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Chatham House Report
Keir Giles, Philip Hanson, Roderic Lyne, James Nixey,
James Sherr and Andrew Wood
The Russian Challenge
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Chatham House Report
Keir Giles, Philip Hanson, Roderic Lyne, James Nixey,
James Sherr and Andrew Wood | June 2015
The Russian Challenge
EMBARGOED UNTIL 00:01, THURSDAY 4 JUNE JUNE 2015
ii | Chatham House
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Cover image © AP Photo/Alexander Zemlianichenko
7 May 2015: Towing cables are attached to a Russian T-14 tank after it breaks
down in Red Square during the dress rehearsal for the 2015 Victory Day parade.
The new T-14, formally displayed for the first time at the parade on 9 May,
has become a symbol for Russia’s far-reaching rearmament and military
modernization programme. The reported advanced design and capabilities
of the tank and its related series of other new armoured vehicles have been
the subject of widespread discussion among defence experts, both within
Russia and abroad. But the introduction of the tank comes amid growing
doubt over the capacity and sustainability of Russia’s defence industry
– and of the economy as a whole – while subjected to external sanctions
and domestic inefficiencies.
Contents
Chatham House | iii
About the Authors iv
Acknowledgments v
Executive Summary and Recommendations vi
Резюмеирекомендации ix
1 Introduction 1
2 Russia’s Changed Outlook on the West: From Convergence to Confrontation 2
Roderic Lyne
3 An Enfeebled Economy 14
Philip Hanson
4 A War of Narratives and Arms 23
James Sherr
5 Russian Foreign Policy Towards the West and Western Responses 33
James Nixey
6 Russia’s Toolkit 40
Keir Giles
7 Russian and Western Expectations 50
Andrew Wood
Summary of Recommendations 58
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iv | Chatham House
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About the Authors
Keir Giles is an associate fellow of the International
Security Department and the Russia and Eurasia
Programme at Chatham House. He is also a director of
the Conflict Studies Research Centre (CSRC), a group of
subject matter experts in Eurasian security. His career
began in aviation in the early 1990s, working with Soviet
military and paramilitary aircraft in Crimea. He went on
to write for several years as Russia correspondent for a
range of military and civilian aviation journals, and to
join the BBC Monitoring Service, where he specialized in
military and economic issues in the former Soviet space.
He was seconded to CSRC in 2005 while it was still part
of the UK Defence Academy (UKDA), and in 2010 brought
key team members into the private sector after the closure
of the UKDA’s non-technical research programmes. He
now oversees CSRC’s research and publications, while
continuing to write and publish on his own specialist
area of Russian approaches to conventional, cyber and
information warfare.
Philip Hanson is an associate fellow of the Russia and
Eurasia Programme at Chatham House and professor
emeritus at the Centre for Russian and East European Studies
of the University of Birmingham, where he also served as
director from 2001 to 2002. He has held positions at the
UK Treasury, the UK Foreign & Commonwealth Office, the
UN Economic Commission for Europe, and Radio Liberty;
and has been a visiting professor at Michigan, Harvard,
Kyoto, Södertörns and Uppsala universities. He has
worked mainly on the Soviet and Russian economies, with
occasional excursions into other topics. His books include
Regional Economic Change in Russia (co-edited with Michael
Bradshaw) and The Rise and Fall of the Soviet Economy.
Roderic Lyne, deputy chairman of the Chatham House
Council, was a member of the UK diplomatic service from
1970 to 2004, serving as British ambassador to the Russian
Federation from 2000 to 2004. From 2005 to 2007 Sir
Roderic was a member of the Task Force of the Trilateral
Commission on Russia and co-authored, with Strobe Talbott
and Koji Watanabe, a report to the Commission entitled
Engaging with Russia: The Next Phase.
James Nixey is head of the Russia and Eurasia Programme
at Chatham House. His principal expertise concerns the
relationships between Russia and the other post-Soviet
states. His publications include The Long Goodbye: Waning
Russian Influence in the South Caucasus and Central Asia;
‘Russia’s Geopolitical Compass: Losing Direction’ in Putin
Again: Implications for Russia and the West; and ‘The
South Caucasus: Drama on Three Stages’ in A Question
of Leadership: America’s Role in a Changed World.
James Sherr is an associate fellow and former head,
between 2008 and 2011, of the Russia and Eurasia
Programme at Chatham House. He was a member of the
Social Studies Faculty of Oxford University from 1993 to
2012; a fellow of the Conflict Studies Research Centre of the
UK Defence Academy from 1995 to 2008; and director of
studies of the Royal United Services Institute from 1983 to
1985. He has published extensively on Soviet and Russian
military, security and foreign policy, as well as energy
security, the Black Sea region and Ukraine’s efforts to deal
with Russia, the West and its own domestic problems.
Andrew Wood is an associate fellow of the Russia
and Eurasia Programme at Chatham House. Since his
retirement from the British diplomatic service in 2000, as
ambassdor in Moscow from the summer of 1995, he has
held positions with a number of UK-based companies with
Russian interests as well as others active in other former
Soviet countries. He co-wrote a book, Change or Decay,
with Lilia Shevtsova published by the Carnegie Institute
in November 2011 and has been a regular contributor
to Chatham House publications, as well as to material
produced by The American Interest.
Chatham House | v
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Acknowledgments
The authors would like to thank Chloe Cranston, Caroline
Hattam, Nikolay Kozhanov, Orysia Lutsevych, Arbakhan
Magomedov, Margaret May, Andrew Monaghan, Robin
Niblett,Ľubica Polláková, Lilia Shevtsova, Zaur Shiriyev and
Jake Statham for their invaluable work on various aspects
of this report. They are also grateful to the four anonymous
peer reviewers who commented on an early draft.
Responsibility for any errors of fact or analysis, as always,
lies with the authors.
vi | Chatham House
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Executive Summary and Recommendations
The war in Ukraine, and Vladimir Putin’s bid to overturn
the post-Cold War international settlement in Europe, have
forced many Western governments to reappraise their
approach to Russia. Until 2003, it was widely believed that
a modernizing Russia might be accommodated into the
international system as a constructive and benign actor.
Variations on this view have given way to the realization
that Russia, on its present course, cannot be a partner or
ally, and that differences outweigh any common interests.
Russia faces mounting internal difficulties, including a
weakening economy and a political culture that stifles
enterprise and society. The combination of these forces
imperils both security in Europe and stability in Russia.
The Russian challenge, which this report sets out to
examine, is therefore twofold: it is a challenge to the
West, in terms of managing the increasing threats Russia
poses to international order; and to Russia itself.
President Putin’s options are uncomfortably narrow.
Russia’s longer-term interests would best be served by
structural reforms at home and mutual accommodation
with outside powers, small as well as great. But such policies
would threaten the ability of Putin and his circle to hold
on to power. While a reforming Russia would benefit from
closer integration with the European Union, the Kremlin
now opposes EU enlargement into its claimed ‘sphere of
interest’ as adamantly as the enlargement of NATO. Putin
has intensified the policies he adopted following his return
to the titular presidency in May 2012: increased domestic
repression; more centralized direction of the economy; the
fomenting of anti-Western nationalism; increased defence
expenditure; and the pursuit of hegemony over as much
of the post-Soviet space as possible.
These choices have boxed the regime in. Russia needs
reform, but the domestic political obstacles to it are
daunting. At the same time, if Moscow maintains its current
course – in both economic management and international
relations – this will be increasingly dangerous for Europe
and costly, if not disastrous, for Russia.
The questions addressed in this report are how far those
costs will rise, whether Russia can bear them, what will
happen if it cannot, and how the West should respond
in the near and longer term.
Deconstructing the Russian challenge
Russia’s changed outlook on the West
President Putin’s ‘new model Russia’ is that of an
independent Great Power resuming its geopolitical position
on its own terms. This reflects a deep sense of insecurity and
a fear that Russia’s interests would be threatened if it lost
control of its neighbourhood. The model is fundamentally
at odds with a Europe that has moved on to a different
conception of international order. As a result, the prospect
of a strategic partnership with Russia, yearned for by many
in the West, has become remote in the face of incompatible
interests and irreconcilable values.
Putin’s model plays strongly to the personal interests of
the clans affiliated with his personal leadership, but it has
been marketed to appeal to the patriotic instincts of the
wider Russian population. The ruling group’s control of the
economy and the levers of power – civil administration, the
armed forces and the security organs – will not be easily
shaken. However, the regime is now facing the most serious
challenge of its 15 years in power. Over time, economic
pressures, combined with the unsustainable extent of
top-level corruption, will generate a growing imperative
for change. The new model Russia is not sustainable, and
Western governments need to consider their responses to
various scenarios for change.
An enfeebled economy
The Russian economy has moved into recession. If and
when it returns to growth, this will be sluggish at best. The
influences dragging down Russian economic performance
are structural, conjunctural and geopolitical. In the long
term, the possibility of growth is severely limited by the
decline in the economically active workforce and the
constraints the Putinist system places on competition and
private investment. Market pressures and external conflict
pose additional challenges of uncertain duration. However
long they last, Russia will find it economically difficult to
sustain its current and planned levels of energy exports
and its ambitious rearmament programme.
By themselves, EU and US sanctions are unlikely to
provoke such economic distress as to force Russia to step
back in Ukraine. On the contrary, they provide the Russian
leadership with a handy scapegoat for ‘stagflation’. The
pressure on the regime exerted by sanctions none the less
remains important while the confrontation continues.
The critical element in the new geo-economic competition
between the West and Russia is the extent of Western
economic support for Ukraine.
Ukraine: a war of narratives and arms
The conflict in Ukraine is a defining factor for the future of
European security. The Kremlin perceives that Europe lacks
the will to pay the necessary price to defend its principles.
Moscow has underestimated the coherence and resilience
of Ukraine, but this does not mean that it cannot achieve
its core objectives: to wreck Ukraine if it cannot control it,
to preserve Russia’s western borderlands as a ‘privileged
Chatham House | vii
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The Russian Challenge
Executive Summary and Recommendations
space’, and to make Europe accept that ‘there can be no
security without Russia’.
For the Kremlin, war is a clash of wills as much as resources.
In the absence of constraints on Russian military power, the
risk is not that Russia could impose a military solution, but
that it might enforce a political one that would damage the
West’s interests and nullify its efforts. A solution based on
terms dictated by today’s Russia would not last.
Russia’s foreign policy towards the West
There has been no sudden change in direction in Russia’s
foreign policy or values since the beginning of the crisis
over Ukraine. Russian ambitions and intentions had been
telegraphed for well over a decade, but the West found it easier
at the time to disregard them and indulge in the fantasy that
Russia was progressing towards a liberal-democratic model
with which the West felt comfortable. The war in Ukraine is, in
part, the result of the West’s laissez-faire approach to Russia.
The West views former Soviet states as fully sovereign
countries. As a result, Putin’s determination to re-establish
Russian primacy in its former dependencies is the crux of
the ‘Russian challenge’ to Europe. But additional challenges
are created by Russia’s illegitimate activities in the European
Union, such as market monopolization and the co-option of
elites, its desperate quest for equality with the United States,
and its pursuit of what it sees as its own interests regardless
of the implications for itself and others.
Russia’s toolkit
The Russian government has pursued its interests by
means of a wide range of hostile measures against its
neighbours, none of which are compatible with European
notions of cooperative international relations. In addition
to well-publicized instances of energy cut-offs and trade
embargoes, other tools include subversive use of Russian
minorities, malicious cyber activity of various forms, and
the co-option of business and political elites. One of the
most distinctive ways in which the Kremlin sustains leverage
over its neighbours is by keeping long-running disputes
alive or frozen for potential future use.
Two specific levers that have developed rapidly since the
armed conflict with Georgia in 2008 are Russia’s armed
forces and its information warfare capabilities. Both
have been employed to great effect during the crisis over
Ukraine; and both can be expected to be used elsewhere
in the future. Continued intensive investment in military
capability, despite Russia’s economic difficulties, is intended
to narrow the capability gap with Western militaries led by
the United States, and thereby to reduce further the risk
inherent in Russia’s possible future military interventions.
Russian and Western expectations
The root cause of the Ukraine crisis lies in Russia’s
internal development, and its failure to find a satisfactory
pattern of development following the collapse of the
Soviet Union. Putin and his circle are not the same
as Russia and its people, and their interests do not
necessarily coincide.
The West has neither the wish nor the means to promote,
or for that matter to prevent, regime change in Russia.
But Western countries need to consider the possible
consequences of a chaotic end to the Putin system.
Recommendations
Western policy-makers will continue to differ in their
assessments of the extent of the Russian challenge and the
best ways to respond to it. But the consensus is emerging
that Russia cannot be integrated into the sort of rules-
based international order in Europe that all European
states subscribe to, unless and until there is a fundamental
change of direction in Moscow. It is a change that must
come from within.
The West therefore needs to develop and implement a clear
and coherent strategy towards Russia. As far as possible this
must be based on a common transatlantic and European
assessment of Russian realities. In particular, policy must
be based on the evidence of Russia’s behaviour, not on
convenient or fashionable narratives.
Overall Western cohesion is critical for success. The
main actors, at least, need to be aligned and working
closely together. This Western strategy needs to include the
following clear goals, and establish the near-term means
and longer-term capabilities to achieve them.
Strategic goals for the West
• To deter and constrain coercion by Russia against its
European neighbours, for as long as is needed, but
not to draw fixed dividing lines. The door should be
kept open for re-engagement when circumstances
change. This cannot be expected with any confidence
under Putin, and it cannot be predicted what the
next regime will look like. But there is a reasonable
possibility that the decline of the Russian economy,
the costs of confrontation and the rise of China will
incline a future Russian leadership to want to re-
engage with the West.
• To restore the integrity of a European security system
based on sovereignty, territorial integrity and the
right of states to determine their own destinies.
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The Russian Challenge
Executive Summary and Recommendations
• To find better ways to communicate to the
Russian regime and people that it is in their long-term
national interest to be a part of a rules-based Europe,
not an isolated regional hegemon.
• To explain Western policies consistently and regularly
in discussions with China, and to all former Soviet
states, most of which have reason to be concerned
about Russian policies, whether or not they admit
it. Governance is flawed in several of these states,
but that is no reason to leave them hearing only the
views of the Kremlin.
• To prepare for the complications and opportunities
that will inevitably be presented by an eventual
change of leadership in Russia.
• Not to isolate Russia or its people. President Putin’s
regime is already doing that very effectively. It is not
in the Western interest to help him cut the Russian
people off from the outside world.
Specific policy objectives
• The reconstruction of Ukraine as an effective
sovereign state, capable of standing up for itself, is
crucial. This requires the input of much greater effort
(political and human resources as well as financial;
and a major programme of technical assistance) than
has been the case up to now. Ukraine’s failure would
deepen instability in Eastern Europe, increase the
risk of further Kremlin adventures, and diminish the
prospects for eventual beneficial change in Russia.
• The EU’s Eastern Partnership needs to be
transformed into an instrument that enables the
European Union and individual member states to
reinforce the sovereignty and economies of Eastern
partners which have proved willing to undertake
serious political and economic reform.
• The effectiveness of sanctions against Russia
depends on their duration as well as severity. The
issue that triggered sanctions was the violation of
Ukraine’s territorial integrity, and until that issue
is fully addressed sanctions should remain in place.
In particular, it is self-defeating to link the lifting
of sanctions solely to implementation of the poorly
crafted and inherently fragile Minsk accords.
• The West should not return to ‘business as usual’
in broader relations with the Russian authorities
until there is an acceptable settlement of the
Ukrainian conflict and compliance by Russia
with its international legal obligations.
• EU energy policy should aim to deprive Russia of
political leverage in energy markets, rather than to
remove Russia from the European supply mix. To
this end, the momentum generated by the EU’s Third
Energy Package and the cancellation of the South
Stream pipeline project needs to be consolidated.
This should be done through further measures
against opaque, anti-market practices by Russian
state energy companies, and through the acceleration
of steps already in train to eliminate ‘energy islands’
in Europe.
• Western states need to invest in defensive strategic
communications and media support in order to
counter the Kremlin’s false narratives. Promoting
truthful accounts of Western policies and values, in
an intelligent manner that is relevant to audiences, is
essential. This must happen both on a national level,
and through EU and NATO cooperation. Channels
of contact to ordinary Russians (including through
education and other interpersonal links) should
be sustained.
• NATO must retain its credibility as a deterrent
to Russian aggression. In particular, it needs to
demonstrate that limited war is impossible and that
the response to ‘ambiguous’ or ‘hybrid’ war will
be robust.
• Conventional deterrent capability must be restored
as a matter of urgency and convincingly conveyed, to
avoid presenting Russia with inviting targets.
• Individual EU member states, as well as the
European Union as a whole, including through
the External Action Service, need to regenerate
their capacity to analyse and understand what is
going on in Russia and neighbouring states. This
understanding, and greater institutional expertise,
must then be used as a basis for the formation
of policy.
Pursuing these goals and achieving these objectives
will ensure that the West is better prepared for any
further deterioration in relations with Russia. Vladimir
Putin must not be accommodated for fear that any
successor would be even worse. This accommodation
has already failed. Whether the present leadership
endures or is prematurely replaced, the way ahead will
be complex and potentially turbulent. The events of the
last 18 months have demonstrated conclusively that
when dealing with Russia, optimism is not a strategy.
Chatham House | ix
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Резюме и рекомендации
Война в Украине и попытки B.B. Путина разрушить
сформировавшуюся после холодной войны систему
международных отношений в Европе заставили
многие западные государства пересмотреть свое
отношение к России. До 2003 года считалось, что
обновленная Россия может стать конструктивным и
здоровым членом международного сообщества. Однако
постепенно пришло осознание того, что пока Москва
придерживается своего нынешнего политического
курса, она не может быть партнером или союзником,
и что существующие различия перечеркивают любые
общие интересы России и Запада.
В России нарастают внутренние проблемы – слабеющая
экономика и политическая культура, которая душит
деловую и гражданскую инициативу. Все это угрожает
как безопасности в Европе, так и стабильности самой
России. Иными словами, существующий российский
вызов – главная тема этого доклада – имеет двоякую
природу: с одной стороны, он брошен Западу, который
вынужден противодействовать растущей российской
угрозе существующему международному порядку, а, с
другой стороны, это вызов и для самой России.
У президента В.В. Путина ограничен выбор действий.
С точки зрения долгосрочных интересов России
самым разумным было бы провести структурные
реформы внутри страны и достичь взаимовыгодных
договоренностей с различными по своей мощи и
влиянию внешними игроками. Однако такая политика
поставила бы под угрозу возможность В.В. Путина и
его окружения удержаться у власти. Несмотря на то,
что реформированная Россия выиграла бы от более
тесной интеграции с Европейским Союзом, Кремль
сейчас выступает против расширения ЕС за счет стран,
входящих в его заявленную «сферу интересов», на
которую он претендует, так же жестко, как когда-то
выступал против расширения НАТО. В.В. Путин стал
активнее реализовывать ту политическую стратегию,
которая была принята им после возвращения на пост
президента в мае 2012 года. Последняя включает
ужесточение репрессий внутри страны, усиление
централизованного управления экономикой,
разжигание антизападных националистических
настроений, увеличение расходов на оборону и
стремление к установлению гегемонии на широком
постсоветском пространстве.
Этот политический выбор загнал режим в тупик. России
нужны реформы, но им мешают серьезные политические
препятствия внутри страны. В то же время, если
Москва продолжит придерживаться нынешнего
курса, как в сфере экономического управления, так
и в сфере международных отношений, это усилит
угрозу для Европы и приведет к серьезным, если не
катастрофическим, последствиям для самой России.
Авторы данного доклада пытаются ответить на
следующие вопросы: какова возможная цена этих
последствий? Сможет ли Россия с ними справиться?
Что произойдет в противном случае? Как Запад должен
реагировать на российские процессы в ближайшей и
более длительной перспективе?
Структурируя проблему российского вызова
Изменение в российском восприятии Запада
«Новая модель развития России», предлагаемая
президентом В.В. Путиным – это независимая «Великая
Держава», восстанавливающая свое геополитическое
положение на собственных условиях. Эта модель
отражает глубокое чувство неуверенности и
опасений того, что интересы России пострадают,
если она потеряет контроль над соседними странами.
Такая модель в корне расходится с концепцией
международного порядка, которую приняла Европа.
Поэтому перспектива стратегического партнерства
с Россией, к которому стремились многие на
Западе, становится все более призрачной из-за
несовместимости интересов России и Запада и
конфликта их ценностей.
Полностью отвечающая личным интересам кланов,
обязанных В.В. Путину своим существованием,
широким слоям российского общества эта модель
преподносится в патриотической упаковке. Не так
легко будет ослабить то влияние, которое правящая
группировка осуществляет над экономическими
и политическими рычагами – в гражданской
администрации, в вооруженных силах и в органах
безопасности. Однако сейчас режим столкнулся с
самыми серьезными проблемами за пятнадцать лет
своего существования. Со временем экономические
проблемы в сочетании с безудержной коррупцией
на высшем уровне вызовут растущую потребность в
переменах. Новая модель развития России неустойчива,
и западным правительствам следует разработать
возможные варианты реагирования на различные
сценарии таких перемен.
Слабость экономики
Экономика России перешла в стадию рецессии. Даже
когда экономический рост восстановится – если
это вообще произойдет – он будет в лучшем случае
вялым и неустойчивым. Факторы, тормозящие
рост российской экономики, имеют структурный,
конъюнктурный и геополитический характер. В
долгосрочной перспективе, возможность роста будет
серьезно ограничена сокращением экономически
x | Chatham House
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The Russian Challenge
Резюмеирекомендации
активногонаселенияимерами,которыепутинская
системаиспользуетдляограниченияконкуренциии
частныхинвестиций.Рыночныефакторыивнешние
конфликтысоздаютдополнительныепроблемына
неопределеннуюперспективу.Независимооттого,как
долгоэтипроблемыбудутоставатьсянерешенными,
Россиибудетэкономическитрудноподдерживать
экспортэнергоносителейнатекущемипланируемом
уровнеифинансироватьсвоюамбициозную
программуперевооружения.
Самипосебе,европейскиеиамериканскиесанкции
врядлиспровоцируюттакиеэкономическиетрудности,
которыезаставятРоссиюотказатьсяотсвоейполитики
вотношенииУкраины.Напротив,дляроссийского
руководстваониявляютсяудобнымобъяснением,на
котороеможносписатьсуществующуюстагфляцию.
Темнеменее,санкцииоказываютощутимоедавление
нарежимприпродолжающейсясЗападом.Масштаб
западнойэкономическойпомощиУкраинеявляется
важнымфакторомвновойгеоэкономической
конкуренциимеждуЗападомиРоссией.
Украина:войнатрактовокиоружия
КонфликтвУкраинеявляетсяопределяющимфактором
вобеспеченииевропейскойбезопасностивбудущем.
Кремльсчитает,чтоЕвропенехватаетготовности
заплатитьнеобходимуюценудлязащитысвоих
принципов.Москванедооценилаединствоистойкость
Украины.Ноэтонезначит,чтоейнеудастсядостичь
своихосновныхцелей–еслиневзятьподконтроль,
тохотябырасчленитьУкраину,сохранивзападные
окраиныРоссиивкачествесвоего«привилегированного
пространства»изаставитьЕвропупризнать,что
«безопасностибезучастияРоссиинеможетбыть».
ДляКремлявойна–этопротивостояниенетолько
ресурсов,ноиволи.Приотсутствиифакторов,
сдерживающихроссийскуювоеннуюсилу,рисксостоит
невтом,чтоРоссиясможетнавязатьвоенноерешение,
автом,чтоейудастсяреализоватьполитический
сценарий,которыйнанесетущербинтересамЗапада
исведетнанетегоусилия.Разрешениеконфликта,
основанноенаусловиях,продиктованныхсовременной
Россией,неможетбытьустойчивым.
ВнешняяполитикаРоссиипоотношениюкЗападу
СначалакризисавокругУкраинывроссийскойвнешней
политикеиееценностяхнепроизошлоникаких
кардинальныхизменений.Россиясигнализировалао
своихамбицияхинамеренияхболеедесятилетназад,но
тогдаЗападубылоудобнонеобращатьнаэтовнимания
ипредаватьсяфантазиям,чтоРоссияразвиваетсяв
направлениилиберально-демократическоймодели,
устраивавшейЗапад.ВойнавУкраине–это,кроме
прочего,результатполитикипопустительства,которую
ЗападосуществлялпоотношениюкРоссии.
Западсчитаетбывшиесоветскиереспублики
полностьюсувереннымистранами.Поэтому
стремлениеВ.В.Путинавосстановитьроссийское
господствовстранах,которыебыливпрошлом
подвластныей,–суть«российскоговызова»для
Европы.Носуществуютещеидополнительные
проблемы,такиекакнезаконныедействияРоссиив
ЕСпомонополизациирынкаикооптацииевропейской
элиты,ееотчаяннаяпогонязаравноправиемс
СоединеннымиШтатамиистремление,невзираяна
последствиядлясебяидругих,продвигатьсобственные
интересыилито,чтоонасчитаеттаковыми.
Российскийинструментарий
ПравительствоРоссиипродвигаетсвоиинтересы
спомощьюширокогоспектрамер,направленных
противсвоихсоседей.Ниоднаизнихнесовместимас
европейскимипонятиямимеждународныхотношений,
основанныхнасотрудничестве.Кромеизвестных
случаевпрекращенияпоставокэнергоносителейи
наложенияторговогоэмбарго,применялисьидругие
инструменты,такиекакиспользованиеподрывного
потенциалароссийскихзарубежныхобщин,
pазличныеформыкибератакикооптацияделовых
иполитическихэлит.Одинизсамыхтипичных
способов,которыеиспользуетКремльдлясохранения
рычаговвлияниянасвоихсоседей–эторазжигание
старыхконфликтовилиихзамораживаниедля
возможногоиспользованиявбудущем.
Дваконкретныхинструментавнешнеполитического
влияния,чейпотенциалМоскваактивноразвивала
послевооруженногоконфликтасГрузиейв2008
году–этовооруженныесилыРоссиииеересурсыпо
ведениюинформационнойвойны.Обаинструмента
весьмаэффективноиспользовалисьвовремякризиса
вокругУкраиныи,скореевсего,вбудущембудут
опятьиспользованывдругихместах.Интенсивное
наращиваниеМосквойсобственноговоенного
потенциала,несмотрянаэкономическиетрудности,
имеетцельюсократитьотставаниеотзападных
вооруженныхсил,воглавесСоединеннымиШтатами,
чтобыуменьшитьриск,связанныйсвозможной
российскойвоеннойинтервенциивбудущем.
ОжиданияРоссиииЗапада
КореннаяпричинакризисавокругУкраиныкроется
вовнутреннемразвитииРоссиииеенеспособности
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The Russian Challenge
Резюмеирекомендации
найтиудовлетворительнуюмодельразвитияпосле
распадаСоветскогоСоюза.Путиниегоокружение
–этонеРоссияиеенарод,иихинтересыне
обязательносовпадают.
Западнеимеетнижелания,нисредств,чтобы
содействоватьилипрепятствоватьсменережима
вРоссии.Нозападныестраныдолжныучитывать
возможныепоследствияхаотическогоразвала
путинскойсистемы.
Рекомендации
Средизападныхполитиковбудутсохраняться
разногласиявоценкесерьезностипроблемыРоссии
итого,каклучшереагироватьнанее.Однакоуже
складываетсяконсенсусотносительнотого,что
Россиюневозможноинтегрироватьвевропейский
международныйпорядокнаоснованниправил,
признанныхвсемиевропейскимигосударствами,до
техпорпоканепроизойдеткардинальногоизменения
кремлевскогокурса.Итакоеизменениедолжно
произойтиизнутри.
ПоэтомуЗападдолженразработатьивнедрять
четкуюипоследовательнуюстратегиюпоотношению
кРоссии.Наскольковозможно,такаястратегия
должнаосновыватьсянаобщейтрансатлантическойи
европейскойоценкероссийскихреалийипонимании
поведенияРоссии,аненаудобныхилимодныхмифах
истереотипах.
СплоченностьЗапада–критическийфакторконечного
успеха.Покрайнеймере,главныезападныеигроки
должныкоординироватьсвоидействияиработать
втесномвзаимодействиимеждусобой.Западная
стратегиядолжнавключатьследующиечеткиецели
ипредусматриватькраткосрочныеидолгосрочные
средстваихдостижения.
СтратегическиецелиЗапада
• Сдерживатьиограничиватьпопытки
принуждениясостороныРоссиипоотношению
кееевропейскимсоседям–скольдолгоэто
будетнеобходимо,–нонесоздаватьпри
этомфиксированныхразделительныхлиний.
Дверидолжныоставатьсяоткрытымидля
возобновлениявзаимодействиясРоссиейв
будущем,когдаизменятсяобстоятельства.Нельзя
суверенностьюожидать,чтоэтопроизойдетпри
В.В.Путине,нотакженевозможнопредсказать,
какимбудетследующийрежим.Втожевремя
существуетвполнерезоннаявероятность,что
спадвроссийскойэкономике,расходына
конфронтациюиподъемКитаяположительно
повлияютнаготовностьбудущегороссийского
руководстваквозобновлениюсотрудничества
сЗападом.
• Восстановитьцелостностьевропейскойсистемы
безопасности,основаннойнасуверенитете,
территориальнойцелостностииправегосударств
самостоятельноопределятьсвоюсудьбу.
• Найтиболееэффективныеспособыубедить
российскийрежимироссийскийнародвтом,
чтоихдолгосрочнымнациональныминтересам
отвечаетинтеграцияРоссиивоснованнуюна
правилахЕвропу,анеизоляциявкачестве
региональногогегемона.
• Регулярноисистематическиобъяснятьполитику
ЗападавдискуссияхсКитаемивсемибывшими
советскимиреспубликами,большинствоиз
которыхимеютоснованиядляобеспокоенности
российскойполитикой,дажееслионивэтомне
признаются.Внекоторыхизэтихстрандалеко
небезупречнаясистемауправления,ноэтоне
означает,чтоонидолжныслышатьтолькоточку
зренияКремля.
• Подготовитьсякосложнениямивозможностям,
которыенеизбежнопредставятся,когдавРоссии,
наконец,произойдетсменаруководства.
• НеизолироватьРоссиюироссиян.Режим
президентаПутинаужезанимаетсяэтимвесьма
эффективно,ипомогатьемуизолироватьроссиян
отвнешнегомираневходитвинтересыЗапада.
КонкретныецелиизадачиполитикиЗапада
• Решающеезначениеимееттрансформация
Украинывэффективноесуверенноегосударство,
способноeпостоятьзасебя.Дляэтоготребуется
гораздобольшеусилий(политические,
человеческиеифинансовыересурсы,атакже
масштабнаяпрограмматехническойпомощи),
чемто,чтоделалосьдосихпор.КрахУкраины
усугубитнестабильностьвВосточнойЕвропе,
увеличитрискновыхавантюрсостороныКремля
иограничитперспективыпотенциальных
благоприятныхпеременвРоссии.
• ПроектЕС«Восточноепартнерство»долженстать
инструментом,которыйпозволитЕвропейскому
Союзуиегоотдельнымчленамукрепить
суверенитетиэкономикувосточныхпартнеров,
проявившихготовностьпровестисерьезные
политическиеиэкономическиереформы.
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The Russian Challenge
Резюмеирекомендации
• ЭффективностьсанкцийпротивРоссиизависитот
ихпродолжительностиижесткости.Санкциибыли
введенывответнанарушениетерриториальной
целостностиУкраиныидолжныоставатьсявсиле
дотехпор,покаэтотвопроснебудетполностью
решен.Вчастности,привязываниеотмены
санкцийисключительноквыполнениюплохо
проработанныхиизначальнохрупкихминских
соглашенийобреченонапровал.
• Западнедолженвозвращатьсяксценарию
сотрудничествасРоссиейвболеешироком
контекстеотношенийсроссийскимивластями
дотехпор,поканебудетдостигнутоприемлемое
урегулированиеукраинскогоконфликтаипока
Россияненачнетсоблюдатьсвоимеждународные
правовыеобязательства.
• ЭнергетическаяполитикаЕСдолжна
бытьнаправленанато,чтобылишить
Россиюполитическихрычаговконтроля
надэнергетическимирынками,аненаее
исключениеизевропейскогоэнергобаланса.
Дляэтогонеобходимоподдерживать
динамику,сложившуюсяблагодаряТретьему
энергетическомупакетуЕСиотменепроекта
построительствугазопровода«Южный
поток»,принимаядальнейшиемерыпротив
непрозрачных,антирыночныхдействий
состороныроссийскихгосударственных
энергетическихкомпанийиускоряяуже
запущенныепроцессыпоустранению
«энергетическихостровов»вЕвропе.
• Западныегосударствадолжнывложить
средствавоборонительныестратегические
коммуникациииподдержкуСМИ,чтобы
противостоятькремлевскойпропаганде.Важно
иметьвозможностьобъективнопредставлять
западнуюполитикуиценности,грамотнои
доступноразъясняяихцелевойаудитории.Это
должноосуществлятьсякакнанациональном
уровне,такичерезсотрудничествоврамках
ЕСиНАТО.Необходимоподдерживатьканалы
контактаспростымироссиянами(втомчисле,
посредствомобразовательныхпрограммидругих
межличностныхсвязей).
• НАТОдолжнасохранитьсвоюсостоятельность
вкачествефакторасдерживанияроссийской
агрессии.Вчастности,альянсдолжен
продемонстрировать,чтоограниченная
войнаневозможна,ичтона«двусмысленную»
или«гибридную»войнупоследует
решительныйответ.
• Необходимосрочновосстановитьобычныесилы
сдерживанияиубедительнопоказать,чтоу
Россиинебудетлегкодоступныхцелей.
• Отдельныегосударства-членыЕС,атакже
ЕвропейскийСоюзвцелом,втомчислечерез
своюЕвропейскуюслужбувнешнеполитической
деятельности,должнывосстановитьресурсы,
которыебыдаливозможностьанализироватьи
пониматьпроцессы,происходящиевРоссиии
всоседнихснеюгосударствах.Этопонимание,
всочитаниисболееглубокойорганизационной
экспертизой,должностатьосновойдля
формированияполитики.
Стремлениекэтимцелямиихдостижениепоможет
Западулучшеподготовитьсякдальнейшемуухудшению
отношенийсРоссией.Нельзяидтинауступки
ВладимируПутинуизбоязни,чтоегопреемник
будетещехуже.Такойподходужедоказалсвою
несостоятельность.Чтобынислучилось–останется
линынешнееруководствоувластиилипроизойдет
досрочнаясменавласти–впередилежитсложныйи,
возможно,турбулентныйпуть.Событияпоследних18
месяцевубедительнопоказали,чтовотношенияхс
Россиейоптимизм–проигрышнаястратегия.
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1. Introduction
In the introduction to a previous Chatham House Report on
Russia – Putin Again: Implications for Russia and the West –
published in February 2012, the authors remarked that ‘the
West will feel Russia’s pain’ as it ‘lashes out while in denial
of its own condition’.
Some of the authors of Putin Again have once more
contributed chapters to this new report, describing how
both the pain and the denial they predicted are now making
themselves felt. But none of them foresaw just how radically
and rapidly Russia would move to challenge the post-Cold
War security order, seizing Crimea within two years of
Vladimir Putin’s return to the Kremlin in May 2012 and
embarking on the dismemberment of eastern Ukraine.
This report examines four key questions. First, what caused
this challenge? Second, where is Russia heading? Third,
what are the possible geopolitical consequences in the
widest sense? And finally, at the tactical and strategic levels,
how should the West act and react?
The authors of this report believe that the major Western
actors have yet to absorb the full implications of Russia’s
descent into authoritarian nationalism. It will take greater
imagination than has been shown to date to develop an
effective response to Moscow’s manoeuvres, supported as
they are by both traditional and unconventional methods
and means. Western strategy will have to take account of
two incontrovertible facts. First, Moscow and the West have
competing, conflicting and entirely incompatible agendas.
Second, Putin is a fundamentally anti-Western leader whose
serial disregard for the truth has destroyed his credibility as
a negotiating partner. Consequently, it is unwise to expect
that any compromise with Putin will produce long-term
stable outcomes in Europe.
To date, the United Kingdom has not settled on a truly
strategic approach. Meanwhile the Obama administration
and many European leaders apparently still hope that
the crisis will somehow fade away. But the precedent of
Georgia in 2008 demonstrated that even if Ukraine were to
disappear from the headlines, this would not imply a return
to peace and stability in Europe. The West would dearly like
Ukraine’s President Petro Poroshenko to patch up some sort
of an accommodation with Putin, so that attention can be
turned to other pressing global problems. This report warns
how short-sighted and futile such an arrangement would be.
The report addresses six important aspects of the
Russian challenge. In Chapter 2, Roderic Lyne outlines
the background to current events, tracks the evolution of
Putin’s outlook on the West, and explains the president’s
new model for Russia, concluding that it is unsustainable.
Philip Hanson examines this unsustainability in Chapter
3, showing how Russia’s economic decline is as much due
to long-term structural factors as it is to contemporary
pressures. James Sherr contributes an analysis of Russia’s
involvement in the struggle over Ukraine in Chapter 4,
and highlights the risks posed by Western inaction in the
face of Russian political manoeuvring. James Nixey argues
in Chapter 5 that Russian foreign policy has, in fact, not
changed significantly for over a decade, and that the desire
for control over the post-Soviet periphery (and consequent
inevitable adversarial relations with the West) is a
persistent factor in Moscow’s planning. In Chapter 6, Keir
Giles analyses the tools deployed by the Russian state to
maintain that control – with a particular focus on Russia’s
upgraded military capabilities, refined information
warfare techniques and distinctive interpretation of ‘soft
power’. Andrew Wood completes the circle in Chapter 7,
urging the West to consider how it will deal proactively
with the risks of Russia after Putin.
Vladimir Putin has chosen the strategic approach of
rebuilding ‘Fortress Russia’. It is a key contention of this
report that his policy risks both figurative and literal
bankruptcy for Russia, and potentially the premature
departure of its current leader. The timing of this
departure and the nature of what may follow cannot
be predicted. The West’s key players must plan for all
eventualities, at the same time as resisting Russia’s
illegitimate and illegal activities today.
The report finishes by offering specific recommendations to
address both current and future challenges. It constitutes a
plea for Western governments to think much more deeply
about the level of support that should be provided to
Ukraine; about how future crises can be pre-empted or at
the least managed better; and above all, about how Russia
can be managed over the long term for the greater security
of Europe.
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2. Russia’s Changed Outlook on the West:
From Convergence to Confrontation
Roderic Lyne
1 House of Lords European Union Committee: ‘The EU and Russia: Before and Beyond the Crisis in Ukraine’, HL Paper 115, Stationery Office, 20 February 2015.
2 Annual address to the Federal Assembly, 16 May 2003.
3 Dmitri Trenin: ‘Russia’s Breakout from the Post-Cold War System: the Drivers of Putin’s Course’, Carnegie Moscow Centre, 22 December 2014.
If Russia continues along its course of the past few weeks, it will not
only be a catastrophe for Ukraine. We would not only regard it as
a threat as neighbouring states of Russia. It would not only change
the relationship of the European Union as a whole with Russia.
No, it would, I am absolutely convinced, hugely damage Russia not
least of all, both politically and economically.
Chancellor Angela Merkel, speaking in the Bundestag, 13 March 2014
Introduction
This chapter reviews the way in which Russia’s outlook
on the West has changed during the 15 years since
Vladimir Putin assumed power, leading from convergence
to confrontation. A different model of Russia has emerged,
aspects of which are examined in more detail in the
chapters which follow.
For the past year and a half, the West’s relationship with
Russia has been viewed largely through the prism of
Ukraine. Of necessity, the West reacted tactically to Russia’s
annexation of Crimea and further attempts to destabilize
Ukraine. However the crisis has brought to the surface
much wider questions about Russia’s direction of travel
and the strategic approach that the West should adopt.
The pursuit of a ‘strategic partnership’ has failed, for now.
The Cold War paradigm does not fit (except as a piece of
polemics). Russia is a much richer and more assertive power
than in the Yeltsin years, but the extent of its ‘resurgence’
tends to be exaggerated by both domestic and Western
commentators: it is a power limited by a relatively weak
economic foundation.
The concept of ‘the West’ is itself unclear. It has always
been geographically inaccurate, but during the Cold War
the ‘Eastern’ and ‘Western’ blocs were readily definable.
I have used the term in this chapter for want of a better
collective description of the democracies which belong
to NATO or the EU or the G7, or which align with those
countries. The Ukrainian crisis has demonstrated, however,
that Western cohesion is not to be taken for granted. The
West is no longer a bloc, under clear leadership and with
a degree of internal discipline in the face of a common
adversary. Securing and sustaining a consensus among
‘Western’ states on the response to Russia’s actions in
Ukraine has been a difficult process.
The starting point for a sensible strategy needs to be an
accurate appreciation of the problem. In a report published
in February 2015, the European Union Committee of the
UK House of Lords commented that, ‘Over the last decade,
the EU has been slow to reappraise its policies in response
to significant changes in Russia’ and that ‘there has been
a strong element of “sleep-walking” into the current crisis,
with Member States being taken by surprise by events in
Ukraine’.1 The EU should not have been taken by surprise.
The evidence has been in plain view.
Vladimir Putin set out in 2000 to restore Russia’s status
as a Great Power through economic development rather
than military might. He initially sought to modernize and
diversify the economy, reducing its dependence on natural
resources. He wanted Russia to be part of the international
status quo and ‘truly integrated into Europe’.2 But, from the
middle of 2003, the Putin administration began to change
course. The Russia of 2015 is no more diversified; has an
economy in decline; is investing heavily in rearmament;
rejects international law and the status quo in favour
of disruption and confrontation; and has abandoned
all thoughts of a strategic partnership with Europe,
let alone with the United States.
I have drawn heavily on the words of Putin because he
is the embodiment of the regime and its key decision-
maker and spokesman. Some argue that there is excessive
personalization in Western analysis of Russian policy. It
is certainly the case that Putin has reflected feelings that
are broadly held within Russia and has enacted policies
that have strong support within powerful constituencies
(including the military, the security organs and the
state bureaucracy). The direction of travel would not
automatically change if he were to leave. Putin is not
acting alone but has exercised power with a phalanx of
associates; and underpinned his position by playing to, and
skilfully manipulating, populist sentiment. But it is also
clear that, to quote Dmitri Trenin, ‘on all important issues,
the Russian political system is driven by one and only one
decision-maker: Vladimir Putin. His power is often likened
to that of a monarch or a czar and is supported by a long
tradition of Russian governance.’3
Putin’s first term: the integrationist model
of convergence and partnership
Three themes predominated in Putin’s first three-and-a-
half years in office. He set out to rebuild a strong state,
reversing the fragmentation of the Yeltsin years; this was
to be the instrument for the modernization of Russia, as a
competitive market economy and a democratic, law-based
society; and Russia would integrate ever more closely with
the advanced countries of the world on a basis of shared
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4 Annual address to the Federal Assembly, 8 July 2000.
5 ‘Millennium’ manifesto, 29 December 1999.
6 Ibid.
7 Annual address to the Federal Assembly, 3 April 2001.
8 Ibid.
9 In 2000 the Commonwealth of Independent States comprised Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan,
Turkmenistan and Uzbekistan. Ukraine had been a founding member in 1991 but refused to ratify the CIS charter in 1994, and had the status of a participant but
not an official member.
10 Annual address to the Federal Assembly, 3 April 2001.
values. Before the end of his first term, in March 2004,
the first of these objectives was beginning to override the
second and the third.
In the ‘Millennium’ manifesto that he issued on 29
December 1999, on the eve of assuming the presidency,
Putin declared: ‘Our state and its institutions and structures
have always played an exceptionally important role in the
life of the country and its people.’
As prime minister, he was the principal instigator of the
renewed campaign, from October 1999, to bring secessionist
Chechnya back under central control – which Yeltsin had
failed to achieve in the first Chechen war of 1994–96.
In his first set-piece ‘Annual Address to the Federal
Assembly’ of 8 July 2000, Putin argued that a ‘vertical of
power’ and ‘dictatorship of the law’ were essential for the
governance of Russia: ‘The authorities must be guided
by the law and the single executive power vertical that
is formed in accordance with it … we insist on a single
dictatorship – the dictatorship of the law.’ To exercise
stronger control over Russia’s regions and their governors
(who at the time were still independently elected),
Putin created seven federal districts under presidential
appointees. His explicit purpose was to consolidate
‘the structures of the presidential vertical of power
in the territories’.4
Putin’s proclaimed objective on coming to power was
not to change Russia’s direction of travel, but rather to
use a stronger state as a more effective instrument of
modernization. He sought to combine ‘the universal
principles of a market economy and democracy with
Russian realities’.5 Russia’s place in the world depended
on the success of economic reform. In asserting in his
Millennium manifesto that Russia ‘was and will remain a
great power’, Putin stressed that in the modern world might
did not depend on military strength but on the ability of a
country to create and use advanced technologies, ensure
the wellbeing of its people, protect its security and uphold
its interests in the international arena. In his annual address
of 2003, he said that the ‘ultimate goal’ of returning Russia
‘to its place among the prosperous, developed, strong and
respected nations … will only be possible when Russia gains
economic power. … We can achieve this kind of Russia
only through sustainable and rapid growth.’ This in turn
depended on producing competitive goods and services
and on private initiative, both from Russian business and
from foreign companies working in Russia – ‘the driving
force of economic growth’.
Putin was equally clear, early on, in proclaiming adherence
to universal and democratic values. Russia had:
entered the highway along which the whole of humanity is
travelling. Only this way offers the possibility of dynamic
economic growth and higher living standards. … We have
come to value the benefits of democracy, a law-based state, and
personal and political freedom. … History proves all dictatorships,
all authoritarian forms of government are transient. Only
democratic systems are intransient.6
He argued in his first annual address that Russia needed
political parties with mass support (not ‘parties of officials
which are attached to the government’), a truly free media
and freedom of speech.
In seeking closer integration with the West, Putin sought
to revive a trend towards partnership which had faltered
in Yeltsin’s second term, especially during NATO’s 1999
bombing campaign against Yugoslavia. He invited the
NATO secretary-general to Moscow and began to develop
friendships with Western leaders. The West in turn
welcomed the emphasis on reform and gave active support
through multilateral and bilateral programmes. Russian
foreign policy, said Putin in his 2001 annual address, should
be based on ‘clearly defined national priorities, pragmatism
and economic effectiveness’.7 Economic interests should be
protected. A good reputation was important: ‘this is why we
must fulfil all our long-term commitments and agreements’.8
At this stage Putin did not see a conflict between Russia’s
interests in the ‘near abroad’ (the former Soviet states on its
borders) and closer relations with the West. While he gave
top priority to ‘further integration in the CIS’,9 he described
integration with Europe as ‘one of the key areas of our
foreign policy’: ‘our efforts to build up a partnership with
the European Union will become even more important’.10
Year after year, Putin wanted to speed up the process of
acceding to the World Trade Organization (which was not
finally achieved until 2012).
He put down markers that Russia wanted its place in the
world to be respected, and its voice to be heard in decision-
making, but stated the case in much milder terms than
he was to use later. In his 2001 annual address, he asked
Russia’s international partners to acknowledge Russia’s
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11 Annual address to the Federal Assembly, 26 May 2004.
12 Annual address to the Federal Assembly, 16 May 2003.
13 Joint press conference of President Putin and NATO Secretary-General George Robertson, Brussels, 11 November 2002.
interests in ‘strategic stability, disarmament, NATO
expansion and forming the foundations of the world order
in the twenty-first century’. NATO should uphold the terms
of the 1997 Founding Act and should not ignore the opinion
of the international community.
By 2002, in the wake of the 9/11 attacks on the United
States, and with Russia’s economy improving, Putin was
optimistic in his annual address that the international
attitude towards Russia was changing:
the period of confrontation has ended. We are building constructive,
normal relations with all the world’s nations … in the world today, no
one intends to be hostile towards us … After 11 September last year,
many, many people in the world realized that the ‘cold war’ was over
… a different war is on – the war with international terrorism. …
Our major goal in foreign policy is to ensure strategic stability in the
world. To do this, we are participating in the creation of a new system
of security, we maintain constant dialogue with the United States,
and work on changing the quality of our relations with NATO. …
Russia is being actively integrated into the international community.
Russia’s active support for the United States after 9/11 was
rewarded by full membership of the G8 and the upgrading
of the NATO–Russia Council at a specially convened summit
in 2002. In 2003 Putin became the first Russian leader since
the Victorian era to be invited to the UK on a state visit.
Putin’s 2003 annual address followed the US-led invasion
of Iraq. He referred obliquely to this, but refrained from
attacking the United States by name: ‘Terrorism threatens
the world and endangers the security of our citizens.
Certain countries sometimes use their strong and well-
armed national armies to increase their zones of strategic
influence rather than fighting these evils we all face.’
In 2003 he reiterated his optimism of the previous year
that Russia had taken ‘some big steps forward on the road
to international integration’. It had become a full member
of the G8 and was taking part in the global partnership on
non-proliferation of weapons of mass destruction, making
progress towards joining the WTO and improving its credit
rating. Russia valued the anti-terrorist coalition. The policy
of developing a strategic partnership with the European
Union was gradually being realized.
Throughout his first term, Putin avoided clashing with
the West over the ‘near abroad’. He placed a benign
interpretation on the enlargement of the European Union
up to the borders of Russia. Estonia, Latvia and Lithuania
– all former Soviet republics – and five countries formerly
within the Warsaw Pact joined the EU on 1 May 2004. In
his annual address three weeks later, Putin declared: ‘The
expansion of the European Union should not just bring us
closer geographically, but also economically and spiritually.
… This means new markets and new investment. Generally
it means new possibilities for the future of Greater Europe.’11
Most strikingly, Putin chose not to make a big issue of the
enlargement of NATO. He had put down a marker that ‘we
see the CIS area as the sphere of our strategic interests’ and
‘tens of millions of Russians live in these countries’.12 The
NATO applicants came from outside the CIS, and the subject
of NATO’s expansion was conspicuously absent (bar his
one glancing reference in 2001) from the set-piece annual
addresses of Putin’s first term.
Russian officials and generals made clear privately that the
applications, in particular, of the three Baltic states to join
NATO, together with those of yet more former members of
the Warsaw Pact (Bulgaria, Romania and Slovakia), were
deeply unwelcome. However, in the wider context of closer
integration with Europe and the United States and of a
strengthened Russia–NATO relationship, the Kremlin chose
not to make strong public objections or by other means to
obstruct the process.
Ten days before NATO’s Prague summit of November
2002 was to approve the accessions, Putin met NATO
Secretary-General George Robertson in Brussels. He
expressed satisfaction with the work of the NATO–Russia
Council and confirmed that Russia would be represented
at the Council’s meeting in Prague by Foreign Minister
Igor Ivanov. He hoped that the enlargement would not
‘undermine the military stability and security in the
common European space, or damage or prejudice the
national security interests of Russia’. He appreciated the
existing cooperation, but ‘Russian military organizations
take their own view of this situation and they make
assessments of the possible deployment of forces to the
territory that is affected by enlargement’.
Putin was asked by a journalist whether Russia might
possibly join the Alliance. He replied that the matter had
never been raised, but added that, if cooperation continued
to develop and NATO continued to transform in a way that
corresponded with Russia’s security interests, Russia could
consider ‘a broader participation in that work’.13
In sum, during its first term the Putin administration’s
perspective of Russia’s relationship with the West broadly
reflected the obverse view from West to East. There were
some sharp points of disagreement, but the across-the-
board hostility of the Cold War appeared to be a thing of
the past. Extensive contacts had developed between non-
state actors of every kind. Integration was the leitmotif.
Strategic partnership was the goal.
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14 Annual address to the Federal Assembly, 8 July 2000.
15 Ibid.
16 Sec hin had worked with Putin in the mayor’s office in St Petersburg. He was a deputy head of the presidential administration during Putin’s first two terms as
president, also becoming chairman of Rosneft in July 2004.
17 The Organization for Security and Co-operation in Europe declared the elections to be ‘free but not fair’ and said they had failed ‘to meet many OSCE and Council of
Europe commitments for democratic elections’.
About turn: divergence and confrontation
From the middle of 2003, it became increasingly apparent
that the mood in the Kremlin was changing. Russia was
becoming richer. The urge to restore its historical role as
an independent Great Power and to reverse the perceived
humiliation of the years of weakness since 1991 was
strongly felt. The balance of power within the upper
echelons shifted towards hard-liners opposed to reformist
and Westernizing tendencies. Policy began to move away
from Putin’s proclaimed goal of closer integration with
the West and towards a very different model.
Internal governance: the state versus civil liberties
There had always been a tension between Putin’s
determination to rebuild a strong state, with the president
at the apex of a vertical of power, and the democratic
values which he claimed to espouse. The concept of
‘loyal opposition’ – that politicians or the media or non-
governmental organizations can criticize a government’s
actions without their loyalty to the nation being called into
question – is hard to transplant and not one that someone
of Putin’s background can easily understand. Speaking
in 2000 about civil society, Putin had asserted: ‘We are
not always able to combine patriotic responsibility for the
destiny of our country with what Stolypin once called “civil
liberties’’.’ He had concluded that work was needed for civil
society to ‘become a full partner of the state’.14 Likewise,
while calling for free media, he had criticized (not without
reason) the dependence of the media on the commercial
and political interests of owners and sponsors who allowed
the media to be used as ‘a means of mass disinformation, a
means of fighting the state’. His solution was for the state
to ‘create legal and economic conditions … for civilized
information business’.15
Since his election, Putin had incrementally used the
presidential powers embodied in Yeltsin’s 1993 constitution
to bring the legislature, judiciary, media and regional
administrations under ever-tighter Kremlin control. From
the middle of 2003 it became evident that these powers
were being used not for the modernization of Russia, but
for the consolidation of power and wealth in the hands of
Putin and his close associates.
The Yukos affair – the arrest of Platon Lebedev in July
2003 and of Mikhail Khodorkovsky in October, and the
subsequent transfer of the assets of the Yukos oil company
to the state-owned Rosneft chaired by Igor Sechin16 – was
a signal that the tensions between reform and state power
were being resolved in favour of the latter. Khodorkovsky
was not only the independently minded head of one of
Russia’s most successful private-sector corporations. He was
also a man with political ambitions who had not been afraid
to challenge Putin in public.
Since his election, Putin had incrementally
used the presidential powers embodied
in Yeltsin’s 1993 constitution to bring the
legislature, judiciary, media and regional
administrations under ever-tighter Kremlin
control. From the middle of 2003 it became
evident that these powers were being used
not for the modernization of Russia, but for
the consolidation of power and wealth in the
hands of Putin and his close associates.
The Duma elections of December 2003 were another
indicator – so heavily manipulated that the combined
representation of the liberal Yabloko and SPS parties fell
from 51 seats to seven.17 In February 2004 the liberal prime
minister, Mikhail Kasyanov, was replaced by the reactionary
Mikhail Fradkov (a former official of the Soviet Ministry
of Foreign Trade and since 2007 the head of the Foreign
Intelligence Service, the SVR). The presidential election
in the following month was little more than cosmetic,
with Putin facing a field fairly described as Lilliputian
and claiming 72 per cent of the vote. Some reformers
were dismissed; some drifted out of the administration
voluntarily in the period that followed; some have
remained to this day, but have been marginalized.
Economic policy: the state versus free enterprise
Whereas the administration had accomplished some
important structural reforms during Putin’s first term
(including legislation for the freehold ownership of land,
reforms to the judicial system and the break-up of the state
power-generation monopoly), it became clear in the course
of 2004 that further restructuring was off the agenda. In
2000, Putin had called for protection of property rights,
equality of conditions of competition, and the freeing of
entrepreneurs from administrative pressure, corruption
and ‘excessive intervention by the state in spheres where
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18 Annual address to the Federal Assembly, 8 July 2000.
19 In 1999, oil and gas revenues contributed $40.5 billion to Russia’s GDP. From 2001 to 2004, the contribution averaged $73.5 billion annually, and between 2005 and 2008
it averaged $264 billion. The figure reached an average of $437 billion in 2011–13. Quoted in Vladislav Inozemtsev, ‘Building Russia’s European Home’, Gulfnews.com,
8 January 2015.
20 Carl Bildt’s December 2003 speech was published as an article in Russia in Global Af fairs, February 2004.
21 Address of 4 September 2004, accessed via http://kremlin.ru/events/president/transcripts/22589.
22 Interview with Deputy Head of t he Presidential Administration Vladislav Surkov, Komsomolskaya Pravda, 29 September 2004, quoted in Eurasia Daily Monitor,
30 September 2004.
it should not be present’.18 There had been little progress
towards these objectives, and from 2004 the idea of reducing
the state’s role was reversed. It became the policy instead
to bring the commanding heights of the economy under
the control of large organizations (many owned wholly or
substantially by the state) which were directed by people
close to the Kremlin. This enabled the people in power to
siphon off a great deal of the nation’s wealth at the expense
of the modernization of the economy, the private sector
and entrepreneurship. ‘Diversification’ of the economy
became little more than a slogan, while the administration
relied ever more heavily on resource nationalism. The role
of privately owned small and medium-sized enterprises in
the Russian economy has remained pitifully low.
If there was one factor above others that triggered this
change of direction, it was the rise in the oil price, which
tripled (in real terms) between 1998 and 2004.19 With
its new wealth, the Kremlin felt able to ignore both
economic liberals at home and advice from abroad.
(A notable example of the latter was a speech in Moscow
in June 2004 by the economist Stanley Fischer, who had
given sympathetic attention to Russia during his time at
the International Monetary Fund. Evidently concerned
about the direction of policy, Fischer warned of the need
to continue structural reform, improve the investment
climate, demonstrate a clear commitment to the rule of law
and the protection of property rights, attack corruption,
reduce state intervention and promote competition.)
External relations: the West as a competitor,
not a partner
In a speech in Moscow in December 2003, the former
Swedish prime minister Carl Bildt raised concerns:
Many in the West are questioning whether there has been a change
in the direction of the development of Russia. … The events of the
last few weeks of 2003 have demonstrated the risk of a crisis and
political confrontation in different vulnerable regions bordering
on both Russia and the European Union. … Is Russia prepared to
continue in its efforts to pursue reform policies that will commit it
to cooperation and integration with the rest of Europe? Will Russia
work to establish the rule of law, together with a political system
that is more democratic and less managed?
He warned that disagreement over Georgia could lead
to ‘the fracturing of the country with long-term and
serious consequences’.20
Many factors contributed to the deterioration of
Russia’s relations with the West; and the process was not
uniform – relations with the United States and the United
Kingdom moved on a different trajectory from those
with, for example, Germany and France. The Kremlin felt
inadequately rewarded for its support of the United States
after 9/11, with the latter reluctant to engage in bilateral
negotiations on ‘strategic stability’. Instead the Bush
administration withdrew from the Anti-Ballistic Missile
(ABM) Treaty in June 2002 and developed plans to deploy
a missile defence system in Europe, with installations in
Poland and the Czech Republic, which caused growing
concern in Moscow.
Chechnya was a running sore. Putin portrayed the conflict
as Russia fighting on Europe’s front line against Islamist
terrorism, and was visibly angered by criticism of Russian
methods (including questions raised about the deaths of 130
hostages in the Dubrovka theatre siege of October 2002). The
Russian authorities objected that a political representative
of the Chechens, Ahmed Zakayev (a former theatre director
and culture minister) was able to travel freely in the West;
after a British court rejected a Russian request for Zakayev’s
extradition in 2003, raids were mounted on British Council
offices in Russia in apparent retaliation. After a series of
terrorist acts in 2004 (the assassination of Chechen leader
Ahmed Kadyrov in May, the Nazran raid in June and the
bombing of two airliners in July), the Kremlin lashed out
against perceived enemies when over 300 hostages, half of
them children, were killed in the mishandled Beslan school
siege in September. Putin declared:
We appeared weak. And the weak are beaten. Some want to tear
away the fattest possible piece, while others help these aspirants
in so doing. They still believe that Russia poses a threat to them as
a nuclear power. That is why this threat must be eliminated, and
terrorism is just another instrument in implementing their designs.21
His close adviser Vladislav Surkov went further, accusing
foreign cold warriors of impeding a financial blockade and
the political isolation of the terrorists: ‘Their goal is the
destruction of Russia and the filling of its huge area with
numerous dysfunctional quasi-state formations.’ Surkov
pronounced that a ‘fifth column of left-wing and right-
wing radicals’ had emerged in Russia – ‘fake liberals and
real Nazis’ with ‘common sponsors of foreign origin’.22 In
the wake of Beslan, though with no logical connection to
the siege, Putin announced that regional governors would
henceforth be appointed rather than elected: a step away
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23 Sir Rodric Braithwaite, then British Ambassador to the USSR, has recorded that in 1991 President Gorbachev’s (liberally inclined) diplomatic adviser told him that:
‘In a decade or two decades, Russia will reassert itself as the dominant force in this huge geographical area. Meanwhile Yeltsin will have no choice but to assert Russia’s
position if it is challenged: his entourage will see to that. So if the Ukrainians are too provocative – over the Crimea, for instance – he will have to weigh in with force of
necessary. That is in no one’s interest.’ Rodric Braithwaite, ‘Russia, Ukraine and the West’, The RUSI Journal, 159:2, May 2014, p. 1.
24 Quoted by Robert Blackwill in ‘Russia and the West’ in Robert Blackwill, Rodric Braithwaite and Akihiko Tanaka: Engaging Russia: A Report to the Trilateral
Commission: 46, The Triangle Papers Series (New York: The Trilateral Commission, 1995), pp. 7–8.
from democracy which drew criticism from US President
George W. Bush and Secretary of State Colin Powell.
At the centre of the widening rift between Russia and the
West, as Carl Bildt had perceived, lay both a direct conflict
of interests over what the EU termed its ‘new neighbours’
and Russia its ‘near abroad’, and value systems which
were becoming impossible to reconcile. The flaws and
contradictions in Putin’s approach to integration were
coming to the surface.
Conflicting interests in the ‘post-Soviet space’
Since the collapse of the Soviet Union, there has been
a latent conflict of interests between the West and
Russia over the status of the other 14 post-Soviet newly
independent states. In the Western view, the sovereignty
of these states is paramount, and they must be free
to determine their own affiliations without threat or
coercion. In the UN Charter, the 1990 Charter of Paris,
the 1994 Budapest Memorandum and numerous other
agreements, Russia pledged to respect their independence,
sovereignty and territorial integrity. In the Russian view,
these states are to a greater or lesser extent historically
part of Russia, acquired independence accidentally rather
than through a formal settlement of the post-Cold War
order, are intimately linked to Russia through myriad
personal and economic connections, and form Russia’s
security perimeter. They must therefore be recognized as
within Russia’s ‘sphere of strategic interests’, and must not
be permitted to act in ways or form affiliations that are
deemed to be contrary to Russia’s strategic interests.
The two views cannot be reconciled.
The attitude of the Putin administration is not a new
departure. When Yeltsin formed the Commonwealth of
Independent States (CIS) in December 1991 with the
presidents of Ukraine and Belarus, the Russian leadership
intended it to be a vehicle to maintain common defence
arrangements and a common economic space across most
of the former Soviet Union. Fearful of the consequences of
the sudden fragmentation of a nuclear-armed superpower,
Western governments supported the formation, under
Russian leadership, of the CIS as an instrument of
stabilization. Senior Russians made clear in private that
they still expected to exercise a dominant influence.23
Russia acknowledged the independent status of the new
members of the United Nations de jure but found it hard
to accept de facto. Even Yeltsin’s foreign minister, Andrei
Kozyrev, who favoured closer relations with the West,
insisted that ‘the states of the CIS and the Baltics constitute
the area of concentration of Russia’s vital interests’ and
warned (in April 1995) that ‘there may be cases when the
use of direct military force may be needed to protect our
compatriots abroad’.24
The conflict of interests remained latent until late 2003. The
focus of East–West relations up to that point was on healing
the division of Europe and building bridges between Russia
and Western organizations and states. Putin, as noted, had
set parallel objectives of further integration in the CIS and
integration with Europe.
In November 2003, the Kremlin suffered two reverses
in neighbouring states. In divided Moldova, a plan for
a settlement on Russian terms brokered by Putin’s aide
Dmitry Kozak was rejected by President Vladimir Voronin
after the EU and the United States had lobbied against the
deal. More ominously for Moscow, in Georgia Russia was
unable (despite last-minute diplomatic efforts) to prevent
the pro-American Mikheil Saakashvili from supplanting
President Eduard Shevardnadze in the Rose Revolution.
In March 2004 (a fortnight after Putin’s re-election as
president) Estonia, Latvia and Lithuania became members
of NATO. While Putin had accepted in 2002 that this would
happen, and the decision did not involve the installation
of new NATO bases in the Baltic states, the intrusion – to
Russian eyes – of NATO into territory formerly part of
the Soviet Union was another negative step at a time of
worsening relations with the West.
The year ended with the Orange Revolution in Ukraine.
The presidential election of 21 November 2004 was perceived
to have been rigged in favour of Viktor Yanukovych. After
popular protests, the Supreme Court ruled that a second
election should be held. This produced a clear victory on
26 December for Viktor Yushchenko.
The Orange Revolution, especially, led to a clear and
lasting change in Putin’s outlook. He had intervened
directly on behalf of Yanukovych in the election campaign.
The result was seen in Moscow as a personal humiliation
for him and damaged his authority. Many saw the
Orange Revolution as an existential threat to Putin’s
administration: the spectacle of successful popular revolts
in neighbouring countries overturning corrupt and
autocratic regimes was an alarming precedent which the
Kremlin did not wish to see repeated in Russia. Worst of
all, liberal Western-oriented leaders had been elected in
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25 Annual address to the Federal Assembly, 10 May 2006.
26 The Treaty on Conventional Armed Forces in Europe, signed by 16 NATO and six Warsaw Pact states on 19 November 1990.
27 Russian policy-makers have long argued that the West gave, and then broke, assurances that NATO would not enlarge. Contradictory accounts have been
produced of conversations between Western and Soviet leaders in 1990–91. The critical point is that there was never any written agreement on this subject. The
first three new members, Poland, Hungary and the Czech Republic, did not join NATO until 1999. By then, NATO had taken steps to allay Russian concerns. These
included commitments not to deploy nuclear weapons on the territory of the new members and not permanently to station substantial combat forces further
east. In 1997 Russia and NATO signed the ‘Founding Act’ in which they declared that they ‘do not consider each other as adversaries’ and defined mechanisms
for cooperation, joint decision-making and joint action, including the NATO–Russia Permanent Joint Council.
Ukraine and Georgia with open political support from the
West. Putin appears to have been encouraged to believe
that the uprisings were neither spontaneous nor internally
generated, but had been organized by malign forces from
the West. He evidently felt that he had been betrayed by
the United States and other Western governments whose
friendship he had cultivated. His policy of bridge-building
had not borne the fruit he desired.
Having convinced himself that the United States and its
allies were bent on ‘tearing’ Ukraine, Georgia and other
states away from Russia, Putin abandoned thoughts of
partnership with the United States and NATO. He built
up the perception that they were encroaching on or
seeking to encircle Russia, and announced a programme
of rearmament in response. Russia reverted to the role of
competitor and opponent to the West.
Thus in Putin’s annual address in 2006 he declared that ‘the
arms race has entered a new spiral’ through new technology
and ‘the danger of the emergence of a whole arsenal of so-
called destabilizing weapons’; and that ‘far from everyone
in the world has abandoned the old bloc mentality and the
prejudices inherited from the era of global confrontation’.
He announced a plan for the restructuring of the Russian
armed forces and a large increase in defence procurement,
including an increase in the strategic nuclear force, in order
to ‘respond to attempts from any quarters to put foreign
policy pressure on Russia’.25
In the following year, Putin made headlines with an
outspoken attack on the United States at the annual Munich
Security Conference. He denounced the ‘pernicious’ concept
of a unipolar world, with ‘one master, one sovereign’,
which had been ‘proposed after the Cold War’. ‘Unilateral
and frequently illegitimate actions … have caused new
human tragedies. … Today we are witnessing an almost
uncontained hyper use of force – military force – in
international relations, force that is plunging the world into
an abyss of permanent conflicts … the United States has
overstepped its national boundaries in every way.’ Putin
cited plans for the militarization of outer space and the
anti-missile defence system in Europe as well as Western
pressure on Russia to comply with the CFE Treaty26 by
removing its bases from Georgia and Moldova.
The NATO with which Putin had sought broadening
cooperation in his first term was depicted in his 2007
Munich speech as a threat. NATO expansion, he asserted,
did not relate to modernization of the Alliance or ensuring
security in Europe, but represented ‘a serious provocation
that reduces the level of mutual trust … against whom is this
expansion intended? And what happened to the assurances
our Western partners made after the dissolution of the
Warsaw Pact? … Now they are trying to impose new dividing
lines and walls on us.’27
In 2008 the clash of interests in the post-Soviet space
turned into conflict. There were two precursors. First, in
February 2008 Kosovo declared its independence from
the Federal Republic of Yugoslavia. This was opposed by
Russia (still bitterly resentful of NATO’s military operation
over Kosovo in 1999) but recognized by most Western
states. Secondly, in April the NATO summit in Bucharest
declined applications from Georgia and Ukraine to join
the Membership Action Plan (MAP – the official pathway
to membership), but agreed to ‘intensive engagement’
about their applications, welcomed their aspirations for
membership, and ‘agreed that these countries will become
members of NATO’. The Bucharest compromise papered
over a rift between the Bush administration, which favoured
Georgian and Ukrainian membership, and some European
NATO members led by Germany, which thought that this
would be premature and dangerous. The mixed signal
pleased no one and had a disastrous effect: it appeared
to substantiate Russian fears that NATO was bent on
‘capturing’ Georgia and Ukraine.
In August 2008 Russia responded to
Georgia’s NATO aspirations with force. After
five years of intermittent harassment of the
Westernizing and US-backed Saakashvili
administration, it lured Georgia into a
short, ugly and ill-judged war.
President Putin met NATO leaders in Bucharest and stated
Russian opposition to Georgian and Ukrainian membership,
to plans for missile defence installations in Poland and the
Czech Republic, and to recognition of Kosovo. Three days
later, he held the last of 28 meetings with President Bush
and continued to argue in vain for a joint missile defence
programme in place of the US scheme. A relationship that
had started warmly in Ljubljana in 2001 had soured long
before its cool end in Sochi in 2008.
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28 Annual address to the Federal Assembly, 5 November 2008.
29 The ‘Brezhnev doctrine’ of limited sovereignty was an attempt to justify the USSR’s right to intervene by force in other socialist countries. After the Soviet invasion
of Czechoslovakia, Leonid Brezhnev declared: ‘When forces that are hostile to socialism try to turn the development of some socialist country towards capitalism, it
becomes not only a problem of the country concerned, but a common problem and concern of all socialist countries’ (speech in Warsaw, 13 November 1968). The
doctrine was abandoned by President Gorbachev.
30 Sergei Magnitsky was a Russian lawyer, who was known for uncovering massive fraud committed by Russian officials. After reporting the corruption to the authorities,
he was detained in 2008 on suspicion of aiding tax evasion. His colleagues at Hermitage Capital Management, where he was a legal adviser, insist the charges were
fabricated. He died in prison less than a year into his detainment after being subjected to torture and beatings. An official investigation into his death was ordered by the
then President Dmitry Medvedev in 2009, but was dropped in 2013. Despite his death he was pronounced guilty of tax fraud in 2013. In December 2012, after pressure
from Magnitsky’s former boss Bill Browder, the US Congress adopted the Magnitsky Act, which allows the US to withhold visas and freeze the financial assets of Russian
officials believed to have been involved in human rights violations. In retaliation Russia banned Americans from adopting Russian orphans under the ‘Dima Yakovlev Law’.
In 2013, the former CIA employee and NSA contractor Edward Snowden leaked NSA and other intelligence files on US intelligence operations against allied countries to
the media. Snowden fled the US and ended up in Moscow, where he was granted one-year temporary asylum status, which is annually renewable.
In August 2008 Russia responded to Georgia’s NATO
aspirations with force. After five years of intermittent
harassment of the Westernizing and US-backed
Saakashvili administration, it lured Georgia into a
short, ugly and ill-judged war. Russia sought to justify
the subsequent ‘independence’ declarations by South
Ossetia and Abkhazia as legitimized by the example of
Kosovo. The West was accused of violating Yugoslavia’s
territorial integrity but standing up for Georgia’s.
Russian leaders were frank about their motives in going to
war with a small neighbour which posed no threat to their
country. Defence Minister Anatoliy Serdyukov described
Georgia as part of Russia’s ‘zone of influence’. Foreign
Minister Sergei Lavrov claimed ‘historically conditioned
mutually privileged relations’ with the ex-Soviet neighbours.
Dmitry Medvedev, newly installed as the titular president of
Russia, said that the conflict ‘was made possible in part by
the conceit of an American administration that closed its ears
to criticism and preferred the road of unilateral decisions’.
Medvedev railed against ‘the installation of military bases
around Russia, the unbridled expansion of NATO’, and
threatened to respond to US missile defence plans by
deploying Iskander missiles in Kaliningrad and jamming US
installations from there.28 Facets of Soviet diplomacy seemed
to be back in play: the ‘principle of reciprocity’; ‘retaliatory
measures’; and limitation of the sovereignty of countries
held to be within Russia’s ‘zone of influence’.29
Medvedev also proposed that there should be a new
European security treaty to provide a common set of rules.
His terms, vague as they were, appeared to offer Russia the
right to exercise a veto over NATO membership. As such
they were of no interest to the West.
Surprisingly, Russia’s 2008 conflict with Georgia did
not lead to a fundamental reassessment of the Western
approach. French President Nicolas Sarkozy hastily stitched
together an agreement that satisfied Putin (and that has
left Russian forces in occupation of two regions within
Georgia’s sovereign borders, Abkhazia and South Ossetia);
and Europe returned to business as usual, having launched
negotiations for a new agreement with Russia (to replace
the Partnership and Cooperation Agreement of 1997) two
months before the war in Georgia.
In the following year, the newly elected Obama
administration tried to restore a wide-angled cooperative
US–Russian partnership in its ‘Reset’ initiative of 2009.
In a similar vein, the EU–Russia summits of 2009 and
2010 launched a ‘Partnership for Modernization’. These
initiatives leaned heavily on an optimistic belief that
Medvedev, as president, would have the latitude to turn
back towards the course of integration and modernization.
That turned out not to be the case: Putin continued to
be the ultimate arbiter. Apart from a new Strategic Arms
Reduction Treaty (START) in 2010, the ‘Reset’ sank
almost without trace.
The divergence between Russia and the West became
more marked from 2011. The West took exception to Russian
support for the Assad regime in Syria; Russia objected
to Western policy across the Middle East, including the
use of NATO airpower in Libya to facilitate the ouster of
Muammar Gaddafi. The Magnitsky and Snowden affairs
added bitterness to US–Russian relations, just as the murder
of Alexander Litvinenko in London in 2006 continues to be
an issue in UK–Russian relations.30 In vivid contrast to the
policy of his first term, Putin’s first action on beginning his
third presidential term in the spring of 2012 was to boycott
the Washington summit of the G8 (the diplomatic top table
which he had striven to join): so much for the ‘Reset’. In
September 2012 US presidential candidate Mitt Romney
labelled Russia ‘our number one geopolitical foe’.
Irreconcilable values
Conflicting values do not prevent states from
cooperating where their interests so dictate (whether in
trade or in opposing common threats or in cultural and
interpersonal exchanges of many kinds); but the form of
strategic partnership with post-communist Russia mooted
by Western Europe and the United States was predicated
on a broad alignment of values.
Partnership assumed that Russia was embracing what
Putin himself called ‘European’ values – enshrined in the
European Convention on Human Rights and the Council
of Europe (to which the Russian Federation acceded in
1996); the values of ‘democracy, a law-based state, and
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31 Ar ticle in Russia in Global Affairs, August 2007.
32 Annual address to the Federal Assembly, 26 April 2007.
33 Federal Security Service board meeting, 26 March 2015, accessed via http://en.kremlin.ru/events/president/news/49006.
34 Ibid.
35 ‘Germany Should Be a Leader on the World Stage’, Financial Times, 21 March 2014.
36 Speech to the Munich Secur ity Conference (Wehrkunde), February 2007.
37 Meeting with the Valdai Club, 14 September 2007.
38 Annual address to the Federal Assembly, 4 December 2014.
personal and political freedom’ proclaimed by Putin in his
Millennium manifesto, and before that by Yeltsin.
Self-evidently the Kremlin has moved a very long distance
away from these values, with a rubber-stamp legislature,
tightly controlled elections, state-controlled courts, curbs
on freedom of expression, and repression of dissent,
opposition movements and NGOs, to the point where
Russia’s continued membership of the Council of Europe
has come under question.
Where once the Russian leadership used to claim that
it shared and was part of Europe’s value system, it has
relapsed into the Soviet practice of responding to criticism
with accusations of double standards and demands to cease
interference in Russia’s ‘internal affairs’. Foreign Minister
Lavrov has asserted that the Westphalian system ‘placed
differences in values beyond the scope of intergovernmental
relations’31 (an argument that would have been approved by
his Soviet predecessor Anatoliy Gromyko). Putin has spoken
of ‘an increasing influx of money from abroad being used to
intervene directly in our internal affairs’, and warned that
‘“civilization” has been replaced by democratization, but
the aim is the same – to ensure unilateral gains and one’s
own advantage, and to pursue one’s own interests’.32 When
announcing the annexation of Crimea he described domestic
critics as a ‘fifth column’ and a ‘disparate bunch of national
traitors’ (echoing the inflammatory language used by Surkov
in 2004, after Beslan). In March 2015 he claimed that:
Western special services do not give up their attempts to use non-
government groups to discredit Russian authorities and destabilize
the internal situation in Russia. They are already planning actions
for the period of the forthcoming elections in 2016 and 2018.33
Referring to opposition movements, Putin said that ‘it makes
no sense to argue with those who work on orders from
outside, who serve the interests of not their nation but an
alien nation or nations’.34
The new model Russia: Putinism in 2015
The foreign policy of President Vladimir Putin’s Russia seems to
be writing a new chapter in a book we thought we had closed a
long time ago.
Norbert Röttgen, Chairman of the Bundestag Foreign Affairs Committee35
The crisis in Ukraine is explored in the chapter by James Sherr.
As a result of Russia’s use of armed force and annexation
of territory in a manifest breach of international law, the
widening rift with the West has become a direct confrontation.
It is now beyond question that the values espoused by
the Putin regime and the methods by which it pursues its
interests abroad cannot be reconciled with partnership.
Today’s Putinist model departs from the integrationist and
modernizing aspirations of 1990–2004, but is not genuinely
‘new’. It is reactionary rather than innovatory; not geared to
the future but inspired by the past – by Russia’s history in the
18th and 19th centuries with elements of the Soviet legacy
added in. What are its distinguishing features?
It is the model of an independent Great Power resuming
its position on its own terms. In Putin’s words, ‘Russia is a
country with a history that spans more than a thousand
years and has practically always used the privilege to carry
out an independent foreign policy.’36 He depicts Russia
as one of a small group of states that could claim to be
sovereign: ‘China, India, Russia and a few other countries.
All other countries are to a large extent dependent either
on each other or on bloc leaders. … Russia will either be
independent and sovereign or will most likely not exist at
all.’37 For Russia ‘true sovereignty … is absolutely necessary
for survival’.38
Russia’s power, in this model, rests on a triad: renewed
economic strength (stemming from natural resources); the
armed forces (in which the administration is now investing
heavily, after a long period of decline); and an ideology
of nationalism and patriotism, infused by history and the
Orthodox Church (intertwined with the state as it was in
Tsarist times).
The state is authoritarian and founded on a single
institution, the ‘vertical of power’ reaching downwards
from the president through the bureaucracy and the
security organs. Citizens enjoy many more civil liberties
than in Soviet times, but not universally and only to the
extent that they do not challenge the control of the ruling
group. The disabled and orphaned are underprivileged;
homosexuals are sanctioned; racism is rife; adherents
of minority religions (including Russia’s large Muslim
population) are vulnerable.
Putin’s model straddles the line between patriotism and
ugly expressions of nationalism and xenophobia (for
which populist movements linked to the Kremlin have
become notorious). The ‘historical military memory of
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39 Annual address to the Federal Assembly, 12 December 2012.
40 Annual address to the Federal Assembly, 26 April 2007.
41 Annual address to the Federal Assembly, 12 December 2013.
42 Press conference, 18 December 2014.
43 Address on the annexation of Crimea, 18 March 2014.
44 Ibid.
45 Press conference, 18 December 2014.
46 Documentary prog ramme broadcast on the Russian television channel Rossiya, 14 March 2015.
47 Address on the annexation of Crimea, 18 March 2014.
48 Annual address to the Federal Assembly, 12 December 2012.
49 Annual address to the Federal Assembly, 4 December 2014.
50 Annual address to the Federal Assembly, 25 April 2005.
the Fatherland’39 is to be preserved. He has spoken of
Russia’s ‘civilizing mission on the Eurasian continent’.40
Russia’s traditional values stand in opposition to Western
liberalism, which is treated as subversive. In the Middle
East, according to Putin, the ‘destruction of traditional
values’ and ‘progressive’ models of development have
resulted in barbarity.41
Putin’s model straddles the line between
patriotism and ugly expressions of
nationalism and xenophobia.
This model reflects a deep sense of insecurity. A fear
that Russia would be threatened if it lost control of its
neighbourhood: ‘It is not just about Crimea but about us
protecting our independence, our sovereignty and our right
to exist.’42 A fear of Western ideas and exemplars. A fear of
the infiltration of Islam (not just Islamist extremism) from
the Caucasus and Central Asia. And an unpublicized fear
that China’s growing power casts a shadow over the thinly
populated and economically vulnerable Russian Far East
(knowing that the Chinese have not forgotten that they
were obliged to cede 1.5 million square kilometres to the
Tsar in the mid-19th century).
Putin’s own language, which at times verges on the
paranoid, reveals a defensive mentality. To justify his
authoritarian control and aggressive tactics on Russia’s
periphery, he has painted a picture of Russia as a victim
and target of Western attack over the centuries: ‘the
infamous policy of containment, led in the eighteenth,
nineteenth and twentieth centuries, continues today.
They are constantly trying to sweep us into a corner.’43
When the USSR broke up, Russia ‘was not simply robbed,
it was plundered’.44 The Americans ‘decided they were
the winners, they were an empire, while all the others
were their vassals. … They never stopped building
walls.’45 The Western partners, led by the United States,
had ‘controlled’ a whole series of ‘colour revolutions’. In
Ukraine in 2014, ‘outwardly the opposition was supported
mostly by the Europeans; but we knew for sure that the
real masterminds were our American friends. They helped
train the nationalists, their armed groups, in Western
Ukraine, in Poland and to some extent in Lithuania.
They facilitated the armed coup.’46 Had Russia not acted
in Ukraine, NATO’s navy would have been in the port
of Sevastopol in Crimea, creating ‘not an illusory but a
perfectly real threat to the whole of southern Russia’.47
Under the pressure of recent events, Putin has taken to
repeating the accusation he first made after the 2004
Beslan massacre that the West is supporting terrorism in
Russia. This surfaced in his remarks to the Valdai Club in
October 2014, in his annual address of December 2014,
and in his press conference of 18 December, when he said:
‘After the fall of the Berlin Wall and the break-up of the
Soviet Union, Russia opened itself to our partners. What
did we see? A direct and fully-fledged support of terrorism
in North Caucasus. They directly supported terrorism …
this is an established fact.’ He has never quoted evidence
to substantiate his ‘established fact’.
In response to the perceived threat, Putin stresses the
need to strengthen Russia’s defences: ‘The ramping up
of high-precision strategic non-nuclear systems by other
countries, in combination with the build-up of missile
defence capabilities, could negate all previous agreements
… and disrupt the strategic balance of power.’ 48 Russia
would respond to these challenges, including through high-
precision weapons systems and new strategic missiles. No
one would ‘ever attain military superiority over Russia’.49
Russia retains a capacity to use military power both for
demonstrative effect (as on the borders of NATO) and to
play a role (through the supply of equipment, intelligence
and advisers, or limited deployments) in regional conflicts,
such as Syria; but the primary purposes of Russia’s forces
are to defend and maintain security within Russia; and to
dominate – to the exclusion of others – Russia’s perimeter.
The perimeter is the former Soviet Union, claimed by Russia
as a zone of influence and within its strategic interests. Putin
has sought to justify his case partly in terms of a duty to
protect the ‘tens of millions’ of ‘compatriots’ who have opted
to remain in other sovereign states – principally Ukraine,
Belarus, Latvia, Estonia and Moldova. He has unilaterally
claimed them as ‘co-citizens’50 and has asserted rights to
intervene on their behalf (and for the most part not at their
request) that go far beyond the limits of international law.
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51 Address on the annexation of Crimea, 18 March 2015.
The second leg of the Russian claim is historical and
cultural. Putin constantly invokes ‘a thousand years of
Russian history’. When annexing Crimea, he argued that
Prince Vladimir’s ‘spiritual feat of adopting Orthodoxy
predetermined the overall basis of the culture, civilization
and human values that unite the peoples of Russia, Ukraine
and Belarus’. Crimea had ‘always been an inseparable
part of Russia’. It was the Bolsheviks who had erroneously
decided to add ‘large sections of the historical South of
Russia to the Republic of Ukraine’.51 While it is true that
Ukraine and Belarus had little or no previous history as
states independent of Russia, the Kremlin’s argument
cannot override the formal recognition of the new sovereign
states by the world, including Russia, in the 1990s; or the
legitimacy which attended the birth of today’s Ukraine
following a 90 per cent vote for independence in the fairly
conducted referendum of 1 December 1991.
Although, as the past year has shown, many Russians
cherish a vision of reincorporating Ukraine and Belarus
(and probably Moldova) within a Greater Russia, and this
cannot be excluded in the future, the current leadership
does not appear to be bent on full annexation, which would
entail costs it cannot afford. But under Putin’s model, the
post-Soviet states must exercise their sovereignty within
limits set by Moscow. The three Baltic states have escaped
into a Western camp, but it is likely that they will continue
to be subjected to coercive pressures. As the examples of
Georgia and Ukraine have shown, any further Western
intrusion into Russia’s zone will be vigorously opposed.
Is Putin’s model sustainable?
Vladimir Putin and his close associates have been
remarkably successful in holding power for 15 years.
They have harvested the fruits of high oil prices. The
population is better off: consumption levels are about
three times as high as in 1998 (although wealth is very
unevenly spread, and the gap between the rich and the
poor has widened). The ruling group controls the most
important parts of the economy. It has kept a firm grip on
the levers of power – civil administration, the armed forces
and, most importantly, the security organs. This will not
be easily shaken.
Putin has made sure that no prominent figure or
opposition movement is in a position to contest power.
He has been astute in both responding to and guiding
the emotions of ordinary Russians, marshalling patriotic
fervour in the face of perceived external threats. The
true level of popular support for Putin is hard to gauge,
in the absence of alternatives or of accurate sources
of information. There is evidence of widespread
dissatisfaction with corruption and living standards.
A regime that felt genuinely secure would feel less
need to clamp down on critics and opponents.
However, Putin’s regime is now facing its most serious
challenges yet.
As a tactic in his battles with the United
States and Europe, Putin is trying to put
himself at the head of a cabal fighting against
a ‘unipolar’ and liberal world and for a new
international order. The bedfellows he has
assembled are ill-assorted and the thesis is
unconvincing.
The Kremlin has staked heavily on the confrontation with
the West over Ukraine, and more generally over its right to
a sphere of strategic interests in which Western influence
and involvement would be limited. Putin has portrayed this
as an existential struggle for Russia. He cannot afford to be
seen to step back. He has to deliver what he can portray as
a victory. But the confrontation has been and will continue
to be very costly. The longer it lasts, the harder it will be
to show that it is beneficial to Russia. Putin has to keep
convincing his people that this is a fight for survival.
Russia is short of allies. Most Russians are deeply
uncomfortable with the possibility of becoming dependent,
as a junior partner, on China. The Kremlin has raised
expectations of the BRICS group (five emerging or
transitional powers which have little in common) and
of a pivot to Asia and the Pacific that cannot be fulfilled.
As a tactic in his battles with the United States and
Europe, Putin is trying to put himself at the head of a
cabal fighting against a ‘unipolar’ and liberal world and
for a new international order. The bedfellows he has
assembled are ill-assorted and the thesis is unconvincing.
The Kremlin is also betting heavily on an expensive build-
up of Russia’s armed forces in contradiction of Putin’s
earlier assertion that its power and status depended
on economic strength rather than military might. The
regime faces difficult decisions over the allocation of
shrinking resources: will it cut back on social welfare, or
on infrastructure, or on support for large corporations
(controlled by Putin’s associates) – or on the military?
Carrying through another five years of rearmament
would overstretch the budget; but cutting it back risks
discontent in a powerful constituency.
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52 Annual address to the Federal Assembly, 12 December 2013.
53 ‘We have managed to set up such poultry raising facilities that even Europe does not have. … Look at the situation with obesity in some countries. It is terrible.
This has to do with food. Our produce is of course much better and healthier.’ Speech at a meeting of the State Duma in Crimea, 14 August 2014.
The traditional and authoritarian values promoted by
the Kremlin do not sit easily with all Russians. Support for
more democratic elections is not confined to the relatively
small number of liberals. Many highly educated young
Russians have left the country or are seeking to leave.
It remains to be seen how far the emergent post-Soviet
generation wishes to distance itself from Europe, which
has been a benchmark for Russian aspirations since the
end of communism.
Meanwhile the nationalist demon is out of its cage. There
have been episodes of murderous inter-ethnic violence.
Putin has warned in the past of:
a kind of Amoral International, which comprises rowdy,
insolent people from certain southern Russian regions, corrupt
law enforcement officials who cover for ethnic mafias, so-called
Russian nationalists, various kinds of separatists who are ready
to turn any common tragedy into an excuse for vandalism and
bloody rampage.52
Reining in the destructive force of extremist nationalism
(including fighters returning from Ukraine) will be a
difficult task.
Most crucially, the leadership has for a decade pursued
a strategy that – as both Russian economists and outside
experts warned – has led to economic stagnation. The decline
set in well before the conflict began in Ukraine. Russia’s
dependence on high prices for hydrocarbons has been cruelly
exposed. The consequences for Russia of the conflict with
Ukraine – the effect on capital markets and trade, the impact
of sanctions and the heavy direct costs of Russian policy –
are weighing down an already ailing economy. Patriotism
and propaganda may for a while obscure economic failure
(Putin has taken to making Orwellian boasts: ‘Our produce
is of course much better and healthier’53) but they do not
put bread on the table.
This is not a model that will satisfy Russia’s aspirations to
become one of the advanced powers of the modern world.
Russians are famously resilient, and the country does not
appear to be close to a tipping point. Over time, however,
declining real incomes and the lack of resources for social
and physical infrastructure, combined with the existing
resentment at the high levels of corruption, will generate
growing pressure for change.
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3. An Enfeebled Economy
Philip Hanson
54 Ol’ga Kuvshinova and Margarita Papchenkova, ‘Minekonomrazvitiya prognoziruyet retsessiyu iz-za sanktsii i spada tsen na neft’ [‘The Ministry of Economic
Development forecasts a recession because of sanctions and the fall in oil prices’], Vedomosti, 2 December 2014.
55 The ‘worst-case’ scenario produces a 2017 GDP 0.2% below the 2014 level; the more optimistic scenario generates a comparable figure of 0.6% above 2014 –
not a dramatic difference.
56 See Deputy Finance Minister Aleksei Moiseev on 16 March on the new budget at http://www.minfin.ru/ru/press-center/?id_4=33119, and discussion by Ewa
Fischer, ‘Amendment to the Russian budget for 2015: an attempt to maintain the status quo’ at http://www.osw.waw.pl/en/publikacje/analyses/2015-03-18/
amendment-to-russian-budget-2015-attempt-to-maintain-status-quo.
Introduction
The Russian economy is in poor shape. Russia’s current
enfeeblement is not unique, even in Europe: the eurozone is
also in trouble. Indeed, both Russia and the eurozone face
strong doubts about the very systems on which they are
based – Putinism and the common currency, respectively.
The Russian systemic problem is politically less acute: its
leadership appears for the time being to be popular, and
alternatives to Putinism and Vladimir Putin himself are not
conspicuous. In two respects, however, it is more acute:
Russia has set itself against a large and influential part of the
rest of the world and is correspondingly isolated; and, as a
medium-developed country with labour productivity about
two-fifths that of Germany, it is missing out on the potential
of rapid, long-term, ‘catch-up’ growth.
This chapter starts by setting out the main features of recent
and prospective Russian economic performance. Then
it reviews the influences on that performance, including
that of the recent events in Ukraine and the foreign
sanctions they have elicited. It finishes by suggesting some
implications for Moscow’s Great Power ambitions and for
Western policy.
Economic performance
Russian real GDP fell steeply during the 2008–09 crisis.
This was followed, as in many other countries, by a recovery
that fell short of a return to pre-crisis rates of growth. Then
there was a marked slowdown starting in 2012. The level of
economic activity in 2014 was just 0.6 per cent above that
of the previous year. Official expectations for the next two
years, exemplified in Figure 1 by Central Bank of Russia
(CBR) projections of November 2014, are for recession
and stagnation.
Those projections are from two, out of many, alternative
CBR scenarios. The higher one is close to an earlier Ministry
of Economic Development (MinEkon) baseline scenario,
which was widely regarded as too optimistic and has since
been revised downwards.54 The lower projection, as far as
the period 2015–16 is concerned, is from the CBR’s worst-
case scenario of 15 December 2014, in which the oil price
averages $60/barrel in both those years and then recovers;
this also assumes that sanctions remain in place up to and
including 2017.55 In March 2015 the government submitted
to parliament a revised draft of the 2015 budget in which
the average annual oil price was assumed to be $50/b, the
average exchange rate was R61.5 to the US dollar, GDP
fell by 3 per cent and consumer price inflation averaged
12.2 per cent. The revisions entailed additional spending
cuts (from the version previously approved) to contain the
federal budget deficit to 3.7 per cent of GDP.56
Figure 1: Russian real GDP, 2005–17
(% year-on-year change)
Worst-case scenario
-10
-8
-6
-4
-2
0
2
4
6
8
10
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
GDP % change p.a.
Optimistic scenario
Sources: Rosstat (historical data); CBR (2014–17 projections).
One consequence of these numbers is that Russia’s weight
in the world economy has recently edged downwards and
is expected to continue to do so for a while at least. Figure
2 illustrates this, using IMF projections for all of the four
original BRICs. China and India, the two less developed of
these countries, continue (and are expected to continue)
to increase their weight in the world economy. Russia and
Brazil are not. For Russia, with its leaders’ apparent belief
in their country’s present and future Great Power status,
this is of particular concern. Indeed, failing to increase the
Russian share of world output is sometimes treated as a
definition of stagnation.
During the 1999–2008 boom household consumption was
the main driver of Russian growth. Rising oil prices and the
resultant rising inflows of petro-dollars made this possible,
but of the different sources of increments in final demand
for Russian production, consumption predominated. The
improvement in Russia’s terms of trade, moreover, allowed
real incomes and consumption to rise faster than output.
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57 Consumer price index and exchange rates from www.cbr.ru.
58 BOFIT Weekly, 30 January 2015.
This was sustainable as long as the terms of trade continued
to improve. The population enjoyed a period of per capita
real income growth of the order of 11 per cent a year.
Figure 2: The BRICs, 2005–17: two up and two down
(% of global output)
0
2
4
6
8
10
12
14
16
18
20
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
% of world output
China India Russia Brazil
Note: The share calculations are based on GDP measured in dollars at purchasing
power parity, not at official exchange rates.
Source: IMF World Economic Outlook database of April 2015.
The 2014–15 crisis has thrown the growth of household
consumption into reverse, as Figure 3 illustrates. This means
that the expectations of the population at large, as well
as those of the leadership, are being challenged. The CBR
projections in Figure 3 look comparatively optimistic, but
household consumption may nevertheless fare worse than
GDP. The state appears to be suspending the indexation of
public-sector pay in the face of double-digit inflation.
Figure 3: GDP and household consumption in Russia,
2005–17 (% p.a. changes)
-10
-5
0
5
10
15
20
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
% change p.a.
GDP Household consumption
Sources: Rosstat; CBR projections of November 2014 for 2015–17.
Fixed investment, meanwhile, was fractionally down in
2013 and somewhat lower still, down by 2½ per cent, in
2014. Real wage growth driven by productivity growth,
driven in turn by investment, does not look to be on the
cards in the near term.
What has hit Russian households is an acceleration of
inflation, despite moderately restrictive monetary policies,
as Figure 4 illustrates.
The CBR expects consumer price inflation to peak in the
second quarter of 2015 and then to moderate. January
2015 inflation was 15 per cent year on year; in February the
figure was 16.7 per cent and in March 16.9 per cent. The
immediate sources of extra inflation in late 2014 and early
2015 were the rapid decline in the rouble, by 41 per cent
against the dollar in the course of 2014, and the ‘counter-
sanction’ of an embargo on food imports from countries that
have imposed sanctions on Russia. Year-on-year inflation
in food prices in January 2015 was 20.7 per cent, and in
February 23.3 per cent.57
Figure 4: Consumer price index and broad money
supply (M2), January 2012–March 2015 (monthly data,
% change from previous year)
0
5
10
15
20
25
CPI M2
% year on year
Jan 2012
Mar 2012
May 2012
Jul 2012
Sep 2012
Nov 2012
Jan 2013
Mar 2013
May 2013
Jul 2013
Sep 2013
Nov 2013
Jan 2014
Mar 2014
May 2014
Jul 2014
Sep 2014
Nov 2014
Jan 2015
Mar 2015
Source: CBRhttp://cbr.ru/statistics/infl/Infl_01032015.pdf and http://cbr.ru/sta
tistics/?PrtId=ms&pid=dkfs&sid=dm.
The fall in the rouble has, up to a point, helped the federal
budget. Half of federal budget revenues come from dollar-
denominated inflows from exports of oil and gas. When a
dollar buys more roubles, it also provides more roubles in
these revenues. But the fall in oil prices in the latter part of
the year worked in the opposite direction. The upshot was a
small federal budget deficit of 0.5 per cent of GDP.58 There
is, however, a separate problem for the regional budgets.
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59 ‘TsBR: Ottok kapitala iz Rossii v 2014 vyros v 2.5 raza’ [‘CBR: the capital outflow from Russia in 2014 rose by 2.5 times’], Vedomosti, 16 January 2015.
Regional administrations face (in aggregate) a modest
deficit, created in part by their efforts to raise the pay of
state employees along the lines promised by President Putin
in May 2012. Individual regions face particular difficulties,
from which they will be bailed out by soft loans from the
federal budget.
The recent fall in investment has already been mentioned.
One influence on this has been the highest-ever net outflow
of private capital. In 2014 this totalled $154 billion, or close
to 10 per cent of GDP if the latter is converted to dollars at
the end-year ballpark figure of R60=$1.59
A net private capital outflow has been a feature of the post-
communist Russian economy in every year except 2006 and
2007. When it is particularly large and accompanied by a
dwindling current-account balance-of-payments surplus,
it threatens the comfortable balance-of-payments position
that has been the norm for Putin’s Russia. Figure 5 depicts
the recent situation.
Figure 5: Russia’s current-account balance and net flows
of private capital, 2005–17 ($bn)
-200
-150
-100
-50
0
50
100
150
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
$bn p.a.
Net private capital flows Balance-of-payments current account
Note: The projections for 2015–17 are those contained in the CBR’s
baseline scenario.
Source: CBR, http://www.cbr.ru/publ/ondkp/on_2015(2016-2017).pdf.
The near future: 2015–16
On 27 November 2014 OPEC decided not to cut crude
oil production quotas. Oil prices fell on the news, and so
did the rouble. This was followed by a fall in forecasts
for the Russian economy in 2015 as the imaginations of
the scenario-makers struggled to keep up with events.
Table 1 presents some key points from the 1 December
projections for 2015 from one official, one independent and
one international forecaster.
Table 1: Selected projections of Russian economic
figures for 2015 based on assumed price of Urals crude
Alfa-BankaCBR World Bank
Average oil price, $/b 40 60 70
GDP, % change year
on year
-3.8 -4.5 to
-4.7
-1.5
Note: Based on different assumptions about the average annual price in 2015.
a A later Alfa-Bank estimate (email from Natalya Orlova of Alfa-Bank of 17
December) estimates that in the first quarter of 2015 GDP could be down year on
year by 7–10%. When the January and February declines proved to be less than
this, Alfa tweaked its GDP forecast for the year to an overall fall of only 2–3%
(Alfa-Bank ‘Macro Insights’, 19 March 2015).
Sources: Alfa-Bank ‘Russian Economic Spotlight’ of 1 December 2014; CBR
as reported by the US–Russia Business Council (USRBC) Daily Update of 16
December 2014; World Bank World Economic Outlook.
The first two forecasts bear the scars of the collapse in oil
prices and in the currency during the weeks that preceded
their publication. Forecasts of these orders of magnitude
continued to be generated into 2015. Even so, they may not
be durable. The volatility of both key numbers and forecasts
serves as a warning of what is the largest single problem
for the Russian economy in the short term: an unusually
heightened degree of uncertainty. This is considered further
in the next section.
By the end of 2014 at least one thing was clear. The
country faced a recession. An anti-crisis plan was being
prepared, but agreement on it proved difficult. That,
along with the vacillations of the CBR – which raised its
key interest rate to 17 per cent to combat inflation and
capital outflow, and then cut it back unexpectedly to 15
per cent and, from mid-March, to 14 per cent – diminished
the business community’s already low confidence in
policy-making. A degree of consumer hardship looks to be
built into these forecasts: inflation is high and MinEkon
envisages a clear fall in real wages. Whether this hardship
produces anything more than widespread grumbling is
another matter.
It is time to start looking at the problems that underlie the
Russian economy’s weak performance and, apparently, still
weaker prospects.
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60 Rosstat demographic pages at http://www.gks.ru.
61 Clifford G. Gaddy and Barry W. Ickes, ‘Russia after the Global Financial Crisis’, Eurasian Geography and Economics, 51 (2010), No. 3, pp. 281–311, and Bear Traps on
Russia’s Road to Modernization (London: Routledge, 2013). For a three-sector analysis see Richard Connolly, Troubled Times: Stagnation, Sanctions and the Prospects for
Economic Reform in Russia, Chatham House Russia and Eurasia Programme Research Paper, February 2015.
Underlying problems
The influences dragging down Russian economic
performance are of different kinds: structural, conjunctural
and geopolitical.
The structural problems limit the trend rate of growth of
potential output in the medium term – say, roughly, the
next five years. They are:
• The decline in the working-age population; and
• The ways in which the Putinist social and political
order limits competition, efficient investment
and innovation.
The conjunctural problems are largely generated outside
Russia, and are of uncertain duration. They tend to reduce
Russian economic activity levels below their (already
limited) potential. They are:
• The end of quantitative easing in the United
States, pulling investment funds away from
emerging markets;
• The rapid rise of shale oil and gas production in
the United States and Canada, putting downward
pressure on world hydrocarbon prices;
• The weakness of the eurozone economies (Europe
as a whole takes about half of Russian exports) and
some slowing of Chinese growth;
and linked with these tendencies:
• The fall in the oil price; and
• The fall in the exchange rate of the rouble against
the euro and the US dollar (and practically all other
currencies except the Ukrainian hryvna).
The geopolitical impediments to Russian economic
growth are:
• The fact that Russia is engaged in a war in Ukraine;
• The economic sanctions imposed on Russia as a result;
• Russian counter-sanctions, notably the embargo on
food imports from countries imposing sanctions;
• The move, propelled by Western sanctions
but acquiring a life of its own, towards import
substitution; and
• An accompanying turn away from liberal economic
reform and in favour of the (often corrupt) organs of
law enforcement and security.
Two fundamental concerns
The two structural problems are different in kind from the
others listed. The first is demographic: the decline in the
economically active workforce that is due to last for some
time into the future. The ‘medium’ variant of Rosstat’s
projections of working-age population (which incorporates
an estimate of net migration) suggests it will diminish by
a little over 4 million between 2015 (84.1 million) and
2020 (80.0 million).60 The number of young entrants to
the workforce is falling precipitously, and this is only partly
offset by net immigration. The immigrant workers are
predominantly from other CIS countries and mostly low-
skilled. Their numbers may, moreover, prove to be lower
than official statisticians have anticipated. As the rouble has
tumbled, the attractions of working in Russia have declined.
Many Central Asian migrants are said to be heading for home.
Such demographic changes, raising the ratio of dependants
to workers, are not necessarily incompatible with strong
economic growth. If one source of growth, labour inputs,
diminishes modestly, an increase in the growth rates of
capital stock and of labour productivity can counteract that
influence on output. Unfortunately, since 2012 investment
has been going down. That is for conjunctural reasons,
which will be considered below. But Russia’s rate of fixed
investment, at around 21 per cent of GDP, has long been
modest for an ‘emerging’ economy. And a principal reason for
that is to do with what might be called the Putinist system.
As the rouble has tumbled, the attractions
of working in Russia have declined. Many
Central Asian migrants are said to be
heading for home.
There are different accounts of the economic workings
of this system. One centres on Russian decision-makers’
alleged ‘addiction’ to the misappropriation of natural-
resource rents, primarily from oil and gas, and in particular
their use of these rents to subsidize inefficient production
units and their workforces inherited from Soviet times.61
The Russian economy certainly exhibits a more extreme
sensitivity to the oil price than those of other major oil and
gas exporters. This showed up in the unusually large fall
in Russian GDP in 2008–09 (7.8 per cent). It is currently
revealed in the exchange-rate fall against the dollar in the
year to February 2015: more than 40 per cent in the case of
the rouble, against 19.5 per cent for the Norwegian krone
and almost zero for the Saudi riyal, which comfortably
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62 Exchange rates from www.xe.com.
63 For example, Sergei Aleksashenko, ‘Ekonomika Rossii k nachalu epokhi “posle Putina”’ [‘The Russian economy towards the beginning of the ‘post-Putin’ era’], Pro et
Contra, Nos 3–4 (63) (2014), pp. 104–18. See also Alexei Kudrin and Evsey Gurvich, ‘A new growth model for the Russian economy’ (Helsinki: BOFIT Policy Brief No. 1,
2015), particularly at p. 29.
64 See Philip Hanson, Reiderstvo: Asset-Grabbing in Russia, Chatham House Russia and Eurasia Programme, Programme Paper 2014/03, March 2014.
65 Boris Titov, ‘Biznes pod “stat’ei”’ [‘Business under the “article” [of the criminal code]’], Vedomosti, 2 December 2014. Titov is the presidential ombudsman for
business. While serving in that capacity, he seems to have preserved his previously demonstrated determination to campaign against asset-grabbing.
66 See its website at http://www.gemconsortium.org/.
67 O. R. Verkhovskaya and M. V. Dorokhina (2013), Natsional’niy otchet Global’niy monitoring predprinimatel’stva: Rossiya 2012, http://www.gemconsortium.org/docs/
download/3261, p. 56.
68 Alena Ledeneva, Can Russia Modernise? Sistema, Power Networks and Informal Governance (Cambridge University Press, 2013).
maintained its peg of SAR3.75=$1.62 It appears that
confidence in the Russian economy is exceptionally
sensitive, for an oil-exporting nation, to the price of oil.
The approach followed here is a more general one, and
close to the mainstream view of many Russian reformers:63
that competition, investment, innovation and enterprise
throughout the economy are heavily handicapped by a
weak rule of law, leaving most business people vulnerable
to attacks by ‘the authorities’, often in collusion with
better-connected business rivals. The exceptions are
precisely those better-connected rivals: businesses that
have special relations with powerful political cronies at
local, regional or national level (depending, broadly,
on the scale of the business). The authorities, in this
connection, are the law-enforcement agencies, and they
are commonly backed up by purchasable courts. This is
the phenomenon of asset-grabbing. It is common and is
not confined to small business.64
Another ingredient of the system has the same roots: the
capacity of the state to intervene directly in what would
otherwise be everyday market activities. Inspectors of
various public services, for example, collect bribes when
supplying electricity connections, certifying workplace
safety, or checking fire precautions and the like.
In the absence of a strong rule of law and protection of
property rights, incentives to invest and innovate are
weakened. So is competition; the famous ‘level playing field’
is highly uneven. This state of affairs did not prevent growth
when oil prices were rising, though it will have made it less
than it could have been. As Boris Titov remarked, ‘When oil
prices are falling, the protection of property becomes the
key question.’65
In short, when conjunctural and geopolitical factors
are tending to depress economic activity, the limitations
imposed by the system are no longer covered up. And the
general sense that business is developed subject to the
will of the authorities (in alliance with well-connected
incumbent companies) is likely to have a depressing
effect on enterprise.
One way of testing this conjecture is to look at the
findings of Global Entrepreneurship Monitor (GEM).66
GEM organizes surveys that ask representative samples
of the population aged 18–64 such questions as whether
they own an established business (defined as one from
which they have drawn an income for at least 42 months),
whether they have personally provided funding for
someone else to start a business and whether they own a
new business (defined as one from which they have been
drawing income for between three and 42 months).
The results indicate a rather low level of enterprise. Of
the 69 countries surveyed in 2012, Russia was 67th by the
number of entrepreneurs per hundred respondents of the
working-age population.67
Table 2 shows some 2013 GEM measures of entrepreneurial
activity for Russia and a few other countries. China is included
as a fellow emerging economy still under communist rule, the
US as a mature, high-income country, and Chile and South
Korea as countries recently under authoritarian rule that have
begun to be considered democracies.
Table 2: Measures of entrepreneurial activity, Russia
and selected countries, 2013 (% of population aged
18–64 owning established or new businesses)
Country Owning established business Owning new business
Russia 3.4 2.8
China 11 8.9
US 7.5 3.7
Chile 8.5 9.6
S. Korea 9 4.2
Note: For definitions of ‘established’ and ‘new’ see the accompanying text.
Source: GEM Key Indicators, http://www.gemconsortium.org/key-indicators.
The fundamental problem of corrupt state involvement
in the operations of business is part of a system in which
informal networks and understandings carry more weight
than formal rules, and the formal rules are themselves often
inconsistent, so that it is difficult to conduct any organized
activity without risk of prosecution, if the informal rules of
the game permit prosecution. Described simply as ‘Sistema’
by Alena Ledeneva,68 it has the consequence of making
members of the political elite, even those conventionally
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69 See Philip Hanson and Elizabeth Teague, Liberal Insiders and Economic Reform in Russia, Chatham House Russia and Eurasia Programme Paper 2013/01 (January 2013).
70 See Hanson, Asset-Grabbing, and Andrey Yakovlev, Anton Sobolev and Anton Kazun, ‘Mozhet li rossiiskii biznes ogranichit’ davlenie so storony gosudarstva?’
[‘Can Russian business limit pressure from the state?’], Moscow Higher School of Economics, preprint WPI/2014/01 (2014).
71 ‘Osnovnye napravleniya yedinoi gosudarstvennoi denezhno-kreditnoi politiki na 2015 god i period 2016 i 2017 godov’ [‘Main directions of the single state monetary
and credit policy for 2015 and 2016–2017’], http://cbr.ru/today/publications_reports/on_2015(2016-2017).pdf.
72 US–Russia Business Council Daily Update, 16 December 2014.
73 Ibid., 26 March 2015.
74 Kudrin and Gurvich, ‘A new growth model’, p. 18.
tagged as liberals, captives of the rules of the game.69 There
are powerful incentives for all members of the elite not to
challenge those rules: they keep subordinates vulnerable to
selective use of the law, and therefore under control; at the
same time they provide those subordinates with the means
to acquire some of the illegal or semi-legal gains that the
system allows; and their own past behaviour, since they
ascended through the same system, would under a rule of
law be open to scrutiny.
It follows that the system would not easily be changed
peacefully and from within, though peaceful change
cannot be ruled out entirely. One ray of hope is the
growing readiness of business associations to stand up for
fair treatment under the law.70 But the long-run prospects
of successful pressure from an emerging class must be
somewhat dimmed by the slow pace of development of
that class, illustrated in Table 2 above. The idea that a
growing middle class in general, and a growing business
class in particular, will want and will press for improved
civil rights, including the rule of law, is a familiar one. In
Russia it comes up against a Catch-22: a weak rule of law
discourages many people from entering business, so the
Russian business community grows slowly, weakening
the growth of a constituency for the rule of law.
It is for this reason that change in the Putinist system is
unlikely in the near term. Two questions follow about
the conjunctural and geopolitical burdens on the Russian
economy: can the existing system cope with them in
the sense of maintaining itself; and will they advance
or retard the process of reform?
The conjunctural and geopolitical problems
of the Russian economy
The common ingredient in the most immediate economic
concerns of Russian policy-makers is uncertainty. There
is great uncertainty about the future oil price, the future
exchange rate of the rouble, the prospects of the war
in Ukraine, the duration and future severity of Western
sanctions, and the likely scope and duration of a policy
of state-led import substitution. (There is no uncertainty
about the long-term outcome of such import substitution:
it won’t work; it may, however, provide a temporary boost
to production levels.)
All economic activity is conducted under conditions of
uncertainty. The immediate problem in Russia now is
that uncertainty is unusually high: plausible scenarios
are constantly being changed and, at any one time,
are widely dispersed over an unusually broad range of
outcomes. This situation is exemplified by the CBR’s
guidelines for monetary and credit policy, published in
November 2014.71 This text drastically revised a previous
document published only two months earlier; it contained
no fewer than five main scenarios; in addition, a sixth,
gloomier than the gloomiest of the five, was mentioned
in the text as a ‘stress scenario’, based on oil at $60/b.
Something close to this has subsequently become the
CBR’s chosen view.72
How much of a problem, however, is posed by the gloomier
scenarios? By mid-December 2014 (after the rouble had
briefly fallen to 80 to the dollar), a decline of perhaps 4–5
per cent in GDP from 2014 to 2015, followed by stagnation
or a small further drop, had become a mainstream view;
this might be followed by a rebound in 2017 (see Figure
1 above). In February–March 2015, as the oil price and
the rouble seemed to stabilize, the forecasters’ visions
of the future lightened: MinEkon, for example, came up
with a baseline scenario of a 2.5 per cent fall in GDP in
2015, followed by a recovery to +2.8 per cent in 2016.73
In either case, its longer-run expectation would be for
growth varying around the slow trend rate of about 2
per cent a year that was dictated by the limitations of
the ‘old growth model’.74
Western sanctions, despite bravado to the contrary, are
seen as part of the problem. The CBR’s main projections
in November 2014 were differentiated according to what
happened to the oil price and the duration of Western
sanctions (see Table 3). For each oil-price assumption
there is a GDP projection that assumes sanctions are ended
in the third quarter of 2015, and another GDP projection
that assumes they are maintained until the end of 2017.
The differences between the two are, by implication, the
CBR projection of the effect of sanctions on the level of
economic activity. What evidence these were based on
has not been divulged, and the oil-price projections now
look highly optimistic, but at least the numbers offer a
clue to the bank’s thinking about the scale of the effects
of sanctions.
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75 http://cbr.ru/statistics/print.aspx?file=credit_statistics/debt_an_new.htm.
76 In this chapter the word ‘companies’ is used to mean ‘non-bank corporations’.
77 http://cbr.ru/statistics/print.aspx?file=credit_statistics/debt_an_new.htm and BOFIT Weekly, 30 January 2015.
78 Not totally. Loans from parent companies to affiliates in Russia will mostly be re-financed. Some finance can be raised in Asia on a limited scale (the Tokyo market
is closed to Russia). A minor segment of foreign loans is denominated in roubles. And there are occasional special cases like the $120 million syndicated loan to the
Otkrytie company: Ol’ga Shestopal, Dmitrii Ladygin, ‘Zapad sdelal “Otkrytie’’’ [‘The West made a “Discovery”’], Kommersant’, 12 November 2014. But the overall effect
is closure.
79 In November 2014 this was being resisted. Mikhail Serov and Margarita Papchenkova, ‘Rosneft’ perepishet zayavku v FNB’ [‘Rosneft will re-write its bid to the FNB’],
Vedomosti, 13 November 2014. The bid was initially for R2.4 trillion, or around $50 billion, from a fund with total assets of about $82 billion. On 15 December 2014, in
the middle of a financial storm, it was announced that Rosneft had issued bonds to the value of R625 billion to unidentified purchasers, on soft terms. See Vedomosti
editorial, ‘Nadezhniy zayemshchik’ [‘A reliable borrower’], 15 December 2014. This spooked the market, making things worse.
80 USRBC Daily Update, 26 January 2015 and 4 February 2015.
81 Data from http://www.cbr.ru and http://minfin.ru/ru/perfomance/nationalwealthfund/statistics/.
Table 3: CBR implicit estimates of the effects of
sanctions on Russian GDP, 2015–17 (% p.a.)
2015 2016 20 17
Oil at around $95/b -0.3 -0.6 -1.8
Oil at around $84/b -0.3 -1.2 -1.9
Note: The figures for 2015 refer to an effect occurring only in the last quarter of
the year, as described in the text.
Source: as in footnote 71.
Still, most projections do not envisage a steep and prolonged
fall in economic activity (more than 5 per cent annual falls
in GDP continuing for two years or more), with or without
continued sanctions. What of financial stability?
It is routinely and quite rightly observed that the Russian
state has considerable financial strength. For a start, its
foreign debt is, by Western standards, laughably low.
At 1 October 2014 the Russian state owed the outside
world $64 billion.75 That is 3.3 per cent of what was until
recently a $2 trillion GDP. Even with the rouble at 60 to
the US dollar rather than the 32 at which it started 2014,
and dollar GDP correspondingly reduced, it is still only
around 6 per cent.
The immediate debt problems lie elsewhere. Non-state debt,
including the debt of state-controlled banks and companies,76
has lately been on a much larger scale: $614 billion at 1
October 2014. The amount due for repayment by banks
and companies in 2015 is $108 billion.77 Sanctions have
effectively closed off external finance for Russian business.78
The pressure is on Russian banks and companies to find other
sources of credit or to use a larger-than-usual share of their
export earnings to repay debt. This has created even bigger
queues than usual for state finance, including a Rosneft bid
for a soft loan that would be more than half the resources of
the National Welfare Fund (NWF).79 The official purpose of
the NWF is to provide long-term back-up for pension funds; it
now faces many other claimants, but only 60 per cent of it is
supposed to be available for domestic projects.
In short, the pressure on public finances is considerable.
If the oil price were to stay below $60/b for some length
of time, with corresponding effects on budget revenue,
and if sanctions remained in place for the medium term,
those pressures would remain substantial. This was the
main reason why Standard & Poor’s, one of three leading
credit rating agencies, downgraded Russian sovereign
debt from BBB- (investment grade) to BB+ (speculative or
‘junk’ grade) on 26 January 2015, and later downgraded
Gazprom, Gazpromneft, Novatek, Rosneft, Transneft and
VTB similarly.80
Nevertheless, the state’s financial reserves are substantial.
At the beginning of April 2015, the gold and foreign-
exchange reserves stood at $356 billion. This was only a
little less than the 2014 annual value of imports of goods
and services ($429 billion). Included in the total were gold
($46 billion), the NWF ($53 billion) and the Reserve Fund
($76 billion), designed primarily to support the budget
when the oil price is low.81
Figure 6: Russian foreign-exchange reserves on 1 April
2015, by type of reserve ($bn)
46.3
75.7
52.9
180.5
Gold
Reserve Fund
NWF
Other
Note: Amounts add up to $355 billion, not $356 billion as mentioned above,
because of rounding.
Source: Heli Simola, ‘Russia’s international reserves and oil funds’, BOFIT Policy
Brief No. 4, 2015 (23 April 2015).
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82 Tat’yana Nedovina, ‘Byudzhet ne soshel’sya v raskhodakh’ [‘The budget didn’t match up on the spending side’], Kommersant’, 5 March 2015.
83 Oxford Analytica Daily Brief, ‘Russian financial system will be increasingly fragile’, 6 March 2015.
84 BOFIT Weekly, 6 March 2015.
85 Ibid., 10 October 2014.
86 Nedovina, ‘Byudzhet’. There had been some earlier compromises, however. See Ivan Safronov and Dmitrii Butrin, ‘Vozrazheniya vstupili v boi s vozrazheniyami’
[‘Objections went to war with objections’], Kommersant’, 19 February 2015.
The most immediate source of risk, then, is bank and
corporate debt to the outside world. But that in turn creates
additional risks for the public finances. There have been
headaches over redrafting the 2015 federal budget to cope
with an oil-price assumption of $50/b instead of $100/b.
One draft produced a deficit equal to 3.8 per cent of GDP,
requiring substantial drawing-down of the Reserve Fund.
The proposed cuts were resisted, but might not be enough.82
In this situation, and particularly in the wake of the
rapid rouble depreciation of late 2014, Russian banks have
got into difficulties. The CBR relaxed capital requirements in
December; there have been runs on some banks, a couple of
bank bail-outs and plans for extensive bank recapitalization.
A banking crisis at some point in 2015–16 cannot be
ruled out.83
It looks as though, in the short and medium term, market
conjuncture and geopolitical conflicts could create serious
problems for the Russian leadership. Default on external
debt is unlikely but recession and continued financial
turmoil are probable. The main question is how long the
recession will last. A stabilization of the oil price around
$60/b, a slowing of inflation and some easing of Western
sanctions are all possible during the course of 2015. A
combination of those developments would indicate an
early exit from recession in 2016. But none of these events
is guaranteed. Confidence in Russia is fragile at the best of
times, and these are not the best of times.
Political implications for Russia’s Great
Power ambitions
The present Russian leadership seeks to make Russia
a dominant regional power (at least), able to bend its
neighbours to that leadership’s will. Keir Giles, in his
chapter, sets out the means by which it has pursued this
aim. Some of these do not, in macroeconomic terms,
amount to a significant burden: cyber warfare, some forms
of hostile messaging, purchasing the influence of individuals
and information warfare, for example. Others could in some
cases entail significant costs but do not necessarily do so
in all instances: energy cut-offs, for example, may in the
medium term even help a Russian supplier to charge high
prices after the cut-off, and the conversion of a neighbour’s
debt to a stake in its infrastructure may also pay off in
commercial terms, even if that was not its main purpose.
Other means of influence, and military power in particular,
have high costs that are significant at a national level. Is the
enfeebled Russian economy capable of supporting them?
It should be borne in mind that military strength, though
most conspicuously exemplified by the United States, is not
the prerogative of rich nations. The Soviet Union, though
much poorer than the US and its allies and lagging behind
in technology, was able to maintain some sort of military
balance with them up to its demise. It did this, moreover,
with very little help from its Warsaw Pact allies. So Russia
is not necessarily debarred by its moderate level of per
capita GDP from pursuing what appear to be substantial
military ambitions.
The weak state of the Russian
economy will at some stage set limits
to the scale and pace of the Russian
state armaments programme. Exactly
how the conflict over that programme
between (broadly) the economic bloc of
the government and the military will be
resolved remains to be seen.
Pursuing them it certainly is. Military expenditure rose by
20 per cent a year in the four years between 2011 and 2014.
That is in nominal terms, and it is likely that inflation in
military hardware procurement is higher than in consumer
prices. Even so, there has been a substantial increase in real
terms, to over 3 per cent of GDP.84
Will the government be able to maintain such increases in
military spending, and in the ambitious state armaments
programme? First indications are that it will at any rate
try. The original budget plan for 2015 envisaged a nominal
increase in military spending of 33 per cent, moving the
total to 4 per cent of GDP.85 In early March 2015 the cuts
(in the form of postponements) in military expenditure
favoured by the Ministry of Finance were still being resisted,
but a federal budget deficit of 5.2 per cent of GDP was
a possible corollary.86 That would be extremely difficult
to finance and would erode what little confidence the
markets retain in Russian policy-making.
The weak state of the Russian economy will at some
stage set limits to the scale and pace of the Russian state
armaments programme. Exactly how the conflict over that
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87 These are not numbers plucked at random. The figure of 2½ per cent is about the level of the ‘low’ prospect (of three) calculated for 2011–20 by Revold Entov and
Oleg Lugovoy in ‘Growth Trends in Russia since 1998’, in Michael Alexeev and Shlomo Weber (eds), The Oxford Handbook of the Russian Economy (Oxford University
Press, 2013), pp. 132–61. Kudrin and Gurvich, in ‘A new model’, suggest the figure is probably less than 2 per cent a year.
88 See https://www.youtube.com/watch?v=Cw8ll-3_Kx0 for Sechin’s remarks and http://www.gazeta.ru/business/2014/12/17/6350425.shtml for Leontiev.
89 Konstantin Gaaze, ‘Poker dlya odnogo’ [‘Poker for one’], New Times, 1 September 2014.
90 Connolly, Troubled Times.
programme between (broadly) the economic bloc of the
government and the military will be resolved remains to
be seen. It does not follow that the leadership will give
up on its pursuit of regional hegemony and its stance of
antagonism towards the West.
Conclusions
The built-in resistance of the Russian policy and business
elite to radical reform of the Putinist system makes any
change in the underlying operation of that system unlikely
in the medium term, short of a regime change. The chances
of a smooth and peaceful regime change are low. If some
stable and lasting compromise were reached over Ukraine,
if sanctions and counter-sanctions were withdrawn, and if
uncertainties over the oil price and the rouble were eased,
the binding constraints on Russian economic performance
would once more be those of demography and system. The
trend rate of growth of Russian GDP might then be of the
order of 2–2½ per cent a year.87 This might not satisfy the
leaders’ ambition for the Russian share of global output to
increase. It might even raise doubts about Russia’s plans to
upgrade its military capabilities. Still, it ought to be liveable.
If those conditions are not fulfilled, and conjunctural and
geopolitical uncertainty remains high, the Putinist system
will come under more pressure. One particular pressure
point would be the leadership’s ambitious plans for military
upgrading. These plans are expensive, and the conflict
of priorities between military ambitions and the public
finances could be acute.
Meanwhile relations within the political elite are visibly
strained, and the visibility is unusual. For example, Igor
Sechin and one of his Rosneft vice-presidents, Mikhail
Leontiev, have criticized Aleksei Kudrin, a former minister
of finance and a personal friend of Putin, raising conspiracy
theories about whom he had been really working for.88 There
is evidence that in mid-2014 President Putin’s inner circle of
advisers had narrowed and was becoming largely confined to
security and defence officials.89 The subsequent steep fall in
the oil price and the rouble brought more meetings involving
the president and senior economic officials, but it is not clear
whether those officials have regained their former influence
on decisions. The prolonged and contentious process of
budget revision, mentioned above, suggests that economic
policy-making is in disarray.
What do Russia’s uncertain economic prospects tell us about
sanctions? By themselves, the sanctions in place at the time
of writing are unlikely to provoke such economic distress
as to generate pressure for radical change. On the contrary,
they provide the Russian leadership with a handy scapegoat
for stagflation: the West. It has been argued that they also
strengthen the forces of nationalism and statism arrayed
in Russia against thoroughgoing market reforms.90 Even if,
as seems probable, nationalism and statism were gaining
ground in Russian policy-making before 2014, this is a
serious unintended consequence of Western sanctions.
The arguments for and against the sanctions so far imposed
on Russia, however, are not exclusively or even primarily to
do with economic consequences. Sanctions send messages.
Reducing sanctions while the situation in Ukraine remains
unchanged would send its own message: the West is
giving up; you will get away with more adventures. In any
case, a test now faces the West that is even harder than
maintaining sanctions: propping up the almost bankrupt
Ukrainian economy.
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4. A War of Narratives and Arms
James Sherr
91 Hannes Adomeit, ‘Collapse of Russia’s Image in Germany: Who is to Blame?’ Eurasia Outlook, Carnegie Moscow Center, 18 February 2014, http://carnegie.ru/
eurasiaoutlook/?fa=54540; Nigel Farage, ‘I admire Vladimir Putin’, the Guardian, 31 March 2015, http://www.theguardian.com/politics/2014/mar/31/farage-i-admire-putin.
92 John J. Mearsheimer, ‘Why the Ukraine Crisis is the West’s Fault’, Foreign Affairs, September–October 2014, https://www.foreignaffairs.com/articles/russia-
fsu/2014-08-18/why-ukraine-crisis-west-s-fault.
93 See pp. 45, 46–48 of this report.
94 The Russian terms are informatsionnaya bor’ba and infor matsionnoe protivostoyaniye.
95 Keir Giles, ‘With Russia and Ukraine, is all really quiet on the cyber front?’, ARS Technica, 11 March 2014, http://arstechnica.com/tech-policy/2014/03/with-russia-
and-ukraine-is-all-really-quiet-on-the-cyber-front/.
96 ‘Conceptual Views Regarding the Activities of the Armed Forces of the Russian Federation in the Information Space’ [Kontseptual’nye vzglyady na deyatel’nost’
Vooruzhennykh Sil Rossiyskoy Federatsii v informatsionnom prostranstve], RF Ministry of Defence, 2011.
97 Lev Trotsky, The Revolution Betrayed, Chapter 11, https://www.marxists.org/archive/trotsky/1936/revbet/ch11.htm.
98 A view prevalent in Russia itself. Peter Pomerantsev, Nothing is True and Everything is Possible: Adventures in Modern Russia (London: Faber & Faber, 2015).
Introduction: a war of perception
In February 2014, the legal order and security system
of post-Cold War Europe collapsed. In retrospect, all
such breakdowns acquire an aura of inevitability. But
their immediate causes are unforeseen and, in the eyes
of those with reputations to salvage, ‘unforeseeable’. In
these two respects, February 2014 resembles August 1914.
There is a third resemblance: the belief that economic
interdependence makes such collapses impossible.
But the West is not at war with Russia and, in contrast
to 1914, no war fever exists. Chancellor Angela Merkel
speaks for the majority of European leaders when she says
that ‘there is no military solution’ to the crisis. In Poland
and the Baltic states Ukraine’s independence is seen as
existentially linked to their own. But to many others in the
West, its ‘pivotal’ role is a dubious abstraction, and Ukraine
itself is seen as a lost cause. Although Vladimir Putin’s
image was falling ‘precipitously’ in Germany well before
Crimea’s annexation, his stock is notably higher in Hungary
and Greece as well as within anti-establishment parties
in France and the United Kingdom.91 In more mainstream
‘realist’ circles, there is a strong residual view that the
post-1991 security order can be repaired, or reformatted,
to ensure that a principal pillar of the antebellum system,
partnership with Russia, is restored.92
The Russian state is not a disinterested observer in these
debates. Many of its current custodians, seasoned ‘special
service’ professionals, have brought Leninist traditions of
‘ideological struggle’ into the post-modern world. As Keir
Giles demonstrates in Chapter 6, Russian investment in
the ‘toolkit’ of perception management is unprecedented.93
Yet this has come as a surprise to many in Europe. In the
age of the web and social networks, as in the age of radio
and television, the West has led the way in information
technology and its commercial application. But such
discoveries are not patentable. Nor do they confer a
genetic mastery of the political applications of information
technology, let alone the methodology of what the Russian
state calls ‘information struggle’.
The word ‘struggle’ (bor’ba) is not a Russian euphemism for
war, but a professional insider’s term denoting adversarial
activity in peacetime as well as in war.94 Both the term and
the practice derive from the USSR’s intensive investment
in ‘ideological struggle’, ‘active measures’ and ‘reflexive
control’, all of them designed to influence opponents,
disorientate them and undermine their effectiveness. As
Keir Giles has observed elsewhere, these practices once
again constitute ‘a wide-ranging, holistic area of offensive
activity by the [Russian] state’.95
In the peculiarly Russian sense of the term, ‘information
struggle’ is a defensive measure, the product of a belated
but intensive and long-term effort to ‘catch up and overtake’
opponents who have used advanced communications, soft
power ‘instruments’ and civic mobilization against target
states as early as NATO’s Kosovo intervention in 1999. The
publication of an ‘Information Security Doctrine of the
Russian Federation’ in September 2000 testifies to the depth
of interest accorded to these issues over a 15-year period.
According to the Ministry of Defence’s 2011 ‘Conceptual
Views’ of the information space, even the narrower concept
of ‘information war’ (voyna) encompasses the ‘undermining
[of] the political, economic and social system, and massive
indoctrination of the population for destabilizing the society
and the state, and also forcing the state to make decisions in
the interests of the opposing party’.96
‘Undermining’ is not the same as persuading. A prime
purpose of Russian information campaigns is to sow doubt
in post-modern societies already distrustful of ‘certainty’.
Such campaigns also have a habit of deluding those
who devise them. Excluding the information dimension
of Russian policy might simplify things, but it does not
advance understanding of a conflict that will be decided by
intellectual and psychological factors as well as material
ones. The conflict in Ukraine is a war of narratives as
well as arms.
For all this, ‘the state is not pure spirit’, as Trotsky
reminded us, and politics and war are not purely subjective
phenomena.97 They create facts, which can be a harsh
auditor of the performance of those who claim to be acting
in the national interest. The analysis that follows is an
attempt to interpose fact into a conflict where, seemingly,
‘nothing is true and everything is possible’.98
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99 For example, Nicolai Petro, ‘The Real War in Ukraine: The Battle Over Ukrainian Identity’, the National Interest, 10 January 2015; ‘Save Ukraine!’, Moscow Times,
19 March 2014 (in which he endorses Moscow’s claim that ‘97 percent of Crimeans … no longer feel comfortable within Ukraine’).
100 Razumkov Centre, September 2014, www.uceps.org/upload/1412757450_file.pdf.
101 ‘ The overwhelming majority of the minority and other representatives consulted by the Special Rapporteur on minority issues dur ing her visit to Ukraine described a
history of harmonious inter-ethnic and interfaith relations and a legislative, policy and social environment that was generally conducive to the protection of their rights,
including cultural and linguistic rights.’ Report of the Special Rapporteur on Minority Issues: Mission to Ukraine (Human Rights Council, Agenda Item 3), 27 January 2015.
102 The treaty, which obliges the parties to ‘respect the territorial integrity and … inviolability of borders between them’, contains general and specific provisions
regarding minority rights (Articles 3 and 12). Treaty of Friendship, Cooperation and Partnership between Ukraine and the Russian Federation, 31 May 1997.
103 According to a survey of the Kucheriv Democratic Initiatives Foundation in January 2015, only 19.9% of respondents nationwide held the view that European
integration ‘divided Ukrainian society’. At the same time, 29.7% supported membership of the Eurasian Economic Union, which implies (as other polls do) that a
proportion of citizens favours membership of both. http://dif.org.ua/ua/publications/press-relizy/sho-obednue-ta-rozednue-ukrainciv.htm; http://dif.org.ua/ua/
publications/press-relizy/krim-ne-opituvannnja-.htm.
104 The Kucheriv Foundation poll places it at 40%, as opposed to 22.4% who favour a non-bloc policy and only 10.1% who support membership of the Collective
Security Treaty Organization (CSTO).
Ukraine divided: between Russia, the West
and itself
However the conflict in Ukraine evolves or ends, its
implications will be significant for the West, and not only
its immediate protagonists. Ukraine’s failure to realize its
core objectives – the restoration of its territorial integrity
and control of its borders – will have repercussions
throughout the NATO treaty area: less so if that failure is
confined to Crimea, more so if ‘frozen conflict’ becomes the
‘new normal’ in eastern Donetsk and Luhansk. As events
in Moldova and the South Caucasus have shown, ‘frozen
conflict’ is a misnomer for a frozen process of conflict
resolution. Such conflicts not only poison the body politic;
they mutate into fresh conflicts, sporadic or decisive. The
potential of escalation is not only a theme of Russian info-
war; it is a very real prospect. Yet even if these dangers can
be averted, Ukraine will confront problems equal to those it
faces at present. It will inherit a humanitarian catastrophe.
Macroeconomic stability and energy security will remain
precarious. For the better part of 20 years, the country
has been irresponsibly governed, and it is far from certain
that EU- and IMF-mandated reform will extirpate the
instincts of a bloated and avaricious state. These burdens
are subjecting an already exhausted country to tests it has
not experienced before.
The pertinent questions are whether
Ukraine’s divisions are the cause of the armed
conflict that broke out after President Viktor
Yanukovych left office and whether the
conflict has diminished or exacerbated them.
Bad governance is not a casus belli. Yet the perception of
Ukraine as a ‘divided country’, a ‘failed state’ and, pace
Putin, an ‘artificial state’ has shaped public attitudes about
the conflict and Russia’s role in it. How many countries
are not divided? Four of the most prosperous countries in
the EU – the UK, Belgium, Italy and Spain – are hosts to
separatist movements. In contrast to Ukraine, all of them are
blessed with benign geopolitical environments. No powerful
neighbours have an interest in their enfeeblement, let alone
dismemberment. The pertinent questions are whether
Ukraine’s divisions are the cause of the armed conflict that
broke out after President Viktor Yanukovych left office and
whether the conflict has diminished or exacerbated them.
It has been argued that the war is a ‘battle over Ukrainian
identity’.99 Yet this raises two questions: who decided to
wage war over it, and who enabled them to wage it? Recent
history does not support the view that the war in Ukraine is
a civil war, and only 20 per cent of Ukrainians believe that
it is.100 The view of the Ukrainian majority is supported by
evidence as much as by sentiment:
• Between 1992 and 2014, it was the absence of
conflict across ethnic, confessional and linguistic
lines that was noted by the UN, OSCE and PACE (the
Parliamentary Assembly of the Council of Europe),
latterly reaffirmed by the UN Special Rapporteur
on Minority Issues in January 2015.101 Between the
signing of the Russia–Ukraine State Treaty (31 May
1997) and Yanukovych’s fall from power (22 February
2014), Russia brought no official complaint against
Ukraine regarding its respect for minority rights.102
• Ukraine’s proverbial ‘balancing act’ between Russia
and the West is overstated. Under all four of its
presidents, Ukraine defined itself as a European state.
EU membership has never been a highly contentious
issue.103 It is NATO membership that has polarized
society, particularly after the 1999 Kosovo conflict
and 2003 Iraq war (wrongly perceived as a NATO-led
operation), though support for joining NATO is now
at unprecedented levels.104 Leonid Kuchma, who won
the 1994 election as the ‘candidate of the east’, not
only devised a ‘multi-vector’ policy but a ‘distinctive
partnership’ with NATO that was treated as a blueprint
for de facto integration. Yanukovych, architect of the
non-bloc policy, pursued an Association Agreement
with the EU and resisted Ukraine’s incorporation
into the Eurasian Customs Union, which he believed
(correctly) would sound the death knell for
his presidency.
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Box 1: Ukraine crisis – timeline
2013
21 November President Viktor Yanukovych abandons the
Association Agreement with the EU, seeking
closer ties with Russia. Small protests start.
30 November– Riot police brutally disburse student protesters
1 December at night. Protests escalate, with over 800,000
people demonstrating in Kyiv – a movement
that comes to be known as the ‘Euromaidan’
or just the ‘Maidan’. Significant protests also
occur in other cities in Ukraine.
17 December Vladimir Putin agrees to buy $15 billion
of Ukrainian debt and reduce the price of
Russian gas supplies by a third.
2014
16–23 January Parliament passes restrictive anti-protest laws
as clashes turn deadly.
20 February At least 88 people reportedly die in 48 hours
as protesters and police clash in Kyiv.
21 February President Yanukovych signs EU-brokered
compromise deal with opposition leaders.
22 February President Yanukovych flees Kyiv. Parliament
votes to remove president from power, elects
Oleksandr Turchynov acting president and
sets elections for 25 May.
23 February Parliament annuls Yanukovych’s August
2012 law allowing oblasts (regions) to adopt
Russian as their ‘official’ language. Vetoed by
Turchynov.
27–28 February Pro-Russian gunmen seize government
buildings in Simferopol.
1 March Russia’s parliament approves President Putin’s
request to use force in Ukraine to protect
Russian interests.
16 March In Crimea 97 per cent of people are said to
have voted to join Russia in a referendum
condemned as a sham in the West.
17 March The EU and US impose travel bans and asset
freezes on several officials from Russia and
Ukraine over the Crimea referendum.
18 March Putin signs a law incorporating Crimea into
Russia.
7 April Protesters seize government buildings in
Kharkiv, Donetsk and Luhansk in eastern
Ukraine.
16 April Ukraine announces the start of an ‘anti-
terrorist operation’ against rebel forces.
2 May Clashes in the Black Sea city of Odessa leave 42
people dead, most of them pro-Russian activists.
5 May–1 July Ukraine Ministry of Defence and National
Guard units gradually regain control of 23 out
of 36 districts seized by the rebels.
11 May The Donetsk and Luhansk ‘People’s Republics’
declare independence after referendums.
25 May Petro Poroshenko is elected president of
Ukraine on the first ballot.
27 June The EU and Ukraine sign the full Association
Agreement (having signed the political
chapters on 21 March).
17 July Malaysia Airlines Flight MH17 is shot down in
eastern Ukraine, allegedly by pro-Russian rebels.
31 July The EU and US announce more stringent
(Tier 3) economic sanctions, restricting access
by Russian banks to finance and by Russian oil
companies to long-term Western financing,
‘dual use’ and advanced technology.
22 August A Russian ‘humanitarian convoy’ arrives
at the besieged city of Luhansk without
Ukrainian permission.
28 August Rebel forces reinforced by Russian regulars
launch a major offensive towards the strategic
port of Mariupol.
5 September The rebels, Ukraine, Russia and the OSCE sign
a ceasefire and political framework agreement
in Minsk.
31 October Russia agrees to resume gas supplies to Ukraine
over the winter in a deal brokered by the EU.
2015
19 January Rebel and Russian forces launch a military
offensive, backed by heavy weapons; rebels
retake Donetsk airport on 22 January after
four months of fighting.
31 January Talks of the Trilateral Contact Group
(Ukraine, Russia, OSCE) in Minsk collapse
when rebel leaders decline to attend.
12 February Under the auspices of Ukraine, Russia, Germany
and France, representatives of the Trilateral
Contact Group and rebel leaders sign a second
ceasefire and political accord in Minsk.
18 February Ukrainian forces routed from Debaltsevo three
days after ceasefire was to have taken effect.
May Military activity in the conflict zone
intensifies.
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105 ‘Do You Support the Activity of Victor Yanukovych?’, Razumkov Centre (Kyiv), April 2014.
106 These were 5–8% for the right of oblasts to secede, 35% for a federal state, 49% for a unitary state – International Republican Institute, Public Opinion Survey:
Residents of Ukraine, 3–12 April 2014, www.iri.org/sites/default/files/2014%20April%2024%20Survey%20of%20Residents%20of%20Ukraine,%20April%20
3-12,%202014.pdf; Pew Research Center, Chapter 1. Ukraine: Desire for Unity Amid Worries about Political Leadership, Ethnic Conflict, 8 May 2014, www.pewglobal.
org/2014/05/08/chapter-1-ukraine-desire-for-unity-amid-worries-about-political-leadership-ethnic-conflict/.
107 The author observed this himself in December 2013. In the Kucheriv poll, only 8.3% of respondents characterized the Euromaidan as a ‘fight by radical and
nationalist groups against a lawful authority’ and 11.5% saw it as a ‘conflict by foreign powers on Ukrainian territory’. (More than one response was permitted.)
108 See Pew Research Center, Chapter 1.
109 According to an April 2014 Pew poll, 73% of eastern (as opposed to 30% of western) Ukrainians want Russian established as a second official language. But even in
eastern Ukraine only 1% would like to see Russian established as the sole official language of the country.
110 In t he most recent census (2001), 17.9% identified themselves as ethnic Russians and 29% as Russian-speaking.
111 Dmitr y Furman, ‘Kuchma has got the wrong people’ [Kuchme dostalsya ne tot narod], Vremya MN [The ‘Times’ of Moscow News], 15 October 2002.
112 For a discussion of these factors, see James Sherr, ‘Ukraine’s Scissors: Between Internal Weakness and External Dependence’ (Russie.Nei.visions no 9,
IFRI March 2006) and ‘Whither the Russian Factor?’, in Andrej Lushnycky and Mikola Riabchuk (eds), Ukraine on its Meandering Path between East and West
(Bern: Peter Lang, 2009).
113 For a wider discussion see ‘Towards the Next Security and Defence Review: Part Two – NATO’ (Third Report of Session 2014–15), House of Commons Defence
Committee, 22 July 2014, p. 17 (hereafter HCDC).
• Despite deep dissatisfaction with the quality of
governance, there has been relatively little discord
over Ukrainian statehood or borders. Eastern
Ukrainians have been estranged from Kyiv, whoever
has held office. Yanukovych was elected by 75–80
per cent of the region’s voters in February 2010, but
his support steadily declined, and by February 2013,
42.6 per cent did not support him at all.105 Following
the victory of the Maidan protesters, dissatisfaction
with Kyiv in the east rose to 67 per cent; nevertheless,
Pew recorded only 27 per cent support for secession
in eastern oblasts in May 2014, and Gallup’s figures
were decidedly lower.106 Fewer than 20 per cent of
Ukrainians as a whole viewed the Maidan as an action
instigated by radical nationalists or foreign powers.
The few large pro-regime protests against the Maidan
were organized by the authorities and were brief in
duration; participants in Kyiv’s ‘anti-Maidan’ were
paid a daily allowance and marshalled in and out.107
In Crimea (whose population is only 58 per cent
Russian), support for joining Russia did not exceed
42 per cent in 2013. According to Pew’s survey one
month after annexation, it had risen to 54 per cent,
but that was still a far cry from the 97 per cent who
supposedly voted for annexation in the Russian-
sponsored referendum.108
• The language issue, which has risen and fallen in
saliency since 1992, defies simple categorization.
Its potential divisiveness was defused by Ukraine’s
constitution of 1996, which establishes Ukrainian
as the ‘state’ language, but also guarantees ‘the free
development, use and protection of Russian and
other languages’ (Article 10). By raising Ukrainian
language requirements in university education,
Viktor Yushchenko’s government contravened the
spirit of these provisions, inadvertently garnering
support for the law of 8 August 2012, which enabled
eastern and southern oblasts to adopt Russian as
their ‘official’ language.109 The rash (and hastily
rescinded) annulment of this law by the Verkhovna
Rada (parliament) on 23 February 2014 deepened
perceptions in russophone communities, saturated by
Russian media, that Yanukovych had been deposed
by radical nationalists. In Ukraine the proportion
of Russian-language schools is greater than the
proportion of ethnic Russians in the country, but
lower than the proportion of Russian speakers.110
In occupied zones, Ukrainian-language schools have
been shut down, and in Russia, where some 2 million
Ukrainians reside, there are none at all.
This record accords poorly with the motifs of Kremlin
discourse. Ukrainians and Russians are not ‘one people’ with
a ‘common history’, but related peoples whose intersecting
histories have bred intimacy, ambivalence and conflict.
The traditions of what Dmitry Furman called the ‘Cossack
anarcho-democratic semi-state’ are clearly visible in the
two Maidans, the country’s ethno-religious diversity, its
civic literacy and the widespread distrust of power.111
Ukrainians have no difficulty distinguishing between
linguistic and state identity or between ethnic origin and
‘belonging’ (nalezhnist’). The ‘identity war’ thesis ignores
the factors that bind Ukraine together.112 It also sidesteps
what by March 2014 had become apparent: Russia’s
instrumental role in the conflict.
Like the USSR before it, the Russian Federation has
invested in a model of warfare designed to cripple a
country before the start of overt conflict.113 With and
without Russian help, Yanukovych had hollowed out
much of the state. For years the president had enabled
Russian loyalists, agents and money to penetrate Ukraine’s
military, security service and police. By December 2013
the Ukrainian Security Service (SBU) found itself under
de facto Russian subordination. So severely was the SBU
compromised that during the final days of Yanukovych’s
rule Russian-directed operatives were able to erase codes,
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114 Taras Kuzio, ‘Yanukovych Authorizes the Return of Russia’s FSB to the Crimea’, 24 May 2010, http://www.moldova.org/yanukovych-authorizes-the-return-of-
russias-fsb-to-the-crimea-209210-eng/. On Russia’s role in 2013–14, the author consulted senior security officials in March 2014. See also ‘Diplomatic Journal: Pavel
Felgenhauer on the Defence of Russia’s Perimeter’, 22 March 2015, http://rus.delfi.ee/daily/diplomaatia/zhurnal-diplomatiya-pavel-felgengauer-o-zaschite-perimetra-
rossii?id=71061427; and Poroshenko, 26 March 2015, http://korrespondent.net/ukraine/3496170-poroshenko-ranshe-sbu-na-80-sostoiala-yz-ahentov-fsb.
115 ‘Strelkov Said that It Was He Who Began the War in Ukraine’ [Strelkov soobshchil, chto eto on nachal voynu na Ukraine], BBC Russian Service, 20 November 2014.
116 Cited in Eastern Ukraine: A Dangerous Winter, International Crisis Group, Europe Report No. 235, 18 December 2014, p. 13.
117 On what is also termed ‘ambiguous’ and ‘network’ war, see Roger McDermott, ‘Russia’s Information-Centric Warfare Strategy: Redefining the Battlespace’,
Eurasia Daily Monitor, Vol. 11, issue 123, 8 July 2014 (Washington, DC: Jamestown Foundation); and for a somewhat different view, see Keir Giles, HCDC, p. 46,
Q154–195. On Putin’s ‘network state’ see Vadim Kononenko and Arkady Moshes, Russia as a Network State: What Works in Russia When State Institutions Do Not
(London: Palgrave, 2011).
118 The term maskirovka describes technical and tactical measures designed to make arms and actions appear to be different from what they are.
119 ‘Lugansk Factory Transports Equipment to Russia and Starts Production There’, http://finance.bigmir.net/news/companies/50185-Luganskij-zavod-vyvez-
oborudovanie-v-Rossiju-i-zapuskaet-tam-proizvodstvo---SMI, 27 August 2014, and <http://forbes.ua/business/1377967-kakie-predpriyatiya-donbassa-riskuyut-
okazatsya-v-rossii.
120 Igor Strelkov, ‘Is that all that you are capable of?’ [Eto vse, na chto viy sposobniy?], Vzglyad, 18 May 2014, www.vz.ru/world/2014/5/18/687251.html, and
https://www.youtube.com/watch?v=-T68YLCV0HA.
121 According to the Ukrainian parliament’s report of October 2014, 300 of these were killed trying to break out of encirclement. ‘Report Says 1,000 Soldiers Died During
Ilovaysk Disaster’, UNIAN, 21 October 2014.
undermine the integrity of communications systems and
destroy records.114 Thus, when Igor Girkin (alias Strelkov),
the first defence minister of the so-called Donetsk People’s
Republic (DPR), states that ‘if our detachment hadn’t
crossed the border, everything in short [i.e. the resistance]
would have collapsed’, he possibly inflates his own
importance.115 The state confronting him had effectively
suffered a stroke.
The direct intervention of Russian regular
forces in August, and the loss of nearly 1,000
Ukrainian troops in Ilovaysk, were a brutal
reminder that Ukraine is not fighting an
internal war.
Among the initial leaders of the insurgency in eastern
Ukraine, only one, Pavel Gubarev, is a Ukrainian citizen.
Girkin, a former FSB (Federal Security Service) colonel
with combat experience in Chechnya, was first deployed
in Crimea and, at the conclusion of that operation, crossed
into Donetsk along with several hundred other ‘tourists’
from Russia. The conflict he claims to have started is the
linear descendant of irregular wars fought on the fringes of
the Tsarist and Soviet empires. These were untidy, covert
and vicious wars, prosecuted as much by informal militias
and networks as by conventional armies. They blurred the
distinction between internal and interstate conflict, and
they were designed to do just that. Combatants in today’s
‘hybrid war’ are, accordingly, a motley assortment of
serving officers in the FSB and GRU (military intelligence),
remnants of Ukraine’s former Berkut ‘special’ police, the
private security forces of oligarchs, Cossacks, Chechen
fighters, adventurers and criminals. In the words of
a militia officer in October 2014, ‘mostly we have nut
jobs’.116 Finance in this ‘network war’ is as opaque as it
is in Russia’s ‘network state’.117
Hybrid wars are also prosecuted by ‘masking’ and make-
believe.118 The Russian ‘humanitarian convoys’ organized
in summer 2014 first appeared in the 1999 Kosovo conflict
under the banner of the Ministry of Emergency Situations,
then headed by the current minister of defence, Sergey
Shoygu. The maskirovka [disguise] was exposed when the
first convoy, stopped on the Ukraine–Romania border, was
found to contain military and dual-purpose equipment.
At least one of the convoys inspected by the OSCE in 2014
contained empty vehicles that then proceeded to remove
industrial machinery from occupied areas, arguably offsetting
the value of the humanitarian goods brought into them.119
In May 2014 (two months before his own dismissal),
Girkin lamented that the people of Donetsk were not
supporting him:
I admit that I never expected that in the entire oblast, one
cannot find even a thousand men ready to risk their lives even
for their own city. … Amongst the volunteers, the majority are
men over 40 who acquired their upbringing in the USSR. But
where are they, the young, healthy lads? Perhaps in the brigades
of gangsters who, enjoying the absence of authority, have
thrown themselves into plunder and pillage in all cities and
right across the oblast.120
By then, the separatists had lost the impact of surprise, and
Ukraine had recovered its bearings. The Ukrainian counter-
offensive between May and July, which regained control
of 23 of the 36 districts seized by the rebels, demonstrated
support for the state and foreclosed military collapse. Yet
it also induced the Kremlin to raise its game. The direct
intervention of Russian regular forces in August, and the loss
of nearly 1,000 Ukrainian troops in Ilovaysk, were a brutal
reminder that Ukraine is not fighting an internal war.121
Reconstitution of Ukraine’s offensive capacity in the ensuing
months provoked a still more dramatic Russian escalation
on 19 January 2015, which brought onto the field not only
fresh forces but munitions, weapons systems and electronic
warfare capabilities that were entirely new to the conflict.
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122 Oleh Tyahnybok, candidate of Svoboda, the main party of the right, secured 1.16% and Dmytro Yarosh of the far-right Praviy Sektor 0.71%. Nevertheless, Oleh
Lyashko, leader of the populist Radical Party, came third at 8.1%. ‘Ukraine: Early Presidential Election 25 May 2014’, OSCE/ODIHR, p. 34. On 26 October, Svoboda
secured six seats in the 426-member national parliament and Praviy Sektor one.
123 He received 35% of the vote in Kharkiv, 38.7% in Zaporizhye and 44.2% in Dnipropetrovsk.
124 Sergiy Kudelia, ‘Ukraine’s 2014 Election Result is Unlikely to be Repeated’, Washington Post, 2 June 2014.
125 James Sherr, ‘Ukraine’s Parliamentary Elections: The Limits of Manipulation’, Occasional Paper 91, Conflict Studies Research Centre, Camberley, 21 April 2002.
These offensives represent an escalation of information
war as well as war-fighting. The January offensive
demonstrated the pitiful irrelevance of the 5 September
Minsk accords, (which mandate the complete withdrawal
of foreign forces from the country); nevertheless, the
response was not the much mooted arming of Ukraine,
but a second Minsk accord that was sabotaged from
the moment it came into effect. Whereas the débâcle of
Ilovaysk preceded the September ceasefire, the débâcle of
Debaltsevo followed the ceasefire that was to have come
into force on 15 February. Not only does the Kremlin seek
to show that the West’s policy of sanctions is not working;
it is equally determined to show that it alone holds the
key to resolving this conflict. The purpose of Russia’s
military card is to deny Ukraine the baseline it requires
for political sustainability, fiscal solvency and structural
reform. If Minsk II stabilizes the situation, Russia will
create the conditions for ‘Minsk III’. This logic, which has
never wavered since Yanukovych’s departure, puts the
spotlight squarely on Ukraine’s state capacity, military
and economic, as well as the West’s resolve to sustain a
course that not everyone regards with enthusiasm.
Over a year after Yanukovych hastily left Kyiv, Ukraine is
no longer the country that it was. It is substantially more
consolidated and vastly more imperilled. Vladimir Putin
has done more than any leader, Russian or Ukrainian, to
forge a broadly based Ukrainian national identity that is
neither aggressive nor extreme. Despite their visibility on
the Maidan, the far-right parties were reduced to a rump
of under 2 per cent in the presidential election of 25 May
2014 and the parliamentary elections of 26 October.122 For
their part, the anti-Maidan candidates secured only 11
per cent of the vote in the latter. Although the exclusion
of Crimea and over 80 per cent of constituencies in
Donetsk and Luhansk by force majeure inevitably skewed
these results, the fact is that in the presidential election,
despite 21 candidates in the field, Petro Poroshenko
received a plurality in all eastern oblasts (including the
Donetsk and Luhansk districts where voting took place)
and avoided a second round by winning a national
majority of 54.7 per cent.123 Set against this, however, the
low turnout in oblasts that voted for Yanukovych in 2010
testifies to the disaffection that remains in much of the
east and south.124
The war has also given prominence to the parallel civic
state, a phenomenon first noted by the author in 2002.125 Its
ethos, summed up in the slogan ‘we rely upon ourselves’, is
symbolized by the Maidan and the cottage industries that
Box 2: Minsk II terms
1. Immediate and full bilateral ceasefire in specific
(otdel’niye) areas of Donetsk and Luhansk with effect from
15 February.
2. Withdrawal of all heavy weapons (by 50–75 km) by both
sides (N.B. on land).
3. Effective monitoring and verification regime for the
ceasefire and withdrawal of heavy weapons by the
Organization for Security and Co-operation in Europe
(OSCE).
4. Launch of dialogue, from day one of the withdrawal, on
holding of local elections and the ‘future regime’ in these
territories.
5. Pardon or amnesty for any figures involved in the Donetsk
and Luhansk conflict.
6. Release of all hostages and other illegally detained
persons.
7. Unimpeded delivery of humanitarian aid to the needy,
internationally supervised.
8. Definition of modalities for restoring full social and
economic links with affected areas, including Ukrainian
government disbursement of ‘social transfers’.
9. Restoration of Ukrainian government control over the
state border, throughout the conflict zone, following
constitutional reform and subject to the concurrence
of separatist leaders.
10. Withdrawal of all foreign armed groups, military
‘equipment’ (tekhniki) and mercenaries from Ukrainian
territory.
11. Adoption of a new constitution by the end of 2015,
with special provisions for specific areas agreed with their
representatives.
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126 On 10 November, the battalions were incorporated into the National Guard, though it remains to be seen what impact this will have on their ethos, their command
structures and their standards of discipline.
127 Stepan Bandera (1909–59), Ukrainian nationalist leader whose beliefs, actions and legacy remain deeply controversial in Ukraine.
128 Evgeniy Shvets, ‘Serhiy Taruta: “Rinat [Akhmetov] is no longer an oligarch, and I am bankrupt”’ [Rinat bol’she ne oligarkh. A ya – bankrot], LB.ua, 5 January 2015.
129 Office of the UN High Commissioner for Human Rights, Report on the Human Rights Situation in Ukraine, 15 May 2014, p. 4.
130 Amie Ferris-Rotman, ‘The Scattering of Ukraine’s Jews’, The Atlantic, 21 September 2014, www.theatlantic.com/international/archive/2014/09/ukraine-jewish-
community-israel/380515/; International Crisis Group, Eastern Ukraine, pp. 17 ff.
sprang up around it. Its most visible wartime manifestation
has been the formation of all-volunteer territorial defence
battalions, currently 37 in number, more than a quarter of
them from eastern oblasts. This helps to explain why the
majority of Ukrainian soldiers in the conflict are Russian-
speaking.126 But the influence of the parallel state can now
be felt across the board, from the bottom-up organization of
defence in Mariupol to the fabrication of body armour out
of household materials, and the provision of winter clothing
for soldiers and shelters for families whose homes have
been destroyed.
At the same time, the strength of the parallel state is a
commentary on the debilities of the legal state. Compared
with the Yushchenko years, there are better prospects that
the two will converge (an example being the emergence
of Samopomich [Self-Help], which won 33 seats in the
new parliament). Yet the legal state, with its bureaucratic
mastodons, suffocating hierarchies, mindless routines
and idiotic regulations, remains very much in place.
Along with its silent partner, the quasi-criminal shadow
state, it is the gum that fouls every good policy and drives
all but the toughest reformers to capitulation or mental
breakdown. It is this malign synergy, rather than any
latent Banderist ideology,127 that has poisoned relations
between the largely self-financing territorial battalions
and the Ministry of Defence, which has covered up fraud
and theft on an unconscionable scale.The last minister to
confront such a challenge, Anatoliy Grytsenko, managed
to remain in office for almost three years – in the event,
not long enough to produce the ‘irreversible’ changes he
sought. Less than a month after Yanukovych took office,
the six deputy ministers and senior officials dismissed
by Grytsenko were reinstated.
The considered wisdom in Kyiv is that President Poroshenko
and Prime Minister Arseniy Yatseniuk are the least bad
leaders that Ukraine has ever had. Intellectually, they
understand the necessity for reform as much as anyone. But
that will not be enough to empower reformers, bring the
economy out of the shadows and overcome the culture of
power and patronage of which they are part. So far, their
actions have been in line with Augustine’s prayer: ‘Lord,
make me good but not yet.’ The differences between the
Russian state, which appears to work even when it does
not, and the Ukrainian state, whose deficiencies escape no
one, are threefold: money, coercion and deference to power.
The challenge for Ukraine is to produce systemic change in
penurious circumstances and by lawful means in a country
where power and privilege are scorned. This is both a
constraint and an opportunity. So is public recognition that
there is no longer any choice.
There is no choice. In present circumstances, prolongation
of the status quo invites destitution and chaos. Over 40
per cent of Ukraine’s coal mines (accounting for 66 per
cent of production) are flooded. Infrastructure has been
destroyed and assets confiscated on a colossal scale. By no
means all of Donetsk and Luhansk was a rust belt. Iron and
steel accounted for 34 per cent of export revenues. There
was measurable (albeit inadequate) investment in energy
efficiency and modernization following the gas crises of
2006 and 2009. Firms such as the Industrial Consortium
of Donbas undertook complex and highly profitable
construction projects for European customers. Today, its
assets are in Russian hands, and its co-chairman, former
Donetsk governor Serhiy Taruta, is bankrupt.128 In this
matrix, Ukrainian military and National Guard units are not
entirely free of blame. They fire into civilian areas, though
supposedly only when fired upon.
The challenge for Ukraine is to produce
systemic change in penurious circumstances
and by lawful means in a country where
power and privilege are scorned. This is
both a constraint and an opportunity. So is
public recognition that there is no longer
any choice.
This dire economic situation, combined with social
and humanitarian conditions in the east, would pose a
formidable challenge to any prosperous EU member state.
In its May 2014 report, the UNHCR described ‘an increasing
number of human rights abuses’ in occupied areas, ‘such as
abductions, harassment, unlawful detentions’ and torture.129
These practices, along with threats against Jews (which
have reduced the 17,000-strong Jewish community of
Donetsk to a rump of several thousand), attacks on Roma
and the ‘plunder and pillage’ described by Girkin, form
the backdrop to a catalogue of material deprivation and
breakdown of essential services, threatening communities
with starvation.130 After the destruction of Debaltsevo, 15
buses filled with residents heading west; only one went east.
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131 Meeting notes shared in confidence by an experienced Western consultant, November 2014; letter from a friend of the author in Donetsk, March 2015.
132 See Putin’s speech to the German Bundestag, 25 September 2001.
133 Arkady Moshes, ‘Will Ukraine Join (and Save) the Eurasian Customs Union?’, Policy Memo 247, PONARS Eurasia, April 2013.
134 Andrew Wood, ‘Reflections on the Closing of the Russian Mind’, The American Interest, 3 November 2014.
135 Sergei Lavrov, ‘The Present and the Future of Global Politics’, Russia in Global Affairs, No. 2, April–June 2007, http://eng.globalaffairs.ru/number/n_8554.
This tableau of grief offers the authorities every
opportunity to drive a wedge between local citizens and an
occupying force. Instead, Ukrainian bureaucracy is helping
them build a ghetto. President Poroshenko’s decree of 14
November cutting off social disbursements in occupied
zones would be justifiable if residents could leave and
collect them elsewhere. Instead, a pass regime has been
imposed, passes only arrive after much delay, and local
officials in neighbouring localities (‘on instructions from
Kyiv’) then impose fresh requirements.131 This amounts to
short-sightedness on a strategic scale.
The country now finds itself in a most paradoxical situation.
The war has united Ukrainians as never before. But where
divisions remain, they are sharper than they were. Ukrainians
in occupied zones fear both sides and trust no one. The Minsk
accords have cast them into a void, and the authorities in Kyiv
behave increasingly as if they no longer exist.
Through the Kremlin looking glass
Years before these events, Russia had become a proud,
resentful, apprehensive and ambitious power. Fifteen years
of Western dominance have instilled an abiding sense of
grievance. Brutal and bungled interventions (Iraq) and
serendipitous ones (Libya) have also nurtured feelings of
contempt. For the current occupants of the Kremlin and
a fair proportion of their predecessors, Ukraine is a vital
interest on all significant counts: identity, legitimacy,
economics and geopolitics. Yet the current conflict has also
become the pivot in a struggle to reshape the post-Cold War
security order, which Gorbachev and Yeltsin co-authored,
but which many saw as a Versailles-type diktat even before
Putin came to power. The Kremlin’s objectives and policies,
and many of its policy instruments, have a strategic
focus; yet it displays the utmost flexibility, boldness and
occasional rashness in tactics. The Russian leadership
has proved to be an astute judge of the weaknesses of
opponents, but as the present conflict shows, it can be
a poor judge of their strengths.
One need not sit inside the Kremlin to understand that
Ukraine’s incorporation into the European system will
have repercussions inside Russia and its governing elite.
Ukraine is not just any neighbour but a core component
of what many Russians see as the ‘Russian world’. By
defining Russia in ‘civilizational’ terms and juxtaposing
the ‘distinctiveness’ of russkiy mir to the liberal, post-
modern and multicultural values of the West, Russia’s
‘conservatives’ and Eurasianists have raised their game
as well as the consequences of failure. This is manifestly
true for President Putin, who has hoisted himself with
this ideological petard, however ‘pragmatic’ his own
views might be. (It is worth recalling that during his first
term he appealed to Europe on the basis of the ‘European
culture’ he now vilifies.132) Moreover, Ukraine is pivotal
to Russian-sponsored integration projects – and not only
in civilizational terms. As Arkady Moshes wrote in 2013,
the ‘stagnation of Eurasian integration’ makes Ukraine’s
inclusion ‘more critical than ever’.133 As a transit hub for
energy and a potential platsdarm (bridgehead) of the
West, Ukraine’s strategic importance is an article of faith.
Yet the dynamic of today’s policy is as much the product of
inner regime imperatives as of these broader secular factors.
Since his re-election in 2012, Putin has narrowed the
circle of power and reconstituted the political system in a
defensive and illiberal direction. Intellectual claustrophobia
and opacity now define a leadership milieu that during
Putin’s first term was appreciably more diverse. This
‘closing of the Russian mind’, in Andrew Wood’s phrase,
has put certain phobias and nostrums beyond the reach
of evidence or argument.134
Chief among these is the presumed determination of the
United States and its ‘satellites’ to isolate Russia, enfeeble
it and deprive it of influence in Europe. As Sergei Lavrov
has stated on more than one occasion, the aim of Western
sanctions is not to change Russia’s policy, but its regime.
At the same time, the Kremlin perceives that Europe
lacks the mettle and cohesion to pay the price that its
principles dictate. Business interests are Europe’s interests
in Russian eyes, and these interests, which require a strong
and reliable Russian partner, will eventually reassert
themselves. Moreover, the Kremlin believes that the West
is ‘losing its monopoly on the globalization process’.135
Although increasing dependency on China is a source of
marked discomfort, the emergence of a world of ‘multiple
values centres’ is seen as conducive to Russian interests
even if it offers little practical help. Finally, nothing
that has occurred in Ukraine since November 2013 has
dislodged the axiom that ‘Ukraine cannot stand alone’.
The second Maidan is viewed as a US special operation,
as was the first. From this perspective, Ukraine’s moral
investment in its own survival is irrelevant. One will
look in vain for anyone in Russia who believes that the
‘Banderist clique’ in Kyiv can survive without ever greater
levels of Western support.
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136 Peter Pomerantsev and Michael Weiss, The Menace of Unreality: How the Kremlin Weaponizes Information, Culture and Money (The Interpreter, Institute of Modern
Russia, 2014), p. 5.
137 Lavrov’s statement at Valdai Club meeting, 23 October 2014.
138 Samuel Charap and Jeremy Shapiro, ‘Consequences of a New Cold War’, Survival (IISS, April/May 2015).
139 But not in that form. See James Sherr, ‘Russia and the EU: The End of Illusions?’, Heinrich Böll Stiftung, June 2014, https://www.boell.de/sites/default/files/e-
paper_aupo2014.pdf.
In their masterful study The Menace of Unreality, Peter
Pomerantsev and Michael Weiss depict Russia’s information
offensive in the West as a potent synergy of innuendo, false
analogies, non sequitur and contradiction.136 Yet this might
also serve as a commentary on how Russia disinforms itself.
The synergy is regularly refreshed by the elements of truth
that it doubtless contains. Reality checks, where they have
occurred, have led to a redrawing of lines rather than a re-
examination of underlying assumptions.
The Kremlin has difficulty understanding that Europe’s
divisions are not objective facts defined by immutable
political fault-lines, but realities subject to change. Putin is
also temperamentally averse to the idea that for Europe’s
elites, rules matter and partnership with Russia requires
mutual trust as much as material interest. His interpretation
of the West’s motivations and agenda assumed that Europe’s
attachment to the post-Cold War system was as cynical as
his own. Owing to these faulty premises, he was unprepared
for the alienation of Angela Merkel and the reinforcement
of transatlantic links. Thus the EU’s adoption of Tier 3
sanctions under German leadership and in unison with
the United States came as a complete surprise.
But arguably Putin’s greatest error was to underestimate
the resilience of Ukraine. Two months after the Kremlin
declared that ‘Ukraine is ours’, Yanukovych fled in disgrace,
and Russia found itself with no influence at all. Within
weeks, the state re-emerged. Ukraine reconstituted military
force and by May 2014 had begun to win battles against the
insurgents. Outside its initial strongholds, the insurgency
failed to gain a critical mass, and by late summer it was on
the point of collapse.
None of this means that the Kremlin cannot achieve its core
objectives: to create a semi-‘mobilization’ regime at home,
to wreck Ukraine if it cannot control it, to preserve Russia’s
western borderlands as a ‘privileged space’ and to make
Europe accept that ‘there can be no security without Russia’. In
any serious undertaking, there are mistakes and setbacks. But
in the Russian mind war is a clash of wills, not an accounting
exercise. The Kremlin’s cognitive framework contains some
hard truths for Western policy-makers: an existential faith
in Russia’s greatness, a willingness to accept risk, damage
and opprobrium in the service of enduring state interests.
‘He who wills the end wills the means.’ Russia’s custodians
believe that ‘reform’ and trust in the country’s enemies led to
the USSR’s collapse, and they have no intention of repeating
that experience. These predilections suggest that the path to
accommodation will be long and arduous.
Clarity and purpose
Against one benchmark of assessment, its own burdens and
priorities, the West’s response to events since February 2014
has been impressive. Against a second, Russian tenacity, the
adequacy of this response is far from certain. For the West
to raise and maintain its game, several revisions of thinking
and practice warrant consideration:
• Whether the West plays its cards well or badly, it
faces a protracted struggle with Russia. The ‘crisis’
paradigm (which stimulates a Pavlovian search
for ‘endgames’) is illusory. Over the past 20 years,
Russia has attempted to limit the sovereignty of
neighbours within the framework of a treaty regime
that recognized no such limitation. It has now torn
up that framework. Today there is no international
law east of the Narva and Prut. Putin’s resurrection of
the notion that language and ethnicity – rather than
citizenship and internationally recognized borders –
are the proper basis of statehood is a test for the legal
order elsewhere. Statements by Lavrov and Deputy
Foreign Minister Konstantin Dolgov to the effect that
Moldova and the Baltic states should ‘consider events
in Ukraine and draw conclusions’ confirm that major
interests are at stake.137 These interests will not be
protected by a patch-and-mend approach.
• The West therefore faces stark choices. The merit of
the ‘realist’ prescription – that Russia be conceded
its sphere of influence – is that it goes to the heart
of the matter. The defect of the prescription is that
Europe will not be able to endure it. We are no longer
in a 19th-century world where ‘zones of security’
can be produced by lines on maps or people treated
like furniture in a room. Betraying Ukraine – what
else would it be? – and, soon enough, Moldova and
Georgia will add to the stock of Vichyite states in
Europe with no love for what remains of the West,
and even less respect. It will then be entirely rational
for Latvians or Poles to ask why, if the West is
unwilling to uphold the Paris Charter by means short
of war, it should be willing to uphold the Washington
Treaty by means of war when ‘hybrid’ threats arise.
• The West is then left with the task of defending the
post-Cold War settlement and deterring those who
would damage it further. To some, it is axiomatic
that this will lead to a ‘new Cold War’.138 Very
possibly.139 But the Cold War was not the reason for
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East–West discord. It was the result. It arose because
fundamental interests were in dispute, and it ended
when they ceased to be in dispute. Today they are in
dispute again. Had there been no Cold War, the issues
at stake in Ukraine would be no different from what
they are now. Either the West bases its interests on
a Europe of sovereign states, free to chart their own
course, or it resigns itself to a coerced stability and the
certainty of future conflicts.
• Ukraine’s sustainability as a sovereign state and
an integrated one depends first and foremost on
Ukrainians. Nevertheless, they cannot succeed
without Western support. That support must be
multi-dimensional, well resourced and toughly
conditional. Strategic patience is needed as well.
A weak and fractured state is at war with a nuclear
power. Ills that are embedded and systemic cannot
be remedied without time and resources. Both the
aid provided and the aid envisaged by the European
Union, United States and International Monetary
Fund are a life-support system, but not a launching
pad for reform. In seeking an alchemy that will
underwrite reforms without deferring them, financial
assistance must be matched by institutional support
and elements of co-management.
• Towards Russia, strategic patience might not be
enough. In the long term, time works against it.
Within two years, the combination of sanctions and
low oil prices is likely to have a debilitating effect
on the Russian state. Yet it never was likely that the
Kremlin would agree to a war of attrition on the
West’s terms, at least so long as other tools of policy
existed. Those tools are force and the threat of force.
Because of them, time works even less to Ukraine’s
advantage than to Russia’s. Ukraine and its Western
partners need to find a way of devaluing these tools
and turning time to their own advantage. That will
require deterrence, not only on Ukraine’s western
border but within the country too. The West has
already undertaken modest measures to improve
Ukraine’s defences. We do not know how Putin will
respond if they gather momentum. What we do know
is how he responds to weakness.
It is time to abandon the notion that the Kremlin is
concerned about anybody’s welfare other than its own.
As the leaders of the Ukraine insurgency themselves
lament, they are but pawns in a bigger game. In this
struggle, Moscow does not care whether its ‘compatriots’
flourish or starve. It does not care about Western
goodwill unless it can be used against the West.
Nevertheless, Russia’s policy will change when its
governing elites conclude that the current course is
damaging the country’s interests and their own. With
firmness and patience, that outcome is achievable. The long-
term aim of Western policy should be to remove the new
dividing lines that Russian policy has created. Meanwhile
Western governments should be alert to any signs of ‘new
thinking’ in the country and give thought to the contours of
a diplomatic settlement that Russia might one day wish to
honour. But until the premises of Russian policy change, any
agreement is likely to be the opposite of a solution, and any
respite gained is likely to be very short-lived.
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5. Russian Foreign Policy Towards the West
and Western Responses
James Nixey
140 For a good exposition, see Andrew Monaghan, A ‘New Cold War’? Abusing History, Misunderstanding Russia, Chatham House Research Paper, May 2015.
141 See, for example, warnings that Crimea could be next, by security specialist Alexei Arbatov, ‘Yushenko Sentenced the Black Sea Fleet’, Novaya Gazeta, 22
May 2008, http://www.ng.ru/cis/2008-05-22/1_yushenko.html; Askold Krushelnycky, ‘Crimean peninsula could be the next South Ossetia’, the Independent,
28 August 2008, http://www.independent.co.uk/news/world/europe/crimean-peninsula-could-be-the-next-south-ossetia-910769.html; or Sergey Zayats, once the
administrator of Sevastopol’s largest district, ‘In Black Sea port, Ukraine is sovereign, but Russia rules’, McClatchy DC, 19 September 2008, http://www.mcclatchydc.
com/2008/09/19/52808/in-black-sea-port-ukraine-is-sovereign.html.
142 For example, Putin has referred to the Winter War with Finland in 1939–40 as an example of a strong Russia necessarily correcting border mistakes. See ‘Putin
Justified the Attack on Finland’, inoSMI.ru, 22 March 2013, http://inosmi.ru/sngbaltia/20130322/207240868.html#ixzz3S5xXW1XV.
Introduction
Russian foreign policy did not suddenly change in 2014 with
the crisis over Ukraine. Many debate whether we are in a
‘new Cold War’,140 but a newly assertive Russia is a misnomer.
Neither the Kremlin’s threat perspective nor its ambition in
the form of a challenge to European territorial integrity is
markedly different from what it has been in the past 10 years.
Russian foreign policy, for all the challenges it presents, has
been telegraphed. Moscow has been nothing if not consistent.
Indeed, the deterioration of relations with the broadly
defined West long predates not only the tumultuous events
of 2014, but also the colour revolutions in other parts of
the former Soviet Union, the 2008 war in Georgia, the
Arab Spring of 2010–11, and the anti-government street
protests in Russia in 2011. All these significant occurrences
are frequently but incorrectly cited as initiators of a sea-
change in Moscow’s attitude to the external world, which
is, in reality, over a decade old. The Russian leadership may
have misread them (as Western-inspired), but none made
the Kremlin change its course because it was already on a
distinctly hostile path.
Russia’s foreign policy play is increasingly
transparent to all but those determined
not to see it.
Thus the West was unprepared for the Crimean invasion and
annexation, but it should not have been surprised.141 Policy-
makers, especially in Germany, were deaf to pleas for caution
in integrating Russia into Western structures before it was
ready with a rules-based economy and society, because those
warnings did not fit the West’s chosen narrative. In short,
there was a refusal to see Russia as anything other than some
form of qualified or quasi-partner, real or at least potential.
What has changed is the tempo, never the leadership’s
intentions. This is not to suggest that it has always been the
goal to invade Ukraine. Indeed, the Kremlin’s foreign policy
in 2014 was characterized by a great deal of opportunism.
But the prevailing view in Moscow is still that Russia was
strong in Soviet times and weak in the 1990s, and that it is
now, apparently, strong again (in spite of what it perceives
as an attack on its economy), largely by virtue of its nuclear
arsenal. Agreements made in the 1990s under pressure,
in Moscow’s view, are deemed to have no validity now.
According to the Kremlin, it is the West that has destroyed
the rules, so Russia must act in its own interests. Russia,
it then follows, is no worse than the West and therefore
lecturing will not be accepted. In other words, Russia’s
borders are, for its leadership, provisional – determined by
accidents of history142 and to be adjusted when necessary.
Well before 2014 Moscow was prepared to use military
instruments – to limit Georgian geopolitical orientation
(notably in 2008), as well as to make aggressive moves in
the energy and trade sectors. But the change of tempo is
signalled by a greater willingness to take strong reactive
action. This was previously viewed as unrealizable but
Vladimir Putin was presented, unexpectedly, with a
historic opportunity in Crimea to act while meeting
only minimal resistance.
Notwithstanding the continuity in Russian foreign policy,
the picture has become starker and clearer since 2014.
Russia’s foreign policy play is increasingly transparent to
all but those determined not to see it. The leadership’s
ambitions are now in plain sight: in the former Soviet
Union, Russian control over the other states’ political
orientation is demanded with various degrees of
stringency, but there is a fundamental insistence on
acknowledgment of Russia’s primacy around its borders.
In particular, Ukraine is required, at a minimum, to be
declared neutral and subject to the Kremlin’s discretion to
interpret any new concords for this region. From Europe,
Moscow demands compliance over its trade practices,
while it continues to play divide-and-rule with individual
member states of the EU, consolidate its status as a long-
term energy partner and call for a new European security
architecture (with its subtext of a Russian veto). With the
United States and NATO, acknowledgment of Russia’s
equal status is a clear requirement – in effect, another veto
over major global decisions. In Asia, increased trade and
having China as an ally are the main ambitions. The rest of
the world is seen as relatively less important. Ukraine has
taken the oxygen from broader foreign policy questions.
However, the leadership sees economic mileage to be
gained from some countries in Latin America, and views
it as important that US power is not boosted by successes
in the Middle East.
The following sections explore these issues with regard to
Russia’s immediate periphery, Western Europe and the EU,
and the United States.
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143 In a 2014 Levada Centre report only 32% of those surveyed wanted Russia to remain in its current borders, 58% believed Russia’s borders should expand, including
17% who thought Russia’s borders should contain all the former Soviet States – ‘Public Opinion 2014’, Levada Centre, March 2015, http://www.levada.ru/sites/
default/files/om14.pdf, p.158.
144 Consisting of Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.
145 This was the essence of George H. W. Bush’s ‘Chicken Kiev’ speech, in 1991, which cautioned against nationalist uprisings in the ex-Soviet republics.
146 James Nixey, The Long Goodbye: Waning Russian Influence in the South Caucasus and Central Asia, Chatham House Briefing Paper, 2012.
147 Comments to the press on 3 March 2014, Washington DC, reported in ‘Obama: Russia’s actions in Ukraine put Putin on the ‘wrong side of history’’, the Guardian,
3 March 2014, http://www.theguardian.com/world/2014/mar/03/russian-sanctions-likely-putin-ukraine-crimea.
148 See ‘Evgeniy Shevchuk: Transnistria is Ready for a Referendum on Self-Determination’, Komsomolskaya Pravda, 11 November 2014, http://www.kp.ru/
daily/26305/3184392/; or ‘Rogozin: Russia Continues to Support Transnistria’, RIA Novosti, 11 November 2014, http://ria.ru/world/20141111/1032816550.html.
Changing the status of Moldova is effectively what the ‘Kozak Memorandum’, written and rejected in 2003, was intended to do.
The broad directions of Russian foreign policy addressed
here are not designed by people or institutions such as
the minister or ministry of foreign affairs, or the allegedly
influential deputy chief of staff responsible for foreign
policy, Yuri Ushakov, and thus only a longer exposition
could and should address such strategically impotent
officials and their departments.
A shared neighbourhood: dominance
and conflict
Russia’s neighbourhood is not shared as far as the majority
of Russian public and elite opinion is concerned. The crux
of ‘the Russian challenge’ lies in the possessive attitudes
towards the other 14 former Soviet states evinced by both
the leadership and the population.143 Not having undergone
de-Sovietization, Moscow’s view was and is that the larger
parent state has pre-eminence over the smaller and the
weaker ones. For the Kremlin, centuries-long ascendancy
awards it rights to modern-day control.
Moscow further believes that NATO and the EU will never
grant membership to countries with unresolved conflicts
and whose borders are disputed. This belief is not without
reason since the EU and NATO have themselves stated as
much, though not explicitly in the Lisbon Treaty or the
North Atlantic Treaty. Of the six countries in the Eastern
Partnership,144 for example, only one, Belarus, is not party to
an unresolved conflict with significant Russian involvement.
But it is under Moscow’s control anyway – President
Alexander Lukashenko’s recent awkward behaviour for the
Kremlin is only the latest in a series of U-turns. There is a
certain logic, then, not just to domination but to starting
or sustaining conflicts that will, as the leadership sees it,
repel ‘Western encroachment’.
As Russian-imposed constraint is unacceptable (to varying
degrees) to each of the 14 countries, it has slowly become
unpalatable to the West by extension. It was not always
thus. In the heady days of early 1990s’ independence, the
West, led by the US, pursued a ‘Russia first’ policy145 based
on the belief that Russia would evolve towards common
views and a democratic structure. Real autonomy for the
‘newly independent states’ was seen as being of secondary
importance, but the West’s view gradually accommodated
this increasing reality. The Kremlin’s did not. Contrary to
popular belief, the West does have a policy of sorts towards
the ex-Soviet states; that is to no longer let Russia ride
roughshod over them. This policy may be underfunded
and inconsistent, and at times amounts to little more than
‘somebody should do something’. But the Western rhetoric has
at least changed to counter the Russian leadership’s bombast.
In practice, of course, Russia does also curtail each
of the other states’ independent ambitions – also to
varying degrees, ranging from the relatively low Russian
penetration of, say, Tbilisi-controlled Georgia or Azerbaijan,
to the acquisition of large parts of the Armenian economy
or a Moscow-installed puppet president in Kyrgyzstan. Most
former Soviet states at least pay lip-service to aspiring to
closer relations with the West. But whether they kowtow
to Moscow or rebel against it, they all pay a price in curbs
on their sovereignty.
The current conflict between the Kremlin and the West is in
the main due to the confluence of the Russian elite’s largely
Soviet and Tsarist legacy mindset, the West’s attitudes
towards the non-Russian post-Soviet countries since 1991,
and each of those 14 countries’ own flourishing senses of
identity and changing assumptions of Russia’s trajectory.
Neither the leadership nor the majority of the population of
a single one of these states desires a return to the Russian
fold. This does not, however, dissuade the Kremlin. Russia’s
prerogative, as it sees it, trumps the other countries’ rights
to exercise full sovereignty – particularly in their foreign
policy orientations. Moscow’s assumptions as to what
Russian speakers in ex-Soviet states want are also a factor.
The leadership is attempting to push back the tide with
limited immediate success and to no long-term avail.146 This
suggests that the Russian elite really is ‘on the wrong side
of history’, as Barack Obama has stated.147
Countries under the thumb
By repudiating more clearly than ever the post-Soviet
‘settlement’, Moscow has raised questions over an arc from
the Baltic states through Eastern Europe to the Caucasus and
Central Asia. Further trouble is conceivable: for example,
Dmitry Rogozin, a deputy prime minister, has floated a
change of status for Transnistria.148 Some even more hawkish
elements are casting envious eyes on Kazakhstan with its
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149 The Foreign Policy Concept of the Russian Federation sets out Russia’s obligations to its diaspora population, particularly in CIS countries. See, for example, Article 5
and Section IV: http://kremlin.ru/acts/news/785.
150 Jack Farchy, ‘Tajikistan looks to China as Russian remittances dry up’, Financial Times, 22 October 2014, http://www.ft.com/cms/s/0/2c87ee20-58f9-11e4-9546-
00144feab7de.html#slide0 [subscriber access].
151 Details of military reinforcement and reform of the basing system of the Black Sea fleet in Sevastopol by summer 2015, and future plans, can be found in Dmitry
Boltenkov and Maksim Shepovalenko, ‘Russian Defense Arrangements in Crimea’, Moscow Defence Brief 43 (5), 2014, http://www.mdb.cast.ru/mdb/5-2014/item4/
article1/.
152 See Roy Allison, ‘Russian “deniable” intervention in Ukraine: how and why Russia broke the rules’, International Affairs 90: 6 (2014), pp. 1278 and 1280.
153 Putin first mentioned the concept ‘Novorossiya’ in his ‘Address to the Federal Assembly’ on 18 March 2014. Novorossiya was the name of the formerly Ottoman
territory conquered by the Russian Empire in the Russo-Turkish Wars, which now covers much of southern and eastern Ukraine. It became part of the Ukrainian Soviet
Socialist Republic during the Soviet period. Since the dissolution of the Soviet Union the term ‘Novorossiya’ has been used controversially by Russian nationalists.
large ethnic Russian population and oil wealth.149 Putin and
Kazakhstani President Nursultan Nazarbaev are relatively
close, but the latter runs a tight, clan-based regime which
is harder for Russia to penetrate. When Nazarbaev departs,
however, presumably within the next 10 years, northern
Kazakhstan may be in the Kremlin’s crosshairs, especially
if the wider geopolitical situation deteriorates. Belarus is
probably even more at risk if it were to undergo a ‘colour
revolution’. And in Tajikistan, there is great concern in
Dushanbe’s government that 250,000 Tajik migrants in
Russia now have Russian passports. These migrants could
become the focal point for a xenophobic backlash. Tajikistan
has reportedly seen a 20 per cent drop in remittances since
the summer of 2014.150
The Black Sea
In the Kremlin’s view, if access to the Black Sea with its
warm-water coastal ports were restricted, its regional
influence would contract. The Russian military elite sees
regaining Crimea as momentous in restoring strategic
competences. Military support for and renewal of the Black
Sea fleet is under way.151 Some analysts have suggested that
this indicates an effort to restore the peninsula as a platform
for power projection into the Black Sea and beyond – and to
prevent its loss were a pro-Western Ukrainian government
to revisit the Kharkiv Treaty granting Russia leasing rights
until 2034.152 Heavy militarization outside Sevastopol
suggests that Crimea is intended to be a bridgehead – not
dissimilar to Kaliningrad. It is conceivable that the Kremlin
really did think, as it has contended, that had it not acted,
the new Ukrainian government would have invited NATO
into Sevastopol.
Russia is now likely to seek to translate land-based gains
into an extension of its maritime territory in the Black
Sea, by claiming Ukraine’s continental shelf and exclusive
economic zone as its own. In addition to serving Russia’s
wider geopolitical agenda, such a move could offer access
to unexploited hydrocarbon deposits. Other countries
bordering the Black Sea would almost certainly not
recognize the legality of such a claim, but Moscow could try
to circumvent their objections by unilaterally renegotiating
maritime boundaries with them. This may explain why
Moscow has incrementally changed the independent
status it had accorded Abkhazia, first by giving itself more
official control under a November 2014 treaty and then by
eliminating border controls altogether in February 2015.
Customs, Economic and Eurasian Unions
Vladimir Putin has long convinced himself that ‘colour
revolutions’ (as in Georgia, Ukraine and Kyrgyzstan)
are directed from the United States and, as with
supposed direct US support for the Arab Spring, have a
malign geopolitical purpose. As noted over the Russian
interpretation of NATO’s intentions in Crimea, such false
perceptions are nevertheless a reality to the Russian
leadership. To counter this, the Eurasian Union is Putin’s
big geopolitical idea to consolidate people and lands – his
self-declared front-line of continuity. While he appears to
concede that a Soviet Union Mark II is impractical if not
undesirable, the putative borders of the Eurasian Union do,
coincidentally, conform to those of the USSR, minus the
probably-lost-to-Europe Baltic states.
Putin’s Eurasian Union is still a long way from becoming a
real political entity. He has been forced to move slowly with
the other newly (if nominally for him) independent former
Soviet states. The alliance evolved from a straightforward
customs union in 2005 to a Eurasian customs union in 2010,
becoming the Eurasian Economic Union in 2015 – all useful
economic preliminary steps towards a full – i.e. political –
Eurasian Union. This, finally, is intended to provide Russia
with the instruments for control in creating an alternative
pole to the EU-centric order. But the Eurasian Union is
intended to be more than a legal framework for dominion
over ‘wayward’ one-time dependencies – it is designed
to be a new geopolitical force capable of standing up to
all competitors on the world stage. Eurasianism provides
the ideological glue and Russia, of course, is the self-
appointed head of the Eurasian civilization. The concept
of Novorossiya is an ideological extension and historical
justification of this project.153
Each iteration of the union has so far had only moderate
success in attracting members among a wary group of
countries. Membership has been limited to those countries
over which Moscow has the greatest hold. Russia’s
worsening economic situation means that the union is
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154 Andr iy Kovalenko, ‘The Mythical Benefits of the Customs Union’, Ukrainian Week, 31 March 2013, http://ukrainianweek.com/World/75913.
155 World Trade Organization, Russian Federation Trade Profile, http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Language=S&Country=RU, accessed
30 April 2015.
156 Source: European Travel Commission, ‘European Tourism in 2013: Trends and Prospects’, 2013. Report accessed through slideshare 30 April 2015:
http://www.slideshare.net/MarinetLtd/european-tourism-2013.
157 US Energy Information Administration, Russia Overview, http://www.eia.gov/countries/cab.cfm?fips=rs, accessed 30 April 2015.
158 European Commission, ‘European Union, Trade in Goods with Russia’, 12 March 2014, http://trade.ec.europa.eu/doclib/docs/2006/september/tradoc_113440.pdf.
159 Some claim 25,000 jobs in Germany are in danger as a result of the sanctions. There are 6,000 German enterprises in Russia with Russian capital (Ost Ausschuss der
Deutschen Wirtschaft, ‘Ost Ausschuss-Umfrage zur Ukraine-Krise’, 27 June 2014, http://www.ost-ausschuss.de/node/714; http://www.ost-ausschuss.de/node/714).
160 For example, as chancellor, Helmut Kohl did not visit the Baltic states as he did not want to offend Russian sensibilities.
becoming less and less attractive and Russia is incurring
further costs to support it.154 Had Ukraine joined, the
Eurasian Union would have extended westwards right up to
the EU’s borders. But this key element – and probably the
whole enterprise – is stalled at best because the Ukrainians
have created new facts on the ground.
Europe, the slow irritant
Before 2014, there was an undeniable ambiguity in
European policy towards Russia, as the EU looked to reach
out, trade and integrate while at the same time expressing
concern and criticism about Russia’s departure from
European norms and values. Many had mistakenly thought
Russia was part of the post-Cold War peace order merely
because it was no longer a communist state. A ‘Partnership
for Modernization’ was the EU’s best hope for bringing
Russia under international law.
Before 2014 most leaders were willing to
ignore the Kremlin’s misdemeanours – to
hold their noses and continue to trade and
talk of partnership. The Ukraine crisis has
made this no longer politically possible.
However, the Kremlin’s inability to get along with Europe
can be attributed to a number of factors including (but not
limited to) political differences, size mismatch, mutual
suspicion and broad disdain. This disdain can be broken
down into the Russian leadership’s perception of the EU
as weak, ineffective and leaderless, with a failed economy,
as well as an incomprehension of its procedures, checks,
balances, rules and regulations, and a dislike of its liberal
values. The partial loss of sovereignty that adopting EU
rules entails is anathema to Moscow, but perhaps more
important is that it sees a nexus between membership of
the EU and future NATO accession.
Yet the Kremlin well knows that it is economically and
culturally bound to Europe, still the destination for 48 per
cent of Russia’s trade,155 78 per cent of its tourists156 and
80 per cent of its pipelines.157 The process of disentangling
on both sides will be slow and limited. Europe and Russia
are not in a relationship of equals, however. Europe has
more alternatives. It is better able to wean itself off Russian
energy and it is already doing so steadily through use of
new energy sources. Even now the EU looks to Russia
for only 10 per cent of its total trade,158 and European
holidaymakers will never flock to Russia in large numbers.
The diversification process in Europe is outpacing Russia’s
efforts to diversify towards Asia. That is not to say that
Europe can (or should) isolate itself from Russia – just that
the effects of disentanglement will be felt more keenly in
Russia than in Europe.
Before 2014 most leaders were willing to ignore the
Kremlin’s misdemeanours – to hold their noses and
continue to trade and talk of partnership. The Ukraine crisis
has made this no longer politically possible. The need for
unanimity, while debilitating in its slowness, also has the
effect of shaming most European countries into action. And
while many have demurred – generally those with close
dependencies on Russia and those that are too far away for
it to matter to them – the ‘Russian question’ has undergone
a belated reassessment in foreign, defence and even trade
ministries across the continent.
Germany changes tack
Moscow has few allies in Europe. This was not always the
case. For over a decade, Germany’s 1990 reunification
determined its attitude towards Moscow: many were still
grateful that Mikhail Gorbachev did not ‘object’. This
attitude was subsequently reinforced by a business-first
mentality,159 and it defined Germany’s broader Russia policy
until well into 2014.160 However, the considerable German
investment in Russia since the fall of the USSR included
a strong normative element in an attempt to bring it into
the fold. The Russian leadership, however, saw Germany’s
investment only as a business package.
Germany is now leading the new wave in robust Russia
policy – to an extent that has shocked the Kremlin,
which had mistakenly believed that their business-
driven relationship would transcend ‘local difficulties’ in
Moscow’s self-proclaimed backyard. Putin’s intransigence
forced a patient Chancellor Angela Merkel to adopt a
radically different stance over the course of approximately
40 phone calls and three face-to-face meetings in 2014.
Distaste had previously been overcome by pragmatism.
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161 However, the respected Russia and Eurasia security analyst Neil Melvin makes precisely the opposite point – that new agreements are needed – in ‘EU needs new
Ukraine strategy’, EU Observer, 28 March 2014, https://euobser ver.com/opinion/124413.
162 Robin Emmott, ‘Putin Warns Ukraine Against Implementing EU Deal – Letter’, Reuters, 23 September 2014, http://www.reuters.com/article/2014/09/23/us-
ukraine-crisis-trade-idUSKCN0HI1T820140923.
163 Transatlantic Trends, Key Findings 2014, German Marshall Fund of the United States, pp. 9, 46 and 48.
Over the course of the year, that pragmatism gave way
to what Merkel came to regard as a necessity if the
European security order was to be defended. With an
initially reluctant but increasingly supportive German
business community behind her, and after consultation
with the United States, Merkel ensured that the German
position on Russia became a beacon for others in Europe.
Although the chancellor’s 10 May 2015 visit suggests
continued inconsistency at best, the primacy of politics
over economics has now been broadly accepted by the
commercial sector and the wider German electorate.
Unlike anywhere else in Western Europe, this is their
number one foreign policy issue.
Germany’s evidence-based stance – initially giving Russia
the benefit of the doubt, then acting firmly – may have
helped pull other European countries, most notably Norway
and the UK, along in its wake, even to the detriment of their
own economies.
Other European countries
France, meanwhile, has indefinitely postponed delivery
of its Mistral-class amphibious assault ships to Russia,
but could still be biding its time until it is less politically
uncomfortable. President François Hollande has put up
with sanctions but began calling for their suspension
once a first ceasefire was agreed in Minsk, only to fall
silent again once that was broken by Russian troops and
Ukrainian proxies in early 2015. With each freshly minted
ceasefire agreement comes an inevitable call by Paris for
sanctions to be lifted. Ukraine is still viewed by many in
France as part of the legitimate Russian sphere.
Others in Europe are even less embarrassed in their support
for the Russian leadership’s course of action. In June 2014,
for example, Putin received red-carpet treatment in Austria,
where Moscow has extensive networks; and he got a hero’s
welcome in Belgrade and Budapest in late 2014 and early
2015 respectively.
Moscow’s motives and fears
In the states sandwiched between them, the EU and
the Kremlin have largely incompatible interests and
irreconcilable differences. The Kremlin fears the EU
because of its attraction for former Soviet states, and
because it is based on principles and economic norms that
are in opposition to the system in Russia. It is now beyond
doubt that the West and the Russian leadership cannot
have a new security relationship involving binding treaties
which would prevent external meddling in Ukraine and
reinforce the country’s independence. The Kremlin simply
does not want that; its definition of European security
differs too greatly.161
Putin’s policy is to divide, and he has found profitable
splits into which to drive wedges. For Moscow, leverage is
better gained through bilateral relationships. It has sought
to exploit differences of opinion between EU member
states. The EU, meanwhile, often fails to function as an
effective geopolitical counterpart to the unitary Russian
state. Moscow, in effect, is attempting to challenge the
EU’s role as a viable model to be emulated. Putin is not
so much asking for a delay in the implementation of the
EU’s tariff-eliminating Deep and Comprehensive Free
Trade Agreement (DCFTA) as insisting on a change in its
substance to benefit his own Eurasian variant. To agree to
this would be to jettison 10 years of EU policy. Putin has
also said in a letter to President Petro Poroshenko that
any decision to implement the DCFTA will trigger
counter-sanctions.162
Moscow’s advantage, when dealing with the EU, is that it
is playing a high-risk game against low-risk players. But
its calculation that business interests in the West would
trump geopolitical considerations has thus far been proved
incorrect, as Germany has showed. The Kremlin’s actions
in 2014, unlike in 2008, have had a profound effect on the
resolve of many European countries to stand up to Putin,
even at economic cost to themselves – as seen, for example,
in Moscow’s retaliatory agricultural and food-related
sanctions targeted at the West.
The EU’s motives and actions
According to one recent poll, 58 per cent of EU citizens are
even willing to risk conflict (broadly defined) with Russia in
order to support Ukraine.163 But the EU bureaucracy is torn
between its desire to back the rule of law and its fear of the
consequences of enforcing the law.
A technocratic partnership with Russia is natural to the EU’s
way of acting – as a means of exporting good governance.
But its major foreign policy experience is enlargement, with
no political target. The side-effect, therefore, has been that
regional issues such as ‘frozen conflicts’ have not been at the
top of the agenda. Another mistake was that the EU was not
steadfast on conditionality. It put a lot of effort into building
bridges, the existence of which Putin now denies. Evidence
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164 See, for example, the transcript of Vladimir Putin’s 18 December 2014 news conference with relevant parts highlighted: http://eng.kremlin.ru/transcripts/23406#s.
165 Previously, the benchmark for economic success was to achieve the standard of living of the poorer EU members, such as Portugal.
166 US National Security Strategy, February 2015, http://nssarchive.us/wp-content/uploads/2015/02/2015.pdf. See President Obama’s two-page preface.
167 ‘Russia’s trade ties with Europe’, BBC, 4 March 2014, http://www.bbc.co.uk/news/world-europe-26436291.
of misdemeanour was continually ignored because it did not
fit the narrative of a developing partnership.
The crisis in Ukraine is a European war, and if things go
wrong it will be Europe that pays the price. It is also a
wake-up call for something even more serious: Europe
needs a new approach if it is to be an effective force to
its east. But it is probably at the limit of its unity. Only if
European economies continue to bounce back and Russian
foreign policy behaviour deteriorates still further will
that unity be fortified.
The US benchmark
Although his core policy has not changed, it is apparent
that Putin’s dislike of America has intensified since his
titular return to the Kremlin in 2012. Whatever its cause
– a sense of betrayal over mission creep in Libya, belief
that the United States was behind the colour revolutions,
or simple jealousy over its continued pre-eminence in the
world – the Russian president’s vitriol towards the US
administration is now manifest in most of his foreign policy
speeches.164 Moscow portrays itself as anti-American – anti-
hegemonism – yet it continues to regard the United States
as the geopolitical status benchmark against which it judges
its own success or failure.165 Emulation is not the aim; the
Kremlin does, however, shout loudly for respect and for
‘equal status’, which it sees as one and the same thing.
The Middle East factor
The majority view among the Russian elite is that the
United States has a weak president who does not believe
in American power but rather is committed to managing
American decline – a man who had voted against the
invasion of Iraq in 2003 and who in 2013 failed to respect
his own ‘red line’ over the use of chemical weapons in
Syria (even though Congress bore more responsibility for
this decision). Putin could not fully protect Syria from the
non-military Western response, but he did make Barack
Obama look weak while also saving him from unpopular
military action against Bashar al-Assad through a Kremlin-
brokered deal. This was a key turning point in Moscow’s
attitude. Having faced down the United States and
prevented regime change in Damascus, it then felt able
to act more confidently.
Obama has tended to look for quick fixes such as the ‘Reset’,
and he has tried to avoid tough decisions and strategic
responses to Russia – preferring approaches couched in
doctrinal terms such as ‘strategic patience’.166 He sees
Russia as a troublesome regional power distracting him
from his focus on domestic rejuvenation, and he does not
want another foreign adventure after Afghanistan, Iraq and
Libya. Washington’s approach is therefore instrumental: the
predominant American stance has been that Russia is needed
in the Middle East, although it is not clear what benefit that
has brought, and Putin has taken advantage of the situation.
America the tough?
Yet as shown in its push on sanctions, Washington does
have a more robust approach to Moscow than most of
Europe. This can be attributed to a combination of being a
unitary actor, pressure from the Republican Party and, to a
lesser extent, the vestiges of a Cold War mentality. Much,
too, has been made of America’s economic independence
from Russia, particularly in the energy sphere; it does
15 times less business with Russia than with the EU.167
Administration officials are concerned about the rift with
the EU over sanctions on Russia, but the tougher American
line ultimately owes more to politics than trade. Obama has
been let down by Putin too many times and, like Merkel, has
become disillusioned. The biggest failing, however, has been
the self-delusion of expectations. Too much was invested
in the ‘Reset’ and there was no contingency plan. That was
a crude and ignorant attempt to seduce President Dmitry
Medvedev away from Putin’s influence. Obama spent more
time with Medvedev during the latter’s nominal presidency
than with any other major world leader, but the ‘Reset’ had
failed even before the end of his first term.
Prospects
The West had hoped time would be a healer for Russia and
its leaders, but instead Vladimir Putin sees his country as
facing a weakening Western adversary. He will try to break
apart Western unity, such as it is, especially if he does not
achieve his goals in the former Soviet space, and he will
continue to interpret Western approval for democratic
transformation in former Soviet states as a threat.
Moreover, Putin’s strategy towards the West will continue
to reflect a drive for greater Russian political and military
assertiveness. Russia’s perception of itself as more than a
European country – as a power with regional and global
interests – will become further entrenched, even though
its position in the world is declining both in comparative
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168 Well expressed and explained in Vitaly Tretyakov, ‘Inflated European Union’, Rossiiskaya Gazeta, 2 June 2005 http://www.rg.ru/2005/06/02/evrosoyuz.html.
169 ‘Estonia hit by “Moscow cyber war’’’, BBC, 17 May 2007, http://news.bbc.co.uk/1/hi/world/europe/6665145.stm.
terms and relative to its own ambitions. Therefore, Moscow’s
cooperation with Europe cannot and will not proceed further
in the medium term.
Moscow’s ambition is for two unions – West European
and East European (Russian) – which balance each other
and compete. This aspiration puts Russia definitively
outside Europe and its core institutions for at least the
next 10 years.168
The West will have to accept that dealing
with Moscow will remain difficult; but the
richer, more resilient part of the world,
which can project power outside its own
region and is arguably home to the dominant
global ideology, ought to be able to do more
than react.
A form of suzerainty by Moscow over Ukraine, if well
disguised, might work. But it may also encourage the
Russian leadership to embark on further adventures in
pursuit of what it sees as its interests. The danger is that
the status quo is quietly accepted and that the West is left
acquiescing to Putin’s adversarial view of the world. If
the tendency of some Western countries towards de facto
appeasement were to become European policy, it would
only exacerbate matters.
There are no guarantees of success, but to push back
against Putin’s ambitions, the West first needs to
acknowledge them. The inclination, for new Western
leaders in particular, is to give the Kremlin the benefit of
the doubt or attempt a Nixon-in-China-like breakthrough,
which continually inhibits progressive understanding of
and learning from the relationship. The facts show that
Russia’s leadership has unleashed hackers on Estonia;169
invaded and annexed part of Georgia; and cut off gas
to, invaded and annexed part of Ukraine. Trust has been
lost and the Helsinki Accords are in shreds. Moscow’s
word is now worth nothing, and there are no longer
grounds to give it the benefit of the doubt. Further
Kremlin miscalculation has the potential to cause further
destabilization, intended or not. The continued near-
neglect on the part of the West suggests there will be no
diminution of conflict.
Russia has dwindling resources, but it does still possess
political skills and resolve. It holds the initiative and decides
which moves to make: to scale up or down. To a certain
extent, the West will have to accept that dealing with
Moscow will remain difficult; but the richer, more resilient
part of the world, which can project power outside its
own region and is arguably home to the dominant global
ideology, ought to be able to do more than react. Every signal
before and after the Ukraine crisis has indicated a reluctance
by the West to act to defend its own interests against Russia’s
encroachment. The West has been too timid.
Conclusion
So Western resolve is being tested. The sanctions-based
policy is not directly aimed at provoking regime change in
Russia; nor is it expected to make the Russian president
alter direction. But in the face of Putin’s intransigence, it
has become an attempt to put pressure on him from above
and below in the full knowledge that this might eventually
lead to his downfall. If he continues along this path, he faces
economic ruin. If he retreats, he could well face internal
regime change.
Russia may have the greater interest in Ukraine. But
the West has an even bigger interest in preserving the
post-Cold War environment. If that is dismantled, it is
conceivable that NATO and the EU could collapse too. The
West has already paid a high price for the prevarications
of the last five years. It has failed to track Russia’s
foreign policy course in spite of its evident continuity.
Unchallenged, this course will not change. But the fact
that Russia’s foreign policy ambitions are clearer than ever
suggests that the West now has an opportunity to counter
them and ultimately improve the situation.
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6. Russia’s Toolkit
Keir Giles
170 Vladimir Putin, presidential address to the Federal Assembly, 4 December 2014, available at http://kremlin.ru/news/47173.
171 Jakob Hedenskog and Robert Larsson, Russian Leverage on the CIS and the Baltic States, FOI report FOI-R-2280-SE (Stockholm: Swedish Defence Research Agency
(FOI), June 2007, foi.se/ReportFiles/foir_2280.pdf.
172 ‘Russia – Future Directions’, Advanced Research and Assessment Group, Defence Academy of the United Kingdom, Shrivenham, 1 October 2008, https://sakpol.files.
wordpress.com/2014/03/20081001-russia_future_directions.pdf.
173 For an easily accessible example, see James Sherr, ‘Russia and the West: A Reassessment’, Shrivenham Papers No. 6, Defence Academy of the United Kingdom, 2007.
174 Norbert Eitelhuber, ‘The Russian Bear: Russian Strategic Culture and What It Implies for the West’, Connections, Winter 2009, p. 9.
175 James Sherr, Hard Diplomacy and Soft Coercion: Russia’s Influence Abroad (London: Chatham House, 2013), pp. 49–53.
176 John Goshko, ‘Yeltsin Claims Russian Sphere of Influence, Regional Peacekeeping Role Asserted’, Washington Post, 27 September 1994.
177 See, for instance, Leonid Velekhov: ‘A New “Warsaw Pact”: To Be or Not To Be?’, Segodnya, 21 September 1995, p. 9.
178 ‘Speech by A. V. Kozyrev’, Diplomaticheskiy vestnik, No. 5, May 1995, pp. 52–54.
We are forced to defend our legitimate interests unilaterally.170
A shock to the system
The annexation of Crimea in 2014 marked the second
time in six years that Russia had used military force to
seize control of part of a neighbouring country. As with
the example of Georgia in 2008, this provided a lively
demonstration of Moscow’s willingness to resort to
measures against its neighbours which in the 21st century
the rest of Europe finds unthinkable in advance and
unpalatable after the fact.
But states bordering Russia have long been aware that
military force was simply the most direct of a wide range of
tools and levers Moscow employs in its neighbourhood with
hostile intent. Both the tools of influence that were used
in the early 1990s, such as energy cut-offs, and those that
have become evident more recently, such as offensive cyber
activity, have been practised, developed and made more
precise in their implementation.171 Furthermore the last
decade has seen growing assertiveness and confidence in
their deployment.
At each stage, Moscow has been encouraged by weak and
unconvincing responses from the European Union, NATO
and the West172 – despite expert assessments predicting
precisely this outcome.173 Finally, Russia learned from the
Georgian ceasefire that in certain circumstances, use of
military force for foreign policy aims will be rewarded.
Seizure of Crimea and intervention in mainland Ukraine,
though dramatic, should therefore not be considered
in isolation. As laid out by James Nixey in Chapter 5
on foreign policy, this does not represent any new
trajectory in Russia’s attitude to its neighbours. Assertive
intervention in Ukraine was simply the latest and most
blatant implementation of Russia’s persistent view of
international relations. Whether Russia’s motivations are
aggressive and imperialist, or founded in genuine notions
of defending key Russian interests from perceived Western
expansionism, is important but not the subject of this
chapter, which reviews instead the levers and instruments
– old and new – that Russia uses in relations with and
against its neighbours.
Plus ça change
Official Russian attitudes towards smaller powers in
Europe have remained consistent since 1991. This is despite
changes of leadership in the Kremlin, wild fluctuations in
Russia’s perceived and actual strength, and the brief period
of optimism in relations with the West as a whole at the
beginning of the last decade, as described in Chapter 2 by
Roderic Lyne. The key difference in 2014 was that with the
assistance of a clear and consistent leadership stance, and a
decade of high oil prices, Russia’s capabilities had developed
to match its intentions more closely. These intentions are
more discernible now simply because they are more likely
to be translated into action while that leadership feels both
relatively strong and, apparently, threatened. Put another
way, Russia’s view of the outside world was not different
before the arrival in power of Vladimir Putin; ‘rather, it
“hibernated” during a period of diminished pressure from
outside and weakness on the inside’.174
In the early post-Soviet period, this view manifested itself
as an explicit aspiration to reunite the newly independent
republics in some new form.175 Throughout the 1990s,
senior Russians such as Yevgeny Primakov, in his various
roles as intelligence chief, foreign minister and prime
minister, maintained that efforts by the West to stand in the
way of reintegration of the former Soviet republics were
‘dangerous and should be reconsidered’.176 This aim was
slowly tempered, but never to the extent of challenging the
implicit assumption that Russia is by right the suzerain of
the ‘near abroad’, and the senior partner in relations further
afield.177 Routine confrontations with Ukraine over the
extent of the latter’s sovereignty were one inevitable result.
This included discussion of the status of Crimea, despite
Russian assurances that ‘Russia does not dispute the fact
that Crimea is a component part of Ukraine’.178
Thus in the last seven years, perceived, if not actual,
challenges to Russian security interests have twice led
directly to the use of Russian military force abroad in a
way not seen since the early 1990s. Russian intervention
in Crimea caused widespread surprise in early 2014; but
this was due entirely to collective Western amnesia of a
kind not suffered in Moscow. The immediate aftermath of
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179 See, for instance, Mikhail Barabanov, ‘Ukraine, NATO and Russia’, Moscow Defense Brief No. 4, 2008; Jakob Hedenskog, ‘Crimea After the Georgian Crisis’, FOI,
November 2008; Aurel Braun, ‘NATO and Russia: Post-Georgia Threat Perceptions’, Institut Français des Relations Internationales (IFRI), May 2009; Leon Aron, ‘The
Georgia Watershed’, Russian Outlook, Fall 2008; Tomislava Penkova, ‘Russia’s attitude towards the post-Soviet space after the war in Georgia’, ISPI Policy Brief, Issue
111, Istituto per gli Studi di Politica Internazionale, December 2008; Steven Pifer, ‘Crisis Between Ukraine and Russia’, Council on Foreign Relations Contingency
Planning Memorandum, July 2009; Col. Timo Kivinen, ‘Russia’s National Interests and Ukraine: What Policies Might Russia Adapt [sic] In Pursuing These Interests’,
Royal College of Defence Studies, 2008 Course.
180 Roderic Lyne, ‘Reading Russia, Rewiring the West’, Open Democracy, 12 October 2008, https://www.opendemocracy.net/Russia/article/Reading-Russia-Rewiring-
the-West.
181 As expressed, for example, in Max Fisher, ‘The worse Russia’s economy gets, the more dangerous Putin becomes’, Vox, 6 May 2015, http://www.vox.
com/2014/12/17/7401681/russia-putin-ruble; or Zachary Keck, ‘Beware: Collapsing Oil Prices Could Make Russia More Dangerous’, the National Interest, 27 January
2015, http://nationalinterest.org/blog/the-buzz/beware-collapsing-oil-prices-could-make-russia-more-12132.
182 ‘Zakarpattia: Pipelines, an Oligarch and Some Separatists’, Armedpolitics.com, 24 October 2014, http://www.armedpolitics.com/131/zakarpattia-pipelines-
a-oligarch-and-some-separatists/; ‘World News Research’, undated article, at http://world-news-research.com/ruthenia.html. The obscurity of this long-r unning
campaign is underlined by its relative invisibility in mainstream sources until highlighted in The Economist, ‘Russian propaganda in Ukraine: Long live Ruthenia’, 3 April
2015, http://www.economist.com/node/21647828/print.
183 Council of Europe, ‘Opinion on the Federal Law on the Amendments to the Federal Law on Defence of the Russian Federation Adopted by the Venice Commission at
its 85th Plenary Session (Venice, 17–18 December 2010)’, http://www.venice.coe.int/webforms/documents/?pdf=CDL-AD(2010)052-e.
the Georgia war saw an abundance of informed analysis
pointing specifically to Crimea as the next target for assertive
Russian action;179 in fact this volume’s co-author wrote that:
It is not surprising that most Russians still struggle with the idea
that Ukraine is a foreign country. … We must assume that Russia
would exert itself mightily, risk a great deal and pay a high price
to prevent Ukraine from becoming, as Russians would see it, a
platform for American power.180
At the time of writing, a wide range of Western observers
are predicting a period of renewed weakness for Russia
resulting from economic pressure. Experience of previous
times of troubles shows that this should not be expected
to lead to any lessening in Russia’s ambition to assert itself
against its front-line states; indeed one school of thought
holds that Moscow is at its most dangerous when weak.181
Dormant issues
A distinctive element of the Russian approach to leverage
against its neighbours is keeping disputes alive – even if in
suspended animation – for future potential use. Bilateral
problems that Russia’s foreign partners may long have
viewed as resolved can resurface indefinitely in Russian
discourse, accusations or grievances. Russia thus maintains
passive and potential leverage through the ability to
reawaken disputes at any time in the future.
In this respect, as in others, Russia enjoys the advantage
of strategic patience. A 2011 private briefing by Russia’s
former chief of general staff on ‘Threats to the Military
Security of the Russian Federation’ included a wide range
of border disputes, including some that the rest of the world
believes were resolved long ago. Karelia and Kaliningrad, in
particular, were noted in the briefing as disputed territories,
even though Russia’s seizure of them has been recognized
as an established fact for 70 years. But by categorizing
these non-problems as military threats, Russia prepares
the ground for justification for a possible military response
to them, regardless of whether the rationale for any such
response is perceptible outside Moscow. This strategic
patience also applies to ambitions to adjust the post-Soviet
order in Russia’s surroundings. One assessment of the
Georgia war in 2008 is that it demonstrates Russia’s capacity
to maintain frozen conflicts in place over a long period, until
they can be unfrozen with confidence that the result will be
in Russia’s favour.
An obscure but indicative example of the tendency to
stockpile disputes is Russia’s encouragement of Ruthenian
separatism in Ukraine’s western Zakarpattia region.182
For over a decade, this quiet campaign attracted little
attention outside Ukraine; but its potential for leverage
and disruption became clear as soon as Russian-backed
separatists at the opposite end of the country moved to
direct action. This also demonstrated the versatility of back-
burner issues. Russia’s original intention in exerting malign
influence may not have been to destabilize Ukraine, but was
more likely connected with the fact that Zakarpattia is a
choke point for energy pipelines from Russia to Europe.
Increased Russian confidence and assertiveness make it
more likely that slow-burn or dormant issues can be revived
and exploited. Thus while it is tempting to dismiss the more
wild or nonsensical Russian accusations, they should still be
assessed for potential justification for hostile action against
other states.
Russian minorities
A further threat that in the Russian view merits a military
response is ‘discrimination and the suppression of rights,
freedoms and legitimate interests of Russian Federation
citizens in foreign countries’. The Russian Federal Law ‘On
Defence’ was amended in 2009 to legitimize this kind of
intervention in Russian law, despite its highly questionable
nature in international law.183
Protection of ‘compatriots’ is a well-worn narrative
in Russia’s motivations for aggressive action against
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184 As, for example, with ‘The Bolzano/Bozen Recommendations on National Minorities in Inter-State Relations’ (Vienna: Organization for Security and Co-operation in
Europe), 2 October 2008, http://www.osce.org/hcnm/33633.
185 Marina Pavlova-Silvanskaya, ‘Four Steps Forward and One Step Back’, Novoye Vremya, 1 April 1995, pp. 9–11.
186 Estonian Internal Security Service Annual Review 2013, https://www.kapo.ee/cms-data/_text/138/124/files/kapo-annual-review-2013-eng.pdf.
187 Interview with Russian Foreign Minister Sergei Lavrov for Pomni Rossiyu website aimed at Russians abroad, http://www.pomnirossiu.ru/about/obrashenie-
lavrov/index.htm.
188 Mike Winnerstig (ed.), ‘Tools of Destabilization: Russian Soft Power and Non-military Influence in the Baltic States’, FOI report No. FOI-R--3990--SE, December 2014.
189 Caroline Binham and Helen Warrell, ‘Rich Russians head for UK in record numbers’, Financial Times, 21 December 2014; ‘300,000 Russians in the UK, “Londongrad”
a prime location’, Workpermit.com, 19 December 2006, http://www.workpermit.com/news/2006_12_19/uk/russians_londongrad.htm.
190 Concept of the Foreign Policy of the Russian Federation, http://www.mid.ru/brp_4.nsf/0/76389FEC168189ED44257B2E0039B16D.
191 Yelena Osipova, ‘“Russification” of “Soft Power”: Transformation of a Concept’, Exchange Journal of Public Diplomacy, Vol. 5, Fall 2014.
192 Greg Simons, ‘Perception of Russia’s soft power and influence in the Baltic States’, Public Relations Review (2014), http://www.sciencedirect.com/science/article/
pii/S0363811114001623.
193 Hedenskog and Larsson, Russian Leverage on the CIS and the Baltic States.
its neighbours, as demonstrated in both Georgia in
2008 and Ukraine in 2014, as well as by the consistent
pressure applied to the Baltic states over often imaginary
disadvantage suffered by Russians and Russian-speakers
there. According to international agreements subscribed
to by Russia, protection of national minorities is the
responsibility of the host nation.184 But these agreements
have not prevented Russia from interfering, both in cases
where there is cause for genuine concern, and in others for
purely political purposes. This theme has been persistent
throughout the post-Soviet period; even Russia’s first foreign
minister, the relatively liberal and Western-oriented Andrey
Kozyrev, threatened the use of ‘direct armed force’ against
neighbouring countries to protect Russian minorities.185
Russians abroad provide Moscow with a tool of direct
influence even when they are not used as an excuse
for military intervention. According to an Estonian
assessment, Russia seeks:
to organise and coordinate the Russian diaspora living in foreign
countries to support the objectives and interests of Russian foreign
policy under the direction of Russian departments. The compatriot
policy aims to influence decisions taken in the host countries, by
guiding the Russian-speaking population, and by using influence
operations inherited from the KGB.186
Russian Foreign Minister Sergei Lavrov is outspoken on the
intent to exploit Russians living abroad to further Moscow’s
political aims:
It is very important that in Russia’s relations with its diasporas,
there is movement in both directions. Russia provides the diasporas
with support, primarily assisting them in consolidating, and the
diasporas strive to act in the interests of Russia. … The diasporas
are a powerful resource for us, and they need to be used to their
greatest power.187
Russia is not the only country that seeks to exploit the role
of diasporas for political ends, but in a European context it is
hard to find other examples where the aim is overtly hostile
to the host nation. Furthermore, while discussion of Russian
minorities often focuses on the three Baltic states,188 Russia’s
‘compatriots policy’ also applies to countries far removed from
Russia. According to some estimates, there are more Russians
living in Greater London than there are in Lithuania.189
Russia and soft power
The use of minorities abroad for political aims
provides a useful illustration of the distinctive Russian
understanding of ‘soft power’. This phrase is becoming
increasingly prominent in Russian foreign policy statements,
most notably the Foreign Policy Concept issued in February
2013.19 0 An explicit foreign policy objective is to ‘increase the
weight and authority’ of Russia in the world, and one way
of achieving this, according to the Concept, is to use ‘soft
power’ as a complement to traditional diplomacy.
Equating Russian and Western perceptions
of soft power is to misunderstand Russian
intentions. Russia has adopted the phrase,
but applied it to an entirely different set
of ideas.
But equating Russian and Western perceptions of soft
power is to misunderstand Russian intentions. Russia has
adopted the phrase, but applied it to an entirely different
set of ideas.191 As classically understood in the Euro-Atlantic
community, soft power deals not with the actual wielding
of power or influence by an actor but with the power of
attraction. But, as Lavrov’s quid pro quo indicates, Russian
minorities are expected to serve as a tool to influence or
destabilize the host nation in return.192 Russia’s approach to
its neighbours is incompatible with the application of soft
power as it is normally understood in the West. As put by a
2007 study on Russian influence on its neighbours, ‘Russia
is primarily successful when influence is bought, taken or
stems from dependence. There are, however, no successful
positive forces of attraction.’193
The conceptual disconnect is exacerbated by the difficulty
of translating the phrase in either direction. The Russian
phrase used for soft power is myagkaya sila, which carries
a meaning much closer to soft force, while explaining the
Western notion of soft power in Russian requires much more
complex and long-winded phrases. For Russia, therefore,
the concept translated here into English as ‘soft power’
includes direct coercion or destabilization by means that
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194 For a detailed examination of how the Russian concept of soft power includes what other states define as hostile influence operations, see Estonian Internal Security
Service Annual Review 2012, https://www.kapo.ee/cms-data/_text/138/124/files/kapo-aastaraamat-2012-en.pdf.
195 ‘Remarks by President Obama to the People of Estonia’, White House website, 3 September 2014, http://www.whitehouse.gov/the-press-office/2014/09/03/
remarks-president-obama-people-estonia.
196 See, for example, ‘Sweden intercepts Russian planes over Baltic amid regional tensions’, Reuters, 24 March 2015.
197 Richard Milne, ‘Scandinavians warn Russia after air near-miss’, Financial Times, 15 December 2014. ‘Simon Coveney is NOT happy about Russian war planes flying
close to Ireland’, TheJournal.ie, 24 March 2015, http://www.thejournal.ie/russian-planes-irish-airspace-2010461-Mar2015/.
198 Tom Nichols, ‘If Putin goes nuclear’, The War Room, 1 September 2014, http://tomnichols.net/blog/2014/09/01/if-putin-goes-nuclear/.
199 Tom Parfitt, ‘Ukraine Crisis: Putin’s Nuclear Threats are a Struggle for Pride and Status’, Daily Teleg raph, 29 August 2014, http://www.telegraph.co.uk/news/
worldnews/europe/russia/11064978/Ukraine-crisis-Putins-nuclear-threats-are-a-struggle-for-pride-and-status.html. For a more detailed examination of this
phenomenon, see also Keir Giles and Andrew Monaghan, ‘European Missile Defense and Russia’, US Army War College Strategic Studies Institute, July 2014,
http://www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubID=1219.
200 Stephen Ennis, ‘Russian media learn to love the bomb’, BBC News, 23 February 2015, http://www.bbc.co.uk/news/world-europe-31557254.
201 Alexander Golts, ‘Russia’s Nuclear Euphoria Ignores Reality’, Moscow Times, 6 October 2014, http://www.themoscowtimes.com/opinion/article/russia-s-nuclear-
euphoria-ignores-reality/508499.html.
202 Interview with Col-Gen Matvey Burlakov, Kommersant-Vlast, 29 March 2005, http://www.kommersant.ru/doc/558042. See also Jan Hoffenaar and Christopher Findlay (eds),
‘Military Planning For European Theatre Conflict During The Cold War: An Oral History Roundtable, Stockholm, 24–25 April 2006’, Center for Security Studies, ETH Zurich.
203 As, for example, with Lithuania’s Druzhba pipeline at t he time of negotiations over the sale of the Mažeikiai oil refinery. ‘Russia won’t re-open oil pipeline, Lithuania
says’, Reuters, 11 October 2007, http://uk.reuters.com/article/2007/10/11/lithuania-russia-oil-idUKL1159854520071011.
204 Robert Larsson, Russia’s Energy Policy: Security Dimensions and Russia’s Reliability as an Energy Supplier, FOI, http://www.foi.se/ReportFiles/foir_1934.pdf.
are not hard, i.e. short of direct military intervention.194
So when we encounter references to soft power in Russian
statements, rather than being encouraged we should bear in
mind the whole range of economic, energy, cyber and other
hostile tools at Russia’s disposal.
Russia’s soft power can thus also be taken to include hostile
messaging and intimidation. In early September 2014, US
President Barack Obama provided explicit encouragement
to the Baltic states with a strongly worded public speech in
Tallinn.19 5 Russian hostile actions against all three countries
followed over the subsequent month. An Estonian counter-
intelligence officer was abducted across the border and put
on show trial in Moscow; a senior Russian official speaking
in Riga accused the Latvian authorities of promoting fascism
and human rights violations against Russian-speaking
minorities; Russian authorities reopened criminal cases
against over 1,000 Lithuanians who had refused military
service in the Soviet army in 1990; and a Lithuanian fishing
vessel was seized in international waters and taken in tow
to the Russian port city of Murmansk. All four incidents
were widely interpreted as a direct response to the Tallinn
speech, intended to show that Obama’s assurances were
hollow and Russia still held sway in the region.
Russia’s demonstrations of military strength throughout
2014 could also, perversely, be classified under this definition
of soft power. Greatly intensified air activity combines with
simulated attack runs by bombers and submarine incursions
to send intimidatory messages to countries outside Russia’s
direct reach by land.196 Even without an overtly hostile
flight profile, for Russian military aircraft to pass through
controlled airspace with no flight plan filed, no transponder
active, and no communications with appropriate controllers
is unnecessarily dangerous and irresponsible – as incidents
including two airmisses with Swedish airliners and disruption
to civil traffic off Ireland have already demonstrated.197
Even more alarming messaging comes in the form of new
emphasis on the potential for use of nuclear weapons in
statements by President Putin and other officials.198 In
addition to the distinctive role strategic nuclear weapons
play in Russian national identity,199 use of both strategic
and tactical nuclear weapons is now presented within
Russia ‘as a realistic possibility and even something to be
embraced’.200 This gives rise to a dangerous mismatch of the
unthinkable.201 Soviet offensive plans for Europe included
early use of tactical nuclear weapons,202 and they still play a
significant – but not publicly acknowledged – role in Russian
doctrine. The experience of Crimea shows that just because
something is unimaginable for Western planners does not
mean it is not considered a viable option by Russia.
Energy
Exploitation of energy dependency for political ends is one
of Russia’s more traditional, and best publicized, forms
of leverage on its neighbours. The boundaries between
commercial dispute and political interference can on
occasion be hard to divine. But in other cases, interruptions
– or threats of interruption – in the supply of oil, gas or
electricity are not linked with coercive negotiations, but
instead result from suspicious sabotage or unspecified
‘damage’ to pipelines, with results which favour Russian
state or business interests.203
Recurrent gas disputes with Ukraine since the mid-2000s
have been the most highly publicized examples of energy
supply interruptions, but this obscures the fact that energy
pressure is also applied to more responsible customers
who pay promptly for Russian oil, gas and electricity. Nor
is this a new phenomenon: between 1991 and 2004 Russia
instigated over 40 politically motivated gas and oil cut-offs
against its neighbours.204
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205 ‘Conscious uncoupling: reducing Europe’s dependence on Russian gas is possible – but it will take time, money and sustained political will’, The Economist,
5 April 2014.
206 ‘Baltic leaders welcome Lithuania’s “Independence” as energy security guarantee for all region’, Baltic News Service (BNS), 27 October 2014, http://en.delfi.lt/
lithuania/energy/baltic-leaders-welcome-lithuanias-independence-as-energy-security-guarantee-for-all-region.d?id=66232218.
207 ‘How Russia’s Membership in the World Trade Organization Improves Sanitary and Phytosanitary Measures and How They Are Applied in the Russian Federation’,
Office of the US Trade Representative, undated document, https://www.ustr.gov/sites/default/files/How%20Russia%20WTO%20Membership%20Improves%20
SPS%20Measures%20and%20How%20They%20are%20Applied%20in%20Russia.pdf.
208 World Trade Organization, ‘Russia contributes to sanitary-phytosanitary committee, but also attracts concerns’, 17 October 2014, http://www.wto.org/english/
news_e/news14_e/sps_15oct14_e.htm.
209 ‘Eat apples to annoy Putin’, Eastern Approaches blog, The Economist, 29 August 2014, http://www.economist.com/blogs/easternapproaches/2014/08/poland-
and-russia.
210 Agnia Grigas, Legacies, Coercion and Soft Power: Russian Influence in the Baltic States, Chatham House Briefing Paper, August 2012.
211 Philip Hanson, ‘Russia’s Inward and Outward Foreign Direct Investment: Insights into the Economy’, Eurasian Geography and Economics, Vol. 51, No. 5, 2010, pp.
632–53. See also forthcoming article by Philip Hanson and Stephen Fortescue, ‘What Drives Russian Outward Foreign Direct Investment? Some Observations on the
Steel Industry’, Post-Communist Economies, Vol. 27, No. 3, September 2015.
212 A topic explored in detail in Janusz Bugajski, ‘Georgian Lessons: Conflicting Russian and Western Interests in the Wider Europe’, CSIS, 2010, http://csis.org/files/
publication/102110_Bugajski_GeorgianLessons.WEB.pdf.
213 Defence Academy of the United Kingdom, ‘Russia – Future Directions’.
The enormous investment undertaken by Russia in
commercially unjustifiable projects such as the Nordstream
pipeline underscores the importance to Russia of energy
as a tool of influence in the last decade. More recent
developments in international energy markets, and moves
to reduce European dependence, may dilute the power of
Russia’s energy lever in the long term.205 This requires the
kind of sustained investment and political will that has been
seen in the Baltic states, where 100 per cent dependence
on Gazprom for gas supplies and prices created a sustained
vulnerability. Pipeline gas contracts provide Russia with
greater leverage than do oil supplies in the more flexible
oil market. In October 2014, Lithuania opened a liquefied
natural gas (LNG) terminal to reduce its exposure to
Russian energy pressure.206
Economy and trade
Price and trade dependency provide further means by
which Russia can persuade or punish its neighbours.
Boycotts and embargoes on their key exports have
repeatedly been employed to inflict economic damage, often
using entirely spurious health or environmental concerns as
a pretext for banning imports of foodstuffs to Russia.
Georgian wine and mineral water, and Baltic and Belarusian
dairy products have been repeated targets for bans. But
almost 25 years after the end of the Soviet Union, well-
established trading relations beyond the Soviet republics
have created a range of new vulnerabilities. Despite optimism
at the time, Russia joining the World Trade Organization in
2012 did little to constrain its misuse of health regulations;207
instead, Russia openly admits within WTO meetings that
some bans on food imports are politically motivated.208
Russia’s August 2014 ban on imports of foodstuffs from a
range of countries was widely viewed as a perverse move
that would further punish Russians themselves to no
positive effect. But the implications for central European
states that had come to rely on the Russian market were
severe. Surplus Polish apples became a symbol of standing
up to Russia, while in the Nordic states, ‘Putin cheese’
(labelled for export to Russia) flooded supermarkets at
dumping prices as producers tried urgently to shift banned
dairy products to alternative markets. The overall effect
was to remind those countries that had come to take well-
developed trade links with Russia for granted that, as put by
Lithuanian President Dalia Grybauskaitė, Russia is ‘a totally
untrustworthy and unpredictable business partner’.209
Other economic instruments routinely feature in Russian
pressure on its neighbours. Russia seeks to establish or
reassert dependencies by the creation and usage of debts,
and a related creeping control of key infrastructure. The
exact amount and type of Russian investment can be
difficult to assess because of the routine use by Russian
businesses of third countries and other jurisdictions to
channel investments, concealing their origin from normal
economic analysis.210 As with energy disputes, much of the
scale, composition and timing of Russian foreign direct
investment used as leverage can also be accounted for by
normal commercial drivers. But the net effect in terms of
a lever that Russia can exploit is similar.211
Purchasing influence
Russia’s ability to purchase or co-opt business and
political elites into loyal, or at least compliant, networks
is a primary tool for garnering influence. Both bribes
and business opportunities are used to recruit agents
of influence throughout target countries. This leads to
direct impacts on political processes through Trojan horse
individuals or organizations.212 A 2008 study warned that
the UK ‘should be wary of placing reliance on EU or NATO
solidarity, or on national leaders or key figures to act in
what would appear to be their own national interests’, and
suggested, ‘it is urgent that we now look more closely at
this activity at home’.213
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214 Andrew Rettman, ‘Reports multiply of Kremlin links to anti-EU parties’, EUObserver, 26 November 2014, https://euobserver.com/foreign/126676.
215 Greg Simons, ‘Putin’s International Suppor ters’, UIBrief No. 3, 2014, Swedish Institute of International Affairs, Stockholm.
216 A Twitter search for #putinmania is enough to make the point beyond doubt.
217 ‘Capacités de lutte informatique russes : état des lieux’, in Observatoire du Monde Cybernétique, Délégation aux Affaires Stratégiques, French Ministry of Defence,
March 2014.
218 ‘ With Russia and Ukraine, is all really quiet on the cyber front?’, Ars Technica, 11 March 2014, http://arstechnica.com/tech-policy/2014/03/with-russia-and-
ukraine-is-all-really-quiet-on-the-cyber-front/.
219 Sherr, Hard Diplomacy and Soft Coercion.
Interference in domestic political systems is increasingly
reflected in financial and other support for political parties
abroad. Unlike in Soviet times, Russia is no longer restricted
by ideology in its choice of foreign friends, and one notable
result is a surge in links with right-wing and anti-EU parties,
whose agendas fall in line with Russian state objectives.214
Organized political influence can suborn policy-making;
however, as during the communist era, Russia need not
always spend money on purchasing this influence but can
also obtain it as a free good. The attraction of communism
as an ideal is being replaced by the attraction of Putin
as a strong leader with a distinctive ideological stance,
resistant to ‘liberal extremism’ and ‘Hollywood values’.215
This perception of strength with its own distinctive appeal
is reinforced by Putin’s personal, and Russia’s collective,
martial posturing.216
‘Cyber attack’
In the early stages of Russia’s intervention in Ukraine,
an apparent lack of cyber activity caused comment and
speculation. Some expected a repeat of the crude cyber
campaigns that accompanied Russian pressure on Estonia in
2007, Georgia in 2008 or Kyrgyzstan in 2009. But not only
are indiscriminate cyber broadsides inappropriate for the
specific circumstances of Ukraine; in the intervening seven
years the cyber threat landscape – as well as the capabilities
to counter threats – has evolved beyond recognition. Russia
is now in a position to make full use of sophisticated cyber
tools with no need for the crude and low-tech ‘cyber carpet
bombing’ seen in Estonia.217
Russia is not unique in seeking an
intelligence advantage by cyber means; but it
is the use to which this advantage may be put
which makes Russia exceptional in Europe.
Cyber actions visible in Crimea and Ukraine have been
facilitators for broader information operations. Interference
with internet infrastructure has been linked directly to
influencing decision-making – whether by Ukrainian Rada
deputies, the National Defence and Security Council218 or
the entire population of Crimea immediately before the
referendum on ‘independence’.
This reflects the holistic nature of the Russian information
warfare approach, where cyber activity is not a separate
discipline but is included implicitly in a much wider range
of tools to affect ‘information space’. This includes not only
information technology but also the cognitive domain –
a point explored in more detail below.
In addition, the ongoing use of less visible cyber espionage
forms a crucial part of positioning for Russia’s foreign policy
with regard both to its neighbours and to adversaries further
afield. Accessing the information systems of diplomatic,
government and military organizations over many years gives
Russia a key advantage in predicting the tactics and thinking
of its smaller neighbours, and thus provides an additional
degree of asymmetry. Again, Russia is not unique in seeking
an intelligence advantage by cyber means; but again, it is the
use to which this advantage may be put that makes Russia
exceptional in Europe. The intelligence insights gathered in
this way may be enough to tip the balance in a risk equation
which results in overtly hostile Russian activity like that
displayed in Crimea and Ukraine.
What was new in Crimea?
Russia’s most recent actions in Ukraine are thus rooted in
decades of applying instruments of coercion, persuasion or
punishment against its neighbours, and making use of new
tools and opportunities as they arise. But their origins lie in
even longer-established Russian principles and assumptions
about the nature of international relations. As James Sherr
has observed:
Today’s Russian state has inherited a culture of influence deriving
from the Soviet and Tsarist past. It bears the imprint of doctrines,
disciplines and habits acquired over a considerable period of time
in relations with subjects, clients and independent states. The
problems that bedevil present-day relations between the West and
Russia are not simply the product of ‘Cold War mindsets’.219
Even the seizure of a neighbour’s territory by military force
was not new, despite being repeatedly presented as such
in both media and expert commentary. Long-term Russia
observers were startled at how swiftly Russian operations
in the armed conflict in Georgia had been forgotten. And
there is no shortage of earlier precedents for the use of
Russian special forces for coup de main operations, seizing
key points to facilitate regime change, or presenting facts
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220 Department of the Ar my [USA] Field Manual 100-2-2, ‘The Soviet Army: Specialized Warfare and Rear Area Support’, 1984, p. 5–3.
221 Stephen J. Cimbala, ‘Sun Tzu and Salami Tactics? Vladimir Putin and Military Persuasion in Ukraine, 21 February–18 March 2014’, Journal of Slavic Military Studies,
Vol. 27, Issue 3, 2014.
222 Kristin Ven Bruusgaard, ‘Crimea and Russia’s Strategic Overhaul’, Parameters, Vol. 44 No. 3, Autumn 2014.
223 Valeriy Gerasimov, ‘Tsennost nauki v predvidenii’ [The value of science lies in foresight], Voyenno-Promyshlennyy Kuryer, 27 February 2013, http://www.vpk-news.
ru/articles/14632.
224 These two topics are to be examined in greater detail in a forthcoming Chatham House research paper: Keir Giles, Russia’s New Tools for Confronting the West.
225 For a detailed evaluation, see Niklas Granholm, Johannes Malminen and Gudrun Persson (eds), A Rude Awakening. Ramifications of Russian Aggression Towards
Ukraine, FOI, June 2014.
226 Anton Lavrov, ‘Nachalo reformy Vozdushno-desantnykh voysk’ [Beginning of reform of the Airborne Assault Forces], in Mikhail Barabanov (ed.), Novaya armiya
Rossii (Moscow: CAST, 2010).
227 See ‘Brothers Armed’, a survey of the Russian and Ukrainian militaries published in late 2014 by the CAST defence consultancy in Moscow.
on the ground without an overt declaration of war. To
claim that this is a new phenomenon is to ignore the use
of Russian special and airborne forces in Prague in 1968,
Kabul in 1979, or Pristina in 1999. This long-standing
tradition is one of the explicit purposes of special forces
units and the Airborne Assault Troops (VDV), just as it was
during Soviet times.220 In fact Russia’s plan for the seizure
of Grozny during the first federal intervention in Chechnya
in 1994 was similar to its actions in Simferopol in 2014. The
Grozny operation failed so spectacularly because Russia’s
disorganized and debilitated army was still 20 years away
from the necessary levels of capability and training.
The current excitement over Russia’s use of ‘hybrid’,
‘ambiguous’ or ‘non-linear’ warfare derives from the way
in which the military effort in Crimea was integrated with
other instruments, rather than resulting from a radical
change in how Russia uses its military.221 As explained by
Kristin Ven Bruusgaard:
although Russia demonstrated new principles of warfighting in
Crimea, most of the tactics and doctrine displayed represented
traditional Russian (or Soviet) warfighting principles refitted
for modern war. … [But] Russia integrated military tools with
other tools of pressure in innovative ways, and made use of a
seamless transition from peace to conflict.222
It is managing this transition, and the related discipline
of escalation control, that is a key element of the overall
campaign within which Russia places use of the military
– and reflects some of the conclusions drawn in the much-
quoted February 2013 presentation by Russian Chief of
General Staff Valeriy Gerasimov.223 The result in Crimea
was a specific combination of two long-standing but
reinvigorated instruments of this power: the armed forces
and the capacity for intensive information warfare.224
The military option
The Russian military capabilities demonstrated in
Crimea in early 2014 are the product of an intense and
costly process of transformation and rearmament since
2008. But the perception of advanced military capability
is also misleading: the Crimea operation made use of
selected elements of elite special forces units, which
were in no way representative of the capabilities of
the broad mass of Russia’s ground troops. Instead they
were drawn from the special forces of the Southern
Military District, the VDV and marine infantry,225 all of
which have consistently been given priority for funding
and equipment.226
At the same time, comparing the Russian military capability
provided by the troops and equipment on display in Crimea
with that shown along the Ukrainian border provides a
snapshot of how far Russia has come in creating a military
fit for 21st-century warfare as envisaged in Moscow. The
military overhaul remains a work in progress.227 But the
Crimea operation demonstrated that Russia is already
willing to use the most capable parts of its military while
the main force is still developing.
In the meantime, Russia’s ground troops can provide the
illusion of a more capable force simply by mobilizing.
Throughout most of 2014, the force deployed close to the
Ukrainian border served as a distraction from actual Russian
operations within Ukraine. The Russian ground forces’
movement to and from the border kept Western governments
and intelligence agencies in a perpetual state of speculation
on the likelihood of a full-scale invasion. In this case, the
actual capability of those troops was irrelevant.
But Russia’s military capability is continuing to improve
rapidly. The outlook for Russia’s armed forces is more
of the same: continued generous investment (despite
Russia’s economic challenges), with the aim of reducing
the capability gap with potential adversaries, especially
the United States.
Information warfare
Examining Russian assessments of current events makes it
clear that Russia considers itself to be engaged in full-scale
information warfare. This is reflected in the new emphasis
on information warfare in Russia’s latest Military Doctrine,
approved on 26 December 2014 – although naturally most
of the concepts that are recognizable from Russian offensive
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228 ‘Military Doctr ine of the Russian Federation’, http://news.kremlin.ru/media/events/files/41d527556bec8deb3530.pdf.
229 Victor Madeira, ‘Haven’t We Been Here Before?’, Institute of Statecraft, 30 July 2014, http://www.statecraft.org.uk/research/russian-subversion-havent-we-been-here.
230 As reflected, for instance, in complaints over lack of language capacity to influence non-Russian-speaking audiences in the Baltic states. See ‘Informatsionnie voiny s
samimi soboi’ [Information wars with ourselves], Postimees-DZD, 7 November 2011, http://rus.postimees.ee/624820/informacionnye-vojny-s-samimi-soboj.
231 ‘Special Briefing by the Ministry of Defence of the Russian Federation on the crash of the Malaysian Boeing 777 in the Ukrainian air space, July 21, 2014’, Russian
Ministry of Foreign Affairs website, http://www.mid.ru/brp_4.nsf/0/ECD62987D4816CA344257D1D00251C76.
action in and around Ukraine appear described in purely
defensive terms of countering threats to Russia itself.228
The current Russian practice of information warfare
combines a number of tried and tested tools of influence
with a new embrace of modern technology and capabilities,
primarily the internet. Some underlying objectives
and guiding principles are broadly recognizable as
reinvigorated aspects of subversion campaigns from the
Cold War era and earlier.229 But Russia has invested hugely
in adapting principles of subversion to the internet age.
These new investments cover three main areas: internally
and externally focused media with a substantial online
presence, of which RT (formerly Russia Today) is the
best known but only one example; use of social media
and online discussion boards and comment pages as a
force multiplier to ensure Russian narratives achieve
broad reach and penetration; and language skills, in
order to engage with target audiences on a wide front in
their own language.230 The result is the dominant online
presence now known as the Kremlin troll army, acting in
coordination with state-backed media.
Western media organizations were entirely unprepared for
a targeted and consistent hostile disinformation campaign
organized and resourced at state level. The result was an
initial startling success for the Russian approach in the
early stages of operations in Crimea, where reports from
journalists on the ground identifying Russian troops did
not reach mainstream audiences because editors in their
newsrooms were baffled by inexplicable Russian denials.
Months later, Western media outlets were still faithfully
reporting Russian disinformation as fact, but the realization
that they had been subjected to a concerted campaign
of subversion was beginning to filter into reporting. One
assessment of this change is that Russian information
campaigns are failing. By Western criteria, this may be true;
to an informed observer, they often appear clumsy, counter-
productive, obvious and easily debunked. But measured
instead against Russian objectives, the information offensive
has made substantial achievements. This is particularly
the case in two key areas: controlling the domestic Russian
media environment, and sowing doubt in Western media
reporting (including influencing information available to
policy-makers).
The exception that proves the rule is online social media. As
has been demonstrated repeatedly throughout the seizure
of Crimea and operations in eastern Ukraine, the ability
of journalists and ordinary citizens – as well as Russian
servicemen themselves – to reach a wide audience directly
with information undermining or contradicting the official
Russian position poses the single greatest challenge to
Russian information campaigns. The result is a range of
recent suppressive measures targeting social media within
Russia in attempts to control this last unregulated subset of
Russia’s ‘national information space’.
Alternative realities have also been presented to
audiences outside Russia, where liberal societies and free
media provide vulnerabilities ready for exploitation by
a coordinated information warfare onslaught. Western
societies put faith in their own independent media to
arrive at and report the truth thanks to their relative
freedom. But Western liberal media training proved
initially to be no match for the unity of message emanating
from Russia. In fact, the opposite is true: the emphasis
on ‘balance’ in many Western media ensures that Russian
narratives, no matter how patently fraudulent, are
repeated to European and American audiences by their
own media. Individual journalists were entirely capable
of perceiving and deconstructing Russian disinformation;
but when Western news editors were presented with a
consistent version of events being repeated by all levels
of the Russian media machine from the president to the
lowliest foot soldier in the Kremlin troll army, they had
little choice but to report it, thereby lending that version
weight and authority.
Both of these aspects of the Russian disinformation
campaign illustrate a key reason why its success or failure
should not be judged by criteria other than those set
in Moscow. The assessment that Russia is failing in its
objectives often rests on the implausibility of Russian
narratives, and the consequent assumption that they will be
rejected by their audiences. But while truth is supposed to
be a fundamental requirement of Western communications
strategies, Russian campaigns need not even remotely
resemble the truth to be successful.
A key example of this approach followed the downing of
Malaysia Airlines Flight MH17. Four days after the crash,
by which time it was already clear that Russia held ultimate
responsibility for the tragedy, the Russian Ministry of
Defence held a press conference to present explanations
absolving Russia.231 The scenarios presented were diverse
and mutually contradictory, and did not stand up to the
briefest examination by experts with even basic knowledge
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232 Keir Giles, ‘Tales from Two Cities: Moscow and Washington on Flight MH17’, Chatham House Expert Comment, 24 July 2014, http://www.chathamhouse.org/
expert/comment/15236.
233 Andrew Monaghan, Defibrillating the Vertikal? Putin and Russian Grand Strategy, Chatham House Research Paper, October 2014, http://www.chathamhouse.org/
publication/defibrillating-vertikal-putin-and-russian-grand-strategy.
234 Maj-Gen V.A. Zolotarev (ed.), ‘Rossiya (SSSR) v lokalnykh voynakh i voyennykh konfliktakh vtoroy poloviny XX veka’ (Moscow: Kuchkovo Pole, 2000).
235 Julian Cooper, ‘The National Defence Management Centre of the Russian Federation. A Research Note’, unpublished article, 18 November 2014.
236 Vladimir Putin, speaking ahead of November 2014 G20 summit, http://itar-tass.com/en/russia/759665.
237 See James Sherr, ‘Reflections on the New East-West Discord’, unpublished article, 20 December 2014.
of the aircraft and missile systems claimed to have been
involved.232 But this was not a Russian concern: their
instant rejection by both foreign and Russian experts did
not prevent them being reported in the West as well as
receiving broad coverage within Russia.
Danger arises when successful pollution by Russia of
the opinion-forming process in the West spills over into
influence on the policy-making process. There is a wide
range of views on the causes of and factors in the Ukraine
conflict, and how best it can be resolved; but many
narratives exonerating Russia or seeking a swift solution
at Ukraine’s expense will find willing audiences in those
policy circles that wish to appease Russia and return to
business as usual at the earliest opportunity, as was the
case following the armed conflict in Georgia in 2008. Even
more dangerously, in circumstances requiring complete
Western unity – such as a decision on collective action to be
taken by NATO – Russian information warfare could play
a key role by exploiting the already existing differences
of opinion among NATO allies in order to prevent the
essential consensus from being achieved.
The danger of these information campaigns lies in
preparation for future Russian action directly countering
the interests of the West, particularly Europe. By either
undermining the will or support for deterrent measures, or
creating an entirely false impression that Russia is justified
in its actions, Russia adjusts key variables in the security
calculus, reducing the risk inherent in any future assertive
action against its neighbours. In the case of Ukraine, Russia
felt the balance was tipped sufficiently in its favour to act;
but Ukraine, and Georgia before it, are unlikely to be the
last neighbours of Russia to fall victim to this calculation.
Current Russian ambitions, if followed to their conclusion,
must necessarily lead to a more direct confrontation with
the West. Russia now benefits from a highly developed
information warfare arsenal, which will be a key
facilitator in preparing for further actions.
The National Defence Control Centre
Linking and consolidating the modern tools available to the
Russian leadership, such as information operations, modern
military forces and other levers of influence, also requires
new capabilities: not only coordination between arms of
the Russian state, which had been noticeably deficient
in previous conflicts, but also forcing through leadership
decisions despite administrative obstacles.233 The new
Russian way of warfare, and in particular the blurred lines
between peace and war that are a defining factor of hybrid
war, demand a whole-of-government approach from Russia
(as well as whole-of-government responses from any states
wishing to resist Russia). It has long been recognized that
management of the information aspects of campaigns in
particular requires ‘a well-developed mechanism of state
control over information policy and processes’.234
The new National Defence Control Centre in Moscow is
intended to facilitate this coordinated approach. At the time
of writing (late 2014), the centre appeared more a symptom
and a symbol of the new approach rather than a distinctive
new capability.235 But by combining a total of 49 military,
police, economic, infrastructure and other authorities under
the stewardship of the General Staff, the centre could, if
implemented as planned, greatly improve Russia’s speed
of reaction and information exchange, and assist in honing
Russia’s coordinated capabilities for future hostile action.
Outlook
We are guided by interests rather than feelings in dealing with
our partners.236
Current trajectories indicate that further confrontation
between Russia and the West is inevitable.237 It is therefore
essential to understand the full range of tools at Russia’s
disposal to achieve its aims. Russia’s intentions remain
persistent over time; but its capabilities, especially in the
military domain, are developing rapidly, emboldening
Moscow to become still more aggressive in achieving its
foreign policy goals.
The current plans for military transformation, like many
other Russian strategic planning horizons, set a completion
date of 2020. If Russia continues to invest heavily while
Western militaries contract, defence capability trajectories
will eventually cross and Russia will eventually achieve its
goal of once more overmatching European military power,
by means of qualitative improvements capitalizing on the
already existing huge quantitative superiority.
But Crimea demonstrated that Russia does not have to
wait until its military transformation is complete to use
military force successfully. This is due to two key force
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238 Keir Giles and Aleksandr V. Rogovoy, ‘A Russian View on Land Power’, US Army War College Strategic Studies Institute, April 2015,
http://www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubID=1258.
multipliers: first, Russia’s political will to resort to force
when necessary, entirely absent in Europe; and second,
the successful integration of other strategic tools such as
information warfare, reflecting the new doctrinal emphasis
on influence rather than destruction.
The text of Russia’s new Military Doctrine shows that in
declaratory policy at least, Moscow’s threat perception has
not substantially changed. Russia might feel after the Wales
summit that its preconceived notions of NATO as a threat
may be a little more realistic and not simply hypothetical, but
in the Doctrine NATO remains just a ‘military risk’ as opposed
to a threat. The distinction in Russian doctrinal lexicon is
significant; and it makes an important political statement,
with NATO and its members the intended audience.
But the emphasis in the Military Doctrine on regime
change both on Russia’s borders and internally, and
on information war, is new. Russia has brought limited
intervention and information warfare back into its arsenal for
bringing recalcitrant neighbours to heel – or replacing their
governments with ones more amenable to Russia’s aims.
The results of the Georgia war in 2008 validated military
force as a foreign policy tool for Russia, bringing long-term
strategic gains in exchange for short-term and limited
economic and reputational pain. As noted elsewhere in
this report, economic upsets have disrupted the application
of this calculus to operations in Ukraine. But they have done
little to dispel the euphoria resulting from the successful
seizure of Crimea – or the impression that bold military
strokes, if designed not to trouble NATO members with
consideration of an Article 5 response, are unlikely to meet
with significant resistance or challenge. Russia’s neighbours
should therefore be alert to the possibility of more
substantial military interventions as the parts of the armed
forces which are considered ready and fit for use expand.238
The distinctive Russian understanding of ‘soft power’ is
linked to the fact that one of Russia’s fundamental demands
from the rest of the world is respect. But so little of what
Russia does earns it respect anywhere except at home. This
paradox cannot be resolved, because to do so would involve
breaking the traditional Russian equation of respect with
fear – an equation that continues to be clear in Putin’s public
statements. As a result, Russia’s neighbours will continue to
face an increasingly assertive Russia. Whether emboldened
by success in Ukraine, or embittered by failure, Russia will
continue to be difficult and can be expected to employ its
full range of both soft and hard power tools to do so.
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7. Russian and Western Expectations
Andrew Wood
The problem
President Vladimir Putin’s third term in the Kremlin has
been a disaster for Russia, and therefore for the wider
world.239 The Russian public is for now largely behind
him, but uncertain of what the future, even the immediate
future, may bring.
Western leaders are still divided in their understanding
of how best to relate to Russia. That is in part because as
a term ‘the West’, while remaining a convenient and often
relevant shorthand, now covers a looser set of organizations
and interests than in the past. Present divisions in the West
also reflect differing understandings of the way in which
Russia has evolved, particularly over the last three years or
so. The previous assumption in North America and most
of Europe was that Russia could somehow be encouraged
back towards a gradual transition favouring a sustainable
relationship with the rest of the world, and Europe in
particular, together with the law-based relationship
between the Russian leadership and people that would
underpin such a desirable outcome. That hope has taken a
beating, particularly over the past year and a half, but there
are still those who ask themselves whether, for instance,
Moscow has been failed by the West and thereby in some
fashion provoked into aggression against its neighbours.
If so, what should be done to correct that fault? Or do
Russia and the West now face far worse prospects, such as
a further slide towards a belligerent nationalist dictatorship
in Moscow or eventual collapse into chaos in Russia and
its neighbourhood?
Putin’s third term
The principal determinant of events since Putin’s return
to the Kremlin in May 2012 has been Russia’s internal
torment as to its future course. Moscow’s relationship with
the outside world in general, and in particular with its
neighbours, wider Europe and Washington, reflects that
struggle and adds to its dynamic. But the key lies in the
way in which the Russian leadership seeks to secure its
domestic power, and the nature and extent of its ability to
determine the assumptions and ambitions of the Russian
people. Putin and his immediate circle did not have to
take the path they chose in 2012. But the alternative
of institutionally backed economic – and by necessary
implication political – reform that had been aired over the
previous few years would have taken courage and boldness
to face. It was therefore not a surprise that the Putin
establishment preferred the apparently safer option of
centrally directed economic policies and increased control
over Russia’s people.240
Clampdown
The repression of protest and criticism, both actual and
potential, was, however, both swifter and more extensive
after Putin’s inauguration than most had expected. It has
worked in the sense that it has cowed overt opposition.
It has also been corrosive. Its cumulative effect has been
to inhibit internal debate and therefore informed policy-
making. The need for that has become increasingly evident
as Russia’s economic and civil development and foreign
policy options have become constrained. As set out in
Chapter 3 by Philip Hanson, Russia’s economic prospects
were darkening as Putin’s third term began; the possibility
of GDP growth of around 5 per cent a year needed to
finance the mandate he had demanded of the government
looked well beyond the country’s reach. The idea that
Russia needed a new development model to replace that
fuelled by high energy and other natural resource prices
plus underutilized inherited assets, which had made for
such success until 2008, was widespread, but not elaborated
by the government. The statist alternative insisted on by the
Kremlin has failed to deliver.
All governments need to convey a sense of national
purpose or mission, but authoritarian governments
organized around an iconic figure like Putin ruling over a
disoriented country like Russia have a special need to do
so. By 2013 the Kremlin had tried a number of expedients
without making sufficient impact to prevent Putin’s poll
ratings sliding. Russians were not seriously investing
in their country. The National Front was a nostrum in
search of a purpose. Presenting Russia as the defender
of conservative paradigms had a certain appeal insofar
as it reflected traditional Russian beliefs in the country’s
exceptionalism, but neither it nor the proclamation of
special ‘Russian values’ resonated with the public as
compelling justification for Putin’s third term, let alone the
prospect of a fourth to last from 2018 to 2024. Thirteen
years after their advent, perhaps Putin and his clique were
in power for their own sakes? On the other hand, who else
was available, and who among Russia’s citizens either
trusted the Russian government as a whole or thought that
its nature had much to do with them anyway? Besides,
neither the European Union nor the United States was in
such good shape as to appear a compelling alternative for
many Russian citizens.
239 I am reinforced in this understanding by what others contributing to this report have written, but the choice of words is mine alone.
240 Philip Hanson, James Nixey, Lilia Shevtsova and Andrew Wood, Putin Again: Implications for Russia and the West (London: Chatham House, 2012).
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241 An elastic pre-First World War term recalling Tsarist Russia’s recovery of international authority after defeat in the Crimean War and representing contemporary
Russia’s ambition to assert its internationally acknowledged authority over its neighbourhood, as the successor to the USSR.
242 See the section on Putin’s new model Russia in Chapter 2 by Roderic Lyne.
243 A number of Russian commentators have gone further. See, for example, Dmitri Trenin of the Carnegie Institute in his noteworthy article of 22 December 2014,
‘Russia’s Breakout from the Post-Cold War System: The Drivers of Putin’s Course’: ‘At the end of his premiership Putin appeared imbued with a sense of history and a
mandate from God.’ And Trenin seems to feel that Putin had a point.
244 Siloviki is a collective Russian term for members of the various secur ity organs of the state.
245 See the latest report by the House of Lords EU Committee, The EU and Russia: Before and Beyond the Crisis in Ukraine, House of Lords Paper 115, 20 February 2015,
http://www.publications.parliament.uk/pa/ld201415/ldselect/ldeucom/115/115.pdf.
246 The retention of compromising material for later use as blackmail.
Great Power?
Putin’s long-term ambition had always been to restore
Russia to what he and many others saw as its rightful
position as a Great Power.241 As the country became richer
during his first two terms, and while Russian gas was
there as a powerful lever, so the Kremlin’s heft abroad and
Putin’s authority at home increased.242 So too, presumably,
did Putin’s self-confidence and his sense of entitlement.243
Dmitry Medvedev’s failure as president to establish himself
as the directing force in Russian politics fed Putin’s vision
of his own personal role. The inner core of the regime from
2008 to 2012 remained the same as it had been in the
previous eight years, but the role of the siloviki within it
steadily increased.244 Moscow’s 2008 Georgian adventure
fed perceptions of entitlement to hegemony in the post-
Soviet space, and Western inability to gainsay it. But the
conditions that had underpinned the Kremlin’s domestic and
foreign ambitions began to weaken after the 2008–09 global
economic crisis. The street protests of late 2011 and early
2012 came as a shock to Putin and his group. The dangers
of ‘colour revolutions’ became a stock Kremlin warning. The
regime’s perception of reality and its message to domestic
and world opinion laid increasing stress on the proposition
that Russia was a besieged fortress, and ultimately the belief
that a Russia risen from its knees meant that others, and
especially its ex-Soviet neighbours, had to fall on theirs.
Western attitudes before November 2013
Few in the West paid sufficient attention to the implications
of what was happening in Russia as Putin’s third term as
president got under way.245 Russia’s inward turn was seen
against the background of the prevailing supposition that
there would be ups and downs in its progress towards
something better; and in any case, insofar as it was
considered at all, it was seen as something beyond the
power of Western governments directly to address. The
major increase in military expenditure and the reforms
that went with it (described in Chapter 6 by Keir Giles)
were seen primarily as necessary and understandable steps
to repair past neglect. Putin had after all given military
reforms insistent backing both before and after his return to
the Kremlin. Less attention was paid to the question of what
exactly Russia’s increased military potential might be for.
Nor were Putin’s ambitions to form a Eurasian Union seen as
necessarily incompatible with EU Association Agreements
with Eastern Partnership countries. But then, no Western
countries saw themselves as being in existential competition
with Russia. Moscow’s insistence on what it regarded as the
reality of just such an East–West struggle should have been
taken more seriously than it was in the West. None of that
is to argue that the European Union or the United States
– the latter being seen by the Kremlin as its rival epicentre
– should have followed different paths. But it does suggest
that the West should have been more fully prepared for the
shock in November 2013. The potential establishment of a
successful and democratic regime in Kyiv was understood in
Moscow from the beginning as an existential threat to the
Putinist regime in Russia, and to the wider order that the
Kremlin hoped to establish over the former Soviet space.
As it was, the struggle within Ukraine focused and
sharpened the Kremlin’s pre-existing fears and convictions,
from triumph as Viktor Yanukovych reneged on the EU
Association Agreement in November 2013 to anger as
he lost to the Maidan protesters in February 2014, with
Moscow’s seizure of Crimea in revenge. It also gave Putin
the opportunity to rally his people around his banner once
more, with the focus firmly on defending Russia against the
menace of the West, and the United States in particular.
Ukraine after November 2014
Presenting the crisis around Ukraine as one between East
and West has been good tactics for Moscow. It has induced
Western leaders, with Germany in the vanguard, to negotiate
Ukraine’s future with Moscow. And to admit instead, even
to Kremlin insiders, that the issue was at the outset one
of decent governance in Ukraine would have been hard,
and very possibly dangerous, given the obvious analogies
between Moscow and Kyiv. The Kremlin had, however, full
knowledge of how Yanukovych tried to suppress the Maidan
protests and how he failed. The breathtaking corruption of
the Yanukovych regime was hardly secret. Putin’s regime
probably saw it as a useful ‘kompromat’,246 and certainly
did not attack the Yanukovych family for its penetration of
Ukraine’s government, which had built up steadily from the
moment the president was elected in 2010. The Kremlin
from the first had made it clear that it wanted ‘much more’,
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247 Andrew Wood, ‘Real Putinism’, The American Interest, 1 April 2015, the-american-interest.com/2015/04/01/real-putinism/.
to quote Medvedev as Yanukovych took over in 2010, than
simply the extension of Russia’s lease for the Black Sea
fleet. It had good reason to be disappointed, arguably even
dismayed, that the effort to force Kyiv into a Eurasian harness
had backfired. But so taken aback that grabbing Crimea was
its response? And promoting and sustaining armed conflict in
eastern Ukraine the follow-up?
Answers to these questions are central to future Western
policy-making and to developing an understanding of
Russia’s possible futures. What the Russians have said,
and still say, is not necessarily the whole truth, to put it
generously. The information available to the narrow group
of major actors in Moscow continues to be coloured by the
prejudices and hopes of those channelling it up to them.
Those actors have their own presuppositions, and their own
fears or hopes. Chapter 4 by James Sherr, and the facts on
the ground, show just how wrong Russian policy-makers
have been, whether through wilful denial/misinterpretation
or out of ignorance, in the assumptions that underlie their
policies towards Ukraine.
Putin and his circle may hope that
exhaustion and fear will in due course resign
Ukrainians to Russian domination. But even
if that turned out to be true, it would very
likely make for no more than a temporary
lull in resistance to Muscovite pressure.
Russia has overreached itself in Ukraine. Far from
compelling that country to renounce its European
orientation, it has reinforced the message that Russia – and
particularly Putin – cannot be trusted and that protection
against Moscow is therefore essential. The revulsion
against the corruption and misrule of Yanukovych and the
realization that the Kremlin model is essentially the same
remain for the majority of Ukrainians a key component
in their ambition to move towards democratic values
of Western origin, and a closer relationship with the
West. They have once again shown themselves ready to
act courageously to that end, as they did in 2004, when
Moscow tried to prevent the victory of Yushchenko over
Yanukovych. Putin and his circle may hope that exhaustion
and fear will in due course resign Ukrainians to Russian
domination. But even if that turned out to be true, it
would very likely make for no more than a temporary
lull in resistance to Muscovite pressure. The leaders of
Russia may have persuaded themselves otherwise, but if
so they have failed to register why their efforts to rouse
Russian-speaking Ukrainians in the east have proved such
hard going. Despite the extensive concessions made to
Moscow during the negotiations under the ‘Normandy
Formula’ to reach the Minsk II ceasefire agreement of
12 February 2015, Russia’s supporters do not for now
have secure control over enough territory in Donetsk and
Luhansk to set up a durable ‘frozen conflict’ zone like
that still plaguing Moldova. Extending their grip would
remain risky. It would, if successful, lead to the long-term
stationing of yet larger military forces. Establishing a land
corridor to Crimea would be an even greater commitment
at still more considerable risk.
The financial cost to Russia of what the Kremlin has already
done is, or at any rate should be, daunting. Crimea will
be a continuing drain on a constrained purse for as long
as it remains in Russian hands. Supporting enclaves in
Donetsk and Luhansk would be another, and probably
larger, commitment. For now, the Kremlin’s refusal to
admit that Russian troops have been deployed allows it
to deny financial responsibility for Donetsk or Luhansk,
but that excuse would not wash if separate statelets were
to be consolidated. They would be dependent on Russian
protection and support.
The external political costs to Russia are considerable as
well. Putin was surprised by the strength of the Western
reaction, and the coordination between the United States
and the EU in setting up sanctions. The strain on Moscow’s
relationship with its scheduled Eurasian Union partners
has been considerable, bringing that project’s chances of
success into serious question.
The assassination of Russia’s former deputy prime minister,
Boris Nemtsov, on 27 February 2015 highlighted a growing
risk to Russia itself. The violence of Donbas interacts with
Russia’s existing vigilante culture, and the menace of Putin’s
proxy in Chechnya, Ramzan Kadyrov.247 The repressive
policies that have increased as Putin’s third term has
progressed both feed on and are fuelled by Russian efforts
to subdue Ukraine to its will.
What now?
Minsk II provided for a lull in the fighting in Donbas, but
its provisions were contradictory and open to conflicting
interpretations by the three principal parties: the EU as
fronted on 12 February by Germany and France, together
with the wider West by extension; Russia; and Ukraine,
which like Russia is free to cry foul at any stage. In the
absence of a clear commitment to the agreement as a
road to a sustainable settlement over the longer term,
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which would require its creative interpretation in the
light of shared aims, it seems unlikely to prove more than a
temporary and partially respected ceasefire.
The West
EU and US sanctions against Russia have had an
ambivalent effect on Russia so far. They have on the one
hand consolidated majority domestic support for Putin,
at least over the short term. On the other, they have
played into pre-existing Russian economic problems
clearly linked to Russian failures to address long-standing
structural economic and political problems. Their effect,
if maintained, is likely to increase over the next couple
of years. Their reach is enhanced beyond their detailed
provisions by the need for Western enterprises to interpret
them broadly so as to avoid possible difficulties with their
own authorities, and by Moscow’s imposition of counter-
sanctions. All concerned must consider whether wider
sanctions might at some stage be imposed in response to
further aggressive Russian actions.
The problem for the EU, however – for now at least – is to
maintain sanctions at their present level, not whether or not
to increase their range or severity. Keeping them at their
present level has been linked to an uncertain yardstick,
the implementation of Minsk II. European judgments and
expectations have varied from alarm to something closer to
complacency as particular shocks such as the downing of
Flight MH17 or clear Russian military interference in eastern
Ukraine give way to relative calm in Donbas. Little has been
said of Russian-induced repression in Crimea, whose fate was
barely considered during the discussions leading to Minsk
II. There can be no certainty over how the EU would reach
a workable consensus by the end of the year on allowing EU
sanctions to be eased or lifted, based on whether Minsk II
had or had not been sufficiently fulfilled by Moscow’s Donbas
proxies or Kyiv, or Moscow itself. Opinion in Washington, for
that matter, might still be divided, too. Congress is minded to
be tough, but the executive arm far less so.
Events may of course weaken the link between maintaining
sanctions and Minsk II, but the fact that such a link now
exists gives a focus to the purpose of sanctions that was
lacking before. Their original aim was to punish the
Kremlin and those directly implicated in Putin’s decision-
making for the seizure of Crimea, and they were increased
in response to subsequent Russian adventures in eastern
Ukraine. President Barack Obama foreswore direct military
intervention from the beginning, and besides, no European
countries would have supported him had he done otherwise.
The general aim, which Chancellor Angela Merkel has
articulated with particular force, was for the West to respond
as effectively as possible to Russia’s challenge to the post-
Cold War international order, and to restore its proper
framework for the security of the whole of the European
continent. That aim remains in force, along with the
restoration of the territorial integrity of Ukraine itself. But
defining Western aims in more detail has proved difficult.
As noted earlier, there are many in the West who have
been seduced by the Russian line that Moscow has been
betrayed by the West over the years, and in particular by the
enlargement of NATO. According to this logic, the possibility
of Ukraine joining NATO was a significant factor in
precipitating Russia’s direct intervention and subsequently
its (officially denied but patently obvious) incursion into
Luhansk and Donetsk. It is supposed therefore that an
undertaking never to accept Ukraine into NATO, whatever
the wishes of Kyiv might be now or later, together with
(in most such propositions) at least de facto acceptance of
Moscow’s occupation of Crimea, is an essential element
of an East–West negotiated settlement of the crisis in and
around Ukraine. It is certainly the case that Moscow has
built up a grievance narrative over the years, including over
NATO enlargement, and that this narrative has satisfying
force for many Russians. That is a fact, irrespective of the
truth of the tale, just as it was a fact that many Germans
in the interwar years believed in the legend of the Stab in
the Back. It does not at all follow, however, that accepting
Ukraine into NATO was ever a real possibility in 2013 or
that a promise now never to do so would be a viable part of
a settlement negotiated between Russia and the Western
powers and forced on Ukraine. To take that approach would
in any case be to admit Moscow’s right to decide Ukraine’s
future, by force if need be.
Germany has moved into the lead in the West in
determining policies towards Russia and the Ukrainian
problem. Berlin has become more critical of Putin than it
once was, and markedly less trustful of him and his ruling
group in the process. Washington’s role in this evolution is
less clear than one might have expected. Merkel’s opposition
to America – or the less immediate possibility of Europe –
supplying lethal weapons to Ukraine may have coincided
with Obama’s reluctance to do so. She has insistently
repeated that force cannot resolve the Ukraine problem. The
trouble with that is that the Russians in effect insist that it
can, and show no sign of changing their minds.
Other Western mantras include the need to preserve
the territorial integrity of Ukraine, and the centrality of
support for its right to democratic development together
with the concomitant close relationship with the West,
and with the EU in particular. Again, however, these are
worthy aims whose concrete meaning is disputable. If
Minsk II is taken as indicative, then one interpretation of
it would be that Kyiv would pay for the cost of Russian-
promoted enclaves in the east of Ukraine that are not in
practice subject to its writ. This would come close to the
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idea of a ‘frozen conflict’ settlement. The Russian Ministry
of Foreign Affairs has already interpreted the clauses
in Minsk II as meaning that Kyiv would have no right to
oversee elections in the two ‘People’s Republics’ in Donetsk
and Luhansk. But this provision is incompatible with
Ukrainian territorial integrity in any real sense. And the
West has yet to come up with serious plans to cope with
paying for and ensuring the reforms it demands, and that
Ukraine needs, if it is to become the stable democratic
state that the West proclaims as core to its strategy.
The reality is that the West’s primary focus is on dealing
with Russia, though of course, as it would maintain,
preferably not at the expense of Ukraine. The West has to a
significant extent tacitly accepted the contention that what
it faces is primarily an East–West contest, not one about the
nature of Ukraine’s potential for democratic and economic
reform, with all the implications that would have for
Russia’s future development, and for Putin’s place in it.
Russia
Putin’s objectives, too, are easier to discern in general
outline than in terms of particular targets in relation to
Ukraine. One step has led to another, in an effort to bolster
his regime at home, and in a wish to deny Ukraine to the
West. It is not obvious that he has a strategic endgame in
mind, such as splitting Ukraine in two, as has sometimes
been suggested. Nor is it clear that he knows how to reach
safe ground. What he has done, however, fits into a pattern
rooted in the nature of his domestic rule, and the way it has
come to depend on the assertion that Russia is surrounded
by foreign enemies, with the United States in the vanguard.
In a country whose rulers are not bound by the law, and who
rely in the last resort on force to ensure the obedience of the
people, it is natural to believe that the rules which in truth
govern international relations are the same: might is right.
The post-Cold War settlement that is critically important for
the West as the basis for European security is for Russia’s
present rulers no more than a framework whose time has
passed. The Russians use the language of democracy, the
market and international law, but its content for them
is different. The natural state of international affairs for
them is that Russia, as a Great Power, should dominate
its neighbourhood and dictate its governing structures.
Frustrating that right is seen as aggression, and linked to
internal unrest, which is blamed on Western incitement.
The fear index of Russia’s neighbours, and for that matter
its formal allies, has undoubtedly risen over the past year
or more, along with their evident or concealed hope that
the West will restrain Moscow’s appetite. But the present
focus remains on Ukraine. Speculation as to how Russian
policies towards other states in the region might develop
will remain just that until Ukraine’s future becomes
clearer, and as Russia’s domestic politics develop in parallel
with that. For all the power of the levers that Moscow has
in its quarrel with Kyiv and the West, there are near-term
constraints on their potential that are set to increase over
the year and into 2016. The most obvious of these is the
speed with which Russia’s financial reserves are being
depleted and the inability of the government to keep up
with the pressures put upon it by sanctions and the fall
in the price of oil.
As things stand, Putin has invested so much,
not least of course in eastern Ukraine, with
so little to show for it in concrete gains for
his country, that he is for now condemned to
show himself indomitable.
If there were such a thing as a pure national interest, Putin
would never have gone in so deep over Ukraine. Crimea
was risky enough. As things stand, he has invested so
much, not least of course in eastern Ukraine, with so little
to show for it in concrete gains for his country, that he is
for now condemned to show himself indomitable. The
personal risks of admitting or even appearing to admit
that he has been in error are considerable. It is not at all
evident, however, either what any further advance would
achieve or what consolidating a defensible position would
entail. This surely is a second constraint on near-term
Russian policy decisions. Putin has spoken often enough
of the need for unity in the face of the threat from a West
driven by a vindictive United States – but sound and fury
are not enough. A leader sure of what to do next in pursuit
of clear and well-recognized goals has authority. Waiting
for others to concede some prize is not the same thing as
having a real strategy.
Putin’s poll ratings, combined with an image of a Russia
inured to hardship, boost the supposition common in the
West that he will remain dominant in his country at least
until the next presidential round in 2018 but more probably
for a further term as well, which would keep him in the
Kremlin until 2024. Plenty of Russians share Putin’s view
that Russia’s troubles are all the fault of others. Turning
in on themselves and raising two fingers to the rest of
the world, and the United States in particular, is some
consolation for the disappointments they have endured
over the past many years. But no one can live forever on a
diet of patriotism alone. Putin is well aware that others who
have seemed secure and popular have lost power suddenly,
completely, and often enough fatally. Russian history is
punctuated by such outbursts as well as being characterized
by long periods when the supreme authority of the ruler has
been passively accepted.
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248 See, for instance, Alena Ledenova, Can Russia Modernise? Sistema, Power Networks, Informal Governance (Cambridge University Press, 2013).
249 See Orysia Lutsevych, ‘Ukraine’s Oligarch Gambit ’, Chatham House Expert Comment, 9 April 2015, http://www.chathamhouse.org/expert/comment/17393.
Putin and his cabal have no answer to the longer-term
questions about Russia’s future. The word ‘modernization’
has dropped out of their vocabulary. Corruption in both
its senses of bribes and kickbacks, and the fundamental
distortion of society by a culture of rule by personal
favours coupled with blackmail, has grown under their
rule into a fundamental system of government.248 Instead
of a rule of law applying to all, high or low, Russia runs
on laws elastic in their meaning, ineffectually policed for
their constitutionality and arbitrary in their application.
The courts can be and are manipulated by the powerful,
and used at will against unruly regime vassals. The Duma
and the Council of the Federation have been drained of
authority. The regions are dependent on the dictates of
the Kremlin. The bigger the Russian business, the greater
its subservience to the state – if state is the right word
for Russia’s governing system. The resulting stasis looks
strong but is vulnerable.
The Kremlin now has no ways it can bring itself to accept
which might resolve the problems it faces over the next
few years. The alternatives are quite stark. If Putin chooses
to stick to present economic policies, to ramp up domestic
repression as and when he believes it necessary, and to
balance Russia’s self-isolation with a belligerent attitude
towards the West, and towards neighbouring states too
for that matter, he will run into increasing economic and
political difficulties. Putin promised his country stability,
not the return of the shadow of 1998. The hope in the
Kremlin may be that in time the situation in Ukraine will
change to Russia’s permanent advantage, that EU and
maybe even US sanctions will be relaxed, and that the price
of oil will rise back towards its old levels, thereby giving the
Russian economy a further lease of life in its current form.
Russia’s leaders, at any rate, seem intent on using the time
they believe they have in the course of this year to stick to
their present last.
The risks of this approach are considerable, and likely to
grow. But so are the risks, for the narrowing group around
Putin, of beginning seriously to address Russia’s long-term
social, economic and political problems. The crisis around
Ukraine is one dangerous element of a deepening crisis for
Russia itself.
Ukraine
Both Western policy-makers and their Russian counterparts
know less about Ukraine than they should, and are inclined
to underestimate its potential (see Chapter 4 by James
Sherr). In contrast to Russia, Ukraine has no vertical of
power, though its governance under Yanukovych was as
corrupted as Russia’s. Since Yanukovych was ejected, the
civic initiative of multiple groups of Ukraine’s citizenry has
been notable, in contrast to the civic passivity of Russians.
Their will to resist Russian aggression has been clear, and
the courage of ordinary Ukrainians in facing up to regular
Russian formations equally remarkable. Russian troops have
taken more casualties than they or foreign observers could
have expected. If spirit alone could give Kyiv the upper
hand, it would have done so.
But Ukraine’s forces have been outgunned and
outmanned. The West has yet to let them have weapons
which might blunt assaults by Russian tanks. There has
been progress towards political and economic reform,
and successful presidential and parliamentary elections.
But the establishment of a fully accountable and effective
machinery of government has yet to be completed for the
major part of the country, which so far lies beyond Moscow’s
power – whether directly or by proxy.249 Without greater
Western commitment, the risk of the failure of Ukraine’s
effort to transform itself into a European state from one
based on the faltering Moscow model is patently clear.
The West’s response
British and other Western policy-makers must of course
deal in the first place with present realities, and present
leaders. But they need also to take account of future
possibilities in framing their approach. At the least, in
dealing with Moscow, it is essential to remember that Putin
and his circle are not the same as Russia and its people,
and that their interests do not necessarily coincide. Ways
should be sought to expand Western communication with
the latter. The current Kremlin may want to develop the
false promise of a separate, self-sufficient and introverted
Russia dominating the former Soviet space. The reality is
that Russia is already part of Europe.
An increasing number of Kremlin-oriented Russians argue
that the purpose of the West, and of course the United
States in particular, is to change the regime in their country
through ‘colour revolutions’. Preventing them is the
Kremlin-mandated duty not just of Russia’s internal security
forces but of the armed services too. In truth, the West is
not consistent, organized or effective enough to mount
such revolutions, even if it had the wish to do so. Russian
leaders’ warnings of the dangers reveal their fear of their
own people. So do the pre-emptive measures of repression
they have taken to protect themselves, including the use of
licensed but deniable thuggery against particular offenders,
paralleled by their actions in and against Ukraine: criminals
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have their uses. The West has no interest in letting Russia
slip into anarchy, and never has had such an interest.
But nor does the West have either the desire or the means
to protect Putin’s regime against change, whether managed
or violent. It is regularly suggested that a successor to Putin
would be worse than he is. All that can in truth be said is
that a successor would be different, and would explore
different policy options. That would be the case whether
Putin was ousted by an internal coup, by illness or by
popular unrest. The risk of a chaotic ending is heightened
by the lack of any realistic succession mechanism in today’s
Russia, and is evident to plenty of Russians themselves.
It would nevertheless be sensible for the West to give
further thought to how it might deal with the consequences
of regime change in Russia. Effective communication
with the Russian people and the defence of human values
beforehand would be essential for Western credibility.
Getting too close now to a ruling cabal that abuses universal
values, while tempting for reasons of so-called realpolitik
on a short- or medium-term basis, would have a longer-
term cost. Prudence is needed as well over the degree to
which the West may seem complicit in its commercial and
financial dealings with possibly corrupt Russian entities and
persons. No self-evident answers to the dilemmas inherent
in approaching such questions exist, but the realization that
the present regime will not last forever, and may indeed face
a serious crisis within the foreseeable future, should help to
focus the mind on their importance.
Planning for the future ought, lastly, to cover the scenarios
from changes of leadership within the current structures, to
the emergence of a group ready to pursue structural reform
in some sort of accountable dialogue with the Russian
population, to regime collapse. The future may rarely be as
visionaries predict, but sketching out possibilities can clarify
future options and draw attention to possible dangers:
refugees? nuclear risks? financial aid? the effects in Central
Asia and the Caucasus? the lessons of the collapse of the
Soviet Union?
In the meantime Western leaders should bide their time
at least until existing pressures on Russian policy-makers
show some signs of inducing them towards substantive
negotiations over Ukraine, beyond paper promises likely on
past form to be broken as soon as convenient. Sanctions are
having a significant effect, which is likely to increase over
2015. But there is at present nothing on offer from Moscow
either to Kyiv or to the West as a whole that holds out some
prospect of a durable modus vivendi.
That does not imply a refusal from time to time to test Putin
directly. But the parameters for that must be clear and strict,
including insistence on a complete and verifiable end to the
presence of Russian soldiers and the provision of supplies to
rebels in Donbas. This is war by any reasonable definition,
whether or not Putin cares to admit what he is doing.
Moreover, strategic patience in pursuing the present Western
course does not mean that increasing the pressure on Russia
by harsher sanctions or by direct military assistance of one
kind or another to Kyiv should be ruled out.
The West should increase its support for Ukraine in
moving towards a more secure future with an accountable
government subject to the rule of law and therefore
more equipped to prosper in its European and global
contexts. Helping Ukraine to make a transition of that
nature would be the best help the West could give Russia
too, since the desire is for it too to revisit the possibility
of democratic development. The cost of helping Ukraine
will be considerable, but ought to be faced: the costs of its
collapse would outweigh them.
It would be imprudent for transatlantic or
European countries to suppose that a return
to what was once seen as business as usual
is a realistic possibility for the foreseeable
future. Doing business as usual with
Fortress Russia, a country undermined by
its present practices, has never been easy.
It would be doing Russia an ill favour to treat that country
as an exception franchised to its own rules as a Great
Power. It would be imprudent for transatlantic or European
countries to suppose that a return to what was once seen as
business as usual is a realistic possibility for the foreseeable
future. Doing business as usual with Fortress Russia, a
country undermined by its present practices, has never been
easy. It looks set to become more difficult, with or without a
Ukraine settlement.
There is as yet no sign that Putin has recognized the
dangers for his country in his foreign policies or his
domestic policies. There are those in the West, some of
them authoritative, who argue that the West needs to offer
a ramp for him to climb down. The assumptions behind
that proposition have been and remain questionable. If
Ukraine were about to give up the struggle, Putin would feel
triumphant and in no need of a ramp. As it is, if he came to
acknowledge that his efforts to find foreign allies, China not
least, had proved insufficient, that he faced a long struggle
in bending Ukraine to reliable obedience, and that he or
an eventual successor had to do something convincing to
revive foreign investment in his country, he would be well
advised to pursue the possibilities of working with outside
powers towards a durable way of living with a changing
Ukraine and with the West as a whole over a wider range of
other matters, rather than putting everything into the anti-
American and anti-Western basket.
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Western countries, for their part, should be on their guard.
Defence has now to move up national agendas. And the
need is now evident for more effective and better-informed
instruments to be nurtured both nationally and within the
EU and NATO to identify, pre-empt and manage potential
threats to peace and security in Europe, including by
regenerating a collective ability to understand and analyse
what is going on in Russia itself. The West should also
explain its policies towards Russia, including of course
those affecting Ukraine, to Russia’s post-Soviet neighbours
– and to China. They deserve to hear directly how the West
understands the position, and how Western countries
propose to proceed. At the least, Russia’s propaganda effort
needs to be balanced in this way.
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Summary of Recommendations
The root cause of the challenge posed to the West by Russia
lies in the country’s internal development, and its failure
to find a satisfactory pattern of development following the
collapse of the Soviet Union. Vladimir Putin and his circle are
not the same as Russia and its people, and their interests do
not necessarily coincide. The West has neither the wish nor
the means to promote, or for that matter to prevent, regime
change in Russia. But Western countries need to consider the
possible consequences of a chaotic end to the Putin system.
The West needs to develop and implement a clear and
coherent strategy towards Russia. As far as possible, this
strategy must be based on a common transatlantic and
European assessment of Russian realities. In particular,
policy should draw on the evidence of Russia’s behaviour,
not on convenient or fashionable narratives.
As outlined in more detail in the Executive Summary at the
beginning of this report, the West’s strategy needs to include
the following clear goals, and establish the near-term means
and longer-term capabilities for achieving them:
Strategic goals for the West
• To deter and constrain coercion by Russia against its
European neighbours, for as long as is needed, but
not to draw fixed dividing lines. The door should be
kept open for re-engagement when circumstances
change. This cannot be expected with any confidence
under Putin.
• To restore the integrity of a European security system
based on sovereignty, territorial integrity and the
right of states to determine their own destinies.
• To find better ways to communicate to the Russian
regime and people that it is in their long-term
national interest to be a part of a rules-based Europe,
not an isolated regional hegemon.
• To explain Western policies consistently and regularly
in discussions with China, and to all former Soviet
states, most of which have reason to be concerned
about Russian policies, whether or not they admit it.
• To prepare for the complications and opportunities
that will inevitably be presented by an eventual
change of leadership in Russia.
• Not to isolate the Russian people. It is not in the
Western interest to help Putin cut them off from
the outside world.
Specific policy objectives
• The reconstruction of Ukraine as an effective
sovereign state, capable of standing up for itself, is
crucial. This requires the input of much greater effort
than has been the case up to now.
• The EU’s Eastern Partnership needs to be transformed
into an instrument that reinforces the sovereignty and
economies of partner countries that have proved willing
to undertake serious political and economic reform.
• The effectiveness of sanctions against Russia depends
on their duration as well as severity. Until the issue
of the violation of Ukraine’s territorial integrity is
fully addressed, sanctions should remain in place.
It is self-defeating to link the lifting of sanctions to
implementation of the poorly crafted and inherently
fragile Minsk accords.
• The West should not return to ‘business as usual’
in broader relations with the Russian authorities
until there is an acceptable settlement of the
Ukrainian conflict and compliance by Russia with its
international legal obligations.
• EU energy policy should aim to deprive Russia of
political leverage in energy markets, rather than to
remove Russia from the European supply mix.
• Western states need to invest in defensive strategic
communications and media support in order to
counter the Kremlin’s false narratives.
• NATO must retain its credibility as a deterrent
to Russian aggression. In particular, it needs to
demonstrate that limited war is impossible and that
the response to ‘ambiguous’ or ‘hybrid’ war will
be robust.
• Conventional deterrent capability must be restored
as a matter of urgency and convincingly conveyed, to
avoid presenting Russia with inviting targets.
• Individual EU member states and the EU as a
whole need to regenerate their ability to analyse
and understand what is going on in Russia and
neighbouring states. This understanding must then
be used as a basis for the formation of policy.
Independent thinking since 1920
The Royal Institute of International Affairs
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