognize that for European sanctions to end, the conflict in eastern Ukraine needs to be resolved. It is no coincidence that the situation in the Donbas has been calmer in recent days than at any time since last spring. While I imagine that neither the Russian nor European sides at this point know exactly what it would take to call off the sanctions regime, Russian leaders may be hoping that even a partial stabilization of the conflict may be enough to prevent EU member states from reaching consensus on renewing the sectoral and financial sanctions that are particularly economically painful to both sides and that are due to expire in July and August 2015.

Given this analysis, one might be surprised that Putin didn’t express more of an intent to compromise in his press conference today. But anyone expecting a soft line in this forum doesn’t understand how Putin operates. The press conference is first and foremost a PR opportunity for a domestic audience. In such a forum, he has to maintain his position in order to reassure his base that he’s not changing course. Even if he wanted to compromise, he wouldn’t announce it at the press conference. In fact, I doubt that he’d announce it publicly at all.

Instead, we should watch Russian actions in coming weeks/months. They will provide a better indication of Putin’s next move(s). But at the same time, I don’t expect much more in the next few months than an effort to avoid further escalation. I think that for now the leadership thinks it can still wait this out, that oil prices will rise sometime in 2015, that the EU will fail to agree to renew sanctions next summer. This is not 1998. Russia has the reserves to wait out the hard times, if they only last a year or two.

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Parts of this post appeared originally in The Monkey Cage.

Personalization and Patriotism

The following article originally appeared at the Carnegie Forum on Rebuilding U.S.-Russia Relations, where it is one of a number of contributions by eminent experts such as Henry Hale, Mark Kramer, Thomas Graham, Steven Pifer, and many others. 

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American media narratives generally tend to excessively personalize politics and international affairs, and recent coverage of Russia is no exception to this overall trend. During the entire Ukraine crisis, and especially in the aftermath of the downing of Malaysian Airlines Flight 17, Vladimir Putin has been portrayed as an evil leader bent on some combination of restoring the Soviet empire and destroying the international order. His motivation has frequently been framed as a sense of pique for the exclusion of Russian leaders from key decisions, such as on the Iraq war, on NATO’s intervention in Kosovo, and on NATO enlargement.

While Russian leaders certainly do have a sense of grievance over perceived slights by the West, and particularly by the United States, against Russia that have accumulated over the 20-plus years since the breakup of the Soviet Union, these grievances are not sufficient to explain Russian foreign policy. Instead, Russian foreign policy is driven by a combination of a desire to restore Russia’s great power status, the perception that Russian security can only be guaranteed if Russia is surrounded by friendly states, and the fear that the United States is taking active measures to overthrow the current Russian government.

Furthermore, the personalization of Russian foreign policy hurts U.S. policymaking toward Russia by creating a perception that Russian actions, as guided by Putin, are irrational and therefore cannot be dealt with through strategies other than containment. Furthermore, there is an implicit (and sometimes explicit) undercurrent that the crisis in U.S.-Russia relations will inevitably continue unless and until Vladimir Putin is removed from his position as Russia’s leader.

While Vladimir Putin has unquestionably installed a repressive domestic regime in Russia and pursued an aggressive foreign policy that seeks to establish a set of dependent buffer states on the territory of the former Soviet Union, Russian foreign policy does derive from a rational set of beliefs, goals, and interests. The inability of many Western commentators and some policymakers to see the world from the Russian point of view damages the ability of the U.S. government to adopt a Russia policy that allows for a reasonable response to Russian actions without defaulting to the outdated image of Russia as a direct descendant of the Soviet “evil empire.” In addition, Western analysts neglect the likelihood that if Vladimir Putin is forced out of office, his replacement is unlikely to be a pro-Western politician. Instead, any successor is likely to be at least as anti-Western as Putin is perceived to be. Given the strength of nationalist sentiment among the Russian population, any new leader is in fact likely to be more nationalistic and aggressive than the current incumbent.

Throughout the current crisis, Russia has been acting from weakness, rather than from strength. While various commentators have described Putin as playing a chess game against the West, I would argue that he has actually been primarily reacting tactically to what he saw as a major defeat. After all, in late February, Ukraine went in just a few days from having chosen alliance with Russia over Europe to a victory by anti-Russian forces and the prospect of a close alliance with the West, and the potential loss of Russia’s naval base in Sevastopol.

Russian leaders see the protests in Ukraine as part of a Western plot. For them, colored revolutions are a new form of warfare invented by Western governments seeking to remove independently-minded national governments in favor of ones that are controlled by the West. They have argued that this is part of a global strategy to force foreign values on a range of nations around the world that refuse to accept American hegemony, and that Russia was a particular target of this strategy.

This perspective appears to be at the core of a new national security strategy that Russia is developing. Although Western readers may find the lumping together of uprisings as disparate as those in Serbia in 2000, Syria in 2011, and Venezuela in 2014 hard to swallow, from the Russian point of view they all share the common thread of occurring in countries that had governments that were opposed to the United States. Although uprisings in countries whose governments were tied more closely to the United States, such as Kyrgyzstan in 2010 and Egypt and Bahrain in 2011 are harder to explain, such inconsistencies appear to not trouble the Russian government.

If this is the dominant perspective, then Russia’s opposition to the United States and the West is about mindset and has nothing to do with interests. In that case, it is not worth spending time to try to convince the current Russian leadership to pursue more cooperative policies. If they truly believe that the United States is seeking to force them out of power and is simply waiting for an opportune moment to strike, then Russian policies will remain committed to ensuring that the United States does not get such an opportunity.

In that environment, Russia’s current policies in Ukraine have little to do with geopolitical calculations about Ukrainian economic ties with the EU versus the Eurasian Union or even with potential Ukrainian NATO membership. And the annexation of Crimea was not about ensuring the security of the Black Sea Fleet. Instead, the main goal is to strengthen the Putin regime domestically by increasing patriotic attitudes among the Russian population. Patriotism would thus be the means by which the Russian government inoculates the Russian population against anti-regime and/or pro-Western attitudes. This goal would explain the obsessive focus on building an anti-Ukrainian and anti-American domestic media narrative from an early stage in the Ukraine conflict.

The U.S. response to such a position would have to focus on a combination of reassuring steps to show that the United States is not planning to overthrow the Putin regime with the restatement of the core U.S. position that the citizens of each country deserve the right to determine their own government without external interference (from either Russia or the United States).

In practical terms, the U.S. government should encourage the Ukrainian government to pursue policies of reconciliation in the Donbas. While the conflict has been greatly exacerbated by Russian actions, it has an internal component that cannot be solved by military action alone. In an ideal world, Russia and the United States would work together to encourage this reconciliation, though I doubt that the current Russian government is genuinely interested in peace in eastern Ukraine. Instead, it would prefer to keep eastern Ukraine unstable as an object lesson to its own population of the dangers of popular protest leading to the overthrow of even a relatively unpopular government.

Putin’s potentially costly blunder in Ukraine

I’ve avoided writing anything on the situation in Ukraine, because there’s so much material being written already and I’m not an expert on the Ukrainian military. But I do want to make just a couple of quick points.

1) Russian military experts seem to have been caught up in their government’s propaganda. This is especially disappointing when it comes from usually top-notch analysts such as Ruslan Pukhov and Igor Korotchenko. In an article that was picked up and translated by Russia Beyond the Headlines, they display a frightening amount of self-delusion in arguing that Ukrainian troops are not combat-capable simply because they stayed in their barracks while Yanukovych was being deposed. To assume, as Korotchenko does, that a military that stays on the sidelines during an internal conflict will not be able to act in the event of a Russian invasion betrays a willful lack of understanding of the difference in motivation between intervening in an internal conflict and defending your country when it’s under attack. Pukhov argues that because the army is made up of contract soldiers, local Crimean boys will not fight the Russians. This is a much more serious possibility and may well turn out to be the case, but so far there are at least a number of units that are refusing to submit to the “polite people” without insignia that are surrounding their bases. For the moment (and thankfully), they have not received any orders to fight, so the jury is still out on this question.

Now from what I know, the Ukrainian military is not in particularly good condition and would undoubtedly lose to the Russian military in any serious conflict. But that doesn’t mean that it would not be able to inflict some serious pain on its opponents in the process. And I would venture that should the conflict spread to “mainland” Ukraine, the soldiers would be highly motivated to defend their homeland.

2) Some Western analysts have argued in recent days that Putin is scoring a massive victory by taking Crimea with pretty much no resistance. But it seems to me that this action was taken not as a triumphant victory but as an effort to avoid what Putin perceived to be a complete geopolitical rout in the aftermath of the defeat of Yanukovych. This seems quite short-sighted to me, as without the Russian intervention the Maidan forces were likely to fall to squabbling and would have most likely come to a relatively quick accommodation with Moscow. Now, it appears that the likeliest scenario is that Putin gets Crimea as a client state (or new province to subsidize) while permanently losing any influence in the rest of Ukraine. The majority of Ukrainians in eastern and southern Ukraine have no desire to be ruled by Putin and will support their leadership while the threat of Russian invasion persists, absent any really stupid polarizing actions on the part of said leadership. I would count this as a net strategic loss for Putin. 

The second likeliest scenario is a Russian intervention in eastern Ukraine, leading to a quite bloody and potentially long-lasting conflict with Russian troops involved. Even though Russia would be likely to win such a war, the result would be long term instability on Russia’s immediate border, with guerrilla warfare likely for some time. And Russia would have to bear the full cost of supporting Ukraine for the foreseeable future. This would be an even bigger strategic loss for Putin.

Putin has also already lost all of the international goodwill generated by his investment in the Sochi Olympics. He is gambling that EU states will fail to impose any serious penalties on Russia for its actions. Given past history this may seem to be a reasonable bet, but sending Russian troops into Ukraine is likely to be seen as a game-changer in the most important European capitals, including Berlin, London, Paris and Warsaw. While sanctions are by no means guaranteed (especially if Russian intervention remains limited to Crimea), they are more likely than one might expect given Europe’s general unwillingness to act.

For more on this, I would suggest that readers take a look at Mark Galeotti’s assessment, which parallels mine in many ways.

 

The Rules of the Political Game in Russia: Editor’s Introduction

This issue of Russian Politics and Law considers how the political system functions in Russia, focusing especially on the differences between formal rules and informal practices. The issue starts with a discussion of the personalities involved in running the Russian political system. In “Formats of Russian State Power,” Ol_’ga Kryshtanovskaia, one of the leading experts on Russian political elites, compares the power resources at the disposal of President Medvedev and Prime Minister Putin. She shows that the two leaders divided responsibilities between themselves in a way that does not match the constitutional division of power between the president and the prime minister. Instead, “the siloviki, the economy, parliament, the regions, and the party have been left to Putin, while Medvedev is responsible for the formal performance of constitutional obligations, the courts, the fight against corruption, and the training of a personnel reserve.”

The comparison of resources available to the two leaders reveals that after two years in power, Medvedev had largely failed to develop his own political team and remained dependent on Putin. By examining the resources available to both members of the ruling tandem in late 2009, Kryshtanovskaia correctly forecast Putin’s return to the presidency in 2012. However, she does not think that the Medvedev presidency will pass without consequences for Russia’s political system. In her conclusion, she discusses the possibility that the creation of the Putin–Medvedev tandem has changed the Russian political game, setting the stage for ongoing shifts between the president and the prime minister in future election cycles.

Grigorii Golosov’s article, “Problems of the Russian Electoral System,” moves the discussion to the sphere of institutional rules of the game. The author analyzes how the Russian electoral system has evolved since 1993, showing how electoral institutions that are commonly used by democratic states around the world have been distorted to eliminate their democratic potential. He enumerates a list of problems withRussia’s electoral system, beginning with the single national electoral district—a feature that can work in small homogenous countries such as Israel and the Netherlands but makes no sense in a country as large and diverse as Russia. An excessively high threshold for party entry into parliament further distorts the proportional representation system, allowing the ruling party to easily dominate parliament. Finally, he criticizes the “locomotive” system that allows candidates who have no intention of sitting in the Duma to run at the head of their party’s list, only to be replaced by unknown deputies after the election.

Having discussed the problems that characterize Russia’s electoral system, Golosov then considers what kind of system should be adopted in the event of democratization. He shows that a majoritarian system based on single-mandate electoral districts would not work well in Russia because of its tendency to create highly disproportional outcomes and to entrench local bureaucratic clans in power. He recommends instead a modification of the current system of proportional representation, with lower thresholds and with relatively small electoral districts.

The bureaucracy plays a critical role in the functioning of the Russian political system. In “The Russian Bureaucracy and State Policy,” Sergei Sytin describes the bureaucracy as a social stratum or corporation with its own subculture and political and economic interests. While traditionally state bureaucrats have been tasked with implementing decisions made by their political superiors, they are no longer willing to limit themselves to such a neutral role. Instead, Sytin argues, they are increasingly seeking to implement their own agenda, a tendency that has led to their partial politicization. He believes that the bureaucracy is gradually usurping power over state policymaking, although its dominance has only limited potential.

Since Vladimir Putin first came to power, propaganda has come to play an increasingly important role in the Russian political system. Aleksandr Belousov’s article, “Political Propaganda in Contemporary Russia,” analyzes the forms and content of propaganda under the Putin–Medvedev regime, with a focus on the ideological concepts of the “power vertical” and “sovereign democracy.” He notes that the regime’s propaganda efforts were most successful in influencing the population during the first two Putin terms, when the regime established a circle of intermediaries who publicized its positions without necessarily having an official position in the government.

As far as the content of the propaganda, the concept of the power vertical was the basis for all subsequent propaganda constructs. It helped that the population was ready for an increase in centralization and control after the relative chaos of the Yeltsin years. The concept of sovereign democracy came later, with the goal of distinguishing the Russian political system from both the democratic ideals of the early postcommunist period and from Western democracies. The concept of sovereign democracy allowed the Putin regime to justify the changes it had made in the Russian political system without explicitly rejecting the democratic revolution of the late 1980s or the partial rapprochement with Western democracies.

The last two articles in this issue focus on efforts to change the rules under which Russian politics takes place. Mikhail Il_’chenko’s “Inertia in Russian Politics” discusses the extent to which reform of the Russian political system is hampered by institutional inertia. He argues that in the 1990s Russian reformers failed to import the institutional innovations that would have been necessary to turn Russia into a functioning democratic state. Neither the party system nor federalism worked as intended, creating instead what Ilchenko calls a decentralized version of the old Soviet nomenklatura. Despite extensive changes in the formal rules of the game, the mechanisms through which power is produced and through which leaders relate to society remain essentially unchanged. What many analysts consider to be traditional Russian values, such as paternalism, strict hierarchy, and clientelism, are in fact merely the representations of Russian political institutions. Putin’s reforms have ensconced these mechanisms more firmly in Russian politics, closing off alternative paths of development and foreclosing the possibility of gradual reform from within.

Ivan Bolshakov’s article on “The Nonsystemic Opposition” addresses the functioning of political opponents of Russia’s current political leadership. Bolshakov argues that the terms “extrasystemic opposition,” “antisystemic opposition,” and “nonsystemic opposition” all fall short as descriptions of what separates opposition parties from those in power, calling instead for a new vocabulary that would more accurately describe the role of such parties in the Russian political system. Bolshakov argues that none of the opposition parties existing in Russia today have a positive evaluation of the Russian political system. Their goals vary between seeking to change the existing system and wanting to destroy it entirely and start over.

The six articles in this issue show that the rules of the political game in Russia depend very little on the formal institutions of the political system. Instead, informal practices, interpersonal relations, and inertia determine power relations. This makes reform both highly necessary and very difficult to implement. The recent protests against fraudulent elections petered out largely because the majority of people who supported them quickly realized that they were not going to be able to affect the system, which would survive this brief scare. The comfortable reelection of Vladimir Putin showed that the system of power had weathered the storm and could endure with minimal modifications until the next crisis. As a result, the chances for real political reform declined further; the system appears likely to survive essentially unchanged until it is brought down completely by a future crisis that it cannot handle.

 

Russian Politics and Law, May 2012 Table of Contents

Volume 50 Number 3 / May-June 2012 of Russian Politics and Law is now available on the mesharpe.metapress.com web site.

This issue contains:

The Rules of the Political Game in Russia: Editor’s Introduction  p. 3
Dmitry Gorenburg
Formats of Russian State Power  p. 7
Ol’ga V. Kryshtanovskaia
Problems of the Russian Electoral System  p. 18
Grigorii V. Golosov
The Russian Bureaucracy and State Policy  p. 40
Sergei Sytin
Political Propaganda in Contemporary Russia  p. 56
Aleksandr Belousov
Inertia in Russian Politics  p. 70
Mikhail Il’chenko
The Nonsystemic Opposition  p. 82
Ivan Bol’shakov

Putin spells out national security strategy

As part of his campaign for the presidency, Vladimir Putin has been publishing a series of articles on various themes. Yesterday, he turned to national security and specifically the Russian military. Since the full text is available in English, I won’t spend much time describing what is in the article, but will just comment on some themes that caught my attention.

I have to say, of all the articles Putin has published as part of his electoral program, this one is one of the best. It’s not a terribly high standard, given that at least one of them was found to have been plagiarized from other sources, but still.

The first part of the article provides one of the best justifications I have seen for the military reform that the government undertook starting back in the fall of 2008. Had this statement been made this clearly and forcefully back then, I think Putin, Serdiukov and company might have had an easier time convincing the expert community that they knew what they were doing. (Back then, the reform was rolled out without a clear plan or explanation, which generated a lot of criticism.) I’ve been a fan of the main ideas behind the reform effort from the start, so I’m glad to see this all spelled out so clearly by Putin (or, more likely, his ghostwriter). Here are the key points justifying the reform:

But previous experience proved that the potential for developing the military system inherited from the Soviet Union had become depleted….

It was not possible to build up the military simply by adding personnel and equipment partly because it didn’t solve the inefficiency problem and partly because the country lacked both the human and financial resources. Most importantly, that system did not meet contemporary and long-term requirements. We could eventually have lost our entire military potential, and we could have lost our armed forces as an efficient mechanism.

There was only one way out. We had to build a new army. We had to establish a modern and mobile army which could maintain permanent combat readiness.

This is followed by an equally clear discussion of accomplishments to date. These primarily have to do with changes in organizational structure, including the transition from brigades to divisions and from military districts to unified strategic commands.

Procurement

The section on future tasks focuses primarily on procurement. The list of priorities is worth quoting:

Our number one priorities are nuclear forces, aerospace defence, military communications, intelligence and control, electronic warfare, drones, unmanned missile systems, modern transport aviation, individual combat protection gear, precision weapons and defence capabilities against such weapons.

In terms of specific platforms and weapons, the list for the next decade reads as follows:

Over 400 modern land and sea-based inter-continental ballistic missiles, 8 strategic ballistic missile submarines, about 20 multi-purpose submarines, over 50 surface warships, around 100 military spacecraft, over 600 modern aircraft including fifth generation fighter jets, more than 1,000 helicopters, 28 regimental kits of S-400 air defence systems, 38 battalion kits of Vityaz missile systems, 10 brigade kits of Iskander-M missile systems, over 2,300 modern tanks, about 2,000 self-propelled artillery systems and vehicles, and more than 17,000 military vehicles.

Parts of this are more believable than others. Given that the military still isn’t sure what tank it wants to build, the 2,300 modern tanks number is particularly unlikely. And I have doubts about 600 modern aircraft and 50 surface warships (unless we count patrol boats and the like). Targets for helicopters, submarines, air defense systems and missiles are more likely to be achieved.

The social dimension

The biggest problems with the reform effort to date have been with the social dimension of reform. This dimension is given an extensive amount of attention in the article. The increase in salaries that came into effect in January is expected to solve the recruitment problem. We shall see.

Putin also made a new proposal to create the Russian equivalent of a GI Bill for soldiers to help with admission to and payment for a university education. This could prove attractive to less wealthy families who otherwise would have little hope of paying the bribes that are often necessary to gain admission to a Russian university.

At the same time, it’s not encouraging that the fiction of a million man army is being maintained. According to the article, there are  220,000 officers and 186,000 contract soldiers and sergeants currently serving in the military. The total number of conscripts serving at present is 350,000. That means the total force is around 750,000, rather than one million. To put it another way, 25 percent of all billets in the Russian military are currently vacant, although this is not being acknowledged. That’s a big problem. The only way to solve it is to step up recruiting of contract soldiers. Again, we shall see if the higher salaries help with that. If it works, then the plan to have 700,000 professional soldiers in place might be achievable, though almost certainly not by the target date of 2017.

Then there’s the housing issue. Putin again makes promises that the issue will be solved, this time by 2014. That’s a year later than previous statements. The deadlines for providing apartments to all active and retired officers who are owed one have been pushed back year after year, so I wouldn’t hold my breath on this.

Dealing with defense industry

The last third of the article deals with new demands that the military and government are placing on Russian defense industry. There’s not much there that hasn’t already been said by various officials elsewhere over the last year. After starting with the usual statements on the importance of domestic defense industry and their modernization, Putin once again makes clear that the military is not going to just accept what they’re being sold. As he puts it, “It is unacceptable for the army to become a market for morale-sapping obsolescent weapons, technologies and research and development, especially if it is being paid for out of the public purse.”

Modernization is to come in a number of ways:

  • The acquisition of foreign technologies with the aim of improving domestic production in the future.
  • Providing greater financial predictability for defense industry by placing state defense orders for a 3-5 (or even 7) year period.
  • Increasing transparency and competition among defense industry companies.
  • Privatizing state-run defense industrial companies.
  • Creating synergies between the defense and civilian economic sectors in order to spur innovation.

The parts about privatization and competition are interesting, as they seem to contradict efforts made in the previous Putin presidency to nationalize many of these same companies through the creation of quasi-state owned sectoral holding companies.  Is this an implicit admission that the government made a mistake then?

All in all, some reasonable grand plans for Russian defense industry, but few specifics on how they might be carried out. And that can probably double as an assessment of the article as a whole. The vision is clearly there. But the question still remains: can the vision be implemented successfully given Russian realities? Or will corruption, the intransigence of the old guard, and just plain old inertia stymie this vision? The jury is still out on that question.

Quick reaction to Putin’s announcement

Josh Tucker over at the Monkey Cage asked me to comment on yesterday’s announcement that Putin will run for President next year. My comments can be found at his blog, together with those by several other PONARS members. I focused on the potential impact of the decision on foreign policy, and particularly U.S.-Russian bilateral relations. Here’s my comment.

There has already been some loose talk about the potential negative impact of Putin’s return on U.S.-Russian relations. On the contrary, I think this move in and of itself will have very little impact on bilateral relations or on overall Russian foreign policy, for that matter. Russia was not ruled by Medvedev over the last 3.5 years, and it will not be ruled exclusively by Putin over the next six. The Russian leadership is in some sense a collectivity, with Putin acting (in the words of Olga Kryshtanovskaia) as primus inter pares among a group of 4-6 top leaders who together make the decisions. In this environment, the current foreign policy course has to have been supported by the leadership, and by Putin in particular. There’s no reason to think he will want to change it as president. Russia will continue to seek to cooperate with the United States on counter-terrorism and counter-proliferation activities and will provide an increasingly important transit route to Afghanistan. At the same time, Russian leaders will continue their sporadic efforts to find a way to integrate their country into Western security institutions, though most likely with no more success than they’ve achieved to date.

To be sure, the atmospherics may be somewhat different. Several Russians I’ve spoken to about Putin’s decision argue that the main difference between him and Medvedev is in their style, rather than their substance. I have no doubt that Putin’s rhetoric will at times cause a great deal of consternation in the West and in the United States in particular. In these circumstances, it will be especially important to focus on Russian actions, rather than their rhetoric, in order to avoid an over-reaction that would derail aspects of the relationship that provide concrete and significant benefits to the United States.

Again, please make sure to go over to The Monkey Cage and read the comments there, especially if you’re interested in the potential impact on Russian domestic politics.