A New Epoch of Confrontation
No. 4 2007 October/December
Sergei A. Karaganov

Professor Emeritus
National Research University–Higher School of Economics, Moscow, Russia
Faculty of World Economy and International Affairs
Academic Supervisor;
Council on Foreign and Defense Policy
Honorary Chairman of the Presidium


SPIN RSCI: 6020-9539
ORCID: 0000-0003-1473-6249
ResearcherID: K-6426-2015
Scopus AuthorID: 26025142400


Email: [email protected]
Address: Office 103, 17, Bldg.1 Malaya Ordynka Str., Moscow 119017, Russia

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

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

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

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

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.

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.

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

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

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

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.

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

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

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


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

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

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

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

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

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.


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

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

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.

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

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.
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

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

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
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.

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.