Russia, Upcoming World Power After 15 Years Turmoil

By: Hari Sud
February 25, 2006
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West’s fixation with China is self-serving. The former always wishes that Russia somehow disappeared from the strategic scene. They rather deal with China instead. The latter from the Cold War days has been considered as a counterweight to the much more powerful Russia (previously Soviet Union). Whereas, China is poor, backward, very large, exploitable, deceitful, it is Russia, which the West has to deal with, in the long run. Russia is technical competent, hardworking, relatively large and full of resources. Its oil wealth alone dwarfs almost everybody combined in the West. With this in mind, then why is the West fixated on China alone and ignores Russia? Reasons - they need the Chinese to back stab Russia, should Russia tries to regain the No. 1 or 2 status in the future. In addition China can be exploited for low priced, low quality consumer goods with financial and technology investment. Chinese pay for these inputs by leaving behind all the money, they earn in American and European banks. Also, the West has found that it is much easier to deal with China including its Communist leadership in all strategic matters, compared to Russia. Take for example, the West granting Communist China the world power status in 1973 as a permanent member of the UN, Security Council. In return, China choked off the Vietnam War, posted a huge army on the Russian border to force Russians into accommodation in nuclear arms reduction. Occasionally the Chinese growl on the Taiwan issue or American spy plane over-flights over China or on commercial issue like textile exports or low value of their currency, but all this is designed to show the world that they are not US lackey. But the facts are otherwise. The Americans can choke off the investments, deny Chinese product market access and effectively kill the Chinese FDI based manufacturing economy. Compared to that, Russians are harder to deal with. They need no Western cash or technology and hold keys to the vast oil and gas reserves which the Western Europe so desperately wants and have retained all the nuclear weapons and missiles after the Communism collapse, hence are almost equal in power to the Americans less their weaker and less diversified economy. The latter is undergoing transformation to match the West. In fact the West is pretending that in some magic way Russia will disappear and they will live happily thereafter. It is a dream unlikely to be true.

Sad Story of Russia in the Last 15 Years

The Russian revolution of ejecting the Communists from power was badly managed. Minor bloodshed aside, the leadership who took control after the 1991 overthrow of the Communists was incapable of handing the transition. Since the American played a major role in putting the new leader in power, hence became advisors to the new government. So much so that the ineffective Russian leader won re-election with an American style, election campaign managed by the Americans. Thereafter, he went round selling off state assets in fire sale and created what the West now calls “oligarchs”. Farms were handed back to the people, who were not prepared for their ownership. Civil service was considered as the Communist controlled, hence was immobilized. The proud army, who once beat the hell out of Hitler and challenged America and rest of the Europe on land, air and high seas, was starved of cash. Nuclear and space program were dealt the severest blows with denial of money. Although in 1990s it appeared to be the price of revolution, it was in fact the American agenda. In the mean time China was developed and made ready, should the Russians rise again? Well, the Russians recovered from their turmoil. The incompetent leadership was ejected. The new leadership began the painful task of rebuilding the economy and state institutions, damaged by the previous leadership. By Year 2003, Russians were not only back to its old glory, but had recovered sufficiently with economy finally making progress. The tumultuous oil industry, which with the American advice had been privatized, was re-acquired. The farm output increased as people learnt to farm without state instructions. And many other changes implemented strengthened the state. All this was done with the Communists not in control.

Technology and the Competence of the Russians People

Had there been no bad leaders in the Russian hierarchy, there would have been a better transition from Communist control to market economy. Chinese have Communists still control, but they transitioned to capitalist society with less turmoil. The Russian leadership for the last 5 years is working hard to get a grip on the national and economic matters. Although they have turned the corner lately, it is still mired in commercial and national controversies. Oil oligarchs of past 15 years were straightened up but with a lot of controversy. Hardly had ink on re-acquisition of the national oil and gas assets dried, controversy on Ukrainian refusal to pay market price for the gas they were receiving, surfaced. As expected the West sided with the Ukrainians for no apparent good reason. They were only keeping the Russians off balance. Politically and militarily, rebels in Chechnya made situation hopeless with atrocities on civilians. Russians response in kind, made them target of West’s anger. Only recently, events in Chechnya have receded to the background, because US & Briton are involved in their own murderous affairs in Iraq. Hence Chechnya is talked less.

The West has expanded itself right up to the Russia’s Western border by including former Soviet Union countries in the NATO and other economic alliances. The Russians do not like it one bit. Nobody can blame them for being angry at these developments. How would the Americans like if Russians re-occupied all the military bases in Cuba. Wisdom would have been not to go too far in peddling Western influence in Eastern Europe. At the moment it would appear that the Russians have decided to lie low and enjoy the fun in Iraq. In not too distant future they will challenge the American hegemony in the Eastern Europe and force the Americans to the negotiating table to discuss their withdrawal. At that time, the Americans are hoping that they will play the China card. The latter would have a price. It is for the Americans to evaluate which of these two would come with a higher price tag.

Russian people are technically competent and are now learning to be commercially smart. Their technology is second to none. They fly their rockets as easily as the Americans do. Their military hardware is very agile and sort after in the world. Food production has caught up with the demand after a long delay. Whatever else they need, they have oil revenues to finance imports. New technologies, super computers, everyday merchandise items, transportation revolution etc where the Russians are behind, are witnessing great improvements. Their products look rugged and out of date today, but in few short years with oil revenues at their disposal, this gap will also be bridged. Hence it is just a matter of time that Russians will become equal to the Americans both militarily and commercially.

Why Does US Keeps Ignoring Russia?

With oil revenues, Russians are about to turn a corner. It is completely unlike China or India, where a huge influx of cash and technology is required to push the per capita GNP to about $1,000 level. Compared to that Russian per capita GDP is at about $5,000 level. At Purchasing Power Parity level this figure rises to about $11,000. European Union combined and US have a much higher per capita GNP. The point is that, as long as Russian maintains an offensive capability in nuclear weapons they are to be respected. Compared to that China’s capability is miniscule. Then, why is US, fixated on a very poor China. Chinese buy everything modern for its military from Russia. Hence a lot more attention needs to be paid to deal with Russia to prevent a future Cold War scenario. The latter is a distinct possibility, once the Russians put their house in order and feel being ignored in world affairs.

It is unlikely that the current Russian leadership will make that cardinal mistake of competing militarily with Europe and US. In the last Cold War, Soviet Union applied excessive resources to its military, leaving the state, its people, its infrastructure and its economy in pitiful shape. Today’s leaders in Russia are way smarter. They will negotiate better and respond in kind should US take too many liberties in Eastern Europe. Gone are the days, when US dictated terms to the Soviet Union during the Cuban crisis of 1962. Any escalation of that nature in the future will find US backing down.

Hence it is imperative that US and Europe pay a bit more attention to the Russians. They should follow the cardinal rule that more you know about your adversary the better it will be to deal with him during the crisis. Pin pricking issues like Chechnya should be relegated to the background.

In the Meantime how is Russia Making its Presence Felt Today

Only a month go the Russian told the Ukrainians to pay up for energy supplies they were getting under the old Soviet Union arrangement. Alternatively, they were advised to get them from elsewhere if they could find supplies cheap enough. Ukrainians suffered a week of energy shut down during the winter month. US and the Europe cried hoarse on the issue except they forgot to mention that just as US is paying market price for all its energy needs today, so is everybody else including the Ukraine has to pay. Russians resumed the energy supplies only after getting a better deal and a pledge from the Ukraine to re-negotiate the pre-1991 deal. While this was going on, the rest of Western Europe watched with a huge concern. Their own supplies could be interrupted should the Russia-Ukraine dispute gets out of hand. All the forgoing happened because a Ukraine under its pro-US President has decided to throw its lot with the Americans. May I remind the reader that historically Ukraine was part of Russia for the last 300 years? When Soviet Union broke up, Ukraine decided to seek independence and Western influence. They did not think for one moment that historical, religious, political and cultural ties with the Russian people would be in jeopardy with these acts. The West mistook it as a great opportunity to weaken the adversary further. West’s victory was too temporary. Energy crisis was the first shot in this awkward relationship. Other issues in the near future will create more unpleasantness. Soon the Ukraine people may decide to pitch the American influence in favor of the Russians.

Recently the Russians found themselves in the middle of controversy about Iran’s nuclear ambitions. The West was looking for an intermediary to make the Iranians a suitable offer to prevent them from extracting Plutonium. Russians were too glad to step in, to offer their services. This brought the Russians the much-needed diplomatic hype. Although everybody could easily guess that the Iranians will reject the offer, but it raised the Russian diplomatic profile. The Russians love this role. In return for this gesture by the Russians, the Chechen front has gone a bit quite.

Middle East quagmire in Iraq, Palestine, Iran, and Afghanistan and to some extent Pakistan will keep US and the West busy for a long time. This is giving an opportunity to the Russians to rise again. With their economy in order (Russia has for the seventh consecutive year of reported 6.5% growth), they are ready to deal with the West on equal terms. By now they have recouped all their losses they suffered during the transition phase. In the process all cash draining deals with Cuba, Latin America, Vietnam, China and India have been re-negotiated. Excessive effort to compete with the Americans militarily has been discouraged. With equal number of nuclear weapons still intact and in their possession combined with newer and smarter missile, Russians are back in the driver seat. Except that the West is taking a bit longer to recognize it.

So, What is the Future for the West and Russian Relations?

Future between these two competing powers is just unfolding. As Russia rebuilds its economy and gets ready for the 21st century, it is not difficult to imagine a noisy Cold War starting all over gain. Smarter heads will prevail. Confrontation will be avoided. Russia will get the recognition it wants. China as trump card of the US may become uncertain. Reasons - First, China has a very long way to go, building itself to the Russian level, economically as well as militarily. Second, it is quite likely that the Chinese may pursue an independent foreign policy with its neighbors. This may include Russia. They may refuse to back the American policy and continue to concentrate on economics than on strategic warfare.

In short, the West at the moment is too mired in the Middle East to think Russia. But soon, US will be out of Iraq. A humiliating US withdrawal will lessen US influence all around. Thereafter, US will need a short break to set its policies in order. After that they will find vibrant Russia waiting for them to straighten up issues, which the West has long ignored.

Hari Sud

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