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“Reset” Means Obedience (II)

The Russians, and particularly Putin, took away a different lesson than the West did. The West assumed that economic dysfunction caused the Soviet Union to fail. Putin and his colleagues took away the idea that it was the attempt to repair economic dysfunction through wholesale reforms that caused Russia to fail. From Putin’s point of view, economic well-being and national power do not necessarily work in tandem where Russia is concerned. ~George Friedman [1]

Friedman’s article reinforces my view [2] that Biden’s recent statements in last week’s WSJ interview [3] were not only foolish things to say publicly, but were basically flawed in their analysis of Russia’s response to its economic and other problems. Biden’s mistake in underestimating Russian strength because of their economic woes is the same one he was making when he told [4] the Georgian parliament that Georgia could win back its separatist enclaves by building a prosperous model state: he evidently believes that political strength flows from economic strength and from no other source. As Friedman argues, this is not necessarily true of Russia. In any case, it fails to account for relative disparities of power between Russia and most of its neighbors, including most of Europe.

Friedman makes another important point, which is that Russian demographic decline will take a generation to lead to the kind of political weakness Biden is counting on. Biden and Obama are setting policy in 2009 that only makes sense in 2029 or later, assuming that the decline trend continues, or it is almost as if they still think it is 1999 and the U.S. may do whatever it likes in Russia’s vicinity. In the meantime, they are ensuring deepening distrust and antagonism from the one major power the U.S. needs as a regular ally. The administration has tended to approach foreign policy issues with very short-term thinking. I think we will find that their handling of Russia, while consistent with the last twenty years of U.S. policy and couched in all of this rhetoric about Russia’s long-term decline, is founded on an immediate perception of Russian weakness in the wake of the financial crisis and collapse of oil prices, which is not likely to be true of Russia in the next three or seven years. Russia may be declining over the long term, but in the present its exceptional weakness is a passing phase. We will probably never again see the $20 or $10/barrel oil prices of the ’90s that made Russia incapable of doing anything on the international stage.

As the global economy recovers, demand for oil will rise, and so will Russian oil revenues, which means that the unusually poor state of the Russian economy will not last for most of the rest of Obama’s time in office. While it is true that resource-rich state economies are fundamentally weak and too dependent on the export of a few commodities, they thrive in times of economic expansion, and the administration certainly has to be hoping for its own sake that global recession comes to an end. If Washington sets out to antagonize and provoke Russia during one of these periods of greater weakness, it will have no markers to call in when the economy recovers and when Russia is in a secure enough position to be willing to make certain concessions on negotiable issues.

What the administration does not grasp at all, as its predecessors have never understood, is that Moscow regards its influence over its near-abroad to be as non-negotiable as our government regards its influence in the Western Hemisphere. Short of total regime collapse, there are probably no conditions under which Moscow will tolerate further NATO expansion.

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5 Comments To "“Reset” Means Obedience (II)"

#1 Comment By Sean S. On July 28, 2009 @ 3:09 pm

Again, while it is true that Russia’s economy will recover, so will other countries. Moreover, there is no sign that the diversification of exports in Eastern Europe and other former satellite state’s will stop anytime soon. While Russia may always be a large trading partner to many of its former captive markets, they will simply be another country amongst a diverse portfolio. No doubt their supply of natural gas and oil will continue to be wielded as a cudgel, but not without a certain sense of mutually assured destruction.

This continual diversification of export markets, as well as further EU expansion, will continue to see Eastern Europe integrate its economies with the West. NATO is the least, and frankly the most irrelevant, of Russia’s future worries. They have much more to worry about in the form of future economic competition than from a European Star Wars.

#2 Comment By JJM lost his password again On July 29, 2009 @ 7:50 am

Replying to Sean above, while Daniel may neglect to take the former Soviet republics’ economic recovery into account, and the accompanying import portfolio diversification, you’re failing to take into account the inverse. That is, as Russia’s economy improves, it will improve faster and its export portfolio will also get more diverse.

Russia is the biggest economy in the region, and will improve faster and more drastically than its neighbors, all things being equal. For example, when the economies of the Central American states improves a little, the economy of the US also improves, but at a far greater rate.

All this means that Biden’s remarks in Georgia are even more misguided. For Saakashvili to create a state that is the envy of the Ossetians and Abkhazians, it would require literal miracles. A country of less than five million is going to have a hard time competing with a country of more than 140 million, regardless of the population trends. The only way such a thing would happen would be huge international subsidies to Georgia. As Daniel and others have already pointed out, most states don’t believe that Georgia holds any value outside of aggrevating Russia, and that by itself isn’t worth going to war over, let alone losing boatloads of money over.


This whole episode is very frustrating, I think. Mostly because one of the key points in the previous presidential campaign was when McCain made the “We are all Georgians” speech. That, along with his “stay in Iraq for a undred years” gaffe and his indicisiveness in the face of economic trouble doomed his bid. Yet, here we are, and instead of “we are all Georgians” it’s “Americans care deeply about you, personally.” It’s almost as if we elected McCain, except Biden is a little taller.

#3 Comment By Sean S. On July 29, 2009 @ 1:05 pm

Russia is the biggest economy in the region, and will improve faster and more drastically than its neighbors, all things being equal. For example, when the economies of the Central American states improves a little, the economy of the US also improves, but at a far greater rate.

No its not, despite Russia’s access to the G8, which is solidified more on precedent than any real metric. After all the common European market is vastly larger than Russia’s which was mostly my point. Given the choice between access to the Russian market or the EU market, the choice will almost always be in favor of the EU.

I’m not arguing that we should just needle Russia for the hell of it. It is mostly because I think they are little, if any, of the threat that they claim to be that we should leave them in benign neglect. The continued obsession with Russia as either as an important ally or as a feared foe is unnecessary.

#4 Comment By JJM lost his password again On July 29, 2009 @ 8:43 pm

“The common European market” is hardly as coherent as a structure as Russia’s economy, and they are more likely to pass over Georgian goods and services in favor of those same goods and services produced in East and Southern Asia.

If you’re arguing that the Georgian economy will improve from its current state, then nobody will disagree with you, but Biden’s outburst specifically implied that Georgia could create a state so successful that Ossetians and Abkhazians would want to call it home. This is absurd, for the reasons that I have pointed out, and those that Daniel has explained. Excepting some incredible foreign subsidies, Georgia cannot fulfill Biden’s challenge, and can either cut ties entirely with Russia (unlikely), or can continue on its current course of simply trading and interacting with whomever is available (likely). Either way, the fates South Ossetia and Abkhazia will not be decided by Tblisi, which is what sparked this whole thing.

None of this back and forth makes Biden look any better, of course. He still poked Russia in the eye at a time when their help is most needed (Afghanistan supply routes?), presented Georgia with a challenge that is impossible, and in general reminded the world why so many countries think our politics are daft.

#5 Comment By vivanchenko On July 31, 2009 @ 2:47 am

Georgia is the only hope for Europe to break free from Russian monopoly on natural gas. Without Georgia Europe becomes way too much dependent on Russia for it’s crucial natural gas supplies. If Europe becomes too dependent on Russia the Americans will be losing their allies in Europe by the hour. The process is already underway. When speaking of how unimportant Georgia is one is strongly recommended to consult his/her map of the region and find out what are the alternative routes for natural gas supplies. When doing so one must remember that Armenia is Russia’s ally. I cannot understand those Americans who are speaking up for Russia’s monopoly in Europe.

Many much smaller nations bordering on Russia were very successful in competing with it. In fact in many cases forsaking dependence on Russian corrupt economy was the key to economic growth. This is true for most East European states. The less one depends on Russia the less problems to worry about. The EU is the biggest trading partner in the region. If one can sell his goods to the EU he’s OK. The Georgians certainly can. Turkey is another big market in the region that is readily accessible to the Georgians.