Russia and the U.S.: A Long Confrontation?

23 september 2014

Implications of the Ukrainian Conflict

Sergei Karaganov, Doctor of History, is Dean of the School of World Economics and International Relations at the National Research University–Higher School of Economics. He is also Honorary Chairman of the Presidium of the Council on Foreign and Defense Policy.

Resume: For the United States, at stake is its leader’s declining reputation and the risk of yet another humiliating defeat. The stakes are high also because Russia stands as a symbol of a rising and increasingly anti-Western “non-West.”

Russian-U.S. relations seem to have entered a long period of not just keen rivalry, but also confrontation. This unpleasant conclusion stems from the actual way these relations have developed recently. Already in 2012-2013 the parties were in a stalemate of utter irritation with each other, and today the interests of both countries’ elites are definitely in a conflict. All of us will now have to live in a new reality. It is essential that the confrontation does not degenerate into a direct military clash, which, as we all know from the experience of the Cold War from 1945-1991, can threaten everyone’s existence.

U.S. REARGUARD ACTIONS

First, let us look at the United States. Having won a seeming victory in the Cold War and almost implemented the Pax Americana dream embodied this time in a unipolar world, the American ruling elite believed in its star and tried to consolidate its victory and even extend the Pax Americana into more regions, at times using military force. The first attempt in Yugoslavia, a country bombed repeatedly, was a success. But in Iraq, Afghanistan, and later Libya the U.S. and its allies suffered political defeats. These setbacks devalued trillions of dollars of investment in military strength, increased still further the budget deficit, and accelerated the growth of the national debt. The financial crisis of 2008-2009, which is not over yet, dealt one more painful blow. Faith collapsed in the liberal model of economic development, which is based on the Washington Consensus and associated with the United States. And the internal crisis – the division of the American elite – revealed the inefficiency of the U.S. political model in the new conditions and undermined American soft power, or its ability to serve as an example that other countries would willingly follow.

At first implicitly but in recent years with increasing explicitness, political dysfunction has undermined economic power, which is based on an advanced economy and the unique positions of the U.S. dollar. In turn, the authority of the dollar rested on two pillars: the strength of the economy and confidence in the stability of the political system.

All these failures have taken place amid a sharp rise of “new powers,” above all China, which increased its influence in the early 2000s, and the “energy revolution” that took place at the end of the last century. Over a short period, the ownership of the majority of energy resources shifted from mainly private Western corporations to state-owned companies from mining countries. The corporations have remained in economically advantageous positions, yet are politically weak. And although the situation in the energy sector has begun to change for the better for the U.S. in the second decade of the 21st century (the U.S. is becoming increasingly energy independent thanks to a boom in shale gas and oil production), it has ever fewer opportunities to use energy as a political tool than before.

In the decade since the early 2000s, the international position of the United States has almost collapsed. This is noteworthy considering the height to which it had been raised by U.S. self-conceit and the foolishness or weakness of others who subscribed to the myth of a unipolar world. By the end of the last decade, responsible circles in the U.S. elite came to believe that the United States should end excessive external liabilities and focus on its own recovery. This was the approach of Barack Obama. However, that tactic has resulted in a still deeper division in American society and rejection of his policies by conservative and messianic forces, a denial that borders on hatred. In addition, the domestic problems that Obama inherited are very serious and hard to cure, even if the White House pursued a more resolute policy. Obama’s opponents vehemently deny his achievements in resuming industrial growth, in the energy sector, and social policy. And it is quite probable that a truly revanchist team will replace the current administration.

The situation remarkably resembles the end of the 1970s when a “weak” Jimmy Carter came to power after the U.S. defeat in Vietnam, the oil crisis, and the Watergate scandal. However, the U.S. elite quickly replaced him with resolute Ronald Reagan. But now the world has changed dramatically and old economic recipes do not work. Therefore, a revanche, if it takes place, will most likely fail. But it will not be any less dangerous; rather it may be more dangerous. In addition, this path of development does not promise normalization of Russian-U.S. relations.

While habitually proclaiming a policy aimed at maintaining peace and stability, albeit in a pro-American spirit, the U.S. de facto is proceeding to destabilize key regions of the world. This is a significant – if not a radical – change in Washington’s foreign-policy behavior. I am convinced that even a suspicion that the U.S. is pursuing a policy of destabilization will sound insulting to the majority of the U.S. establishment. Yet this policy is being implemented – whether intentionally or not – in order to weaken competitors and create conditions for a return in the future. Iraq has been destroyed; Libya has collapsed; and now it is Afghanistan’s turn. Attempts to divide Syria are continuing. The desperately unwise support for the Arab Spring, which was dictated by slim hopes for the strengthening of Western democracy in the world, has resulted in the weakening of mainly pro-American regimes. Essentially, the Middle East has become less stable.

The U.S. quite skillfully entrenches tensions over China, preventing it from expanding the security perimeter and supporting all countries that have territorial conflicts with Beijing. However, it has failed so far to set India against China. Moreover, there is a possibility of a major settlement between the two countries. The policy of keeping up controlled tensions is also manifested in the loss of the U.S.’s interest in the six-party talks on North Korea’s nuclear program. It seems the U.S. is happy when North Korea threatens its neighbors, as it makes them more dependent on U.S. guarantees and creates a pretext for the Americans to build up their presence in the region.

The rearguard strategy of leaving behind zones of instability and potential dependence manifested itself most graphically by first provoking a crisis over Ukraine and then blowing it up. The overall impression is that the United States is turning from the pillar of the world order and stability into the main spoiler and destroyer, while the task for the international community and Russia is the Western-proposed control of not so much the “rise of new powers” as the weakening of old ones.

A THREAT INSTEAD OF RENOVATION

In turn, Russia, gnawed by complexes stemming from its previous humiliations and still struggling with the residual yet significant domination of the United States, has lost the opportunity to reach an agreement with the Americans similar to what existed during the brief period of U.S. constructiveness. The Russian leadership was under the influence of anti-Americanism inherited from the Cold War era and the experience of the last twenty-five years. Perhaps the chance for a normal relationship was lost after the bombing of Yugoslavia, which shocked even the most pro-Western members of the Russian elite. But Russian President Vladimir Putin tried again to normalize relations after the terrorist attacks on the United States – and failed. A new wave of NATO enlargement and the U.S withdrawal from the ABM Treaty followed. Russia, which has never conceded defeat, was made the target of a policy of winners who ignored its interests and encroached on its vital interests. The West expanded the area of its own military, political, and economic control and influence, while saying that the concept of spheres of interests had become outdated. Russia took this talk as hypocrisy, if not outright lies. In fact, it was a repeat of the “Versailles policy” first used against Germany after World War I. This time it was “Versailles policy-light,” and the result was softer than a century ago. Yet a semblance of the “Weimar syndrome” still emerged, a condition that once led a humiliated Germany to Nazism and an attempt at revenge. This syndrome had to be cured by fighting in Chechnya and Georgia, and later by taking over Crimea.

Russia had almost no desire to make a new try with Obama. The last remnants of this wish vanished after NATO, in violation of the UN mandate, directly supported the overthrow of the ruling regime in Libya, which plunged the country into the abyss of total disintegration.

The reset policy was a mistake, too. It was based on an artificial agenda that no one needed and which was inherited from the past (strategic arms reduction). At the same time, this policy ignored issues that were important to both parties – destabilization in the Greater Middle East and, most importantly, the destiny of the post-Soviet space. Nor was the reset aimed at the future – it did not envisage the development of interaction on a prospective agenda: climate change, the new situation in Asia, the Arctic, etc.

The result was the absence of a positive balance in mutual relations; a wide scope for forces that wanted a return to confrontation, mutual indifference, misunderstanding, and irritation.

Ultimately, Russia embarked on a strategy of confronting the U.S., without using the new opportunities that U.S. weakness might provide. As a result, Russia ended up engaging in rearguard action against the still strong adversary. It makes no sense now to discuss whether or not Russia could have achieved its goals in the crisis over Ukraine without a direct confrontation. It started and that is all.

There are no signs Russia is planning to withdraw from the confrontation. Firstly, Moscow seems interested in it. Having failed to develop and implement a credible and effective development concept and having only paid lip service to “modernization,” the Russian elite – both consciously and unconsciously – began to look for excuses for its inaction and turned to the idea of an external threat, which had always come in handy for the country that had for thousands of years been built around the idea of defense. At first, the “threat” was consistently inflated, but later it did emerge as a real crisis to hit the country. However, no mobilization for national development purposes took place, so there was nothing left but to pump up the threat alone.

Now there is almost no chance for a quick exit from the clash. Theoretically, there is always the possibility of a sharp turn. Obama has no reason to fear elections, while Putin has strong positions inside Russia. However, the balance of interests and mutual irritation prevent the two parties from finding a compromise. The more probable turn of events is an escalation of the confrontation, even up to a military clash.

HIGH STAKES

For the United States, at stake is its leader’s declining reputation and the risk of yet another humiliating defeat. The stakes are high also because Russia stands as a symbol of a rising and increasingly anti-Western “non-West.” The West is fighting against Russia, but it wants to intimidate China, India, and Brazil. A failure to put Russia in its place would mean to de facto concede a defeat of the world order, which the “victorious” West built for more than twenty years after the end of the Cold War. Another factor spurring the confrontation is a feeling, partly false and created by domestic propagandists, that Russia is a “colossus with feet of clay” that can be finished off.

So the U.S. threw prudence to the wind. Not only were proprieties cast aside in the information war, but also an openly hostile policy was launched and a double-edged weapon was deployed that could undermine the trend towards economic globalization. The moves include denial of access to Visa and MasterCard payment services, threats to block Russia from the SWIFT banking system, and personal sanctions against members of the Russian political elite. These measures are not only detrimental to Russia, but also undermine the system of U.S. influence. Although everyone uses these services, they bring the most benefits to the U.S.; namely, the modern financial system and the model of free trade. The bell is tolling increasingly louder for the WTO.

If Russia holds out, in five to ten years these foundations of American influence will weaken. Alternative payment and financial systems will emerge along with non-U.S. international banks, new financial centers and reserve currencies, settlements in national currencies, and an increasingly possible flight from the U.S. dollar. There will be a growing tendency to create trade and economic groups outside of the WTO.

For Russia, the stakes are even higher. To lose in this confrontation would mean a real and long-lasting defeat. The hopes of the majority of the elites would be dashed for Russia’s revival as a great power and a strong and independent center of the world economy and politics. And, perhaps most importantly for today’s Russia, it would undermine the legitimacy of and support for the ruling regime, based not on economic achievements, but rather on the revival of national pride and faith inherent in most Russians that “we live in a great power.”

The U.S. seems reluctant to step back from Ukraine, although a victory that would entail bringing the country into the Western orbit is hardly attainable considering the state of the Ukrainian economy, government, and society. The U.S. will seek to attain negative goals, such as preventing Ukraine from coming under Russia’s influence, deepening the division of Europe, and, increasingly obviously, weakening Russia, as the U.S. is barely concealing its desire to topple the ruling Russian regime and personally President Putin. The U.S. will try to involve Russia in a full-scale conflict with Ukraine, a sort of Afghanistan-2. The cost of such a policy is not great yet. It leads to a rapprochement between Russia and China, which is dangerous to the U.S., but the bulk of the price will be paid by Europe, Russia, and, of course, the long-suffering people of Ukraine, who have been pushed into the furnace of the new Cold War.

The scenario performed by the U.S. resembles a tragic farce similar to Reagan’s plan to combat the “Evil Empire,” retrieved from a dust-covered shelf. Only this time, instead of organizing an uprising in Poland, we see Ukraine, and instead of the South Korean Boeing, a Malaysian one. We are witnessing the same attempts to bring down oil prices and prevent the construction of new energy pipelines between Russia and Europe. The heated rhetoric is the same, if not worse. And this time there are even more lies from all sides.

The Russian elite is the relative winner for now. Crimea has been incorporated into Russia; the nation is buoyed by feelings of pride and self-esteem; the country has rallied around its leadership; and the president’s popularity rating is soaring. Russia has dealt a telling blow to the Western policy of expansion. The process of the world’s transition from Western domination to a more equitable world order, more advantageous to the non-West, has accelerated, although it is not known whether it has become irreversible. However, having lost the first round when Russia converted almost latent soft rivalry into a competition of hard power and will, the United States and U.S.-oriented Europeans are trying to take the fight into areas where they are stronger by exerting economic pressure and engaging in an informational standoff.

Russia has paid for this initial success with its deteriorating economic climate and image in the West. On the other hand, the Kremlin is not too worried about its image in the West. In addition, this loss is compensated for by a growing respect on the part of the non-West. Yet this deterioration is painful for the traditionally Western-oriented part of the Russian elites. Another price, hopefully reversible, is a slowdown (due to distraction) of Russia’s long-overdue economic reorientation to Asia through the accelerated rise of Siberia and the Russian Far East. Distracting Russia from an eastward turn is one of the objectives of U.S. and European policies. Such a turn would consolidate Russia’s position in bargaining with the West (there would be an alternative, which, as some people used to say only recently, Russia does not and will not have) and would not only strengthen China, but also provide more room for maneuvering to U.S. allies in Asia, thus reducing their dependence on U.S. guarantees.

Russia has much fewer levers to inflict direct damage to its rivals. This is why, apart from the semi-symbolic embargo on food imports from the West, Russia’s strategy is objectively changing into trying to bring about the economic and political collapse of Ukraine – possibly in the hope that the West (Europe) will come to its senses and back down.

The result is deplorable for the Ukrainian people. At first, the West turned them into “cannon fodder” of the geopolitical strife by encouraging them to conclude an association agreement with the EU, which was economically senseless and provoked fierce opposition from Russia. Apparently, Russia will now try to ruin Ukraine in order to “punish” the West and demonstrate its impotence. Another danger is that Russia’s limited economic, financial, and informational capabilities will objectively push it  to using military force – and this may open the way to nuclear muscle flexing, especially since Russia already held large-scale military exercises of its strategic nuclear forces at the beginning of the Ukrainian crisis. In addition, the Western policy looks almost completely hostile. I hope I am wrong.

THE CONTOURS OF A COMPROMISE

Is there any way out? I do not see any right now and I cannot rule out the worst-case scenario. Mutual distrust is over the top. There may be many more “black swans” – unforeseen disasters or provocations like the destruction of the Malaysian Boeing.

Yet there may be a way out. Inside Russia, the government is mobilizing society for radical economic reforms and the development of eastern Russia. in his speech in Crimea in August 2014, Putin emphasized the need to focus on internal development. Endless confrontation will hinder this strategy. On the other hand, Russia could use the “hostile environment,” which it partly created itself, to launch reforms. In diplomacy, task number one is avoiding a major war in Ukraine or a direct clash with the West, and the second task is to look for a long-term compromise and settlement, possibly by briefly raising the stakes.

Despite the sharp rejection by Russia of the present Western policy and some Western values, hatred and contempt should not govern its behavior. Even if Russia “wins” – that is, if the U.S. enters yet another crisis and the EU starts bursting at the seams, which is quite probable – the situation may turn out to be no less complicated and dangerous. In the new, overly interdependent world, a falling enemy is as dangerous as an attacking enemy.

In looking for a settlement the best option is a treaty fixing the new status quo in Europe. The territory of what is now Ukraine should be either divided or, preferably, made an area of joint development. The same category includes other countries that create discord between great powers. However, it will be very hard to reach an agreement. The U.S. does not seem to be interested in a settlement. Ukraine is not independent and is rapidly losing its governability. It remains to be seen whether Germany and other European countries, which advocated close ties with Russia, will be able to take the initiative, which they have lost, along with confidence. The Ukrainian situation, which is threatening to collapse the peace on which the prosperity and influence of Europe rests, is a greater challenge for Europeans than for the U.S.

Russia needs peace in the West. Europeans need peace in Eastern Europe. Both players are faced with the risk of marginalization if they fail to overcome the division and pool their potentials and efforts.

It is still possible to outline the contours of a compromise:

  • the eternal neutrality of Ukraine, codified in its constitution and guaranteed by external powers;
  • greater cultural autonomy for eastern and southeastern Ukraine;
  • economic openness of Ukraine to the East and the West (ideally, a compromise allowing Ukraine to be both in association with the EU and in the Customs Union);
  • Russian and German joint support for the economic development of Ukraine;
  • termination by all involved, including Russia, of support for the sides in the civil war, and an appeal to them to renounce the use of force;
  • evacuation of refugees and resistance fighters;
  • mutual renunciation of sanctions and counter-sanctions.

However, this is a distant prospect. Yet there seems to be no other solution. The alternative is a lukewarm civil war in the heart of Europe with the growing threat of disasters (there are 15 nuclear reactors in Ukraine), decades of misery for the Ukrainian people, and deaths ranging from tens to hundreds of thousands of people – not only in conflicts, but also because of the degradation of vital services and the healthcare system.

The West, too, is putting forward similar proposals; naturally with a bias towards its own interests and ideology. One can only hope that diplomacy will be given a chance before this crisis escalates to the next level and a new war breaks out in Europe.

But in any case, all the eggs can no longer be placed into the European basket. Therefore, in parallel with efforts to reach an agreement with the West, Russia should intensify its efforts to develop Siberia and build a new economic and political diplomacy in Asia. The Shanghai Cooperation Organization should step up its activities and converge with the Eurasian Economic Union, the Collective Security Treaty Organization, China’s idea of a New Silk Road (which Beijing does not seem to mind), and the South Korean project of a Eurasian Community. Also, Russia needs a rapprochement with Iran, the future leader of Central Asia. Such a turn would be difficult for the Russian Eurocentric elite, but attempts to integrate with the West have failed. Relinquishing ties with Europe and European roots would be dangerous for Russian identity and development. At the same time, it would be unpractical and dangerous not to use the opportunities opening up in the East.

In four, six, or eight years, a new rapprochement (on new terms) may be possible with the U.S. and, especially, Europe. Using the political lexicon of the recent past, such a rapprochement objectively meets the interests of the parties and the interests of the entire world.

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