Russia’s Response to the Economic Crisis
by J. R. Nyquist, Global Analyst. November 14, 2008
The United States of America is headed for a “crisis of its existence.” These were the words of a Soviet diplomat, speaking anonymously to Pravda in late July. A few days prior to this statement, at a meeting of Russian ambassadors convened by President Dmitry Medvedev, Moscow launched a new diplomatic offensive to push the United States out of Europe. A war between Russia and Georgia would provide the catalyst. Europe’s attention would be galvanized. Special negotiations between Moscow and Berlin, Moscow and Paris, Moscow and Rome, could move forward, and new security arrangements announced for the whole of Europe. The United States would be depicted as an irritant in otherwise good relations between Russia and Berlin. In the process, Washington would be gradually isolated.
In his November 5 address to the Federal Assembly, President Medvedev spoke of “long-term economic” plans, including the modernization of Russia’s armed forces. “Events of great significance for each one of us in this country, I am sure, have taken place,” he underscored, “events that have also been a serious test for all of Russia.” He was referring to Russia’s military incursion into Georgia, prepared over a period of many months. Russia’s disinformation campaign has now succeeded in obscuring the fact that Russia planned to invade Georgia for many months. Russian agents in South Ossetia goaded a Georgian over-reaction that would justify a Russian “counter-reaction.”
The purpose of the Russian incursion, in grand strategic terms, was not to overrun Georgia. The purpose was to shake loose the rotten European timbers. The fighting in Georgia would form the backdrop to a new chapter in Russian diplomacy as well as naval deployments to the Mediterranean and Caribbean. The Russian strategy seeks to justify a return to Cold War military moves. Aggressive maneuvers must be portrayed as defensive reactions. Consider the words of the Russian president: “The conflict in the Caucasus was used as a pretext for NATO vessels to enter the Black Sea and then to speed up the imposition of an American missile defense system in Europe,” He said. “This situation forces Russia to take measures in response (which I will talk about today). Tbilisi’s adventure in its own backyard has had repercussions that go far beyond the region, have increased tension across Europe and throughout the whole world, cast doubts on the effectiveness of the international security institutions and destabilized the foundations of the world order.”
This last sentence is the key phrase in Medvedev’s Address to the Russian Federal Assembly. The destabilization of the foundations of the world order is Moscow’s objective. It is not the result of the war in Georgia, but the reason for initiating it. Since the Kremlin planned the war months in advance, since it was not a spontaneous reaction to Tbilisi’s “aggression,” since the South Ossetians were the ones who provoked the Georgians into action for the sake of justifying a Russian “reaction,” the destabilization of the world order was in view from the outset. Such is the Russian strategic plan. Destabilization opens a pathway to a Russian-dominated world, where American power is neutralized once and for all. Listen carefully to the words of the Russian president: “The global financial crisis also began as a ‘local crisis’ on the U.S. domestic market. As the biggest developed economy, tightly linked to the markets in all the developed countries, when the U.S. economy began to slide it pulled financial markets all around the globe with it in its fall. This crisis has now become global in scale.”
The crisis of capitalism brings about a global revolution. In this revolution America will fall and Russia will rise. According to the Russian president, “we need to put in place mechanisms that can block the mistaken, selfish and at times simply dangerous decisions made by some members of the international community [i.e., the U.S.]. It makes no sense to hide the fact that the tragedy of Tskhinvali [South Ossetia] was made possible in part by the conceit of an America administration that closed it ears to criticism and preferred the road of unilateral decisions.” President Medvedev does not describe the Russian invasion of Georgia as a “unilateral decision,” but blames the Americans. Medvedev also says that U.S. domestic policies were “unilateral.” American domestic policy, he alleges, should be decided in consultation with Moscow and other U.S. “partners.”
How could the domestic policy of a democratic country, where a system of checks and balances prevents the president from having a final decision, accommodate the policy preferences of foreign governments? President Medvedev would have us believe that such a mitigation of U.S. sovereignty is perfectly reasonable. In fact, U.S. sovereignty is what he laments. The Americans have the largest economy in the world. When America sneezes, the world catches cold. This situation is intolerable and must be changed. Fortuitously, the destabilization of the foundations of global order makes change possible. Hinting at this, Medvedev noted that “every cloud has a silver lining. The mistakes and crises of 2008 are a lesson to all responsible nations that it is time for action. We need to radically reform the political and economic systems. Russia, at any event, will insist on this.”
The most intriguing element in Medvedev’s speech was his elaboration of unique Russian “values,” which supposedly include “honest courts” and regard for “freedom.” Seeming to criticize the secret police dictatorship fronted by Vladimir Putin, President Medvedev advocates liberty and justice as the keys to national success. An open return to Marxism-Leninism isn’t going work in Russia, Medvedev is saying. The bureaucracy created in Soviet times was stultifying. The country’s long-term prospects were damaged, and people became too passive. But how does Mevedev hope to revitalize a sick nation after decades of socialism? Surely, he cannot stand up to Putin. Or does he have powerful backing from the General Staff?
Note Medvedev’s words: “The bureaucracy from time to time casts fear over the business world, pressuring it to keep in line and not take what they consider wrong action, [it] takes control of this or that media outlet, trying to stop it from saying what they consider the wrong thing, meddles in the electoral process, preventing the election of what they consider the wrong person, and puts pressure on the courts, stopping them from handing down what they consider the wrong verdict.” The significance of this statement should not be misunderstood. Criticism of the previous ruler has long been normalized in Russian politics. One must remember that Khrushchev criticized Stalin, Brezhnev criticized Khrushchev, and Gorbachev outdid them all. But Vladimir Putin is not dead. He is prime minister and is supposedly more powerful than his president. What are we to make of this?
In Russia, national strategy trumps everything. Even Stalin was compelled to reverse himself at times. There is every reason to believe that the Kremlin, ambitious to fulfill its declared international mission, recognizes its own mistakes, and seeks to improve the efficiency of the country. “The result [of our policy],” admitted Medvedev, “is that the state bureaucracy is the biggest employer, the most active publisher, best producer, and is its own court, own political party, and ultimately its own people. This is a completely ineffective system and leads only to corruption. It gives rise to legal nihilism on a mass scale, goes counter to the Constitution, and hinders the development of innovative economic and democratic institutions.”
These are true words, and a breath of fresh air. But we cannot take them at face value. The analyst must look back to Khrushchev’s denunciation of Stalin. What do such denunciations signify in the end? They give the Kremlin a breathing space. They give a deceptive government a lease on credibility. The exorcism pronounced against Stalinism or against Soviet style bureaucracy is more style than substance. Medvedev’s words are meant to draw Western Europe into closer collaboration with Moscow. Perhaps he would make an honest attempt at reform, though it makes no difference. The system follows its own logic, and no man can change what has long been established. The Russian president is groping toward two objectives. A new partnership with Europe calls for another round of reforms inside Russia. The Europeans will never join with Russia while corruption and non-transparency remains an affliction so pronounced, and Russia will never become a great power if it fails to liberate the energies of the Russian people. This can be done, for a short while, with the semblance of reform – if it is announced with apparent conviction by the Russian president. Russia must take another stab at “democratization.” It is one more Potemkin village among many, to be sure, but Medvedev is obligated to say the right words. He must try something, however contradictory it appears, for the sake of Russia’s relationship with Germany, for the sake of the Russian voter, for the sake of Russia’s economy, and for the sake of military renewal.
We have seen all this before, with Boris Yeltsin. And Boris Yeltsin proved faithful to the KGB in the end. The Yeltsin years were deceptive, and Yeltsin himself was deceptive. The Russian politician who talks of democracy and liberty gains tremendous advantages at home and abroad. But what is the outcome, ever and always? The “state within the state,” the KGB and its secret structures, always remain on top. And so, inevitably, Medvedev’s Address to the Federal Assembly reverts to international strategic objectives: “In practice,” he explained, “a qualitatively new geopolitical situation has been created. The August crisis simply forced a so-called moment of truth upon us.”
And what is that truth? According to Medvedev, “Our Armed Forces have been restored to combat potential to a considerable degree.” Furthermore, Russia faces “the construction of a global missile defense system, the installation of military bases around Russia, the unbridled expansion of NATO and other similar ‘presents’ for Russia….” The strength of Russia, he explained, is being tested. Therefore, Russia must take specific measures in response: Three Russians missile regiments will not be disbanded, as previously decided; the Iskander missile system will be deployed to Kaliningrad in order to “neutralize” NATO’s ABM deployment in Poland; electronic jamming of the ABM bases will be undertaken. In explaining these moves the Russian president said: “I would stress that we have no issue with the American people, we do not have inherent anti-Americanism. And we hope that our partners, the new administration of the United States of America, will make a choice in favor of full-fledged relations with Russia.”
What the Kremlin wants is a “new global security regime.” What does this mean, in essence? It means that America will be detached from Europe, and Russia will supply America’s place – as Europe’s protector and dedicated energy supplier. According to Medvedev, “the creation of a polycentric international system is more relevant than ever.” American global leadership is over. The economic crisis and the Russian incursion into Georgia suggest nothing less. The foundations of the global order have been called into question, and the questioning has only just begun. “The world cannot be run from one capital,” says Medvedev. “Those who refuse to understand this will only create new problems for themselves and others.” The Russian policy is, first and last, to isolate the United States and weaken its position as the defender of Europe. In addition, Medvedev wants “a new economic architecture” for the world.
The Russian strategists are feeling their way. They are groping toward their objectives, inch by inch. On Saturday, Nov. 15, we will hear more about Medvedev’s new “architecture” as the G-20 summit unfolds. Stay tuned.
© 2008 J. R. Nyquist