A New Epoch of Confrontation

18 november 2007

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: Many analysts in Moscow argue that the political and propaganda pressure being exerted by the West on Russia is the result of Russia’s growth. But this Western pressure is more of a counterattack against Russia than a direct attack, intended to prevent a further weakening of the West’s positions and possibly win them back. This counterattack is an important constituent feature of a "New Epoch of Confrontation."

Global politics, of which relations between the traditional West and Russia make up an essential part, is acquiring a new quality. Many analysts have been impatient to call the changes a “new Cold War.” However, the causes and forms of the confrontation, occurring right before our eyes, markedly differ from the sources of the confrontation that ended almost 20 years ago. The new confrontation is proceeding in different conditions and, most likely, it will be less profound – although it may be even more dangerous – than the confrontation of the past.
 
Let us describe this stage as a “New Epoch of Confrontation” (NEC). Basically, it differs not only from the Cold War period, but also the period that began in the late 1980s and is coming to a close now. The main feature of the last 15 years was the economic, ideological and geopolitical triumph of liberal-democratic capitalism (above all, as represented by the United States), and the redistribution of labor, economic and financial resources in favor of those countries that followed this model. Now, however, the situation is changing.
 
EXTERNAL MANIFESTATIONS OF NEC

Russia has recently become a target of the West’s propaganda attack. Paradoxically, Russia is now coming under political attack even more severely than the Soviet Union was, although – unlike the U.S.S.R. – today’s Russia is not trying to impose its ideology on the rest of the world and is not confrontation-minded. In the Soviet years, it was the Communist regime, not the Soviet people, which was the enemy of the “free world.” Now it seems that the West wants to blame Russian President Vladimir Putin, as well as the rest of Russia, for what it perceives to be intrinsic imperialism.

In the 1990s, any attempt by the Kremlin to halt the panic retreat caused by the collapse of the Soviet Union was immediately branded as “neo-imperialism.” Now this label is put on virtually everything that Russia does. Things have reached the point of absurdity as Moscow is now stigmatized for expansionism and the policy of pressure when it subsidizes the economies of neighboring countries by selling them energy resources at reduced prices, and then again when it decides to switch to market prices.
 
Russia is not the only target of propaganda attacks; China was another target in the late 1990s. Washington, however, opted not to wage an openly hostile policy toward China (although such a possibility was discussed), choosing instead a policy of soft containment. China proved to be too strong and invulnerable and did not yield to provocations, or did so in a well-planned and very tough way. It was careful not to get involved in a Cold War that was proposed to it.

In contrast, Russia began to return the criticism, sometimes even taking the dubious lead in the verbal exchange. The desire to always respond to criticism – more effectively and in even more scathing terms – is rooted in the lingering inferiority complex, which is intensified by the geopolitical defeats of the 1990s, as well as by the apprehension that less-prominent members of the elite had toward their challenging neighbors. Some Russian politicians might have thought that an aggravation of relations was useful for forming a new Russian identity, and for restoring sovereignty and governability of political processes, including the transfer of power. We are beginning to play according to the rules that are being handed to us, thus getting involved in rhetorical confrontations that our rivals seem to be provoking deliberately.

An analysis of recent developments suggests that the United States and part of the traditional West have given up any hope of turning Russia into an allied state. There are signs of transition to a policy of “neo-containment.” At the same time, Moscow realizes that it does not want, and cannot afford, to integrate with the traditional West on the terms the latter proposed just recently – that is, a kind of integration without the right to vote. The Kremlin has begun to change the rules of the game, or at least it is ceasing to play according to the old rules of the 1990s.
 
WHY THE NEC BEGAN

The most obvious reason for the introduction of this New Epoch of Confrontation is the increased readiness and ability of revitalized Russia to uphold its interests. Moscow’s tough policy and almost total mistrust toward the West is the price for the strategic mistake made by Western powers in the previous decade. When Russia was weak, it was not invited to join the “club” of developed democracies as an equal yet junior partner. Now Russia has made the decision that it will not join this club; and if it does ever decide to join in the future, it will do so as a strong power.

Moscow has learned its lesson and has started to behave toward other nations the way they once behaved toward Russia. The West’s reaction to Russia’s behavior is worsened by its inculcated desire for a feeble and weak Russia, an idea that Western political elites developed over the previous decade. Yet, the causes of this resentment go much deeper.

Ineffective attempts by the European Union to shape a common foreign policy (conducted by the lowest common denominator) are increasingly weakening the united Europe. Simultaneously – after years of growth in the 1980s and the first half of the 1990s – the foreign-policy influence of the leading European nations is decreasing.

Now, Russia also must pay for the Europeans’ mistakes. First, general feelings of weakness, characteristic of today’s Europe, increases European suspicion about Russia. Second, the EU’s inability to consolidate on the principles of common sense leaves Russia without a potentially key partner on the international stage.

In the 1990s, many people believed that the United States was destined for sole global leadership and even hegemony. However, the reckless Iraqi campaign showed that America’s overwhelming military supremacy does not necessarily guarantee foreign-policy effectiveness. The “soft power” of the United States – that is, the traditional U.S. model of political and economic development – was dealt a crushing setback. Even worse, Washington’s failure made democracy per se, which the U.S. had attempted to impose by force, less attractive.

Against this unexpected weakness on both sides of the Atlantic, Russia’s rapid foreign-policy rise makes a particularly strong impression. It would be fair to say, however, that this rise is not only due to the revival of the Russian state, its economic growth and a competent and steadfast foreign policy, but also due to pure luck.

In the late 1990s, the geopolitical wind began to fill Russia’s sails. The role of global energy supplies increasingly became a factor in global politics; long-term destabilization of the Greater Middle East began; and the governability of the international system decreased. All these factors, including the bombings of Yugoslavia and Iraq, increased the role of military force. Russia, despite its difficulties, is still the world’s second largest military power; it has proved its readiness to use force and even emerged victorious in a war against Islamic radicals and separatists in Chechnya (although at a horrible price).

Even the economic and geopolitical growth of China now plays into Moscow’s hand: Washington seriously fears an alliance between Russia and China. Other factors that have strengthened Russia’s positions include North Korea and, more importantly, Iran’s desire to acquire a nuclear potential, as these problems cannot be solved without Moscow.

European and American elites are very anxious about Russia’s growing energy might, while Europe’s dependence on energy imports, above all, from Russia, will only grow. This is particularly frightening for the Old World, considering Russia’s new aggressive and tough policy, which often is very clumsy in form.

Energy competition is perhaps the main reason for the anti-Russian pressure. If the Europeans agree to a historic deal proposed by the Kremlin – namely, permitting Russian companies to energy distribution networks in Europe in exchange for permitting Western companies access to hydrocarbon fields and extraction facilities in Russia – then the differences that derive from this competition could be overcome to mutual benefit. Thus, a single energy complex would be created on the European continent, which would greatly strengthen both parties and allay many fears. Officially, Brussels has rejected the Russian proposal, although individual transactions are already being implemented. A mutually advantageous compromise is still possible unless political circumstances – for example, from the United States – disrupt the discussions.

A unified energy complex throughout Europe is not in the interests of the U.S. If the European Union reaches agreement with Russia and reduces its dependence on non-European energy sources, it will reduce U.S. influence in Europe, as well as Europe’s dependence on America. The United States alone has the political and military capabilities to guarantee access to resources for itself and its allies.

Washington continuously opposes any possible deal between Russia and the EU. This situation resembles the fierce struggle that Washington waged in the late 1950s until the early 1980s against the development of energy cooperation between the Soviet Union and West European countries. The U.S. lost that struggle, and export-oriented gas and oil pipelines were built from the Soviet Union to Western Europe. Now America is struggling not only against Russia’s rise, but also against the strengthening of Europe, or rather against the weakening of its own positions in the Old World, and there is little hope that differences with the U.S. on this issue will subside.

The bitter rivalry over energy is due to fundamental changes that have taken place in the world over the last 8 to 10 years. Until recently, the bulk of the world’s energy resources were owned or controlled by Western companies. Today, a greater portion of the world’s energy resources, beyond the borders of North America and Europe, are owned or controlled by national states or state-run companies. The rules of the game are changing before our eyes. The era of the “Seven Sisters,” when the oil giants had total access to energy resources, is coming to an end. We are witnessing the defeat of a major element of U.S. and Western policy of the last 60 years: ensuring control over energy-producing countries in order to gain unimpeded access to cheap energy resources from the Third World, where the bulk of these resources are concentrated.

Many analysts in Moscow argue that the political and propaganda pressure being exerted by the West on Russia is the result of Russia’s growth. This conclusion is only partly right. “To be sure, mounting Western concerns about Russia are a consequence of Russian policies that appear to undermine Western interests, but they are also a reflection of declining confidence in our own abilities and the efficacy of our own policies,” wrote Thomas Graham, until recently a senior advisor on Russia with the U.S. National Security Council, in Russia in Global Affairs (July-September 2007).

This Western pressure is more of a counterattack against Russia than a direct attack, intended to prevent a further weakening of the West’s positions and possibly win them back. This counterattack is an important constituent feature of the NEC.

Russia has found itself on the frontlines of this new redistribution of power and influence in the world, and thus in the field of fire. Moscow’s rejection of strict control over its energy resources, followed by their privatization in the 1990s, created the impression that the West’s energy security had been drastically strengthened. However, over the last few years, Russia has restored control over its resources in one way or another, thus becoming the most visible part of the new redistribution. Moscow, now feeling much stronger, has wasted no time trying to win back some of the positions it lost or abandoned in the 1990s. However, the West, which is seeking to prevent any further weakening – a weakening that has been caused by its own policies, not Russia’s – has countered its counterattack.

ECONOMIC FOUNDATION OF NEC

There is yet another aspect to this bitter global rivalry, namely, the emerging struggle between two models of development – liberal-democratic capitalism of the traditional West, and “authoritarian capitalism” led by the Asian “tigers” and “dragons.” The West considered the rapid economic progress of the Southeast Asian countries and South Korea to be an exception rather than a rule. However, China’s rapid growth, despite predictions over the past 20 years about its imminent collapse, does not permit indulging in escapism anymore.

The victory of liberal-democratic capitalism in the Cold War created an illusion that this victory was final. The “end of history,” predicted by Francis Fukuyama, has not materialized, but not simply because the collapse of the bloc system has brought about growing chaos. As it turned out, competition is not over: the defeated planned socialist economy has been replaced by a new model, which potentially is very attractive, especially to the former Third World countries – that is, the majority of humanity. This model is authoritarian semi-democratic capitalism, effective economically and acceptable politically.

Unlike Communism, capitalism ensures the growth (albeit an uneven growth) of the wellbeing for the majority of people; and unlike totalitarian Communism, authoritarianism – or limited democracy – ensures an acceptable level of personal freedom for the same majority.

The rivalry between the two varieties of capitalism was analyzed by Israeli strategist Azar Gat in the influential U.S. journal Foreign Affairs. “Authoritarian capitalist states, today exemplified by China and Russia, may represent a viable alternative path to modernity, which in turn suggests that there is nothing inevitable about liberal democracy’s ultimate victory – or future dominance,” he wrote. “A successful nondemocratic Second World could then be regarded by many as an attractive alternative to liberal democracy.”

It may well be that “authoritarian capitalism” is only one stage in the development toward a more liberal model. After all, before the second half of the last century, many countries in Western Europe and the United States had features that are now characteristic of those states that have so-called authoritarian capitalism.

Nevertheless, the liberal-democratic victors now see that they are beginning to suffer defeat. The “mission” in the Middle East has weakened the global position of the United States, which in turn has made democracy per se less attractive. Furthermore, the mostly unsuccessful ‘color revolutions’ imported to former Soviet republics was a less noticeable, yet substantial, blow to the idea of democracy. Meanwhile, the democratic elections in Palestine have plunged the country into a civil war. Lebanon, which is quite democratic, has been set on fire, while its neighbor – the authoritarian Syria – is developing quite well.

The competition of models is not just a struggle for the sense of moral superiority. In the long run, the victory of a particular model will be translated into a redistribution of manpower and other resources in favor of those states that support such a model. The period from the late 1980s to the beginning of the 2000s saw a huge redistribution of resources in favor of the United States and Western Europe. Now the process may reverse itself, especially as the success of authoritarian capitalism and the weakening of the positions of democracy have coincided in time with another tectonic shift: the center of the global economy and geopolitics is moving away from the Euro-Atlantic to the Asian space.

States that are liberal-democratic yet economically weak must automatically orient themselves to the West and follow in the wake of its policy. However, if another model proves successful, some states will have an opportunity to reorient themselves, or at least have more room for maneuver.

Russia, for example – by demonstrating to the post-Soviet and developing countries that they can successfully organize their economies in other ways, and not only according to the dependent liberal-democratic model of Central and Eastern Europe – is restoring, albeit very slowly, its ability to attract medium-developed societies and countries. Many neighboring societies, tired of poverty, chaos and uncertainty, are eager to emulate the sovereign system of Russia, which is showing growth and is better governed. In addition, authoritarian rulers of many states prefer to have a tough yet predictable Russia that would not encroach on their sovereignty as their neighbor.

History has pushed Russia into the center of a new competitive struggle between the liberal-democratic and authoritarian models of capitalism. Russia is a key state from the point of view of competition between political and socio-economic models, and is, moreover, capable of tipping the military-political balance in the world.

Mistrust toward the authoritarian development model largely explains European suspicion about Russia’s energy policy. An authoritarian state finds it easier to manipulate its energy and other assets for foreign-policy purposes. In this sense, democracy, especially weak democracy, is more convenient for partners, as it is less suited for such manipulation.

So, Russia is now in the midst of two new competitions at once, which will largely determine the future of the world. These are competitions between energy producers and consumers for control over energy resources, and between different varieties of capitalism. Moreover, Russia is situated on three critical divides – between radical Islam and Christian civilization, between the rich and the poor, and between Europe and Asia.

In the past, the latter divide was a choice between modernity and backwardness, freedom and tyranny, individualism and collectivism, and capitalism and feudalism, and in the long run, between progress and stagnation. Today, however, the rapidly growing East has actually become a new West.

SOME CHARACTERISTICS OF NEC

The introduction of new elements into the present competition has made it more complicated; at the same time, the world’s evolution less predictable. In the face of new challenges and rifts, the American and European poles of the traditional West, which have diverged after the Cold War, may attempt to achieve a new rapprochement. However, their relative unity would be possible only if systemic military confrontation is restored in one way or another.

The United States will continue relying on NATO to retain its positions in Europe and, possibly, to encourage a new military-political confrontation. There is an unrealistic but consciously provocative plan to transform the North Atlantic Alliance by including other countries, such as Japan, South Korea, Australia and New Zealand, thus transforming the bloc into a political-military foundation of a global “union of democracies.”

The very idea of establishing a community of powerful and responsible states that could lead the struggle against new threats to world order is quite reasonable. But in the new epoch of an all-against-all competition, such an idea is not only highly unlikely, but also simply harmful, as it may sow the seeds of a new ideological divide and systemic confrontation.

Ivo Daalder and James Lindsay forwarded this very idea late last year in an article published in The American Interest. The authors argue: “The world’s democracies possess the greatest capacity to shape global politics. They deploy the greatest and most potent militaries; the largest twenty democracies are responsible for three-quarters of the resources spent on defense in the world today.” Then they ask the question: “Can a Concert of Democracies succeed if it excludes large countries such as China and Russia?” The answer: “Of course it can.” The authors then attempt to allay possible fears that “the creation of a Concert of Democracies might encourage China and Russia to create an alternative organization.”

The momentous changes in the global economy and politics, together with the rapid redistribution of forces and resources, increase the perception of unpredictability of the external environment. This is why the NEC will most likely be marked by the continued remilitarization of international relations, and even an arms race. NATO’s further enlargement will be more likely if Russia takes the bait and starts adding fuel into the fire of global remilitarization.

Bitter multi-level competition – economic, geopolitical and ideological – will become another characteristic of the NEC. Russian Foreign Minister Sergei Lavrov has formulated this peculiarity of the new world in the following way: “The paradigm of contemporary international relations is determined by competition in the broadest interpretation of this notion, particularly when the object of competition is value systems and development models. The novelty of the situation is that the West is losing its monopoly on the globalization processes. This, perhaps, explains attempts to present the current developments as a threat to the West, its values and way of life.”

We may expect to see renewed attempts to limit the economic expansion of the authoritarian capitalist countries and their affiliated corporations. Many liberal states are now borrowing protectionist practices from the newly authoritarian capitalists and introducing limitations on foreign investment in “strategic industries.” Meanwhile, the desire to use antiquated international organizations as instruments in the new competition may undermine their importance. The influence of the International Monetary Fund has drastically diminished; the World Bank is losing its positions; and destructive attempts are being made to use the World Trade Organization in the interests of its founders – countries that are representative of “old” capitalism. It is important to note that the increase of protectionism, in addition to trade and investment conflicts, has often preceded military clashes in the past.

Competition will intensify in the ideological domain, as well, where the democracies have already launched a counterattack. The United States needs to restore its own attractiveness. Unfortunately, the fierce competition will most likely turn the struggle for lofty democratic values into geopolitical confrontation. This factor may delay the potential for liberalization in those countries that have shown allegiance to authoritarian capitalism, including Russia. One should not forget the Cold War lessons. At that time, strong pressure from abroad strengthened the positions of reactionaries and conservatives inside the country. Like in the past, those who seek reforms in the country will now be easily labeled as agents of rival states.

The most unattractive consequence of the new multifactor competition will be the lower intensity and quality of international cooperation in countering global challenges, among them the proliferation of weapons of mass destruction, environmental degradation and the growth of Islamic extremism.

The time frame for the NEC is predictable. In five to seven years, Europe will most likely start overcoming its current systemic crisis, and its economic development will accelerate. America will leave Iraq, overcome its “Iraqi syndrome,” and return to a more rational multilateral policy. Russia will come down to earth after its present euphoria and will conduct a more cautious, although not less active, policy.

There will emerge political and economic prerequisites for overcoming the current irrational confrontation over energy supplies, as well as for establishing an Energy Union in Europe.
 
Energy consumers will probably adapt to the new situation caused by the redistribution of resources from private and foreign ownership into state hands. However, nor can a wave of reprivatization be ruled out, either. History has known many examples when governments, having received the required incomes and witnessing the inefficiency of state-run companies, gave the management of natural resources to private businesses. Some form of partial reprivatization may possibly happen in Russia too.
 
The ideological foundation of the new confrontation and competition between the two models of capitalism can also be partially overcome, as these models are not as incompatible as “real socialism” and capitalism.

Global challenges, which are currently not being countered due to the acute competition of the NEC, will require close cooperation. A new round of such cooperation may be more stable than it was in the 1990s. In those years, interaction between states was conducted according to the rules dictated by the victors in the Cold War, which doomed those efforts to failure.

But an epoch of closer cooperation will arrive only if the global community, including Russia, avoids a systemic mistake, that is, structuring and militarizing the new competition. Furthermore, there must be no new military confrontation, which would most likely occur in the Greater Middle East. The evolution of the competition to the point of systemic confrontation may ultimately bring about a series of large wars and even a new world war.

What should Russia do in this situation?

First, Russia’s arrogant faith in success, which is quite understandable after years of losses and humiliation, must be given up. All forecasts about the development of the global economy indicate that in the foreseeable future Russia will not be able to rise above the current 2.5 percent of the world GNP; and if we do not achieve a sustainable growth of 8 to 10 percent a year, our share will tend to decrease. In addition, most of the factors that in the past few years predetermined Russia’s achievements (these factors range from the general decline of global governability to China’s success) may bring about serious problems in the long term.

Second, the new epoch of competition requires the transition to a knowledge economy; advantages based on energy resources are transient. The continuous modernization of the political system is required in order to prevent a slide into stagnant authoritarianism. If Russia does not take avail of the favorable economic and geopolitical situation, and fails to use semi-authoritarian and state-capitalism methods for moving to a new development model, the country’s decline in the next epoch will be predetermined.

Third, the world is growing increasingly complicated. Compared to the Soviet Union, Russia’s dependence on the outside world has increased dramatically. Therefore, it must sharply increase investment in the study of the current international environment. It must also invest in personnel training so that new specialists could use new methods to protect the positions of Russia and its corporations and to advance their interests.
 
Fourth, all efforts must be made to prevent the remilitarization and institutionalization of the new competition, which would be disadvantageous in terms of medium and long-term interests. Hence a policy is required for preventing NATO’s further expansion and consolidation, while caution must be used when entering into alliances and conducting disarmament negotiations. Previous experience has shown that these may be used for remilitarizing politics.

Countering remilitarization does not mean giving up efforts to rebuild the armed forces on a new basis; nor does it mean that Russia should avoid the modernization of its military doctrine. At the same time, a reasonable restoration of military power must be based on unilaterally identified needs, rather than on asymmetrical responses to the actions of others.

Fifth, cooperation with all responsible forces is necessary to prevent a further proliferation of nuclear weapons and new large-scale conflicts, especially of a nuclear variety, which can provoke the uncontrolled deterioration of the international political environment.

Sixth, there is no sense for Russia to make concessions to the West during an acute phase of the New Epoch of Confrontation, which would be marked by a fierce counterattack by a losing West. Concessions would be taken as manifestations of weakness. However, Russia should avoid unjustified demonstrations of strength, which Russia will be provoked into and which will only make Russia waste its emerging strength.

Russia is no longer a losing country that is trying to make up leeway. Thus, it is important that we must once again smile politely, rather than in a scoffing or arrogant manner.

Last updated 18 november 2007, 13:09

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