Steven A. Tananbaum Senior Fellow for International Economics Robert Kahn argues that summer has seemingly brought a new optimism about the Russian economy. Russia’s economic downturn is coming to an end, and markets have outperformed amidst global turbulence. But the coming recovery is likely to be tepid, constrained by deficits and poor structural policies, and sanctions will continue to bite. Brexit-related concerns are also likely to weigh on oil prices and demand. All this suggests that Russia’s economy will have a limited capacity to respond to future shocks.
For half a millennium, Russian foreign policy has been characterized by soaring ambitions that have exceeded the country’s capabilities. Beginning with the reign of Ivan the Terrible in the sixteenth century, Russia managed to expand at an average rate of 50 square miles per day for hundreds of years, eventually covering one-sixth of the earth’s landmass. By 1900, it was the world’s fourth- or fifth-largest industrial power and the largest agricultural producer in Europe.
Between 1996 and 2011, I served as a consultant to the Kremlin, advising Russian Presidents Boris Yeltsin, Vladimir Putin, and Dmitry Medvedev. And yet even I can hardly claim to understand the real mechanisms of power in today’s Russia.
In recent years, many discussions of the Russian economy have opened with an old joke. In the mid-1990s, John Major, the British prime minister, askedRussian President Boris Yeltsin to characterize Russia’s economy in one word. “Good,” Yeltsin said. Major, seeking more detail, asked him to elaborate in two words. Yeltsin replied: “Not good.”
After the collapse of the Soviet Union, the Russian military rotted away. In one of the most dramatic campaigns of peacetime demilitarization in world history, from 1988 to 1994, Moscow’s armed forces shrank from five million to one million personnel.
In February, Moscow and Washington issued a joint statement announcing the terms of a “cessation of hostilities” in Syria—a truce agreed to by major world powers, regional players, and most of the participants in the Syrian civil war. Given the fierce mutual recriminations that have become typical of U.S.-Russian relations in recent years, the tone of the statement suggested a surprising degree of common cause.
In December 2015, the Russian antigraft activist Alexey Navalny released adocumentary in which he exposed the corrupt business dealings of the children of Yuri Chaika, Russia’s prosecutor general—the top law enforcement official in the country. In the film, Navalny accuses Chaika’s son Artem of “continuously exploit[ing] the protection that his father, the prosecutor general of the Russian Federation, gives him to extort from and steal other people’s companies.”
In the 20th century, few nations suffered as much as the Baltic republics—Estonia, Latvia, and Lithuania. Their brief taste of freedom, made possible by the collapse of the Russian Empire in 1917-1918, was snuffed out in 1940 when Russian armies marched back in, this time under the banner of the commissars rather than the czars. When the German Army invaded the following year, many Balts saw them as liberators. But the cruel nature of Nazi rule soon became apparent.
As China asserts itself in its nearby seas and Russia wages war in Syriaand Ukraine, it is easy to assume that Eurasia’s two great land powers are showing signs of newfound strength. But the opposite is true: increasingly, China and Russia flex their muscles not because they are powerful but because they are weak.
At the end of September, Russia began conducting air strikes in Syria, ostensibly to combat terrorist groups. The strikes constitute Russia’s biggest intervention in the Middle East in decades. Its unanticipated military foray into Syria has transformed the civil war there into a proxy U.S.-Russian conflict and has raised the stakes in the ongoing standoff between Moscow and Washington.
“The underreported story of the Cold War is that the United States succeeded in achieving many of its objectives in the Middle East,” argue Ray Takeyh, senior fellow for Middle Eastern studies at the Council on Foreign Relations, and Steven Simon, visiting scholar at Dartmouth College. Cutting against conventional wisdom, the authors shed new light on the makings of the modern Middle East and draw lessons for U.S. strategy today.
It’s easy to snicker at Vladimir Putin’s annual televised call-in extravaganza, known as “Direct Line.” The show’s campy, “Dear Leader” deference would hardly be greater if Kim Jong Un were its star. Still, Mr. Putin’s performance is a valuable political barometer. The questions allowed and the answers they generate tell us how the Kremlin views the country’s mind and mood.
Over the past two decades, many developing countries have turned away from free market capitalism and toward modern state capitalism, which is a combination of traditional state economic planning and elements of free market competition. In his new book, Council on Foreign Relations Senior Fellow for Southeast Asia Joshua Kurlantzick argues that modern state capitalism is ultimately “more protectionist, more dangerous to global security and prosperity, and more threatening to political freedom” than free market economics.
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