Growing Pains or a Paradigm Shift?
No. 4 2006 October/ December


In the
spring of 2005, the Trilateral Commission asked the co-authors of
this article to write a report on Russia and her relationships with
the Trilateral area. The last report on Russia to the Commission
was in 1995: much had changed since then. (The Trilateral
Commission, founded in 1973, has about 400 members, who are leading
politicians, businessmen and opinion-formers from North America,
Europe, and Pacific Asia – predominantly Japan and South Korea.)
The Commission debated our report at its annual conference in April
2006 in Tokyo, and published it in June under the title “Engaging
with Russia: The Next Phase”. (The report can be found on the
Trilateral Commission’s website at http://www.trilateral.org/library/stacks/EngagingWithRussia.pdf).

the report presented a number of challenges. One was whether three
authors – from the U.S.A., Japan and UK, all of whom had lived in
Russia at different periods, had served for varying lengths of time
in their respective governments, and were now enjoying the
independence of retirement from government – would be able to form
a single view on this complex subject. We wanted a view that was
not shaped simply by a national or regional interest. After
extensive consultations in our regions and a joint visit to Moscow,
we were able fairly easily to agree on the report.


A larger
challenge for any outsider writing about Russia is fairness and
objectivity. If we are to make sense of our relationships in the
21st century, we certainly need to avoid the “prism of past
prejudices” (to use President Putin’s phrase) through which many in
the older and middle generations in both Russia and the West view
each other. This is not to say that history should be ignored: it
is vital to a proper understanding of the current situation, as we
shall argue. But we must not be the prisoners of the past. The
three co-authors were conscious that writing about Russia takes one
into an emotionally charged environment in which all too often the
voice of reason and moderation is drowned by more extreme and
polemical attitudes infected by prejudice, suspicion and
intolerance of critical or dissenting views. Our aim, we said, was
to contribute to public debate “not by downplaying problems, but by
assessing them in context, in a candid and balanced way, and by
looking for constructive ways forward”. Whether we have achieved
this is for others to judge.


The past
two years have exposed a paradox in Russia’s relations with the
countries of the Trilateral area. (This area comprises the
industrially advanced democracies of Europe, North America and
Pacific Asia. We allow ourselves to use “the West” as a term of
politico-economic shorthand, but with the understanding that some
important “Western”-type countries, including Japan and South
Korea, are far to the East of the Greenwich meridian). In the early
1990s, the worst nightmare of Western governments was that Russia
might fall apart, leaving a vast and important area of the world in
a state of disorder and economic collapse, without secure control
of her arsenal of weapons of mass destruction. Insofar as they were
able, bilaterally and multilaterally, Western countries and Japan
sought to promote stability in Russia and the CIS and to assist the
transition to a democratic system and a market economy. They wanted
Russia not to be weak but to be strong, orderly and prosperous – in
their own interests, and for very obvious reasons. They were
relieved when, early in the new century, Russia moved across the
international agenda from being one of the problems on the list to
being part of the solution – one of the countries working in
partnership to deal with global and regional problems.


Now Russia
is strong again – at least by some important measures. Her economy
is booming; Russian businesses are playing an increasingly
significant role at a global level; Russia holds the chairmanship
of the world’s most prestigious club of states, the G8, and is
acting with renewed self-confidence on the international stage.
From the depths of the 1990s she has risen again to the heights.
But the paradox is that Russia’s reinvigoration has not led to the
flowering of the partnership which the West hoped to establish – as
did, we are sure, many readers of this journal.


in 2005/6 relations between Russian and the West, at least as
measured in political rhetoric, have sunk to their lowest point
since the demise of the Soviet Union; and in the view of many
commentators are set to deteriorate further. Leon Aron, writing in
this journal, forecast that alienation between Washington and
Moscow would increase up to 2009 (“U.S.–Russia Relations Through
the Prism of Ideology” in Russia in Global Affairs, No. 3, 2006).
In the same edition Fyodor Shelov-Kovedyaev expressed concern that
“we are becoming increasingly paranoid about being encircled by
enemies, and we feed our phobias instead of curing them”; he argued
that “we should relieve our minds of historical chimeras and stop
deluding ourselves with the West’s perennial aggressiveness toward
Russia” (“Russia, an Engine for Global Development” in Russia in
Global Affairs, No. 3, 2006). In the parallel edition of Foreign
Affairs, Dmitry Trenin predicted “serious tension, and even
conflict, between Russia and the West, although nothing like a
return to the Cold War” (“Russia Leaves the West” in Foreign
Affairs, Volume 85, No. 4, July/August 2006). And over the past two
years leading official figures in Russia have repeatedly accused
the West of resenting Russia’s new-found strength and of seeking to
weaken her.

argues that “the terms of Western-Russian interaction…have shifted
fundamentally”; that the old paradigm of partnership is lost and it
is time to start looking for a new one. Shelov-Kovedyaev makes the
opposite case, arguing that Russia should throw off her inferiority
complex and use her strengthened position as a platform for deeper
cooperation with the EU and the United States, especially in the
face of the challenge of the rising China. Are we looking at a
fundamental shift, or only at a downward curve in a long and
cyclical process of transition and readjustment? What will
determine our future relationships? What is in the best interests
both of Russia and of the “West”? These are among the issues which
we explored in our report to the Trilateral Commission.




With the
benefit of hindsight, a major failure of Western policy-makers in
their approach to Russia over the past fifteen years (one shared by
many modernizers within Russia) was to underestimate the depth and
complexity of the transition Russia was undergoing; and of the time
it would take for the transitional processes to work through into a
settled model. There is no precedent or analogy, at least in
peacetime, for a transition on this scale. As we observed in our
report, “the Russian Federation is in the throes of not one, but
three, simultaneous processes of transition in what is, by land
area, by far the world’s largest country: the transition from being
the second superpower, an imperial power directly or indirectly
ruling 350 million people, to a middling or regional power with a
declining population of just over 140 million; the transition from
a collapsed autarkic command economy to a market economy
integrating into the world economic system; and the transition from
Communist dictatorship, ideology and control of society to a new
political order, the eventual shape of which remains to be


There was
an over-optimistic belief in the West, born in the euphoria of the
end of the Cold War and the collapse of Communism, that, with
Western goodwill, encouragement and active assistance, Russia could
rapidly develop a market economy and her own model of democracy and
take the place in the circle of advanced democracies appropriate
for a country with Russia’s cultural, intellectual, scientific and
industrial strengths. One of the bigger concerns was that, after
seventy years of the command economy, Russia would not have the
entrepreneurs necessary to make capitalism work. This, too, was a
miscalculation. The skills required to survive and prosper in (or,
more accurately, despite) the Communist system left Russia bursting
with entrepreneurs. It was not there that the deficit lay, but in
the absence or weakness of the institutions and laws to provide a
fair environment for business competition. The adjustment to market
economics, rough though it has been at times, has been a more rapid
process than the development of a workable model of democratic
government: on this, one Minister accurately described Russia to us
as still being “in search mode”. Democracies elsewhere have taken
many years, sometimes hundreds of years, to develop. It is a
process which, by definition, needs to be “bottom-up” more than
“top-down” – the antithesis of the “vertical” tradition in


the traumatic effect of the collapse of the Soviet Union tends to
be underestimated. Very large numbers of people in the former
U.S.S.R. could rejoice at the demise of the Communist system, which
had stifled their individual freedom and had delivered very poor
living standards. But for the Russian people to wake up one day to
discover that their country had shrunk by two fifths (in
population); and that republics which they had considered integral
to their country and indivisible from it, especially Ukraine and
Belarus, were now separated from Russia, was a shock. It was no
less of a shock for the former Soviet republics (with the exception
of the three Baltic States) to wake up to find that they had become
independent, sovereign states. There had been almost no preparation
for this. It was as if people in Washington had woken up one
morning to find that a belt of states from Florida through Texas to
California had left the U.S.A. When the British and French empires
broke up after the Second World War, the process happened
incrementally over about a quarter of a century; the case for
decolonization had become increasingly obvious to the electorate in
the metropolitan powers (though not universally accepted); and
there was a certain amount of time, varying from case to case, to
prepare for separation and independence. None of the colonies was
contiguous with the motherland (save the Republic of Ireland, which
separated from the UK at an earlier stage; the closest French
colonies were across the Mediterranean Sea). Nevertheless, it took
the better part of half a century – some would say longer – for the
decolonizing power and the newly independent ex-colonies to
readjust their relationships. For countries like Britain and France
(and the same could be said of other ex-empires) coming to terms
with the loss of imperial power was a slow and painful process.
Britain’s failure to join the European Economic Community when it
was founded in 1957, for example, was part of the imperial
hang-over. In the case of the Russian Federation and the other
former Soviet Socialist Republics, the divorce has been vastly more
painful and complicated, for obvious reasons: the suddenness; the
division of family members and ethnic groupings (including the many
Russians who found themselves outside Russia); and the difficulty
of dividing up a single, integrated economy and system of defence.
Physically sorting out all of the issues bequeathed by the Soviet
Union’s collapse was bound to take a number of years and remains an
unfinished process (the so-called “frozen conflicts” being an
example). The psychological readjustment, to judge from the
experience of others, will take even longer. What has happened has
happened, and cannot be reversed; but coming to terms with the
legacy and easing old instincts, suspicions and prejudices –
dealing with the emotional rather than the rational – will remain
difficult. Outsiders need to recognize this.


When one
reviews a decade and a half of transition, as we did in our report,
certain points come out very clearly, none of them surprising. One
is that it is an erratic process. Periods of rapid change and
forward movement, such as 1991-93 and 2000-03, have been followed
by periods of retrenchment. President Putin himself reflected this
when he reportedly told the “Valdai” group on 9 September that
strengthening the multi-party system, establishing real
self-government and tackling corruption were issues that would have
to be left for his successor. Another key point is that the first
genuinely “post-Soviet” generation of leaders and decision makers
has not yet arrived in power. In Russia, as in other countries, top
positions tend to be held by people between 45 and 65 years old –
that is to say by people who were already well into adulthood and
careers by the time the Soviet Union ended, and who had been denied
the wide range of opportunities and exposure to information and
foreign travel open to the succeeding generation. Business is a
partial exception to this: it is no coincidence that many of the
most dynamic leaders of new Russian business are in their 30s or
early 40s.


years of transition therefore do not bring one to a defining moment
at which long-term conclusions about Russia’s future internal
character or her place in the world can sensibly be drawn.
Important choices lie ahead, choices which will shape the
relationships Russia builds with the West and with other external




What lies
at the root of the deterioration in relations between Russia and
the West which the commentators quoted above (and many others) have
described? Cooperation continues in many areas where there are
shared interests. Although there have been a number of tactical
disagreements – the handling of Iran and of Hamas being two recent
examples – these have not, yet at least, provoked a fundamental
rift. But the G8 Summit in St. Petersburg, far from setting the
seal on the partnership between Russia and the Seven (as had been
intended when the decision on Russian chairmanship was taken in
Kananaskis in 2002), was a frosty affair which will be remembered
less for its meagre results than for some unusually sharp exchanges
between the host and his guests. For the past year and more, the
air has often been filled with the crackle of polemical


There seem
to us to be two broad reasons for the estrangement. The clue to the
first lies in the Kananaskis G8 communique, which said that the
decision on chairmanship “reflects the remarkable economic and
democratic transformation that has occurred in Russia in recent
years.” There was an informal understanding that the process of
reform and of East-West convergence, which was running strongly in
2002, would continue and would by 2006 have created a very
different environment. Likewise the European Union’s hopes of a
“strategic partnership founded on common interests and shared
values” (articulated in the 1997 EU/Russia Partnership and
Cooperation Agreement, though the concept has cropped up in many
other places) have been disappointed, leading to disillusionment on
all sides. What appeared to be convergence toward shared values of
democracy, the rule of law, protection of civil and political
rights and so on came to a halt: a growing divergence has been the
pattern of the past three years.


The second
reason is that, while there remain many important shared or
overlapping interests – counter-terrorism, counter-proliferation,
trade and investment being high on the list, there has also been a
manifest conflict of interests in what is sometimes called “the
post-Soviet space” – especially, but not only, in Ukraine, Belarus,
Moldova, Georgia and Uzbekistan. No one wants a new dividing line
in Europe; but the space between the European Union and Russia has
become a fault line and focus of disagreement, just as the Kurile
Islands or, to the Japanese, Northern Territories have long been a
fault line in Russo/Japanese relations.


There is
now uncertainty in the West about the way Russia is heading, and
how Russia intends to use the strength she has regained, especially
in and from the energy sector. A wary watchfulness has come into
the Western approach. Thoughts of deeper partnership are
effectively in suspense until Russia’s direction is clearer. This
question of direction is of course being asked even more
insistently within Russia. In an article recently published in this
journal, Arkady Dvorkovich saw the next three years as “a critical
period for providing answers to the challenges now confronting the
Russian economy” (“The Russian Economy, Today and Tomorrow” in
Russia in Global Affairs, No. 3, July/September 2006). The
immediate challenges he identified were legitimizing private
property, reducing inflation and poverty levels, and creating a
competitive environment for economic growth. He saw a need to
stimulate investment, improve law enforcement and oppose the
unwarranted interference of state bodies in companies’ activities,
and noted that “the general atmosphere of corruption inflicts
serious damage to the investment climate and social relations as a
whole.” Dvorkovich also defined fundamental long-term challenges:
demography, skill levels and modernization of the education system,
and the development of high-quality production


 Dvorkovich’s analysis, from the
perspective of the Presidential Administration, is similar to our
own. Not for the first time in her history, Russia faces a choice
between modernization and retrenchment. Six years of stability and
economic growth (assisted by high energy prices, but also by
domestic consumption) have lifted the Russian Federation to an
unprecedented level of prosperity. The question now is whether, on
the one hand, Russia chooses to remain on this plateau, enjoying
the sunshine, until the boom ends, and then drifts down again into
a valley; or, on the other, uses the plateau as a base camp for an
ascent to a much higher peak. The economic boom has taken the
pressure off reform, and is masking the challenges which must be
faced if Russia is to modernize and achieve her full potential.
These include the renewal of structural reforms and steps to
achieve a diversified, competitive economy, and to tackle
deep-seated social issues, as Dvorkovich argues; and also the
development of more diverse, effective and independent
institutions, with a clear separation of powers; and, we would
argue, the modernization of the defence forces and security
apparatus to deal more effectively with the changing nature of
threats to security.




As the
above analysis will have indicated, we think it too soon to say
that the shift in Western-Russian interaction is “fundamental,” if
by that Dmitry Trenin means permanent. We are more inclined to see
the deterioration of the past three years as an episode in a long
process of readjustment – the ultimate outcome of which cannot be
predicted with any certainty. It is not surprising that, after the
humiliation of the 1990s, Russians are relishing the strength and
independence they have regained (as anyone would), and are
disinclined simply to dance to a Western tune. It is natural that a
degree of hyperbole has crept into statements about “energy
superpower” (a term which President Putin has explicitly disowned);
but it seems premature to suggest that Russia and her G7 partners
are now locked into separate and potentially conflicting orbits,
above all because this would correspond neither to their interests
nor to the wishes of the majority of their peoples. A striking
facet of recent opinion polls in Russia has been the high level of
opinion favorable to the EU and the United States – despite the
negative rhetoric beamed at television

We share
Trenin’s view that “positive change in Russia can only come from
within and that economic realities, rather than democratic ideals,
will be the vehicle for that change.” The West’s ability to
influence events in Russia is at best marginal, and can be
exercised in a positive or a negative sense. The approach which we
have advocated is that the West should show patience and deepen its
understanding of Russian attitudes, of what is achievable, and of
the time it will take. We believe the West should stand by its
principles and not ignore the importance of values; but should
avoid relapsing into Cold War-style megaphone diplomacy and
zero-sum approaches. Name calling or threatening language is
entirely counter-productive. It strengthens the hand of extreme
elements on the opposite side, does nothing to advance policy, and
undermines the advocates of moderation and sensible engagement. The
West needs to articulate a long-term vision which underlines that
we seek a Russia which is strong, prosperous and successful; that
we believe strong, independent neighbors would be to Russia’s
advantage, not disadvantage; and that there should be no dividing
lines, no closed doors and no exceptionalism. This last point is
particularly important. We wrote that:


should be treated according to its merits and judged by its actions
– not by negative emotions from the past, nor by wishful thinking
about the future. International associations and relationships
should be open to Russia on the same basis as to others, and Russia
should abide by the same rules as others.


For those
who have invested effort in trying to promote closer partnerships
between Russia and the West, the current political atmosphere is
disappointingly somber. The conventional wisdom is that the
approach of Presidential elections in Russia and the U.S.A. will
make matters worse. So it is important to remember that not
everything is determined by politics; and that, in the post-Cold
War era, personal and business contacts of different kinds do not
have to be calibrated according to ideology or inter-governmental
relations. The past five years have seen rapid growth in the
participation of Western companies in the Russian market, and we
are now beginning to see significant outward moves by Russian
companies. The Russian private sector is driven by strong
competitive urges. It is a force for change, and a force for
Russia’s closer integration with the most advanced economies.
Western countries should welcome the entry into their markets of
Russian companies and investors ready to compete by the same rules
on a level playing field (WTO membership would help this). Russian
businessmen want their country to play in the Premier League, and
know that she is capable of doing so if modernization


There is
no denying that the Cold War left a legacy of suspicion which can
all too easily, albeit irrationally, be reawakened. (The Trilateral
Commission spans countries which have had to strive, not always
successfully, to bury the much more distant legacy of the Second
World War: it takes a long time and real statesmanship.)
Responsible leaders should refrain from playing on that legacy and
reopening old wounds. Paranoia makes bad policy. If, as it seems,
we have entered a period of turbulence, there will be a need to
exercise restraint, build on the many things which bind us
together, and focus clearly on our long-term goals and best
interests. To the authors of this article, the interests of Russia
and of her G8 partners from Europe, the United States and Japan
must rationally lie, not in drifting further apart, but in renewing
the drive for a closer and modernized engagement, when it becomes
possible to do so.