Abstract
When Russian Prime Minister Vladimir Putin announced his intention to return to the Kremlin for a third presidential term, he marked a significant milestone in the country's political development. More than just another assumed victory for Putin's party of power, his putative return to the presidency is without precedent in post-Communist Russia and signals a clear venture into uncharted territory. Even if Putin's triumph at the ballot box is all but certain, it is far from clear whether his next administration will be able to address the mounting pressures that weigh heavily on the Russian state. From the country's spiralling demographic crisis to its over-reliance on mineral exports and long-delayed reforms to the judiciary and political institutions, the risk of long-term stagnation and state decline is greater today than when Putin first took office more than 10 years ago. Indeed, the choices made during Putin's next term could have far-reaching consequences, not just for Russia's relationship with the US and the EU, but for his country's aspirations to reassert itself as a global power.
The risk of decline
Among all of the obstacles that policymakers will face during Putin's next presidential term, the reality of Russia's demographic collapse is perhaps the most chilling. Since 1992, Russia's overall population has been declining in a slow, unnerving spiral. Rooted in the premature death of its citizens rather than low birth rates, the current trend of Russian depopulation has now lasted longer than at any other period in the country's modern history. Worse still, this process shows no signs of abating. According to the most recent projections by the United Nations Development Program (UNDP), by 2030 Russia will be home to roughly 130 million people; by 2040 that number will have fallen to little more than 120 million [2,7]. By comparison, in 2040, neighbouring Turkey will boast roughly the same population as Russia.
As the consequences of this unsettling decline grow more acute over the next decade, Russian defence and economic planners will have to contend with a host of new problems. In the security realm, Russia's armed forces will have an increasingly smaller pool of available manpower with which to ensure the territorial integrity of one-eighth of the earth's inhabited land surface. This will be no small feat, since Russia's eastern and southern frontiers are likely to be flanked by the ambitious rise of strategic competitors, such as China, and an arc of potential instability stretching from Afghanistan to the South Caucasus [8]. In the economic sphere, the outlook is equally troubling—there are no historical examples of a society that has undergone this level of population collapse while simultaneously maintaining strong economic growth. Yet, it is precisely the promise of affluence and national strength that United Russia has pledged to provide to its citizens.
Clearly, one source of traditional strength for the Russian economy has been the natural resources sector, particularly the hard currency generated through energy and mineral exports. However, the draw-down in Russian GDP growth during the recent global economic crisis demonstrated that the country's dependence on these exports has amplified its vulnerability to unexpected price shocks and the capricious appetite of global markets. Worse still, Russia's vast energy wealth is not without its limits. In fact, the failure of state-owned companies like Gazprom to invest in new extraction technologies and up-stream capacity could ultimately compromise Russia's ability to fulfil its long-term gas delivery contracts with downstream customers in Europe [1].
Inside Russian policymaking circles, the baseline risk of export dependence and declining extraction capacity is frequently acknowledged. In fact, during his acceptance speech at the United Russia party conference in September 2011, President Dmitry Medvedev (soon to be Prime Minister Medvedev) placed economic modernisation at the top of his priority list. However, economic diversification and sustainable GDP growth—the ultimate benefits of modernisation—have been on the agenda for over a decade, with limited signs of success. As the recent dismissal of long-standing Finance and Deputy Prime Minister Alexei Kudrin indicated, it is one thing to promise modernisation and entirely another to deliver it. One outcome of Kudrin's discordant departure from power was the opening of a rare window onto the decision-making councils of Putin's Russia. By denouncing the government's preference for top-down strategies that bloat the state budget and hinder sustainable economic growth, Kudrin accused outgoing President Medvedev of being enamoured with unnecessary budgetary outlays. Medvedev responded by indignantly asserting that such expenditures are essential, since Russia is ‘not a banana republic’. This may be so, but the unintended consequences of the Kremlin's current approach to governance are more likely to aggravate, rather than alleviate, the overall conditions of long-term decline in Russia.
Restive Russia
Given these unwanted pressures, the potential for a restive Russian decline, as opposed to a modernising recovery, is significant. In addressing the dilemma this poses, Western governments will need to answer a number of critical policy questions, including:
What is the likely future of the US–Russia reset?
What can be expected from Russia's evolving relationships with its neighbours? and
How might these relationships impact the security perceptions of US allies in Central Europe?
The future of the reset is perhaps the most immediate question to arise out of Putin's announcement that he will assume a third term as Russia's president. During the initial phase of his own presidency, Barack Obama invested considerable political capital in cultivating an effective working relationship with Medvedev. This included the secret letter offering to reset relations with Moscow, the Start II Treaty, cross-border transit rights for supply shipments to Afghanistan and even working lunches between the two heads of state at popular burger restaurants in Washington. In President Obama's view, Putin was a man with ‘one foot in the old ways of doing business’, while Medvedev was ostensibly a leader with both feet in the present [4]. The ‘old way of doing business’ is one that views the collapse of the Soviet Union as ‘the greatest geopolitical catastrophe of the twentieth century’, as Putin once infamously stated. But what is old is new again, and will likely have a direct bearing on future efforts to squeeze additional foreign policy and security deliverables out of the reset.
When it comes to Russia's foreign policy priorities, it is no coincidence that Putin's announced return to the Kremlin coincided with his bold new initiative to reassert Moscow's prominence in Europe and Eurasia. One week after the United Russia party conference, the president-in-waiting set out his vision for transforming Russia's emerging Customs Union with Belarus and Kazakhstan into an ambitious ‘Eurasian Union’ alongside Kyrgyzstan and Tajikistan. Modelled on the EU, this reordering of the Eurasian geopolitical space would include shared governing institutions, joint economic policies and passport-free travel. Economically linked but politically ‘polycentric’, Putin's strategy would place Russia at ‘a nexus between Europe and a dynamic Asia’. In line with Russia's enduring effort to assert its status as primus inter pares in the post-Soviet space, Putin's plan would ultimately make Russia the strongest and only fully sovereign actor in the Union project [5]. 1 This Eurasian blueprint can be seen as an effort to counter the downward pressures of the demographic crisis. However, in fully addressing these challenges, Russian interests would be better served by cultivating an alignment of nimble, politically vibrant mid- and small-sized allies—not a ring fence of dependent clients.
See also [6].
Viewed holistically, Putin's plan to forge a Eurasian Union will advance efforts in Moscow to solidify a hardened sphere of Russian interests in the near abroad. If the current trend continues unabated, this strategy could ultimately aggravate latent security concerns among US allies in Moscow's ambient zone of influence. Since the onset of Washington's reset, and the similar atmosphere of rapprochement in Warsaw, these anxieties have generally lain dormant across Central Europe. Yet they have not disappeared. In fact, Russia's desire to expand its control of strategic economic assets in Belarus, and persistent questions over the eastward bias of Ukraine's multi-vector foreign policy, only increase the potential for heightened threat perceptions in the region. If left unchecked, elevated security concerns along the EU's eastern border could reintroduce calls for overt—and costly—demonstrations of NATO's commitment to the collective defence of its members.
What next?
Resetting expectations
Going forward, the announcement of Vladimir Putin's third presidential term provides an ideal opportunity for the US and Europe to evaluate the current state of transatlantic engagement with Moscow. This is not to say that the recent improvement in US–Russia relations should be discarded. However, expectations for additional, substantive deliverables from the reset should be realistic. Thus far, the most significant deliverable to be produced by the reset has been the Start II Treaty. Yet this agreement represented relatively low-hanging fruit for both sides. The ceiling on long-range strategic weapons is generous, while the chances of an intercontinental nuclear exchange between the United States and Russia are infinitesimal. Meanwhile, other, more relevant security questions could prove harder to resolve. This includes Moscow's likely efforts to impose limits on the development of US missile defence technology and the future of tactical nuclear weapons in Europe. In this regard, Russia's population decline will play a significant role. As the Kremlin contends with a shrinking pool of conventional forces, it will have a powerful incentive to brace itself against the bulwark of its nuclear deterrent. If policymakers in Washington hope to use the reset as a mechanism for additional breakthroughs in nuclear non-proliferation, they are likely to be disappointed.
Eurasian Union
At the same time, the Kremlin risks its own disappointment if it hopes to fundamentally re-order the Eurasian geopolitical space through an eastern counterpart to the EU. As seen from Europe's efforts to form a more perfect union, ambitious multi-state projects are most successful when they enjoy a shared, self-sustaining rationale and a willingness among members to make sacrifices for the benefit of all. Thus far, the underlying logic of Putin's Eurasian Union is neither self-sustaining nor would its full implementation benefit all countries equally. Visa travel might be an appealing offer for prospective members. But short of coercion, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan have no compelling reason to uniformly submerge key aspects of their sovereignty into yet another Russian-dominated union.
Even so, the allure of Russian sovereign democracy and other soft-power mechanisms could still have a net negative impact on democratic principles and best practices in governance across the whole of the post-Soviet space. As such, US and EU pro-democracy programmes are one of the best Western response strategies to Russia's ambitious Eurasian agenda. 2 In countries where robust free-market competition and transparent, democratic governance are dominant, Russia's ability to exert its special status is greatly diminished. The opposite is true, however, in places where these principles are not firmly embedded in the political culture. By exporting transatlantic norms to the East and helping to develop institutions of democratic governance far beyond the EU's formal borders, the West can counter the corrosive influence of non-transparency and top-down rule.
This is especially relevant in the case of the EU's Eastern Partnership Initiative.
Fault line allies
Despite the headwinds facing the Eurasian Union, the potential for elevated Russian pressure along the NATO–Russian fault line coincides with the prospect of heightened austerity in US and European defence budgets. In this environment, Western defence planners should be prepared for a surge in revisionist rhetoric and behaviour from Moscow. Only two short years have passed since the destabilising Russia–Georgia war, and the risk of future low-intensity conflicts in the post-Soviet space should not be ignored. As transatlantic security structures grapple with the practical implications of expected cuts, Washington will need to engage with NATO's easternmost members in order to forestall the perception of American retrenchment and retreat [3]. When articulating his vision for a reordered European and Eurasian geopolitical space, Putin gives little currency to the transatlantic links that have bolstered US and EU policy for decades. If Putin truly intends to use his next presidential term to establish Russia as the spokesperson for a new Eurasian bloc, policymakers in the West should actively seek to frame their engagement with Moscow within the context of transatlantic values and collective security.
In the event that Russian forces are again involved in a high-profile cross-border operation, the United States and NATO would do well to anticipate a re-examination of their long-standing security arrangements with Central European allies. In the near term, Washington should seek to cultivate its transatlantic security links with the region through existing formats such as the US–Polish strategic dialogue, increased visits by senior US government officials and widened the channels of day-to-day bilateral communication. Should exposed Central European states once again question the sincerity of America's security guarantees (as was the case following the 2009 Russia–Georgia war), the answer from Washington should be immediate and precise: the United States stands by its commitments.
Ultimately, Russia can, and should, play a constructive and beneficial role in the economic and security affairs of its neighbours. Yet such a positive influence is less likely if Russian policymakers are unable to resolve the burdens of the demographic collapse, their overdependence on mineral exports and the need for systemic political reform. If the current approach, one which leans heavily on one-party rule and special project directives, proves to be unsuccessful, then Russia's aspirations for prominence on the global stage are likely to be trapped in the thicket of a restive decline. This outcome would be just as bad for Russia as it would be for the US and Europe. And it is for this reason that the choices made during Putin's third term will reverberate throughout the next decade.