Does Russia Have a Future?

The break-up of the Soviet Union smashes the mold of conceptualization of empire.  It is the only case I can think of where the nation supposedly running the show was among the first to abandon ship and opt for sovereignty….






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               Does Russia Have a Future?


                 by Gilbert Doctorow, Ph. D.


I periodically return to an unfinished, in fact barely begun chat in our parlor in early March with one of the leading exponents of the Realist school of international relations in America over the question of whether Russia has a future as a great power and a justified seat at the world’s governing board. My interlocutor was fairly certain it has no future and based his judgment on economic indicators, in particular GDP/per capita, but also on the loss of half the population of what was the USSR, on the de-industrialization that took place in the 1990s, on the over-dependence today on extractive industries, and so forth.   His position is without doubt shared by the overwhelming majority of expert opinion in the United States within the disciplines of economics and political science.  I won’t mention history, because historians have run for cover and plead ignorance of the present and especially the future.


This is not a minor issue. Indeed I think it is the fundamental issue over how we are dealing with Russia today.  If Russia is a declining power, there is no reason to show it mercy and many good reasons to cut it down to size in the international community, which is exactly what bipartisan US foreign policy is trying to do today, with mixed success (or possibly with disastrous results if you look closely at the Russian-Chinese strategic partnership that is flowering as we talk).  On the other hand, if it is a rising power, kicking the dog will not play out well. It also is obvious that the clamorous minority who insist that resolution of many key international challenges depends on a strategic partnership between the US and Russia is totally misguided if the Russian future is oblivion.


Therefore I want to go public with a few thoughts that upend the certitudes on which even Realists who are unsympathetic to the Washington narrative on Ukraine have built their argument.

First, the notion that the downsizing of the Soviet Union to the borders of its “continuer state,” the Russian Federation, means a proportional loss of military, economic strength misses the point of the dysfunctional imperialism that the Soviet Union represented.


Vladimir Zhirinovsky is hardly the only thinker in Russia today who sees the Soviet Union as having been a great drain on Russia’s strength and watches like a hawk to ensure that no new commitments are made to real or pretended ideological soul-mates, let alone the resurrection of a new Soviet Union under a different name.  Add to that the further drain of resources to maintain the Soviet domination of Eastern Europe during the Cold War. Russia was exchanging its gas and oil with the Comecon countries and received in return shoddy consumer goods that would have been unsaleable on world markets.


While economic historians may debate forever whether the European colonies were a net benefit or loss to the home countries, as opposed to the imperial ruling castes and classes, there is nothing to debate in the Soviet case.  The break-up of the Soviet Union smashes the mold of conceptualization of empire.  It is the only case I can think of where the nation supposedly running the show was among the first (second republic in fact) to abandon ship and opt for sovereignty, leaving all the other republics in the lurch to find their own identity. Compare that with the Hapsburg, the Ottoman and other traditional empires where the titular nation was always the last to find its feet and its identity, where it was what was left when the others left, and you see that we have not begun to comprehend what the break-up of the Soviet Union means for Russia today.

Regarding Russia’s military potential, the truisms about its dependence on its nuclear strike force as its equalizer have been overturned since March 2014 and the display of the new Russian army’s prowess.  The latest military gear may not yet be in wide circulation but it is in production.  The latest S400 missile defense system is potent proof of the country’s cutting edge military technology (just ask the Chinese who cannot wait to install it on their southern coast), and the latest tanks shown off on the 70th anniversary celebrations on Red Square also give the lie to the idea that Russia will be down and out if the nuclear arm is neutralized by US ABMs.

All of this is being done on a relatively tiny budget.  Russia is spending 4% of GDP on arms today, whereas the Soviet Union spent an unsustainable 25%.   Why doesn’t this fact figure in our calculations of the Russian challenge?


The economy:  from the moment Putin came to power, the Kremlin was pursuing the neo-liberal economic agenda that swept the world and swept Russia itself in the 1990s. However, the difference under Putin from the start was the restoration of the vertical of power, the re-centralization of political authority and the curbing of excesses of the oligarchical rule that underpinned the weak, shambolic Yeltsin regime.  Russia pursued globalization and national specialization in the diversified world economy by exploiting to greatest advantage its position as the world’s best endowed territory for hydrocarbons and metals..  WTO membership was accepted even though it threatened nascent re-industrialization and brought immediate harm to Russian agriculture which desperately needed state credit subsidies for purchase of farm equipment, seed, breeding cattle to become globally competitive.


The US/EU sanctions policy has now overthrown the shackles of globalization and introduced direct rewards for protectionism and re-industrialization.  It is beginning to put Russian agriculture on a pre-WTO footing, and it is beginning to address the dire state of farm machinery production, where 40,000 of last year’s 41,000 tractors put into operation across the country were imported.


In brief, the Russian economy is in a transition phase with the recessionary statistics covering up a wholly new phenomenon of import substitution and recovery of domestic manufacturing potential.  This is taking place in an atmosphere of very cautious dirigisme, because the market principles have not been swept aside, merely been given more modest room to act where they do not collide with national defense potential. Mr Kudrin’s ideas have been fenced in. Even the IMF has recently shown respect for the way that the Bank of Russia has managed the country’s economic policies amidst a perfect storm.


Are we about to witness an ascent of the free Russian economy similar to what happened in the five years after Peter Stolypin’s reforms of 1907?   Watch this space.  Given the history of the country and its record over centuries as a hammer rather than an anvil, I believe it is a grave mistake to dismiss this ‘traditional competitor,’ as Hillary so diplomatically put it in her NYC campaign speech yesterday.



© Gilbert Doctorow, 2015

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