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The Russians Are Coming?

When the Kremlin sent its tanks and soldiers into Georgia this past August, it demonstrated to the world that it is prepared to confront a Western-backed nation in the most forceful terms possible—up to and including military action, if need be. Since then foreign policy experts and politicians in Europe and the US have embarked on a vigorous debate about how best to respond to Russia’s growing assertiveness.

Their fears were further heightened in early January when Moscow, in an escalating feud with the Ukrainian government, briefly shut down pipelines running through Ukraine, which provide Europe’s principal supply of natural gas. Coming during a deep winter cold spell, the move left several Eastern European countries without heat, causing schools and factories to close—and forcing European leaders into a round of urgent diplomacy with Russia.

Few of those striving to analyze the situation, however, have gone about the task with the passion of Edward Lucas, a journalist with The Economist who has been covering Central and Eastern Europe for nearly a quarter of a century. The title of his new book, The New Cold War: Putin’s Russia and the Threat to the West, was treated by some reviewers as a bit of a stretch when it first appeared in 2008; since the conflict in Georgia and this winter’s natural gas crisis, though, it has looked more like prescience, as commentators have tripped over each other to announce the revival of geopolitical confrontation between Russia and the West.1 Lucas is refreshingly direct:

Twenty years after Mikhail Gorbachev started dismantling communism, Russia is reverting to Soviet behavior at home and abroad, and in its contemptuous disregard for Western norms.

This is a pretty bold assertion, but Lucas immediately sets about qualifying it.

It turns out that quite a lot has changed. For one thing, Russia has embraced capitalism—albeit a form of capitalism marred by institutionalized cronyism, minimal rule of law, and endemic corruption. The ex-KGB men who returned to power with Putin have close relations with the organized crime syndicates and some of the oligarchs who played such a prominent part in the Yeltsin era. (Today’s secret policemen are quite different from the Jacobin executioners of Lenin’s day or the torturers of Stalin’s Lubyanka; modern-day Chekists, as Lucas points out, are more likely to be high-paid CEOs than ascetic servants of the state.) The result is a hybrid regime described by Putin and his supporters as “managed democracy”—in fact a markedly authoritarian system that merges select trappings of liberalism (elections, the right to own property, and the freedom to travel) with an ideological mishmash of tsarist imperialism, Soviet nostalgia, and xenophobia inspired by nationalist visions of a Greater Russia.

It does not add up to a pretty picture. Prominent critics of the regime—such as the journalist Anna Politkovskaya and the ex–secret policeman turned dissident Alexander Litvinenko—have been murdered under mysterious circumstances. Those who have tried to pose serious challenges to Putin’s hold on power—such as the former chess champion and presidential candidate Garry Kasparov and the ex–prime minister Mikhail Kasyanov—have faced official harassment. Freedom of the press, one of the few undeniably positive achievements of the Yeltsin years, has been sharply curtailed. Business interests with close ties to the state bully domestic or foreign investors out of their assets with impunity; indeed, tycoons who have defied the regime now find themselves in exile (Boris Berezovsky) or prison (Mikhail Khodorkovsky). School textbooks glorify Stalin’s leadership in World War II and pass over his crimes. In December Russian police raided the St. Petersburg office of Memorial, a human-rights organization that has chronicled Stalinist horrors, and confiscated computer disks containing thousands of interviews with victims.

And yet, as Lucas concedes, the picture is not entirely gloomy. Putin—who assumed the office of prime minister earlier this year after completing his second term as president—remains enormously popular among Russians:

For all his attacks on other freedoms, he has preserved the ones that the “new Russians” most care about. More than ever before Russians can plan their lives: they can save, educate themselves, travel, and bring up their children as they like; they can buy anything they can afford, own property at home or abroad, worship (mostly) as they like; they can even live according to their sexual preference (if not always publicly).

Though they lack the freedom to choose their elected representatives, to organize publicly to influence their government, or to change their political systems, never in Russian history have so many Russians lived so well and so freely. That is a proud boast, and one that even those who dislike Russia’s current path must honestly acknowledge.

Sky-high oil prices didn’t hurt either, of course, and now that they’ve dropped sharply as a result of the economic crisis, Russia suddenly finds itself facing straitened circumstances. Yet Putin deserves considerable credit for his cautious macroeconomic management and his success in introducing some necessary reforms (for example, implementing sensible tax policies that have dramatically boosted government revenue). Nor—despite the surge in oil wealth—did he succumb to the temptation to boost defense spending. Only recently has the Kremlin decided to reverse this course, vowing to ramp up military expenditures dramatically over the next few years. Even if the Russian government pushes ahead with these plans (which could be affected by its recent economic travails), it would still take decades to reach a level comparable to the old USSR, which at the peak spent as much as 30 percent of its GDP on defense. Right now the figure is less than one tenth of that.

Whatever else this new Russia is, in other words, the old Soviet Union it is most definitely not. So how can we reasonably speak of a “New Cold War”? While coming close to acknowledging that the label might contain a bit of hyperbole, Lucas insists that its essence applies. It is precisely Russia’s intense, revisionist nationalism, born out of the perceived humiliations of the Yeltsin period, that represents a threat not only to its own neighbors but also to Russia itself. Putin famously declared the collapse of the USSR, comparatively peaceful as it was, to be the “greatest geopolitical catastrophe of the twentieth century” (which would make it worse than the Bolshevik Revolution, Stalin’s terror, or the two world wars).

The new Russia may not intend to challenge the West throughout the globe, but according to Lucas, it clearly strives to reassert its influence regionally—particularly in Europe. It may no longer have the enormous military arsenals of Brezhnev’s day, but its armed forces—as was recently made clear in Georgia—are certainly enough to threaten or cow its neighbors. Lucas compares it to “an aggressive man on crutches.” In his book—written well before the events of last August—he notes that Russian military intervention “is unlikely in the case of Estonia, a NATO member, but conceivable in an artificially stoked conflict between Georgia and South Ossetia or Abkhazia, or both.” So he was certainly right about that. (Though he does not make specific predictions for Ukraine, he describes the ominous machinations of Kremlin-inspired groups of local “Russian citizens” in the Ukrainian territory of Crimea, something that certainly bodes ill for the future.)

The central irony of Lucas’s analysis is that Russia’s most dangerous weapon in its crusade to restore its place in the world is none other than capitalism itself. And it’s not just that Russian mobsters threaten to infiltrate Western financial institutions. The most potent foreign policy lever at the disposal of Putin and Medvedev is their country’s huge energy reserves. Russia is second only to Saudi Arabia in oil exports, but it has no serious competitors when it comes to natural gas. And gas, as it happens, is a resource that seems virtually designed for geopolitical mischief. Unlike oil, which can be transported in a variety of ways, the most practical and economical technology for transporting natural gas remains the pipeline.

Natural gas pipelines are immensely expensive. Once a line connecting a particular field with a particular consumer has been built, investors tend to be leery of putting money into duplicate or partially overlapping routes. And if the builder of the first pipeline refuses to allow it to be used by competing suppliers, consumers will be left with only one choice. This means that the monopolistic supplier can exploit its route to its own advantage in a myriad of ways—including, in the case of Russia, to exert political pressure.

And this, indeed, is precisely what Gazprom, Russia’s powerful state-dominated gas monopoly, has done. Gazprom—whose chairman during much of the Putin administration was Medvedev, the current president and close Putin ally—doesn’t just own most of Russia’s gas fields; it also controls access to the pipelines that bring that gas to markets—above all to the European Union, which despite its status as the world’s largest economy has relatively little in the way of indigenous energy resources and finds itself correspondingly dependent on Russian petroleum products. (By 2004, Russia was the sole gas supplier to Estonia, Finland, Latvia, Lithuania, Moldova, and Slovakia; and the principal supplier to Germany, Greece, Bulgaria, Hungary, Poland, Austria, the Czech Republic, and Turkey. Overall, it accounts for nearly 30 percent of the EU’s gas supply.) Gazprom has already shown its willingness to employ its stranglehold over energy supplies as a political weapon, even if it often does so in the guise of dispassionate adjustment to market realities.

As we have seen in the startling recent dispute with Ukraine, governments that disagree with Russian policy have been punished by overnight price hikes or interruptions in service. The Ukraine standoff began in the last days of 2008, ostensibly over Russia’s demand for a large increase in the price Ukraine pays for its gas; but the ensuing shutdown affected much of Europe, including leading nations such as Germany, and some analysts suggest that the standoff has been a way for Russia to warn the West about exerting too much influence in Ukrainian affairs. In fact much of the gas Russia sends westward actually comes from the Central Asian republic of Turkmenistan, which is forced to sell to the Russians at bargain-basement rates since Gazprom pipelines are the only way the Turkmens can get their gas to market.

  1. 1

    A random search for the term “New Cold War” on Lexis-Nexis turns up 1,358 uses of the term between August 8 and September 23. That’s more than the 1,325 uses the same database notes for the entire year before August 8.

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