Russia's Domestic and Foreign Policy Challenges

By
Markian Dobczansky

"No one in the Russian political elite in the Kremlin is thinking about what will happen after the election, which says a lot about the Russian political system and its sustainability," said Lilia Shevtsova, senior associate, Carnegie Moscow Center. Speaking at a 21 May 2007 Kennan Institute talk, Shevtsova said that the upcoming Russian presidential election poses a great challenge to the Russian state because of this lack of foresight. She noted that although President Vladimir Putin has enjoyed great popularity, he has not yet named a "favored candidate" to replace him or allowed two candidates to compete, she noted. The resulting uncertainty is intensifying the struggle over who will replace him.

For Shevtsova, Russians and observers of Russia can generally be divided into two groups: "pragmatists" and "idealists." Pragmatists are generally cautious, and believe that Russia will prosper through gradual reform. Their emphasis is on securing economic growth through the introduction of capitalism and the formation of a middle class, she explained. Idealists, on the other hand, question why democracy seems to recede with continued economic growth, and observe a rising tide of nationalism with a certain amount of unease. She said this proves that there is no causal link between economic growth and democracy.

Placing herself in the "idealist" group, Shevtsova stated that, for the time being, the liberal project has failed to take off in Russia, while Putin's project appears to have succeeded. The president has brought Russia both social and economic stability, united the often factional Russian elite, and changed the style of leadership Russians expect from their politicians. Three major factors have contributed to stability in Russia. First, high oil and gas prices have put the Russian budget into a surplus. Second, Putin's approval rating has given many in the elite and in the population as a whole confidence in the system. Third, there is hope that things will improve in the future.

In spite of these successes, Shevtsova cautioned that the current "stability" merely preserves the status quo and limits Russia's chances at modernizing itself. She questioned whether the ruling elite have a longer-term strategy. In her opinion, the current system is characterized by several tactics on the part of the leadership: 1) aggressively struggling over the redistribution of property; 2) creating a model for succession; and 3) lulling the population into complacency through national initiatives and debates over the allocation of money from the stabilization fund. In essence, Shevtsova said, "the tactics are the strategy." For this reason, in her opinion, it matters little who will win the 2008 presidential election, because the essential elements of the state system will remain in place.

At the same time, the Kremlin is offering Russia several succession scenarios, she said. Two scenarios are symbolized by the two leading candidates, First Deputy Prime Minister Dmitry Medvedev and former Defense Minister Sergei Ivanov. According to Shevtsova, Medvedev represents a softer, more pro-Western Russia, while Ivanov represents a more conservative state-centered Russia. Should a third candidate arise, he could take Russia in an even more statist and nationalist direction, which would include more "bullying" behavior in foreign policy, she cautioned. In spite of the change in leadership, she noted, the substance of the system will remain the same.

One irony of the succession struggle is that Putin's interests and the interests of the elite diverge, Shevtsova noted. For Putin, it is advantageous to maintain a level of uncertainty about whom he will choose as his successor, because this allows him to avoid becoming a "lame duck" president. The elites, on the other hand, want to know who the next president will be as soon as possible, so that they can secure their property rights and begin to build ties with the new leadership, she said.

Overall, Russian foreign policy during Putin's term "fits the domestic landscape perfectly," meaning that it has become a tool of domestic policy, Shevtsova stated. Russia's "new assertiveness" has been one of the keys to Putin's popularity. In terms of Russia's relations with Western Europe and the United States, Shevtsova explained that Putin has offered several bargains to these countries collectively. Russia will allow Western energy companies access to upstream development projects in exchange for access to Western distribution networks. It is unclear how various Western countries will react to this proposal, she said. Russia also wants to renegotiate the terms of the foreign policy model worked out in the 1990s. Russia does not want to be the junior partner of the West in international relations, she observed; rather, it wants to be alternately a partner and a competitor.

Although the Russian system as a whole seems stable, there is a lot of political uncertainty, according to Shevtsova. This has led the Russian elite to act out of fear and their own self-interest, she continued. There are potential problems inherent in this system, she noted, including the contradictions between stability and the periodic upheaval of elections, between capitalism and the needs of the market, and within the federal system between the needs of the center and the individual needs of the regions for self-government. Russian elites are aware of these problems, and have found a variety of ways of managing the risk associated with the succession process.

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