Russia’s three mistakes and the Ukrainian trap

Nord Stream 2 (Source: ?)

     Whatever Russia’s grievances against the West, which are not all unfounded – being fueled in particular by a sense of rejection, a new form of an already old obsidional complex – Russia has committed at least three major strategic mistakes since the end of the Soviet Union. The exacerbation of the Ukrainian crisis is largely a result of this, and the crossing of red lines could prove disastrous for Moscow as well as for Europe as a whole.

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The original sin, which remains decisive in the present postures, is the failure of the democratic and republican transition. The fear had gradually disappeared from the time of the perestroika launched by Mikhail Gorbachev and everything had become possible both internally and in relation to the outside world. The high level of education of the Russian people, the aspirations of the latter for a future that would indeed be radiant, seemed likely to facilitate a rapprochement from the Atlantic to the Urals, to mention only the European continent. The in-depth resistance of the system, of which the putsch of August 1991 was only an epiphenomenon, and the appropriation of national wealth by what was called “the oligarchy” – replacing a formally disappeared Soviet state – have blocked any possibility of real evolution.

The major problem of Russia, already discussed in great detail, is more that of the Republic – that is to say, of a distribution as harmonious as possible of public and private wealth – that democracy, which is not non-existent and could only be strengthened. From «savage» privatisations under Boris Yeltsin until today, there has been no real solution of continuity.

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The second fundamental error is Russia’s inability to modernize, which is largely a result of the previous consideration, and to diversify its economy. The «diversification» was the leitmotif of the presidency of Dimitri Medvedev (2008-2012) while Prime Minister Putin had insisted in his inauguration speech of May 8, 2008 on the «modernization» of the economy and the integration of Russia in the global economy. But did the “acting” president, who ultimately held the place for only one term to allow his predecessor to return, have the political weight to undertake such a project? 

It is true that the global financial crisis, which began to affect Russia in the autumn of 2008, has destroyed the impulses of transformation – had not Dimitri Medvedev himself chaired the Board of Directors of Gazprom? -, if these have been sufficiently consistent. Persistent mental patterns inherited from a directed and closed view of the economy also did not facilitate an understanding of contemporary economic mechanisms during a particularly troubled period.

In the months or even years leading up to the crisis (NB: oil prices fell in a few months, from July to September 2008, from $147 per barrel to $30; the level to maintain the budget balance was then $60), a lively debate was established within the government, in particular between the Minister of Finance Alexei Kudrin (2000-2011), yet considered as part of the «Petersburg Liberals», to the Minister of Economy German Gref on the best allocation of oil revenues. These contributed above $27 a barrel to the Stabilisation Fund, which then reached several hundred billion dollars (NB: $600 billion at its peak, including about half of the Central Bank’s reserves). The Minister of Finance, motivated by a perfect financial rigorism, pleaded for the freezing of the Fund arguing that it had been created precisely to deal with the brutal vagaries of energy prices that Russia had already made the cruel experience. German Gref, for his part, felt that the considerable amounts saved should be used for investments which, even in times of low economic conditions, would be the guarantee of future development. 

The Kudrin line eventually prevailed and there is no memory of Prime Minister Putin taking a clear line in this debate. Kudrin thought he was triumphant when “gusting winds” were blowing, when the fragilities noted before the crisis (cf. excessive dependence, of the order of 80%, on raw materials, especially energy; obsolete infrastructure; and supply shortfall and double-digit inflation; regional imbalances) were still there. The fall in energy prices had caused a marked deterioration in the terms of trade which should have led to a formal devaluation. The Executive power refused to proceed in that way for political and social reasons, in a country still affected by the 1998 syndrome, a sort of «financial Chernobyl» (NB: drop in the value of the ruble of 70% in a few days) by replacing it with a policy of adjustments sometimes qualified as “wrong steps in the right direction”. The Central Bank intervened to the tune of 200 billion dollars between November 2008 and February 2009 to curb the loss of value of the ruble. This did not prevent a de facto devaluation of about 30% for the period considered. 

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To the handicaps of a country that remained crippled and deprived of considerable potential vitality, poorly managed economically and financially, was added a third strategic error of historic significance, which is not generally talked about and which goes even more directly to the Ukrainian crisis.

President Yeltsin undertook a state visit to Japan during his first presidential term. The main objective was the conclusion of a Peace Treaty and the settlement of territorial disputes on the Kuril Islands occupied by the Soviet Union in 1945. It seems that the Russian President was genuinely determined in 1992-93 to “turn the page” on a chaotic bilateral history, and he did some things, for example, by apologizing for his country’s treatment of Japanese prisoners of war. But he was obviously confronted with very powerful inertia forces, particularly within the Ministry of Defence and the Security Council. 

The USSR, then Russia, have always been suspected of observing an approach to international negotiation, consistent with the well-known formula according to which «what is ours is ours, what is yours is negotiable». That the occupation of the Japanese «Northern Territories» was the fact of Stalin did not change anything. Moreover, the dispute was deep and permeated Russian mentalities since the humiliation suffered in 1905 by the tsarist fleet. It is a bit strange after the annexation of Crimea in 2014 to take into consideration a Russian argument based on the refusal of the return of territory in the name of «territorial integrity».

In any event, Boris Yeltsin apparently met with fierce resistance from the Siloviki to such an extent that the trip was cancelled sine die for the first time in September 1992. After blowing hot and cold for months, he finally went to Japan in October 1993, but without any notable results. The bilateral relationship continued to be characterized by many vicissitudes and diplomatic tensions (NB: visits of Dimitri Medvedev in 2010 and 2015; naval incidents; fear of the Japanese for use in the area of Mistral ships which were ultimately not delivered by France to Russia). Vladimir Putin’s fascination with a certain Japanese culture and his advanced practice of judo did not change anything.

Again, a lot of Russian postures date back in the early 1990s. During the first years of the transition, Tokyo took steps towards Moscow and Japan, for example, provided economic assistance to Russia through the G7. One can imagine what impetus to the development of the bilateral relationship would have given rise thank to the conclusion of the Peace Treaty. While the China of the time was not at all that of today, the complementarity of a country hungry for current consumption and supplier of energy raw materials and the world’s second largest economy offering the most advanced technologies and not threatening the Extreme-Russian East of disordered immigration would have been invariably very profitable to the development of the Russian economy and society. Russia’s position in Asia and even in Europe would likely have been profoundly affected.

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Japan brings us back in a way to Ukraine and China. Let us be very clear: we must put an end as quickly as possible to the cacophony caused by the noise of boots on the Ukrainian border and the announcement of a military conflict with drums and trumpets. How can we be told the worst in Washington, and now in London, while stating outright, to paraphrase a French foreign minister at the time of the Polish crisis in the early 1980s, that “Of course, we will do nothing”. Worse than that, President Biden evoked during his press conference, at the end of his first year in office, the scenario of an operation of minor importance giving in a way a nihil obstat to the projects lent to the Russians. 

A Russian military operation in Ukraine, regardless of its scale, appears irrational at first glance. In addition to the number of victims, both on the Ukrainian and Russian side (see Do the families want to relive the return of the coffins in Russia at the time of Afghanistan?), the economic consequences in terms of sanctions already announced would be significant in the long term for Russia. NATO, whose state of “brain death” has already been proclaimed, would be reinvigorated and even expanded to new countries once tempted by relative neutrality, such as Sweden and Finland. The torn Ukraine between East and West could make a national leap forward and move further away from Russia against precisely what Moscow wants.

On the other hand, as was the case with the crisis in Georgia in 2008, would this increase Vladimir Putin’s popularity in his country, and would the tension with the West not be primarily for domestic consumption? But the worst case scenario cannot be totally excluded, for example in the form of an occupation of Donbass that would become for years, such as Transnistria, South Ossetia or Abkhazia, a frozen conflict. The question of Ukraine’s integration into NATO would be settled because one cannot imagine a country at war joining the Alliance whose article 5 on mutual assistance should automatically be implemented.

Does the situation of extreme tension, which currently prevails and may have advantages for Moscow, displace Washington so much in substance? This iconoclastic interrogation would then shed light, if it were founded, on the «signal» given by President Biden. In addition to the question of NATO’s identity since the end of the Cold War, the question of Europe’s strategic autonomy has been raised with particular acuteness since Asia’s “pivot”, the relative distancing from the Middle East and abandonment of Afghanistan without consultation of partners. The Ukrainian «phoney war» would then have the advantage of helping to close the ranks, to widen them and in a later phase to train towards Asia.

In this context, what can Europe do?  The issue cannot be dealt with in a few sentences and will require consistency over time. The first response was the French suggestion of separate discussions with Russia. These are essential, as well as within Europe the Franco-German tandem does. Ms. Baerbock was clear and consistent: do everything for the security of Ukraine, which means in a first step the definitive abandonment of Nord Stream 2, since no one naturally wants to “die for Kiev”.

 

       

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