Sir Tony Brenton joined the British Diplomatic Service in 1975 and, in the course of a 33 year career, served in the Arab world, the European Union, Russia and the USA. He has dealt with such issues as the Arab/Israel dispute, global climate change, international energy policy, and the Kosovo, Afghanistan and Iraq wars. He was a senior official at the British Embassy in Washington DC following 9/11 and at the time of the Iraq war. He served as British Ambassador in Moscow 2004-2008 during the most difficult period in modern British/Russian relations. He has written a well received book on international environmental diplomacy – “The Greening of Machiavelli”, is a regular commentator in the “Times” and other British publications, a Senior Advisor to Lloyds of London, Director of the Russia British Chamber of Commerce, and a Fellow of Wolfson College Cambridge where he is writing a book on Russia at the time of Peter the Great.
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This is the second Part of a comprehensive paper on Russia’s relations with the West. The aim of the paper is to pick out which parts of our traditional picture of Russia and its relations are right, and which wrong, and to look at where our relationship with Russia is going.
The first Part, which appeared on 3 May, introduced the issues and dealt with Putin; this Part deals with Foreign Policy and the Economy; the final Part, which will appear on 28 June, will deal with relations with China and prognoses for the future.
Is the Bear on the prowl again?
Russia is not a revanchist state. She is not planning to invade any of her neighbours or rebuild the USSR. The many who use Putin’s quote that “the fall of the USSR was the greatest geopolitical catastrophe of the 20th Century” fail to add the balancing quote (from the same speech) that “those who want to restore the USSR have no brains”. The two main events offered as evidence of revanchism - the Georgia war of 2008, and the Donbass war and annexation of Crimea in 2014 - were both Russian reactions to external events. It was Georgia, not Russia, that started the 2008 war, and the Ukraine events were precipitated by the popular overthrow (with, as the Russians saw it, distinct US involvement) of Ukraine’s pro-Russia President. With the conspicuous exception of Crimea (which has its own very special history) Russia in both cases refused any other possibility of territorial gain.
Not only is Russia not revanchist but she is, and knows she is, weak by comparison with the West. Her defence expenditure is one-tenth, and GDP one-fifth, of those of NATO. She is not going to get into a military confrontation which she knows she would lose. The Russians’ view of their current confrontation with the West is that they are on the defensive against a much larger and essentially predatory opponent. They see accusations that they are intent on subverting and undermining the West as deliberately misleading and way beyond their country’s reach.
Nevertheless, Russia is determined to regain as much as she can of the international standing and “respect” that she enjoyed before the fall of the USSR. Putin’s view, explicitly stated in speeches in 2007 and 2014, and widely shared among Russians, is that the West deliberately took advantage of Russia’s weakness after 1991 to humiliate and marginalise her. Charges against the West include the economic advice which contributed to the implosion of the early 1990s, Western support for the Chechen insurrections, the Kosovo war, the expansion of NATO to Russia’s borders (contrary to what the Russians claim they were promised), and Western action on human rights grounds to overthrow various regimes in the Middle East - with implications (in Russian eyes) for similar action against them.
This paranoia about Western intentions is compounded by Russian awareness of their immense conventional military inferiority to the West and was sharply boosted by the Western economic and other sanctions following Russia’s actions in Ukraine and Syria. Since Russia has limited scope to retaliate in the economic sphere they seem to have launched an “asymmetric” response through cyberattacks, online propaganda and interference in Western political systems, as well as operations such as that launched against Skripal. All of this has contributed to a further downward spiral in relations, a stepping up of defence expenditure on both sides, and regular Russian references - given their conventional military inferiority - to the possible use of nuclear weapons.
An economy in the crosshairs
Russia does not have a large economy, or population, as a basis for taking on the West. Her post-1991 demographic collapse has now stabilised. Population is growing slowly but, at about 140 million, is less than one fifth of that of NATO. Her economy is 12th in the world (just below Canada), heavily state dominated (about 70% of GDP) and dependent on hydrocarbon exports (70% of all exports).
Economic growth has been something of a rollercoaster ride since Putin came to power. Fuelled by a rising oil price, disposable incomes rose sevenfold from 2000-2012. This period helped cement Putin’s hold on power, although it was also accompanied by vast capital flight and almost ubiquitous corruption (estimated at up to 25% of GDP). In 2014 all of this took a big hit, mostly from the collapse in the oil price that year but also from the impact of Western sanctions. Russia’s well-judged policy response (notably a large devaluation of the rouble) enabled her, contrary to the predictions of many western commentators, to weather the storm. After two years recession the economy is growing again, if slowly. Debt has been brought sharply under control and inflation is at record lows. Russia regained its investment grade status in 2017.
As part of his 2018 election platform, and responding to popular unhappiness over the austerity of preceding years, Putin has promised very substantial increases in pension and other social expenditure. The economists advising him (in particular former Finance Minister Kudrin) have been clear that this can only be afforded if accompanied by significant and disruptive economic reforms including privatization and a crackdown on corruption (as well as a “less confrontational” foreign policy). The biggest domestic challenge facing Putin is whether he is willing to take the political risks associated with such a programme. The alternative is likely to be economic stagnation for Russia for many years to come, almost certainly accompanied by diminishing popular support for the regime.
Putin’s decision is further complicated by the impact of Western economic sanctions. These have been the West’s weapon of choice in dealing with Russia since 2014. They have been adopted by the EU, the US and a variety of other Western allies. Mostly they have been directed against individual Russians, in particular members of Putin’s inner circle, but have also extended to take in some major state companies, and to include limits on technology transfer. Their economic impact is disputed (perhaps up to 2.5% of GDP) but, at least up to the latest round, has been dwarfed by the impact of the fall in the oil price.
Sanctions have so far had absolutely no effect on Russian policy with regard to either Ukraine or Syria (or indeed anything else). Security considerations heavily outweigh economic considerations in Kremlin policy debates, and it would be a huge humiliation for the regime to be seen to be bending to Western pressure. Given their experience of the decades it took for cold war era sanctions to be lifted, the Russians also question whether, even if relations did get better, the US administration could or would lift sanctions which are mandated by Congress and some of which are transparently protectionist in intent.
Meanwhile the political effect of sanctions has been exactly the opposite of what was hoped by their authors. They have reinforced support for Putin rather than undermining it. This of course is a familiar phenomenon from Russian history. At moments of external pressure Russia coalesces around its leader.
