Putin and Camouflage Diplomacy

by Ferry de Kerckhove

In a way, the story of Russia since the dismemberment of the Soviet Union is a sad one. Looking at developments since 1992 from the Russian perspective – something we mostly fail to do – the diagnosis is profoundly different. Despite François Mitterrand’s 1995 warning “never to humiliate Russia,” the West did exactly that: taking advantage of a diminished leader in the person of Yeltsin; trying to fast-track the transformation of Russia from Soviet socialism to “wild wild East” capitalism even before property laws were clearly defined; and bringing NATO closer to its borders by incorporating some former Soviet republics into the fold – a development Putin’s Russia considers an existential threat.

As Putin himself stated, “Unfortunately, our Western partners, having divided the USSR’s geopolitical legacy, were certain of their own incontestable righteousness having declared themselves the victors of the ‘Cold War’.” To Putin, ideology matters little; territory does. This explains why, feeling it has been robbed of its history, space, and legacy, “Moscow harbours a strong sense of strategic entitlement and will assert its ‘rights’ energetically.” While the West confidently felt that Russia would see the advantage of globalization, which it was prepared to “teach” to the new student, the actual result was an explosion of nationalism in the face of an alien culture.

That is the Russian narrative today, irrespective of the nearly tripling of both GDP – $1.469 trillion, still only 1/8th of China’s – and GDP per capita since 1992. Thus, Russia’s interpretation of globalization is both very much correlated to its recent political history and linked to its efforts to regain its status as a superpower, notably through the awkward concept of the Eurasian Empire, linking the two sides of the Eurasian continent into a single economic space with Russia at the centre, acting as the link, the bridge, and the dominant power.

In the early stages of his multiple tenures, President/Prime Minister/President Putin took advantage of high oil prices to position Russia as a major supplier to Europe, to negotiate long-term contracts with several countries, including China, to obtain preferential rates from previous Soviet republics like Kazakhstan and Turkmenistan, and also to establish strategic control of many pipelines from Turkmenistan. Russia’s initial take on globalization was a kind of oil-for-technology exchange and a closely controlled Western investment gambit. As Nigel Gould-Davies explains, Putin’s central dilemma has been to manage the tension between controlling the state and growing the economy, i.e. “reap prosperity through globalization while maintaining domestic control and great-power autonomy.” Yet, while initially ensuring powerful foreign exchange earnings and lifting its GDP, Russia would eventually experience the “Dutch disease syndrome” of undue reliance on a single source of earnings from a commodity highly sensitive to price fluctuations. This explains why Russia suffered more than any Western country from the financial crisis of 2008.

Furthermore, for a country of nearly 150 million, Russia’s level of exports is lower than that of the Netherlands, far from the powerhouse it would aspire to be on international markets. It tried to compensate for this weakness by aggressively pursuing any opportunity in former Soviet republics and its “near abroad” – Georgia, Ukraine, Central Asia in competition with China, and Syria, to name a few – to reestablish its dominance or at least to prevent their democratization and eventual cozying up to the West. As Celeste Wallander puts it, Russia on the international economic stage does not play by the rules and norms of the liberal order, but tries to establish relations of subservience with its clients.

The 2008 financial crisis was a watershed for Russia in its relationship with globalization. Putin saw it as evidence of the failure of the liberal capitalist order as universally imposed by the West, and a confirmation that “economic state dirigisme” was a more efficient model of development, as amply demonstrated by its Chinese neighbour. But 2008 also drove Russia to confront more directly what it saw as Western incursions in out-of-area regions, either by the US through coalitions of the willing, or more institutionally through NATO’s engineering of “colour revolutions.” Ukraine became a no-go zone for Putin, so he seized Crimea. There is a strong correlation in Russian thinking between its security concept and strategy, and its perceptions of Western-imposed globalization, such as when the EU proffered a special economic partnership to Ukraine. Russia’s intensive arms buildup, including nuclear weapons, is both part of its desire to reassert its lost status and power as well as a tacit admission that Putin “cannot do this by claiming Russia is a successful economy or a peer competitor.”

As Richard Weitz puts it aptly, after 2008 “Russians described Western-led neoliberal globalization as universally destructive economically, culturally, and politically and responsible for sparking a worldwide revolt.” For Putin, “it is essential to transform globalization from something for a select few into something for all.” Putin’s view is geographically determined, especially given the disappearance of the Soviet Union, hence his determination to prevent Ukraine from falling into the economic orbit of the European Union, seen as a Trojan Horse sent by the US.

So, for Putin, recent events such as Brexit, Trump’s accession to the presidency, the rise of fascism in Europe, and the emergence of illiberal regimes in Eastern Europe – some strongly encouraged by Moscow for security reasons to weaken NATO and EU solidarity – clearly point to the failure of the Western concept of globalization. Putin sees this as an opportunity to foster – by both overt and covert means – an alternative concept with sovereignty at its core, based more on traditional nationalism and conventional, unanimity-based, multilateral institutions, where Russia has a veto power and can suborn anti-establishment groups, parties and movements.

But, at the same time, Moscow wants to benefit from existing economic and technological networks resulting from globalization, and views Western sanctions as attempts to curb Russia’s growth, with Crimea merely a pretext. Russia is thus concerned by a slowdown in international trade as well as by oil prices’ downward spiral, which it sees as brought about by US fracking and politically driven delays and/or competition in expanding pipeline networks. It does not want to be excluded from international trade routes but refuses to abide by the rules and norms of international investments. This makes Russia one of the less attractive markets for long-term foreign investment, even though returns could be highly profitable. Foreign investment in Russia, fairly high before 2008, has dwindled in recent years while outflows exceed the latter by 2 to 1. Russia is definitely not for the faint of heart.

The yearly Valdai conferences – a Russian version of the Davos World Economic Forum – often emphasize the importance of the Eurasian Economic Union, calling it the “revisionist” alternative to Western models of integration. There is no comparison with structures such as the European Union, if only because of Russia’s total domination. And despite various attempts at interaction, member countries end up looking to Moscow and interact very little with their counterparts. Whatever structure might emerge, it will be no match to the Euro-Atlantic centric political-economic structure so strongly denounced by President Putin. Therein lies the difference between Russia and China’s perception of globalization: at the 2016 Valdai conference, the senior Chinese delegate did repeat Russian criticisms of Western-led globalization, but noted that “the US dollar-centered global economic framework spawned global governance institutions and opened up the world economic structure” and also helped China attain “unprecedented growth.”

All of that makes for little cooperation, whether economic or political, within the troubled globalized world. While Vladimir Putin dreams of some rebirth of the Soviet Union, the real globalization, or variants thereof, is playing out away from Russia, pitting the US against China as the real economic powerhouses of the world, barely noticing Russia other than as a nuclear power to contend with. But that latter dimension is also part of the changing nature of globalization, whereby the established bipolar arms control regimes no longer reflect the reality of a multipolar world. Systemic imbalances add to the uncertainties reflected in renewed arms races, where China is the disruptor until it is included – if ever – in entirely new arms control regimes yet to be conceived. Meanwhile, as evidenced by the recent oh-so-friendly embrace between Mr. Putin and North Korean Chairman Kim – as Donald Trump refers to him – the Russian President demonstrates once again an uncanny ability to fill whatever void opens up on the international stage, hoping to upstage both China and the United States, to the utter delight of Kim Jong-un whose stature continues to grow unchecked.

It may be presumptuous to even think that Canada might have a role to play, as it is much less a player now than previously in the new international environment. What is very sad is the growing, widespread “Russophobia” in the world, and in our own country particularly, fed by our leadership. Gone are the days when, as people of the North, ice hockey included, we used to harbour positive feelings towards the people of the Soviet Union, during and despite the Cold War, and subsequently in the years following the fall of the Berlin Wall. The situation in Ukraine and Crimea plays a part but it should not be a justification for hatred at the people’s level. It is hard to think that such attitudes are good for our economic relations with Russia. And from a foreign policy perspective, not talking to Russia is not a policy. 

1 On the occasion of the 50th anniversary of the end of World War II in Moscow in 1995.

2 As coined for the author in 1993 by a senior advisor of President Yeltsin.

3 newsweek.com/russia-putin-reveal-biggiest-mistake-trusting-west-688998.

4 Bobo Lo: cer.eu/sites/default/files/publications/attachments/pdf/2011/policybrief_russia_19feb09-771.pdf.

5 See Eduard Ponarin, “The effect of globalization on Russia”, in Conflict and Reconstruction in Multiethnic Societies – Proceedings of a Russian-American Workshop, 2003. nap.edu/read/10879/chapter/11.

6 The jury is still out as to who won on the contract but the long term of it would argue in favour of China.

7 See Nigel Gould-Davies, chathamhouse.org/publication/russias-sovereign-globalization-rise-fall-and-future.

8 Bobo Lo: op. cit.

9 “Russian Transimperialism and its Implications,” The Washington Quarterly, Spring 2007.

10 Anthony Cordesman, csis.org/analysis/russias-new-nuclear-weapons-whoever-dies-most-toys-wins.

11 yaleglobal.yale.edu/content/russia-wants-remake-globalization-itsown-image.

12 veteranstoday.com/2017/03/23/putins-speech-to-the-valdai-international-discussion-club.

13 valdaiclub.com/events/posts/articles/session-5-the-world-economy-a-new-globalization-or-new-protectionism.

14 valdaiclub.com/a/highlights/how-can-the-eaeu-produce-a-better-economic-effect.

15 valdaiclub.com/a/highlights/major-countries-need-to-build-trust.

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