29 December 2016

Putin will never restore Russia’s greatness

By Andrew Foxall

Over the Christmas week, CapX is republishing its favourite pieces from the past year. You can find the full list here.  

Twenty-five years ago, on 8 December 1991, the leaders of Belarus, Russia, and Ukraine signed the Belavezha Accords, an agreement that dissolved the Soviet Union.

Fewer than two weeks afterwards, leaders from all but one of the other Soviet states joined the Accords. Thus, the Cold War ended without so much as a shot being fired.

A quarter of a century on and the West and Russia are again locked in a seemingly intractable conflict. It is a conflict of Vladimir Putin’s creation. He believes the fall of the Soviet Union to be “the greatest geopolitical catastrophe” of the 20th century.

His reckless behaviour since becoming Russia’s president, in 2000, has led us into what some have called a “new cold war”.

Mr Putin longs for a return to the Cold War. Not in the sense of the Soviet Union’s zastoi (or economic stagnation) in the 1970s or its disastrous decade-long war in Afghanistan in the 1980s. He would rather forget about these; so too the misery and poverty suffered by many Soviet citizens.

Stalin’s purges and the Gulag are whitewashed. As is the Molotov-Ribbentrop Pact, which consigned the countries of Eastern Europe to servitude post-World War Two, either through their inclusion in the Soviet Union or membership of the Warsaw Pact.

Instead, Mr Putin is desperate for Moscow to be recognised as a seat of global power. He accepts that the era of bipolarity ended in 1991, but argues that the unipolar world order that took shape after 1991 is now over too. In his eyes, a new, multipolar system has emerged, with Russia as one of its poles.

He seeks for Russia to have both influence and respect. He wants the West to recognise Russia’s right to act with carte blanche in the internal affairs of its neighbouring states (an area he and other senior Russians call “the near abroad” and “sphere of privileged interests”), its having a right of veto over European Union and Nato expansion, and its ability to transgress (or break) international law.

In attempting to hallucinate Russia’s global power status into reality, nothing has proven beyond the pale.

Mr Putin has gone some way toward reconstituting the Soviet Union in Russia. The Soviet anthem has been adopted as Russia’s national anthem, military parades have returned to Red Square after being absent for almost two decades, and the Leninist”‘Hero of Labour” award has been resurrected.

The two main pillars of the Soviet state, propaganda and repression, have been restored. The FSB, the state security service (and successor to the KGB), is once again the country’s pre-eminent institution.

Soviet-style coercive psychiatry has returned as a judicial and political weapon, history is being falsified, and the number of political prisoners is increasing. All the while, Joseph Stalin has been quietly rehabilitated.

True, Mr Putin has embraced pre-Soviet themes, too. He has befriended the Russian Orthodox Church and name-checked Tsarist-era philosophers such as Ivan Ilyin, whose corpse he had repatriated from Switzerland.

In launching Russia’s intervention in Syria, he drew a line of continuity with Moscow’s imperial policies in the Middle East dating back to 1453. But it is Soviet nostalgia – bolstered by recent interventions in Ukraine and Syria – upon which he bases Russia’s claim to be a global power.

Mr Putin’s claim has some merit, but only in respect of the size of Russia’s landmass and its possession of nuclear weapons. Anything else is pure bluff.

During the Cold War, the Soviet Union was guided by the grim but sophisticated edifice of Marxism-Leninism. Whatever one thinks about Communism, the ideology did provide a genuine alternative to Capitalism for many of the Soviet Union’s 74 years of existence.

Nothing of the kind exists in Mr Putin’s Russia. Russia’s ideology, if one can call it that, is a crude and contradictory mixture of Soviet nostalgia, anti-Westernism, and nationalist bombast.

Russia’s foreign policy is destructive not constructive. The country is now more isolated internationally than at any time since 1991 – more than the Soviet Union was at any point after 1945.

The Kremlin’s actions in Ukraine led it to alienate a country with which it had longstanding cultural and ethnic ties. Its earlier war with Georgia had much the same effect.

Russia was suspended from the G8 (which now refers to itself as the G7) in 2014 and has since been subject to far-reaching economic sanctions by the West.

Unlike the Soviet Union, Russia has no meaningful allies. One could point to China, Iran, India, Syria and a handful of other countries, but these relationships are largely transactional. They do not represent shared values, longstanding mutual interests, or any other basis for sustainable alliance, even in the shortest of terms.

Within the Former Soviet Union, Russia’s close relationship with Belarus is largely based on Moscow’s supply of cheap energy to Minsk.

The gap between Mr Putin’s claim for Russia’s global power status and the reality is most obvious where the country’s economy is concerned.

In 1985, the United States’ Gross Domestic Product (GDP) was only twice that of the Soviet Union. Today, US GDP is greater by a magnitude of 15. While the Soviet Union was once the second largest economy globally, today the Japanese, German, British, and French economies are two or three times bigger than the Russian economy.

According to the IMF, Russia’s GDP per capita is smaller than that of Hungary and marginally larger than that of Kazakhstan. It is, in a sense, a Third World country. The US, by contrast, only trails behind petrochemical states and global financial centres in having the highest GDP per capita globally. These states and centres aside, the US has the largest GDP per capita of any large, First World country.

The authoritarian system Mr Putin has built over the past 16 years is not, in itself, enough to explain this. China – hardly the most democratic of states – has leveraged economic reform to build a competitive, diversified economy over the past two and a half decades.

The issue is not only that Mr Putin’s system is based on massive predation on a level not seen since the time of the Tsars, nor that he has refused to reform Russia’s economy in any meaningful way.

The bigger issue is that Russia does not control its economy. It is overly dependent on commodities and their volatile prices. Almost half of its fiscal revenue comes from oil and natural gas. In many respects, the Soviet economy was more diversified and stable than is Russia’s.

Levels of disposable income per capita in Russia (US$17,006) are well below the OECD average (US$29,016). By this measure, Russia ranks at 30 among the 38 countries included in the OECD’s surveys, ahead of Chile and just behind Poland and Greece.

Ranked by household net wealth per capita, Russia does even worse; it is 38th of 38. Its net wealth per capita (US$ 3,687) is 23 times smaller than the OECD average (US$ 84,547) and 44 times smaller than that of the US (US$ 163,268).

And the bad news for Russians (rather than Russia’s elite, whose wealth has been more stable since 2000 than that of the elite in any of the G7 countries) is that things are unlikely to change for the better anytime soon.

Russia’s economy is stagnating, and levels of unemployment are increasing, as are poverty levels. Each of these is having an impact on the quality of health, which itself is declining.

When the Soviet Union collapsed, in 1991, Soviet Russia’s life expectancy was 68 years. Over the last quarter of a century, this has increased – to 70. Compare that with the US, where life expectancy grew from 75 years to 79 years over the same period. Russia’s life expectancy is now at the same level that it was in America in 1969.

After Russia annexed Crimea, President Barack Obama dismissed it as a “regional power” whose actions are an expression of weakness rather than strength. Russia is more than this, but it is not a global power.

It did not have to be this way. Mr Putin could have decided that his top foreign-policy priority was good relations with its neighbouring states. Had he wanted, Russia could have had close and friendly relations with Nato.

Moscow could have enhanced its global stature by embracing the existing international order, supporting openness, and working cooperatively.

Domestically, he could have reasserted the rule of law, backed by independent courts; cracked down on corruption; and, supported private enterprise. But Mr Putin choose to do none of this.

A quarter of a century after the end of the Cold War, Russia is a shell of its former Soviet self.

Dr Andrew Foxall is Director of the Russia Studies Centre at The Henry Jackson Society. This article was originally published in December 2016.