Russia and the West—What's Next?

By
F. Joseph Dresen

"As we approach the end of 2007, relations between Russia and the West are quite brittle," said Angela Stent, professor of Government and director, Center for Eurasian, Russian and East European Studies, Georgetown University at a 19 November 2007 lecture. Issues such as Kosovo, U.S. missile defense deployment, and possible sanctions on Iran are serious irritants in the U.S.-Russian relationship. Officials on both sides have exchanged verbal barbs as each enters their upcoming presidential election season—"not usually a time for measured, thoughtful rhetoric," Stent observed.

The diplomatic gulf between Russia and the United States can be understood as a reflection of "dueling narratives" about what has happened in the relationship in the past, and what should be done in the present. "Russia sees itself as a status quo power in the international system, and it sees the United States as a revolutionary power trying to create a new order in the 21st century that will guarantee continued U.S. preeminence," said Stent. Russia also feels a sense of neglect from the West in that it was not treated as an equal in the 1990s and was not rewarded for its support following the 9/11 terrorist attack. The emerging narrative under Putin, continued Stent, is that a newly self-confident capitalist Russia is redefining its role abroad and at home. At the same time, much of Russian rhetoric depicts the West as a threat to Russia and its interests.

By contrast, according to Stent, the United States and many European countries do not view Russia as a threat, but they do see Russia as a revisionist power trying to renegotiate the settlements of the 1990s, which were negotiated when Russia was weak and largely had to accept the West's agenda. Where Russia feels entitled to consideration for its post-9/11 support, the U.S. feels Russia acted in its own interests in aiding the defeat of the Taliban in Afghanistan, and that Russia then played a key role in closing the U.S. air base in Uzbekistan. Moreover, the U.S. is concerned by the nationalization of the commanding heights of the Russian economy and the decline of political competition within Russia.

The reality behind these narratives is more complex. The Russian economy is booming, with growth rates averaging over 7 percent for eight years; $430 billion and rising in currency reserves (3rd highest in the world); and $120 billion in a stabilization fund. "This capitalist Russia has a lot to offer the West," stressed Stent. The Western business community is very positive regarding Russia and feels that it will develop democratically in the long run as other modernizing countries have done. In spite of setbacks, Western energy companies are ready to stay and adapt to changing conditions, Stent continued, both because of Russia's tremendous reserves and because conditions are still favorable compared to other energy producing countries such as Nigeria or Venezuela.

Another reality, noted Stent, is that the number of Russians moving between Russia and the West is increasing. There are approximately 300,000 Russians living in the United Kingdom and 200,000 living in Germany. These Russians are "increasingly part of the fabric of Western society," she said.

Russia is also emerging as an important outward investor, poised to deploy some of its huge reserves abroad in "sovereign wealth funds." The United States and the EU are struggling to craft policies to deal with such funds from Russia and elsewhere, as there are concerns as to whether such funds would base their actions on political considerations as well as economics.

Behind the encouraging economic signs is an emerging Russian system in which, "Russia is run by the people who own it," Stent cautioned, quoting Dmitri Trenin. This "Russia, Inc." might be understood as a post-Soviet version of the 19th century patrimonial state, in which the office of the president combines the management of the state with the custody and operation of the most important state assets, Stent suggested, noting that many of these assets have been renationalized during the Putin administration. The heads of most top companies in strategic sectors such as energy occupy very high government positions. This kind of arrangement, contended Stent, produces questions about stability and succession in Russia—will there be a transfer of wealth as well as a transfer of power? It also results in a lack of transparency that clouds Russia's energy and economic relations with its neighbors and trading partners.

Stent recommended that in the short term, U.S. policy should focus on damage limitation so that problems do not get worse. "Where we can, we should delay taking decisions that could provoke unwanted consequences for the United States and EU." For the foreseeable future, she continued, "we need to tone down or eliminate the discussion of common values and focus on our common interests, because that is much more productive." In the longer run, both Russia and the United States need to work to recalibrate and rehabilitate the relationship. "I think you will not see many changes in the next year. If we can get through the next year without any major crises, that would be good," concluded Stent. "It is going to be a bumpy ride."

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