Steven Pifer gave the Scowcroft Institute Lecture before the George Bush School of Government and Public Service at Texas A&M.
Seven years ago today, al-Qaeda launched attacks against New York and Washington, and caused a fundamental change in how the United States views threats to its national security. Just a little over one month ago, Russian tanks rolled into Georgia and reminded us that, while confronting the threat posed by international terrorism, we cannot overlook the more traditional challenges to American security interests.
Today, I propose to address four subjects concerning Russia: First, what does Russia want from the outside world? Second, how did the U.S. government reach the point in this key bilateral relationship where it has so few tools to influence Kremlin behavior? Third, how should we now think about the balance between punishing and engaging Russia? Fourth, what are the options for the United States to respond?
In the aftermath of the collapse of the Soviet Union in 1991, the Russian people passed through turbulent times. The 1990s were a grim period: adjusting to the loss of empire; an economic collapse worse than the Great Depression; and a political system that, while incorporating democratic practices, often appeared chaotic and corrupt.
For many Russians, the nadir came in 1998, when an enfeebled President Boris Yeltsin led an unstable government, economic crisis struck, and the financial system collapsed. Since then, Russia has experienced a remarkable economic resurgence and demonstrated that assumptions in the 1990s about its long-term weakness were not well-grounded.
Rising prices for natural gas and oil exports fueled the recovery. By 2008, gross domestic product topped $1.3 trillion, four times the level in 1998. Russia’s international reserves today total more than $580 billion, and the Kremlin has established stabilization and national wealth funds that exceed $160 billion. Living standards are rising. Rightly or wrongly, the Russian population gives much of the credit to Vladimir Putin, who served as president from 2000 to earlier this year, when he became prime minister.
Moscow’s foreign policy has over the past several years adopted an increasingly assertive tone. To put the Kremlin’s message in a slogan: Russia is back. And, given a widely shared belief among Russians that the West took advantage of their weakness in the 1990s, Russia is back with a chip on its shoulder.
Georgia last month experienced just how large that chip is. This is not to fix all the blame for the August conflict on Russia. Georgian President Mikhail Saakashvili’s decision to send his army into South Ossetia on August 7 was ill-advised. He should have known that Moscow would not accept a Georgian bid to change the status of South Ossetia by force. The American narrative on the conflict sometimes overlooks this.
The speed of the Russian military response nonetheless was breathtaking. It suggests the Russians had planned and prepared to carry out a major combined arms operation in advance. They were awaiting a pretext. Saakashvili provided one. The scale of Russian operations made clear that they were not just about South Ossetia. Those operations and Moscow’s subsequent decision unilaterally to recognize South Ossetia and Abkhazia as independent states reflected the Russians’ broader unhappiness with Georgia’s pro-Western foreign policy course. They aimed to send a message not just to Tbilisi, but to other Russian neighbors, Europe and the United States as well.
What Does Russia Want?
As we consider the challenge that Russia poses today, it makes sense to ask: what does Russia want? Let me offer five suggestions.
First, Russia wants to develop its own political and economic model, free of criticism from the West. As the Russians struggled in the 1990s to transform their political institutions, they welcomed democracy promotion assistance. But, for many Russians today, the 1990s experience with democracy evokes bad memories. They associate democracy not just with chaos and corruption, but with economic uncertainty and the country’s economic collapse.
Thus, when Putin began to roll back the democratic advances of the previous decade, he faced little pushback from a population that first and foremost valued economic security. Relatively few Russians protested the roll-back, which included eliminating the direct election of regional governors, sharply reducing the independence of the judicial and legislative branches, and bringing the major television networks under Kremlin control.
To be sure, Russians today enjoy more individual liberties than during Soviet times. But by any objective measure, democracy is significantly weaker than it was ten years ago. One basic criterion: is the outcome of elections uncertain? However flawed the 1996 Russian presidential ballot in which Yeltsin won reelection, there was uncertainty about the outcome. There was no uncertainty when Putin ran for reelection in 2004, or when Dmitriy Medvedev, Putin’s designated successor, ran for president this spring.
In the early Putin years, Kremlin pundits spoke of “managed democracy.” More recently, they have talked of “sovereign democracy.” Its key feature appears to be that it is solely up to Russia to decide its form of government, without Western interference. The Russians want no lectures, no advice, no criticism about how they structure their internal institutions. In their current robust economic circumstances, they feel they can ignore any lectures, advice or criticism that the West might offer.
Second, Russia wants a sphere of influence in the former Soviet space. As Russia has regained its strength, it has escalated its expectations regarding its neighbors’ policies and behavior. Moscow does not seek to recreate the Soviet Union, but it does seek special deference in the former Soviet space to what it defines as its vital interests. President Medvedev recently cited a sphere of influence – or sphere of “privileged interests” – as one of five key principles underlying Russian foreign policy.
Russia’s stance has become most pointedly evident with regard to how it views the relationships between its neighbors and NATO. Although the Ukrainian government has sought constructive relations with Moscow in parallel with its pro-European, pro-Euro Atlantic course, the Russians insist the Ukrainians make a choice: either NATO and Europe, or good relations with Moscow. Interestingly, the shrillness of Russian rhetoric only increased after NATO leaders at the April Bucharest summit failed to reach consensus on giving Ukraine a NATO membership action plan.
Georgia’s expressed desire to join NATO predates Ukraine’s. Russia has over the past eight years applied even more intense pressure on Georgia, resorting to trade embargos, energy cut-offs, border closings, the occasional air raid and last month a full-scale military offensive. The Abkhazian and South Ossetian problems simmered for more than 15 years in large part because the Kremlin chose not to use its influence to resolve them; it instead kept the disputes alive as pressure points to exploit against Georgia.
Russia should have influence with its neighbors, and they with Russia. The problem is that Russia sees its sphere of influence largely in zero-sum terms: Moscow regards steps by Ukraine, Georgia or other neighbors to draw closer to Europe and the West, or by Western states or institutions to engage these countries, as a threat to Russian interests.
Third, Russia wants a seat when major European or global issues are being decided and to have its views accommodated. Moscow insists on this regardless of whether or not it can bring something to the table to facilitate resolution of the problem.
Russia regularly has a seat when major issues are discussed, but Moscow has not always been a helpful participant. On how to deal with Kosovo’s desire for independence, Russia rejected the proposal advanced by the United Nations point-man. In the subsequent EU-U.S.-Russian mediation attempt, the Russians put forward no new or creative ideas but instead slavishly backed Serbia’s refusal to concede independence.
Long a participant in the Middle East quartet, Moscow’s embrace of Hamas last year did little to facilitate the thorny effort to promote peace between Israel and the Palestinians. Moscow stands today the most important player in the effort to persuade Iran to desist from its effort to acquire nuclear weapons. The Russians certainly do not want a nuclear-armed Iran. But Russia’s broad geopolitical and economic interests with the Iranians mean that Russian diplomats spend as much time watering down proposals for UN sanctions against Iran as they do pressuring Tehran to end its nuclear enrichment effort.
So Russia sits at the table, even if it does not always exercise influence to promote solutions. Russian leaders assert that no world problem can be resolved without their participation; simply being there appears important to Moscow, something seen as part of Russia’s due as a recovered great power.
Fourth, Russia does not seek isolation and wants better relations with Europe and the United States, but on its terms. Autarky makes little sense for the Kremlin. Integration has spurred Russian economic growth. Medvedev recognizes this and talks about integrating fully into the global economy and a greater Europe. The Russians would like better relations with the West, but they insist that that be on Russia’s terms. This appears to include recognition of a Russian sphere of influence in the former Soviet space.
Just two weeks ago, Foreign Minister Sergey Lavrov made this point explicitly. He said the United States and the West must choose between support for Georgia and good relations with Russia. The Kremlin feels its energy exports to Europe give it leverage to insist on its terms. Western Europe receives 20-30 percent of the natural gas that it uses each year from Russia or from Central Asia via pipelines that transit Russia. This dependence emboldens the Kremlin.
Fifth, Russia wants freedom for its major economic entities to take part in global commercial and investment markets. This is smart for the Russian economy, as Russian companies derive significant profits from overseas operations and access to foreign capital markets. A major goal of Russian foreign policy is to support the penetration of large companies, such as Gazprom, into global markets. The Kremlin decries efforts to limit or scrutinize the activities of Russian companies, for example, European questions regarding potential Gazprom investments in pipelines or energy distribution firms. At the same time, the Russian government carefully scrutinizes and, in some cases, limits or thwarts parallel attempts to invest in Russia.
The Price of Neglect in U.S.-Russian Relations
Russia’s assertive course has left the United States struggling for ideas on how to respond. This was painfully evident in August, as reports came in of Russian tanks moving into South Ossetia and then into undisputed Georgian territory. Administration officials looked for ways to influence the Kremlin but found that the thin state of the U.S.-Russia relationship yielded few useful levers. Bilateral relations had deteriorated to the point where there was little cooperation that the U.S. government could threaten to halt that the Russians cared much about.
U.S.-Russian relations have declined markedly since May 2002, when Putin hosted President George Bush to a summit meeting in Moscow. The two leaders signed the Strategic Offensive Reductions Treaty and issued joint statements outlining broad areas for cooperation, from economics and energy to missile defense and people-to-people contacts. Officials on both sides spoke of a qualitative change in the relationship, one that would move increasingly to partnership and, on some issues, alliance. But that meeting proved the high point of Bush-Putin summitry; thereafter, it was all downhill.
Washington and Moscow share responsibility for the downturn, but the effects are now being felt more acutely on the Potomac. More so than any other bilateral relationship, U.S.-Russian relations require focused attention and guidance from the top. After 2002, however, the two presidents became distracted with other issues. Bush focused on Iraq; his administration did not see Russia as all that relevant for its key policy goals. For his part, Putin focused on increasing the Kremlin’s hold on key domestic power levers.
As presidential attention turned elsewhere, the National Security Council and its Kremlin counterpart failed to press their bureaucracies to implement presidential commitments. For example, neither the Pentagon nor the Russian Ministry of Defense showed much interest in missile defense cooperation in 2002-2003, regardless of what the presidents said. Despite promises to Putin, the White House failed to move to persuade Congress to graduate Russia from the Jackson-Vanik amendment. Despite the presidential launch of a commercial energy dialogue, the Russians showed little interest in allowing American companies to invest in developing Russian energy and realize the dialogue’s potential.
One other problem on the American side complicated management of U.S.-Russia relations. While bureaucratic in nature, it had strategic ramifications. Many of the key questions in U.S.-Russian relations – bilateral issues, strategic arms control, missile defense, Iran and NATO enlargement – have been handled by different interagency groups. In each group, American officials understandably sought positions to maximize U.S. interests. But the system lacked a mechanism to review the overall U.S.-Russia relationship. If one truly sought to change the relationship qualitatively and build partnership relations, one could not “win” on every issue with Moscow. Allowing the Russians a couple of “wins” was a necessary investment for a new relationship, an investment that the Bush administration proved unready to make.
Drift turned to clear decline in 2004, as the extent of Russia’s democratic roll-back became clear. The Rose and Orange revolutions in Georgia and Ukraine caused new anxieties within the Kremlin, which regarded those events not as manifestations of democratic unrest but as U.S.-organized special operations to hem Russia in. At the same time, the more assertive Russian stance in the region raised alarm in Washington.
Difficult problems thereafter piled up, with no resolution, including: Iran’s nuclear effort, U.S. missile defense deployments in Europe, the fate of strategic arms control, Kosovo’s status, NATO outreach, and the adapted treaty on conventional forces in Europe. The result of this deteriorating relationship hit home when the Georgia crisis erupted: concern about the relationship with the United States did not give the Kremlin any reason for pause before it sent its forces into South Ossetia and Georgia, and with a military response clearly not in the cards, the U.S. government could threaten little that had serious impact on Russian decision-makers.
Shaping a Response – Washington’s Dilemma
Washington and the West now face the challenge of shaping a response in light of Russia’s August actions. Some suggest punishment and isolating Moscow. Proposed measures include halting ongoing diplomatic discussions, booting Russia out of the G-8, and blocking Russian entry into the World Trade Organization and Organization for Economic Cooperation and Development. Others suggest a boycott of the 2014 Olympic Games, scheduled to be held in Sochi, which just happens to border Abkhazia.
The logic behind such suggestions is understandable. By its military action against Georgia and unilateral attempt to redraw post-Soviet borders, Russia has egregiously violated international rules. If the international community does not respond, it runs the risk that Moscow will conclude it can take such actions in the future without penalty.
On the other hand, does isolating Moscow offer the wisest course? Some areas of cooperation, such as controlling nuclear materials, make sense even if relations are at a low point. Getting Russia into the World Trade Organization and OECD would encourage Russia to play by the rules of institutions that have served the United States and the West well. Likewise, participation in the G-8 creates incentives for more cooperative Russian approaches to problems on the G-8 agenda.
Threats to exclude Russia may well be useful, because the Kremlin cares. Secretary Condoleezza Rice’s convening of teleconferences among the G-7 foreign ministers sent a useful reminder to Moscow that the G-8 format is not sacrosanct. Actually excluding Russia on a permanent basis, however, could undermine U.S. and Western interests as well as punish Moscow.
We also need to be careful about a spiral of tit-for-tat exchanges. The Kremlin has some serious cards to play: the Russians could withhold oil from the global market, tamp down gas flows to Europe, use their veto more actively in the UN Security Council, or dump the U.S. treasury notes that they hold.
Crafting a policy response to Russia requires a deft balance. It is important to make clear to the Kremlin the unacceptability of its assertion of a sphere of influence that denies its neighbors the freedom to choose their own foreign policy course. Moreover, it is unwise to let Moscow conclude that its pressure tactics have succeeded at little or no cost.
At the same time, the West retains an interest in Russian cooperation on numerous issues. The West likewise has an interest in seeing Russia become a stakeholder in the existing international order. That requires, of course, that Russia accept and play by international norms and rules.
We should want Russia to choose integration and cooperation over self-isolation. And, just as it was a mistake in the 1990s to assume long-term Russian weakness, we should not now overestimate Moscow’s strength. In the coming years, Russia faces significant vulnerabilities: overdependence on energy exports, lack of a diversified economy, fragile infrastructure, abysmal demographics. Russia may come to see integration in its interest.
The Continuing U.S. Interest in Cooperation
Despite the current chill with Moscow, Washington and the administration that takes office in January 2009 will have an interest in exploring whether U.S.-Russian relations could be put on a more solid footing. First, securing Russian help in controlling nuclear materials, pressuring Iran not to acquire nuclear arms, and countering international terrorism is in the U.S. interest. While we may be thoroughly and rightly unhappy with Russian behavior in Georgia, it makes no sense to ignore these vital interests.
Second, the greater the interest that Moscow has in the bilateral relationship, the greater the leverage Washington has with Moscow. Building areas of cooperation not only advances specific U.S. policy goals, but it can give Washington things to threaten should Moscow misbehave – or better yet give reasons that dissuade Moscow from misbehaving in the first place. We should seek to have more levers than was the case in August.
Third, institutions such as the World Trade Organization and NATO-Russia Council can advance U.S. goals. Provided that Russia is prepared to accept the norms of those institutions, the United States has every reason to be inclusive. Having Russia at the table in a cooperative frame of mind is vastly preferable to a self-isolated, truculent Russia that tries to undermine those institutions or create alternatives.
How Does the United States Respond?
Finding the combination of carrots and sticks to influence Moscow to adopt the right course poses a challenge and will require a subtle, nuanced approach. Washington, unfortunately, does not do subtlety and nuance well, normally preferring to operate in black and white. A number of options are on the table for punishing Russia, including: ratcheting down bilateral ties; threatening exclusion from key international institutions; and calling into question the Sochi Olympics. Russian oligarchs, who enjoy traveling in the West and keep much of their money here, may offer another pressure point.
At the same time, the incoming administration should consider ways to give a new substance and tenor to bilateral relations. The next president can develop options to advance specific U.S. national interests and, by broadening the relationship, secure greater influence with Moscow.
First, revive the nuclear arms reduction process. The Bush administration signed the Strategic Offensive Reductions Treaty in 2002 and then essentially shut down nuclear arms control. The 2002 treaty allows the United States and Russia each to deploy 2200 strategic nuclear warheads. Those levels exceed deterrent requirements and make no sense today. Moreover, America’s impressive conventional force advantages give it every incentive to deemphasize nuclear weapons. The United States could ensure its security at a level of 1000 strategic warheads. An American offer to reduce to such a limit, accompanied by ancillary limits on missiles and bombers, would find resonance in Moscow. The Russians have an aging nuclear force and would welcome lower numbers.
Such an offer would be good not just for reducing the nuclear threat to the United States. It could exert a positive impact on the broader bilateral relationship. The Russians value a nuclear arms dialogue with Washington in part because such a dialogue acknowledges Russia’s standing as a nuclear superpower. Washington should take advantage of this.
In the 1980s, President Ronald Reagan skillfully made nuclear arms reductions a central element of a broader agenda with the Soviet Union. Reagan and Secretary George Shultz recognized that the Kremlin’s interest in arms control created diplomatic space and opportunities to press other questions such as human rights. Their strategy succeeded: as Reagan and Mikhail Gorbachev signed a treaty banning medium-range missiles, parallel discussions won exit permission for Soviet dissidents and secured more helpful Soviet approaches on issues such as the Middle East peace process.
Presidents George H. W. Bush and Bill Clinton also gave arms control a special place in their dealings with Gorbachev and Yeltsin. Arms control progress contributed to more positive relations, greater confidence and a better atmosphere. All this helped advance other U.S. interests: Russia went along with German reunification, withdrew its military from Central Europe and the Baltics, lent diplomatic support during the 1990-91 Persian Gulf crisis, and cooperated in ending the Bosnia conflict, including deploying Russian peacekeeping troops under U.S. command alongside NATO forces.
Trying to link strategic arms cuts directly to Russian concessions on specific questions would fail. But the next administration should be able to employ deft diplomacy and a restored nuclear arms dialogue to give the broader relationship a badly needed boost, create a more positive atmosphere, and carve out space to make progress on other issues.
Second, consider dealing seriously on missile defense. The Bush administration has pressed forward with its plan to deploy a missile defense radar and interceptors in the Czech Republic and Poland. It has doggedly resisted any Moscow proposal that would affect that deployment plan.
The Russians object sharply. This results in part from their unhappiness at seeing new U.S. military infrastructure appear closer to their borders. Moscow, moreover, does not accept that the missile defense system is oriented against an Iranian threat, given the cost and the fact that Iran does not yet have a missile capable of reaching the United States or Europe. Concern about breakout potential further fuels Russian suspicions – ten missile interceptors today, but how many later on?
The next administration should consider adjusting the pace of missile defense deployment in Central Europe. The Defense Department budget indicates that it will take two years to construct the radar and missile interceptor sites. The intelligence community should be asked to estimate when Iran might produce a missile capable of reaching the United States or most of Europe. If the answer is, say, 2014, the president could offer to delay the start of construction at the radar and interceptor sites until 2012.
He could offer further delays if the Iranian missile program were slowed. This would create incentives for the Russians, who have far more influence in Tehran than we do, to press the Iranians to abandon their long-range missile program. While the odds of success might be low, such an offer at least would defuse the missile defense issue with Moscow by making clear that the system is aimed against an Iranian threat.
Third, promote NATO-Russia cooperation. In the aftermath of the Russian-Georgian conflict, NATO-Russia relations are at a standstill. If they can be moved from their current impasse, it would be useful to explore with allies the possibility of a more productive NATO-Russia relationship. Transnational dangers such as international terrorism and the proliferation of weapons of mass destruction threaten NATO members and Russia equally, and there exists potential for greater cooperation in these areas.
NATO might also offer to make more concrete the assurances that the Alliance gave Russia in 1997 regarding restraint on the deployment of NATO forces on the territory of new member states. Such cooperation and greater transparency regarding Alliance intentions hopefully would alter Russian attitudes toward NATO.
The desire of Ukraine and Georgia to draw closer to NATO and have membership action plans (or MAPs) provokes particular concern in Moscow. That concern made some NATO leaders reluctant to grant Ukraine and Georgia MAPs in April. They may be more reluctant now. NATO should ask itself, however, whether yielding to Russian pressure tactics would be wise. A Russia that sees success in such tactics will not be an easy country with which to deal. Moreover, is NATO prepared to accept that Moscow can veto the foreign policy choices of its neighbors? Is the Alliance prepared to see those countries permanently fenced off from Europe and the Euro Atlantic community?
A key question is whether Russia can get past its phobia regarding NATO. The Alliance has changed radically over the past 20 years. For example, the number of American troops in NATO Europe is a fifth of what it was. NATO missions have changed as well; the Alliance no longer focuses on deterring a Soviet threat; it instead concentrates on Balkan peacekeeping, coalition operations in Afghanistan and counter-proliferation.
Despite this, changing Russian attitudes will be difficult. Moscow feels aggrieved by NATO actions over the past 15 years. Some official American comments during the negotiations on German reunification in 1990 implied no enlargement of NATO once Germany was united. While the U.S. missile defense planned for Central Europe is aimed at Iran, not Russia, and the establishment of U.S. military headquarters in Bulgaria and Romania was driven by Middle East requirements, not Russia, Moscow sees things differently. Moscow sees U.S. flags going up on the territory of new NATO member states, ever closer to Russian borders. We need to understand this better in Washington.
The primary motivation for NATO enlargement has not been anti-Russian but to foster a more stable and secure Europe. The Russians do not understand it that way. Bilateral and multilateral dialogues might develop ways to allay some Russian concerns. Russia’s neighbors, such as Ukraine, would gain greater freedom of maneuver in their own relations with NATO if NATO-Russian relations improved.
Fourth, broaden economic relations. Broadening trade and investment links would facilitate the access of American companies to a $1.3 trillion economy with a growing and more prosperous middle class. It would also add economic ballast that could cushion the overall relationship against unpredictable swings caused by political differences.
Anemic U.S.-Russian commercial relations fall well below their potential. In 2007, two-way trade totaled $27 billion. Russia represented just the thirtieth largest market for U.S. exports. These numbers create little incentive for Moscow (or Washington) to adopt more measured stances when differences arise.
Consider the U.S.-Chinese relationship by contrast. Two-way trade between the United States and China totaled almost $387 billion in 2007. U.S. exports were more than $65 billion, making China America’s third largest export market. This is real money, which factors into the calculations of political leaders as they manage the overall relationship.
One particular U.S.-Russian issue is the fate of the peaceful nuclear cooperation – or 123 – agreement. In practical terms, the Russian-Georgian conflict killed that agreement for the current Congressional term, and the administration withdrew it. At some point, reconsideration will make sense. First, a 123 agreement would let U.S. companies engage in civil nuclear cooperation with Russia as their European competitors do.
Second, the Russian atomic energy agency, RosAtom, wants to store nuclear waste from third-country reactors, an activity that it sees as worth tens of billions of dollars in a world where most prefer not to have nuclear waste in their backyard. Much of the waste would come from U.S.-origin nuclear fuel, provided under agreements by which the U.S. government must approve where the waste gets stored. The 123 agreement would create a framework; Washington would then have to approve each decision to ship nuclear waste to RosAtom for storage. This means leverage: the U.S. government would gain the ability to turn off a significant revenue-earner for a Russian state business.
Russia has felt some serious economic consequences over Georgia. No government imposed them; the market did. By one estimate, the Russian stock market has lost $290 billion in value since August 7. During the same period, the ruble saw its biggest monthly decline against the dollar in nine years. And $20-25 billion in capital flowed out of Russia during the last three weeks of August. These are numbers that the Kremlin may find hard to ignore. They result from Russia’s integration into the global economy.
Styles of Engaging Russia
In diplomacy, style can matter as much as substance. The next president will need to engage his Russian counterpart to define the future of U.S.-Russian relations. He should return to the Reagan, Bush 41 and Clinton models for talking with Russian leaders.
Summits between Reagan and Gorbachev, George H. W. Bush and Gorbachev, and Clinton and Yeltsin allowed plenty of time for presidential discussions. Summits typically included two or three working sessions, each of which could range in length from 90 minutes to three hours. Th