#5 - JRL 7007
January 7, 2003
Mr. Putin's resurgent Russia
Remember Russia? The government in Moscow no longer commands the international respect -- or fear -- that it did during the Cold War days, but a decade after the collapse of its empire, Russia appears ready for a comeback. President Vladimir Putin has revealed a deft touch at home and abroad, besting adversaries and winning new friends. The much maligned economy is regaining its feet, a recovery that has been fueled by surging energy exports.
In short, the foundation for a Russian resurgence is being laid. Domestic terrorism or a foreign-policy miscalculation could undermine the progress that has been made, however. Critical to Russia's future is an understanding of where its national interests lie: consolidating the rule of law at home and casting its lot with the West rather than acting as an independent force in foreign affairs.
After the tumult of the Yeltsin era, Russia has stabilized under Mr. Putin. A relatively unknown quantity when he took office, the Russian president has proven to be a capable leader and politician. He has marginalized the domestic opposition, despite a number of incidents -- including the Kursk submarine disaster and the Chechen hostage drama in a Moscow theater -- that could have damaged his popularity. He has projected the image of a man of action and a man of the people, a marked contrast to the mostly sclerotic leaders of the Soviet era.
Mr. Putin's domestic standing has been enhanced by his international stature. He has forged a special relationship with U.S. President George W. Bush and built strong ties with European leaders. During Mr. Putin's tenure, Russia has institutionalized a new relationship with the North Atlantic Treaty Organization that turned the former enemies into partners. At the same time, Mr. Putin and Chinese President Jiang Zemin established the Shanghai Cooperation Organization, which consolidates Russian influence in Central Asia and tightens cooperation between the two countries. Mr. Putin has also made it clear that Russia will be a player in Northeast Asian diplomacy and that any eventual framework for the region will have to take Russian interests into account.
The only shadow on this diplomatic horizon is the continuing freeze in Russia's relations with Japan. Tokyo and Moscow have yet to sign a peace treaty; every effort has been blocked by nationalist sentiment in both countries. Nonetheless, a strong and confident president like Mr. Putin should be able to overcome those forces and strike a deal that allows the two Pacific powers to cooperate in building a more stable future in the region. Prime Minister Junichiro Koizumi's forthcoming trip to Russia could lay the foundation for such a development.
Japanese funds could help open the Russian Far East, and its vast resources, to the world. That would be a boon to a Russian economy that is recovering from the downturn that began with the country's transition from communism and the plunge that followed the 1998 financial crisis. Last year, gross domestic product grew between 4 and 4.1 percent. Industrial output rose 3.9 percent in 2002, and agriculture and capital investment both increased, 1.5 percent and 2.5 percent, respectively. Unemployment has dropped to 8 percent. Although this figure remains high, continued reform will boost employment. And while Russia sometimes seems like capitalism's last untamed frontier, the rule of law is being consolidated.
Russia's oil and natural gas reserves have fueled the country's growth, and since last year it has been the world's largest oil exporter. The prospect of war with Iraq could further benefit Moscow; conflict would increase its international leverage as an alternative source of oil and every $1-per-barrel increase in the price brings in almost $1 billion in extra earnings. There is similar promise in natural gas reserves; Russia is already the world's top natural gas exporter, and exports could increase by 150 percent in the years ahead.
Two issues can undermine Moscow's bright future. The first is domestic terrorism. The seizure of a Moscow theater by Chechen rebels last October, and the suicide bombing last month are reminders of the dangers that Russians face on a daily basis. No government can allow such threats to continue without undermining its own legitimacy. Nonetheless, a savage response to terrorism could prove equally damaging.
Russia's image will also be affected by its international relations. Moscow's seeming willingness to put commercial interests above nuclear-proliferation concerns in its dealings with Iraq and Iran raise troubling questions about its priorities. These questions will have to be answered to the satisfaction of the international community if Moscow is to reclaim its rightful place on the international stage in the years ahead.