Debating Russia's Fate

ANN/Groong -- Geopolitical Intelligence Report: Debating Russia's Fate: "Geopolitical Intelligence Report: Debating Russia's Fate"

Geopolitical Intelligence Report

Debating Russia's Fate

STRATFOR Weekly
May 09, 2005

It has been 60 years since the defeat of Nazi Germany. The leaders of
the nations that participated in that victory, along with those that
didn't, have gathered in Moscow to commemorate the anniversary. The
gathering has a meaning that transcends the historical.

The question on the table is the future of Russia's relationship with
the West. The issue is simple: From Moscow's point of view, it is
whether the Russians squandered, over the past 15 years, the victory
that was won at the cost of more than 20 million killed. >From its
erstwhile allies' point of view, it is whether to take Russia
seriously, not only as a global power, but even as a regional
power. How these questions are answered will determine the shape of
Eurasia for a generation.

>From the Soviet point of view, World War II was simultaneously a
catastrophe and a triumph. The catastrophe consisted of Josef Stalin's
massive diplomatic and military miscalculations, which led to the
occupation of vast parts of the Soviet Union by the Germans. The
triumph was the fact that the Soviet Union not only won the war (along
with its allies), it also emerged from the war as the dominant
Eurasian power -- its borders effectively pushing into central Germany
-- as well as a global power. It became the only challenger to the
other great victor in World War II, the United States. Now the fruits
of the victories of 1945 are gone.

Moscow's sphere of influence no longer extends to central Germany. In
fact, it doesn't extend even through the former Soviet Union. The
Baltics, Ukraine, the Caucasus and Central Asia are all slipping from
its hands. It is not even certain that the Kremlin can hold all of
the Russian Federation. >From Moscow's point of view, the current
generation has squandered the victory and betrayed the sacrifices of
its greatest generation.

The leadership of the Soviet and Russian recessional did not undertake
this course out of indifference or confusion. Mikhail Gorbachev, Boris
Yeltsin and Russian President Vladimir Putin all pursued a calculated
policy, dictated in their minds by irresistible reality. Following
the analysis of Yuri Andropov, the head of the KGB in the 1960s and
1970s, they recognized that the Soviet Union was -- imperceptibly to
many in the West -- slipping into economic and social catastrophe,
caused by two things. First, the Soviet economy was inherently
inefficient; geography and ideology combined to create a fundamentally
flawed system. Second, the decision by the United States in the 1980s
to directly attack this weakness by accelerating the arms race created
a crisis of unsustainable proportions.

The Soviet Union was poor, but geopolitically and strategically
powerful. In order to retain that strategic power, it had to devote an
enormous amount of economic energy to sustaining its military forces
and the economic sectors that underpinned them. The cost of strategic
parity with the United States rose and threatened the rest of the
economy with collapse. Very quickly, the Soviet Union would be both
poorer and weaker.

Moscow made a fundamental strategic decision to preserve the Soviet
Union by rebalancing the relationship between geopolitics and
economics. Gorbachev attempted to implement this policy by
effectively ending the Cold War in return for technology transfers and
investments from the West. He lost control of the situation for two
reasons. First, regardless of the level of Western investment and aid,
the economic sclerosis of the Soviet Union was so extensive that
Moscow could not effectively utilize the Western funds in any
politically meaningful timeframe. Second, the United States was not
going to allow the Soviets to recover from their weakness.

Washington pressed home its advantage. First, it made alliances,
covert and overt, in Eastern Europe that essentially pried the region
out of the weakening Soviet grip. Second, the loss of its Eastern
European empire created a dynamic that led to Gorbachev's fall and the
rise of Yeltsin -- and the collapse of the Soviet Union
itself. Retreat fed on itself, until Moscow lost not only what it won
in World War II, but also much more.

Yeltsin essentially extended Gorbachev's policies and deepened
them. He assumed that the economic benefits that Andropov had been
searching for would materialize more quickly if Russia were not also
responsible for economic conditions in Soviet republics that lagged
generations behind Russia itself. In effect, Yeltsin continued to
trade geopolitics for economic relations with the West -- having
abandoned the drag imposed by, for example, Central Asia.

Russians hoped for a massive improvement in their lives. While there
was substantial economic activity, wealth was not dispersed. The lives
of Russians outside of Moscow and St. Petersburg, as well as the
elderly and others who were not among the Westernized elites, went
from difficult to extraordinarily harsh. The reasons are complex, but
they boil down to this: Capitalism is extremely rewarding, but it
demands huge social sacrifices up front -- and Russia, having already
paid the price of communism, had nothing more to offer. By this, we
don't simply mean money; we mean the social dynamism that capitalism
requires. Russia was exhausted by communism. Its social, political
and legal structure could not change to accommodate the requirements
of capitalism. Theft replaced production as a means of becoming
wealthy.

Yeltsin could not have done anything about this had he wanted to. It
was hardwired into the system. As a result, there was no economic
payoff in return for Russia's geopolitical decline. Before the
collapse of communism, Russia had been poor but enormously powerful.
Afterward, Russia was even poorer and pathetically weak. Moscow had to
struggle to hold on to Russia itself.

Geopolitics is not a sentimental game, and the United States is not a
sentimental country. It did precisely what the Russians had done in
the past and would have done had the situation been reversed: It
pressed its advantage. Using a variety of mechanisms, such as NATO
expansion, the United States first spread its influence into Eastern
Europe, then into the former Soviet Union itself, in the
Baltics. Washington has increased its influence in the Caucasus via
its relationship with Georgia and others.The Americans moved into
Central Asia -- first, through the development of energy resources
there; then, as a side effect of Sept. 11, through the deployment of
U.S. troops and intelligence services throughout the region.

Russian weakness had created a vacuum. The United States inexorably
moved into it. Putin came to power in the wake of the Kosovo conflict,
in which the United States had treated Russian interests with
indifference and even contempt. He did not wish to reverse the
Andropov doctrine, but intended only to refine it. He expected there
never to be a repeat of Kosovo, in which the United States attacked
Serbia -- a nation regarded by the Russians as friendly -- without
ever taking Russian interests into account. Putin also intended to
reverse the consequences of the economic chaos of the 1990s. But he
did not intend to create any fundamental change.

In other words, Putin wanted to have his cake and eat it too. He did
not want to change the foundation of U.S.-Russian relations; he simply
wanted to rebalance it. The two goals contradicted each other. The
relationship could not be rebalanced: It was built around the reality
that Russian leaders had been dealing with for a generation with
declining success. Russia didn't have the weight to rebalance the
relationship. Economically, it remained crippled. Militarily, it was
impotent. The geopolitical consequence -- decline -- could not be
stopped. For the past six years, Putin has been searching for the Holy
Grail: a no-cost, no-risk solution to Russia's problems.

The United States has followed a consistent policy from Ronald Reagan,
through the administrations of George H. W. Bush, Bill Clinton and now
George W. Bush as well. It has sought to prevent, under any
circumstances, the re-emergence of Russia as a regional hegemon and
potential global challenger. This has been a truly bipartisan policy.
Clinton and George W. Bush have sought to systematically increase
American influence in what the Russians call their "near abroad" while
at the same time allowing the natural process of economic dysfunction
to continue. More precisely, they have allowed Russia's weaknesses to
create vacuums into which American power could move.

The breakpoint came in Ukraine. Washington took advantage of
pro-Western forces there to create a situation in which it, rather
than Moscow, was the most influential foreign force in Kiev --
including raising pointed discussions about whether to include Ukraine
in NATO. Ukraine lies on Russia's southern frontier; if it becomes a
NATO country, Russia becomes indefensible. This, coupled with growing
U.S. power in Central Asia, threatens Russia's position in the
Caucasus. The situation quickly becomes hopeless for Moscow.

This explains why Putin recently referred to the collapse of the
Soviet Union as the greatest geopolitical catastrophe in the 21st
century. Western leaders expressed shock at the statement, but Putin
was simply expressing the obvious. President Bush's travel itinerary
surrounding Russia's V-E Day celebrations -- making his first stop in
the Baltics and leaving by way of Georgia -- is intended to drive the
point home. Discussion of internal Russian affairs -- the status of
democracy there -- similarly drives home the inequality of the
relationship. So, too, does the attempt to equate the Soviet
occupation of the Baltics with the Nazi occupation, with Bush
administration leaders saying that the fall of Adolf Hitler did not
end oppression. All of this is designed rhetorically to put Russia on
the defensive, just as it has been put on the defensive
geopolitically.

The Russian decline and the U.S. exploitation of the situation have
taken us to the breakpoint. If Ukraine is lost to Moscow, if Georgia
becomes the dominant power in the Caucasus, if events in Kyrgyzstan
are extended to the rest of Central Asia -- all of which are very easy
to imagine -- it will be difficult to imagine the survival of the
Russian Federation. We will see a second devolution in which parts of
the Federation peel off. Russia, as we know it today, will be
finished.

It is not clear that the Russians have the will to recover. Putin
seems to be struggling with internal and external demons, and his heir
is not apparent. However, if Russia is going to make an attempt to
recover, now is the time when it will have to happen. Another year and
there might not be any chance. It might already be too late, but the
Russians have little to lose. It is really a case of now or never.

Russia will never have a vibrant economy. In the long run, centralized
command economies don't work. But neither does capitalism in Russia. A
centralized economy can do remarkable things in the short run,
however. Russia is particularly noted for short-term, unbalanced
spurts -- sometimes with the government using terror as a tool,
sometimes not.

It must always be remembered how quickly military power can be
recovered. Germany went from a collapsed military in 1932 to Great
Power status in five or six years. Economic authoritarianism, coupled
with a pre-existing skilled officer class, transformed Germany's
strategic position. It is not wise, therefore, to assume that Russia
cannot recover significant military force if it has the will to do
so. It might not become a superpower, but Great Power status -- even
with an impoverished population -- is not beyond its capabilities. We
have seen Russia achieve this in the past.

It therefore makes sense that the United States has been consolidating
and extending its position in the former Soviet Union during the past
few months. Russia can recover, but only if given time. The United
States, having no desire to see Russia recover, doesn't intend to give
it time. Washington intends to present Moscow with a reality that is
so unfavorable that it cannot be reversed. Russia is close to that
situation right now, but in our opinion, not yet there. A window is
open that will close shortly.

The question is simple: Will the Russians grab what might be a last
chance, or are they just too tired to care?


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