Johnson's Russia List
#6106
28 February 2002
davidjohnson@erols.com
A CDI Project 
www.cdi.org

[Note from David Johnson:
  1. US House of Representatives Committee on International Relations
Subcommittee on Europe: Hearing on  U.S.-Russian Relations: An Assessment:
Testimony of Michael McFaul: U.S.-Russia Relations after September 11, 2001.
  2. US House of Representatives Committee on International Relations
Subcommittee on Europe: Hearing on  U.S.-Russian Relations: An Assessment: 
Testimony of Celeste Wallander: Russian Foreign Policy: the Implications of 
Pragmatism for U.S. Policy.]

********

#1
US House of Representatives
Committee on International Relations
Subcommittee on Europe
Hearing on  U.S.-Russian Relations: An Assessment
February 27, 2002

PREPARED STATEMENT
Michael McFaul, Ph.D., Hoover Fellow
and Senior Associate at the Carnegie Endowment for International Peace
"U.S.-Russia Relations after September 11, 2001"
February 27, 2002

September 11, 2001 was one of the most tragic days in American history. In
devising responses to the attacks of September 11th, American policymakers
face difficult choices with uncertain outcomes. The war against extremist
elements of Islamic fundamentalism that use terror as their main weapon
will be new, protracted, and multi-faceted. The battlefield will appear in
the strangest of places – in the mountains of Afghanistan, the mosques of
Egypt, and the airwaves of Saudi Arabia. There will never be unconditional
surrenders or clear military victories. Above all else, a new level of
uncertainty about the tactics of war, the nature of the enemy, and the
conditions of peace will haunt American decisionmakers and the American
people for an undefined period of time. In almost all realms of
international politics, the United States faces a new, more complex set of
political, economic, and security, challenges after September 11th.

U.S.-Russian relations offer one bright counter to this otherwise gloomier
international picture. Russian President Vladimir Putin was one of the
first foreign leaders to speak directly to President Bush. In that phone
call, he expressed his condolences to the president and the American people
and his unequivocal support for whatever reactions the American president
might decide to take. He then followed this rhetorical support with
concrete policies. Though American and Russian armed forces had worked
together successfully in Bosnia and Serbia in the 1990s, Putin’s pledges of
support seemed to signal a qualitatively new level of military cooperation
between former Eold War enemies. Some have the new relationship a strategic
partnership; others have even described the new relationship as an alliance.

The potential to build a new foundation for Russian-American relations is
great, similar to the window of opportunity that opened a decade ago in the
wake of the Soviet collapse. Ironically, at a time when the United States
is struggling to maintain strong relations with traditional allies in
Europe, Russia has the potential to become a strategic partner of the
United States. Not since World War II have Russian and American foreign
policy interests been in closer alignment. To date, however, the
expectations about a new future have vastly outpaced the actual concrete
steps taken (or even outlined) to build a closer relationship between our
two countries. The United States cannot afford to repeat some of the
mistakes made when the last window of opportunity opened. We thought the
Cold War ended in 1991, yet it is amazing how many legacies of that earlier
era still linger today. (And many of the lingering legacies have impeded
our readiness for addressing post-Cold War challenges such as the threat we
currently face.) Leaders in both countries must lead. They must act boldly,
abandon business as usual, take chances, and take advantage of this moment
to map the path to a new future.

Russia’s Contribution to the War on Terrorism

On September 11th, Putin did not hesitate to call his new friend, George W.
Bush, to communicate his full support for the United States and the
American people. Putin did not let a decade of unfulfilled expectations in
U.S.-Russian relations color his rhetorical response. While some leaders
and people around the world believe that the United States ‘got what it
deserved’ on September 11th, Putin expressed sympathy as a leader of a
country that also has suffered from acts of terrorism against civilians in
the capital. Polls conducted immediately after the September 11th attacks
demonstrated that the majority of Russian citizens also sympathized with
the American people and considered the terrorist attacks on the World Trade
Center and the Pentagon to be attacks on the entire civilized world.

Putin, however, did not immediately follow his rhetorical pledge of support
with concrete policies of support. On the contrary, in the immediate days
after September 11th, several senior Russian officials – including Minister
of Defense Sergei Ivanov – spoke openly against military cooperation with
the United States to fight terrorism. It appeared that Putin was beginning
to embark upon a pattern of decisionmaking that has now become routine in
the Putin era. During previous moments of critical policymaking (be it
economic policy, military reform, or foreign policy), Putin has allowed
open disagreement between his advisors without coming down on one side or
the other. At many of these critical junctures, Putin has avoided making
the hard choice until a consensus opinion coalesced. If such a consensus
did not form, for instance on military reform, then the initial push for
policy change quietly stopped.

To help devise a plan of action for Russian foreign policy in the aftermath
of September 11th, Putin consulted with many. According to once account, a
group of 21 prominent politicians and government officials gathered at one
meeting to discuss Russia’s options. At this meeting, only two participants
supported an overt pro-American position. Putin also retreated to his dacha
in Sochi on the Black Sea and invited his top foreign and security policy
advisors to come down and consult with him. While Putin was in Sochi, Bush
called him from his retreat at Camp David. Some time after their
conversation, Putin seems to have made a truly strategic decision to offer
concrete support for the new American war effort.

The following Monday, September 24th, Putin announced a five-point plan to
support the American war against terrorism. He pledged that his Russian
government would (1) share intelligence with their American counterparts,
(2) open Russian airspace for flights providing humanitarian assistance (3)
cooperate with Russia’s Central Asian allies to provide similar kinds of
airspace access to American flights, (4) participate in international
search and rescue efforts, and (5) increase direct assistance –humanitarian
as well as military assistance -- to the Northern Alliance in Afghanistan.

Some have interpreted these policies of support as nothing new or
extraordinary. Of the five policies, the most dramatic change concerns
Putin’s acquiescence to American troops in Central Asia. Yet, even this
policy might be interpreted as Putin merely reacting to hard facts on the
ground. Through the U.S. initiated Partnership-for-Peace program,
especially as developed under Secretary of Defense William Perry, the
American and Uzbek militaries have cooperated actively and often well
before September 11th. While Russian armed forces protect the border
between Tajikistan and Afghanistan, Russia has considerably less influence
on Uzbek defense policy for several years.

Nonetheless, Putin’s pro-American plan was not simply tactical. It was a
strategic decision to use September 11th as a stimulus for aligning Russian
and American interests. Before September 11th, Putin had moving slowly in
this strategic direction, though his focus beforehand had been on European
integration and not the U.S.-Russian bilateral relationship. September 11th
pushed him further in the pro-American direction.

Russian policy subsequently reflected this strategic shift. Russian
military advisors and Russian trained soldiers actively participated in the
Northern Alliance campaign to liberate Afghanistan. To be sure, American
air power and U.S. Special Forces provided the pivotal military assets
necessary for the defeat of the Taliban. Russia’s role, however, was
significant if also unnoticed. Russia could have stood on the sidelines,
offering rhetoric support and nothing more. Instead, while avoiding the
direct use of Russian troops in the war (for obvious historical reasons),
Russia’s engagement went well beyond words.

Moreover, Putin’s agreement to an American military presence in Central
Asia represented a historic change in Russian foreign policy. Before
September 11th, President Putin has vacillated between pro-Western and
anti-Western foreign policy stances. In many ways, Putin own personal dual
impulses of seeking at times to integrate into the West while at other
times seeking to balance against the West reflects Russia’s longstanding
love-hate relationship with the West. In the wake of September 11th,
however, Putin has seemed to lean much further towards the West and the
United States in particular. (Before September 11th, Putin had placed
relations with Europe as a higher priority than relations with the United
States). His acquiescence to NATO troops in Central Asia signaled a
reversal of two hundred years of Russian foreign policy. Under Yeltsin, the
communists, and the tsars, Russia had always considered Central Asia as its
‘sphere of influence.’ Putin broke with that tradition.

The American Response to Russia’s Assistance

Bush immediately rewarded Putin’s supportive turn by changing the way he
spoke about Russia’s ‘war against terrorism.’ On September 26th, White
House press spokesperson Ari Fleischer communicated President Bush’s
appreciation for Putin’s statement. The White House press spokesperson also
stated that the "Chechnya leadership, like all responsible political
leaders in the world, must immediately and conditionally cut all contacts
with international terrorist groups, such as Osama bin Laden and the Al
Qaeda organization." The Clinton Administration had previously connected
some Chechen fighters to bin Laden’s network. The Bush Administration had
not. Subsequent meetings between the Bush administration and the Chechen
government in exile have been downgraded.

President Bush’s statement did not give Putin a green light to do what he
wanted in Chechnya. For the past two years, the Russian armed forces
already have done whatever they wanted in Chechnya with little or no
reference to American opinions. Before September 11th, the Bush
Administration had not made Chechnya a top priority in its policy towards
Russia. The statement of support, however, did underscore the notion that
the United States and Russia faced a common enemy. Putin had been pushing
this theme for two years with his American counterparts. Putin was pleased
to hear that President Bush finally recognized publicly their common cause.

More generally, Bush also has praised Putin for his support in the war.
During Putin’s visit to the United States in November, Bush was especially
complimentary of his Russian counterpart. As a symbol of his commitment to
foster closer ties to Putin and Russia, Bush hosted the Russian president
at his ranch in Texas, a rare invitation coveted by but not offered to many
other world leaders.

However, beyond President Bush’s statement on Chechnya in September and the
words of praise and genuine hospitality for Putin, the Bush administration
has offered little to Putin or Russia in response to Russia’s support for
the American war on terrorism in Afghanistan and more generally. To be
sure, Putin did not provide a request list of goodies that he wanted from
United States in return for Russia’s support of the American war effort. It
is not his style. Bush officials also have argued that the new U.S.-Russian
relationship has grown beyond this "old" approach of zero sum exchange.
Nonetheless, within Russia there are real expectations that Russia should
receive some tangible benefits from its pro-American policy. To date, these
expectations have gone unmet. Rather, in the view of many foreign policy
elite in Russia, the Bush administration has ignored Russia’s contribution
and instead embarrassed Putin by continuing to pursue old policies
considered to be against Russia’s national interest. Bush’s decision in
December 2001 to withdraw from the ABM treaty is cited as the most glaring
example of business as usual – that is anti-Russian business as usual.

Domestic Resistance to Putin’s Pro-American Lean

In deciding to make concrete policy changes to reflect his rhetorical
support for the American war against terrorism, Putin has acted against the
preferences of many important constituencies within Russia. In making this
decision, Putin was leading elite and public opinion, not following it. To
date, open criticism of Putin has been limited. After all, Putin still
enjoys tremendous popularity, making it unwise politically to speak out
against him. Below the surface, however, there are subtle signs of
discontent with Putin’s new support for American military action in
Russia’s own backyard.

Russia’s armed forces, first and foremost, are not happy about NATO troops
in Central Asia. The recent American deployment of troops in Kyrgyzstan
after the war in Afghanistan was over is especially puzzling and alarming
for this Russian constituency since they do not understand the American
mission there and the Bush administration ahs not explained the mission.
Uzbek President Islam Karimov has hinted that he would like to see the
American armed forces stay in Uzbekistan for an indefinite period of time
to help protect Uzbekistan from terrorists, and though never stated
publicly, the Russians. American troops have demonstrated a pattern of
staying in places well after the fighting has ended. Moreover, the recent
increases in U.S. aid to the Uzbek dictatorship are cited in Russia as
additional evidence of the United States’ long-term military intentions in
the region. Some Russian military officers as well and defense policy
elites have hinted at the possible benefits of the American deployments.
The American presence offers Russia help in containing terrorist threats
from the region for which the Russian military does not have the capacity
to do alone. However, for the vast majority of Russian military officers
still fighting the last war – the Cold War – the thought of American troops
based permanently in a former Soviet republic must be horrifying,
especially in a place as strategic and anti-Russian as Uzbekistan.

Second, the intelligence services, including Putin’s own alma mater, the
KGB (now called the FSB) do not welcome the new alliance. Putin’s Minister
of Defense and former KGB general, Sergei Ivanov, has reversed his earlier
remarks and pledged support for Putin’s position. Nonetheless, many Russian
observers believe that Ivanov could become the focal point of opposition to
Putin within the government should the pro-American policy adopted by Putin
not yield results. Within Putin’ presidential administration, several
former KGB officers are known to harbor real suspicions of American grand
designs.

Third, the military industrial complex does not welcome the new Western
orientation. These companies enjoy contracts with American enemies such as
Iran and Syria and hope to develop even further relations with other
American enemies in the Middle East such as Iraq. For them, therefore, a
Russian realignment in the Middle East means fewer hard cash contracts.
These military enterprises enjoy strong support within the Duma.

Fourth, Russia’s oil industry is a lukewarm supporter at best of Putin’s
pro-American policy. In the long run, the most forward looking owners of
Russia’s oil companies see an opportunity for Russia to replace Saudi
Arabia as a more reliable supplier of oil to the United States and its
allies. In the short term, however, the next phase of the war against
terrorism could threaten the investments of companies such a Lukhoil and
Yukos in Iraq.

Fifth, few within the Russian parliament support Putin's pro-American
policy. The Communist Part of the Russian Federation (CPRF) has spoken
openly against Russia’s new foreign policy orientation, arguing that
Putin’s new strategy represents a sell out of Russian national security
interests. More surprisingly, Dmitry Rogozin, the chairman of the foreign
affairs committee a member of a pro-Putin faction in the Duma, stated
recently that Russia has only two reliable allies – the Russian army and
the Russian navy. Many others in the Duma have called for renewed increases
in Russian military spending as the only way to guarantee respect for
Russia in international affairs. While reluctant still top speak out
publicly, many other Duma deputies support these public statements of
Rogozin and the communists. Within the Duma, only two factions the Union of
Right Forces and Yabloko have consistently backed Putin’s pro-Western
orientation.

Sixth, even these pro-Western liberals are divided. Publicly, the Union of
Right Forces and its chairman, Boris Nemtsov, as well as Yabloko and its
chairman, Grigory Yavlinsky, have endorsed Putin’s strategic Western turn.
These political groups see this moment as a real opportunity for Russia to
finally and fully integrate into the West. At the same time, and less
publicly, voices within both of these organizations, as well as human
rights activists, worry that Putin will use the camouflage of the war
against terrorism to roll back democratic practices within Russia even
further. For instance, Putin’s pledge to support the United States in no
way altered the campaign to close TV-6, Russia’s last non-governmental
television network with a national reach.

int Seventh, and finally, Russian society is divided, While the majority in
polls has expressed solidarity with the American cause, this same society
is divided about the benefits of engagement with the West. Anti-Americanism
in Russia is only skin-deep but pervasive. Many commentators have compared
Putin’s pro-American leanings to the hapless foreign policy of Mikhail
Gorbachev, who also cooperated fully with the United States but received
little in return for his country. The perceived injustices against Russian
athletes at the Winter Olympics have prompted a new wave of
anti-Americanism within Russia. Immediately after September 11th, it was
taboo to criticize the United States publicly in Russia. After the
Olympics, that taboo has been lifted.

The comparison between Gorbachev and Putin is flawed in one critical
respect. Putin is very popular while his opponents are poorly organized,
two assets that Gorbachev did not enjoy in his last years in power. How
stable and lasting Putin’s support will be, however, is not clear. If, for
instance, Russia begins to experience economic difficulties in part due to
the war against terrorism (oil prices have already fallen dramatically),
quiet criticism of Putin’s policy may become more public. And then what?
Past experience would suggest that Putin would pull away from his forward
leaning policy, unless he can show tangible gains from the new orientation.

Perhaps the greatest threat to Putin’s new pro-American orientation is
Putin himself. Putin made a strategic choice to support the United State
after the September 11th that was motivated by intuition and feeling, as
much as calculation of tangible interests. As one Russian policymaker close
to Putin told this author, Putin has decided that it his historical mission
to integrate Russia in to the West. The magnitude of this mission, however,
does not mean it is irreversible. If Putin decides that the United States
is not serious in helping him realize his mission, he could abandon his new
pro-American policy as quickly as he embraced it. He can always return to
his focus on Europe as a way to continue his pursuit of Russian integration
o the West

Locking in Russia’s Pro-Western Orientation: Recommendations for New U.S.
Policy Initiatives towards Russia

It is both natural and appropriate that the Bush administration is focused
primarily on the next stage of the war on terrorism and homeland defense.
Russian policy must be subordinated to these new priorities. At the same
time, Russia cannot be neglected. U.S. policymakers must take advantage of
the window of opportunity opened by September 11th. American decision
makers cannot assume that relations between the United Stats and Russia
will improve organically simply because we in the United States have
determined that the "post-Cold War era" ended on September 11th. American
foreign policy leaders in both the executive and legislative branches must
establish a realistic sequence of milestones that, if met, could finally
integrate Russian fully and permanently into the Western community of
democratic states and market economies.

This mission can be understood as four broad tasks: (1) ending Cold War
legacies, (2) integration of the Russian state into Western international
institutions, (3) integration of Russian society into the West, and (4)
cooperation in fighting the war against terrorism. To achieve progress in
all of these agenda categories, democratic consolidation within Russia must
be understood as a necessary precondition.
 
I. Ending Cold War Legacies.

The United States must stop treating Russia as the Soviet Union. The
Russian state decided to accept many international obligations once
assigned to the USSR. If Russian government leaders willingly accepted
these responsibilities, be they treaty obligations or Soviet debts, then
they must be held accountable for their decisions. However, the United
States and the U.S. Congress in particular are not commensurately obligated
to keep in place legislation written specifically to punish or influence
the Soviet communist regime. Congress should review all laws written during
the Cold War designed (quite rightly) to punish the USSR. Restrictions on
high technology exports, severe dumping laws regarding Russian goods
(especially steel), and the Jackson-Vanik Amendment to the 1974 Trade Act
are examples of effective tools from the Cold War era that need review
today. Congress would be giving President Bush a much needed deliverable if
American lawmakers repealed Jackson-Vanik before the May summit.

Some executive policies from the Cold War, such as the requirement that
Russian diplomats report their travel plans beyond a 25-mile radius from
Washington, also should be abolished. And without question, the most
harmful lingering legacy from the Cold War era is the American visa regime
still in place that limits and aggravates legitimate Russian travel in the
United States.

Russia also still has many laws on the books that are leftovers from the
Cold War era. For instance, Russia still refuses the use of Russian
airspace for commercial GPS. Russia also still has in place an outdated
visa regime and registration system for American travelers to and residents
in Russia.

The Bush and Putin administrations should invite Russian and American
lawmakers to join them in establishing a special taskforce of executive and
legislative officials whose mandate would be to eliminate the laws and
executive orders put in place during the Cold War.

II. Integration of the Russian State into Western International Institutions.

The best strategy for insuring long-term cooperation between Russia and the
United States is to imbed Russia into Western international institutions.
The United States pursued this strategy with former enemies Germany and
Japan (as well as Italy and Austria) after World War II. In comparative
terms, the integration of Russia has gone much slower after the end of the
Cold War. The fortuitous combination of a new Russian president and
September 11th offer a unique opportunity for accelerating the integration
process.

Push for Russian membership into the WTO. President Putin has stated his
desire to see Russia join the WTO. By pressing forward with a new bilateral
trading agreement with Russia, the United States should become the leading
advocate for Russian accession. Because Russian domestic manufacturers are
still weak and disorganized, it will be easier for Russia to join the WTO
today than it will be when these domestic interest groups become more
consolidated. 2003 – not the 2005 preferred by some European diplomats –
should be the target year for membership.

Codify NATO at 20. Putin has hinted several times that he would like to see
Russia become a NATO member. These statements are both encouraging and
dangerous. It is encouraging that the Russian president is not continuing
the ineffective anti-NATO rhetorical assault pursued by many Russian
foreign policy leaders throughout the 1990s. At the same time, Putin’s
statements also could be fueling unrealistic expectations within Russia. In
particular, Putin has stated that Russia could join NATO if NATO becomes a
political organization. But NATO will never (or should never) become a
purely political organization. It is a military alliance. Like all other
Western international institutions, Russia can join only if it accepts the
rules of membership and does not try to change the rules of membership as a
precondition for joining. Russian membership into NATO is a worthy, but
distant goal. (I like the year 2017 – 100 years after the Bolshevik
revolution – as a target date.) To occur, however, Russia and NATO must
establish interim arrangements that prove the benefits of cooperation to
both sides.

The Permanent Joint Council (PJC) is already in place, but ineffective.
Russia’s full participation in NATO’s political arm, the North Atlantic
Council, must be must formalized. Above all else, NATO must clearly
articulate what issues can be discussed with Russia at the table and what
issues cannot. One of the problems with the PJC formulation was that the
list of possible issues was exhaustive, while the basic dynamic was
bilateral, that is the nineteen countries of NATO first agreed on a course
of action and then presented a unified position to Russia. NATO at 20
should treat all countries similarly, letting Russia in on initial
deliberations. At the same time, the agenda of NATO at 20 should be as
limited but as meaningful as possible. Perhaps focusing only on one issue
-- counterterrorism – might give NATO at 20 it best chance of success.

In addition to framing clearly and limitedly the new agenda of Russia-NATO
relations, NATO allies can take several steps to make the alliance less
threatening to Russia. As NATO expands eastward, the alliance should pledge
not to deploy nuclear weapons on Russia’s borders. A bolder step would
declare all of East Central Europe – including Kaliningrad – a nuclear free
zone. NATO and Russia should also codify agreements to guarantee
communication and transport lines between Russia and Kaliningrad on the one
hand and NATO and the Baltic states on the other. More generally, Russia
and NATO should pledge to reduce the number of conventional weapons in
Central Europe and European Russia.

End the Boycott of Russian arms purchases by NATO members. The announcement
of a new policy allowing NATO allies to buy Russian arms would not produce
massive new contracts for the Russian arms makers. Symbolically, however,
such a policy change would undermine the claim of the Russian military
industrial complex that NATO expansion is principally an export promotion
policy for Western arms makers.
 
Push for a Closer Relationship between the European Union and Russia. In
many respects, it will be easier for Russia to join NATO than the European
Union. In Russia, however, even the most astute foreign policy observers do
not understand the difficulties of Russian membership into the EU. They
must be educated. However, the EU also must be pushed to establish more
creative ways for engaging countries on its periphery. At the EU expands,
it eventually will operate on a tiered system, with the core interacting a
different level of intensity and degree of integration than some new
members. Trading regimes similar to NAFTA may be a way to offer greater
integration of Russia into European trade and investment markets without
undertaking the steps necessary for full membership.

Sign a New Arms Control Agreement with Russia. The Bush administration made
a mistake in not seeking to negotiate a new treaty to replace the ABM
treaty. The Russians were ready to allow the United States to do almost
anything regarding the research, development, and deployment of missile
defenses, just as long as these plans were governed by a bilateral
agreement. The United States should proceed with research and development
of missile defense systems. In doing so, however, the United States has an
interest in maximizing understanding within Russia of our intentions and
capabilities. Instead, the unilateral abrogation of the ABM treaty has
heightened suspicion and misunderstanding in Russia.

As a partial remedy, the Bush administration has rightly announced its
intention to sign a new strategic arms reduction agreement with Russia.
This document should be a treaty, even if only a 3-page document. A treaty
offers the best assurances for clarity of intentions and transparency of
capabilities on both sides. Even the best of friends forget what they
agreed to handshakes. Until Russia has fully integrated into the West, the
motto must always remain Ronald Reagan’s famous quip, ‘trust but verify.’
It is silly to continue to think of Russia as a strategic competitor. It is
imprudent and misleading to pretend that Russia is an ally with whom
treaties are no longer necessary. After all, even with its closest partners
in Europe, the United States still maintains a credible commitment of
mutual defense through a treaty – the North Atlantic Treaty Organization. A
treaty would also allow the United States to restrict the MIRVing of
Russian rockets. The absence of a treaty will make it difficult for
American officials to insist that Russia not return to a policy of putting
multiple nuclear warheads on its rockets. Finally, a treaty provides the
best opportunity for public scrutiny and debate in both countries. It is
more democratic than an executive order.

Missile Defense Cooperation. If Russia becomes a more cooperative partner
and a successful joiner of Western institutions, then American leaders
could begin to build joint missile defense systems with Russia. The first
step towards such cooperation could begin now by jointly modernizing and
sharing information from our respective early warning systems. The second
step might be a joint research and development program that takes advantage
of Russian technologies. Russia, after all, has pursued missile defenses
with greater vigor for a lot longer than the United States. American
officials should seek to take advantage of this research and development.

III. Integration of Russian Society into the West

Some believe that the integration of the Russian state in Western
institutions will make Russia a trusted ally of the United States. They are
wrong. Russia will only be a full and respected member of Europe and a
trustworthy ally of the United States if it is a fully consolidated
democracy. Throughout the twentieth century, the United States had to forge
alliances with dictatorships and democracies. Even Stalin’s USSR was once
an American ally. Over time, however, the democracies on the list proved to
be the more effective and reliable allies, while international institution
proved incapable of taming autocracies like the USSR. A semi-democratic
Russia will always be a quasi partner of the United States. Integration
helps the cause of democratic consolidation within Russia, but integration
alone will not bring democracy to Russia. In addition, the forces for
democracy within Russia must be supported and strengthened. This is best
done by integrating Russian societal forces directly into the world
community of democratic societies.

Putin’s real efforts to integrate Russia into the West coupled with his
equally real efforts to limit democratic freedoms within Russia are
evidence that integration alone does cause democracy. Although Mr. Putin
has made great strides in reforming the Russian economy, he has weakened
Russia’s already fragile democratic institutions. He has emasculated the
upper house of parliament, impeded party, trade union, and ngo development,
destroyed the most important outlets of the independent media, and
demonstrated an indifference to the human rights of his own citizens by how
he has conducted his military forces in Chechnya. Because the United States
needs Russia now in our fight against terrorism, some have suggested that
the Bush administration should devote less attention to Russia’s
antidemocratic drift.

This would be a terrible and shortsighted mistake. Because Putin is
committed to integrating Russian into the West, Bush and other Western
leaders actually have the opportunity to push Putin in the right direction.
(This would not be true if Putin was an anti-Western, autocratic despot.)
President Bush needs to work with his new friend in the Kremlin to
recalibrate expectations within Russia about the benefits of cooperation
with the West and elevate democratization in Russia as an American national
security interest.

Democracy as the Cost of Admission into Western Institutions. When
discussing NATO or other Western clubs, Mr. Bush should state clearly that
long-term cooperation and eventually membership will be conditioned upon
democratic consolidation in Russia. During the Cold War, NATO made
compromises on this commitment to democracy for some members. Such
compromises need not and should not be tolerated now. Russia should not
aspire to become Turkey, a troubled NATO partner that has struggled
unsuccessfully to join the EU. Rather, Russia should be encouraged to
aspire to become another Germany, a full partner of and a major player in
Europe.

Speak Clearly about Chechnya. The Bush administration was right to call
upon the Chechen leadership to severe its ties with international terrorist
organizations. At the same time the Bush administration must emphasize that
not all Chechens – not even all Chechen fighters – are terrorists. The Bush
administration also should actively encourage negotiations between Chechen
leaders and the Russian government. Moderate Chechen leaders and the
Russian government actually have a mutual enemy in the extremists who have
been attracted to fight in the Chechen war. The negative lessons of
Russia’s war against terrorism almost must be realized. Fighting a just
cause by unjust means has produced disastrous results for Russian national
security.

Increase Support for Russian Democratization. The best way to support
further democratization within Russia is to increase direct assistance to
Russian democrats. If many other items on my list require executive
initiative, this policy change does not. Congress should pass the
legislation introduced by Tom Lantos last summer, which would provide for
increased funds for Russian democracy. In honor of the highly effective
Jackson-Vanik legislation from thirty years ago, Congress should establish
a Jackson-Vanik Foundation for the support of religious and human rights in
Russia. The foundation could be dedicated to the training and technical
support of Russian non-governmental organizations dedicated to improving
the quality of Russian democracy.

Increase Funds for Education in Russia and the United States. Education is
the ally of democracy and democracy is the ally of the United States. The
United States must devote greater resources to developing higher education
within Russia and to promoting the study of more Russians within the United
States. Special emphasis must be placed on promoting public policy schools.
Subsiding internet access and promoting the study of English within Russia
are two additional powerful tools for promoting democracy within Russia and
integrating Russian society into the West.

A Parallel Society-to-Society Summit. In May, Presidents Bush and Putin
will meet for a summit in Moscow that will be dominated largely by an old
agenda from the Cold War era – arms control, regional conflicts (Iran,
Iraq, Middle East, North Korea), European security (i.e. NATO expansion),
and human rights problems within Russia. This agenda does not reflect the
new breadth of relations between American and Russian societies. To
underscore the new sinews that bind Americans and Russians, the Bush
administration, U.S. lawmakers, business leaders, scholars, and
non-governmental organizations should collaborate with their Russian
counterparts to convene several summits at the same time in May. Each group
– the U.S.-Russia business community, lawmakers from the Duma and the U.S.
Congress, Russian and American scholars, and NGO leaders from both
countries – could meet, generate a list of ideas for promoting greater
U.S.-Russian cooperation, and then present these ideas to their respective
state leaders at the May summit. These multiple session would highlight the
new nature of U.S.-Russian relations that often is ignored in analyses of
the state-to-state relationship.

IV. Russian-American Cooperation to Fight Terrorism.

The Bush and Putin administrations already have done much to develop this
agenda. Two outstanding issues, however, need immediate attention.

Cooperate to Fight Terrorism in Georgia In the wake of September 11th,
Russian military commanders in the Caucasus may wrongly believe that they
now have a green light to pursue terrorists within Georgian territory. Such
an intervention would have disastrous consequences for Georgia and
U.S.-Russia relations. As an act of preventive defense, the United States
must become more engaged in helping the Georgian government to secure its
borders. Working on opposites sides of the Georgian border, American and
Russian military officials might even cooperate to secure the area. Above
all else, the United States cannot allow Russia to ‘fight terrorism’
unilaterally within Georgian territory.

Recognition of Russia’s Role in the War in Afghanistan. Russian military
advisors, Russian trained soldiers, and Russian weapons played a far
greater role in the war in Afghanistan than have been reported in the West.
When visiting Russian in May, President Bush should help to clarify the
record by recognizing Russia’s role. He could improve dramatically Russia’s
image of the United States by giving a few medals of honor to those Russian
military or emergency personnel who assisted in the war effort. The last
time such a gesture occurred between the United States and Russia was after
World War II. Because World War II is the most revered moment of recent
Russian history for most Russians, a symbolic gesture that recaptured some
of the spirit of World War II would have tremendous resonance within
Russian today.

Conclusion

In our fight against terrorism, many of our new coalition partners will be
temporary allies. However, our newly developing relationship with Russia
has the potential to blossom into something deeper and more lasting. The
key condition for such a positive outcome is the deepening of Russian
democratization at home and integration into Western international
institutions abroad. Throughout the twentieth century, the United States
had to forge alliances with dictatorships and democracies Even Stalin’s
USSR was an American ally for a time. Over time, however, the democracies
on the list proved to be the more effective and reliable allies. Not
infrequently, ostensible gains in the short term from partnerships with
anti-democratic regimes and movements – such as the Shah in Iran, the
Suharto dictatorship in Indonesia, the mujaheddin in Afghanistan, and the
apartheid regime in South Africa -- were more than offset by setbacks to
American security and embarrassments to American ideals in the long term.
Today, it not a coincidence that no democracy in the world is an enemy of
the United States, while every sworn enemy of the United States is a
dictatorship. Russia has the chance to join the list of our permanent
friends, but only if we take seriously Russian integration into our Western
institutions and Russia’s takes seriously democratization. The potential
for breakthrough – for a fundamentally new and improved relationship
between Russia and the West – has never been greater.

*******

#2
US House of Representatives
Committee on International Relations
Subcommittee on Europe
Hearing on  U.S.-Russian Relations: An Assessment
February 27, 2002

Russian Foreign Policy: the Implications of Pragmatism for U.S. Policy
Celeste A. Wallander
Director and Senior Fellow, Russia and Eurasia Program
Center for Strategic and International Studies

Mr. Chairman, I am grateful for the opportunity to contribute to the work
of your committee as the United States faces the challenge of crafting a
relationship with Russia that builds upon the positive experience of
cooperating to counter the threat posed to American, Russian, and global
security by the al Qaeda and the Taliban regime. Even after the successful
mission in Afghanistan, Russia occupies geopolitical and policy space
crucial to the conduct and success of the long-term counterterrorist
mission that President Bush has placed at the center of American policy.
Our steps in the coming months will determine whether and how we realize
the opportunity as we approach the Russia-U.S. summit in May. I hope to
contribute by outlining the bases of Russian foreign policy under Putin,
Russia’s current relations with a variety of countries, and the
implications for U.S. policy and national interests.

Bases of Russian Foreign Policy under Putin

The domestic political and economic coalitions behind President Putin
differ substantially from that of the Yeltsin period, a fact which has
important effects on Putin's foreign policy. In political terms, Putin’s
support and legitimacy are based on his claim to have brought a measure of
order and stability to daily life in the country. His career in the KGB,
reputation as an effective official in St. Petersburg, and determination to
fight in Chechnya earned him support not only in security and military
circles, but in public opinion. Leveraging early support, the Putin
leadership has created a stronger and more centralized state as a way to
create stability, restore Russian power, and create a market economy able
to function in a globalized world. Determined to end what in academic
circles is called "state capture," Putin has sought to break to political
power of the oligarchs and of regional leaders in Moscow. He has launched
attacks on certain oligarchs, against much of the independent media, and
regional governors not in his circle. Putin has succeeded in reducing the
power of the oligarchs and regional governors. He largely controls the
lower house of the Russian legislature, and consolidated control of the
Federation Council by changing the rules on who serves in that body.

More than political order, however, the Putin government’s support derives
from the economic growth that began in 1999 and by the end of 2001 had
resulted in 20% growth in the economy since the August 1998 crisis.
Political support and a successful economy became mutually reinforcing:
government surpluses contributed to macroeconomic stability, allowed the
government to pay pensions and wages, and had numerous other tangible
economic effects that enabled Russians to feel more secure and hopeful.
This in turn created space for longer term thinking about economic reform,
and especially a strategy for participation in the international economy.
The Putin leadership team is less mired in breaking up the Soviet economy,
and clearly focused upon building a Russian economy that will provide the
country the resources and power to play the role of one of the world’s
leading countries. Unlike Yeltsin’s habit in the last half of the 1990s of
asserting by right Russia’s great power role in a multipolar world, Putin’s
Russia is embarked upon a policy to create a Russian economy that makes
Russia a world power. Whether the policy will be successful remains to be
seen, but Russian foreign policy can only be understood if we understand
that Russian foreign policy essentially serves its economic goals.

The shape of the Russian economy and its implications for foreign policy

The Russian economy grew 5.4% in 1999, 8.3% in 2000, and 5.2% in 2001. In
the first two years, growth was primarily due to the effects of devaluation
of the ruble (and thus the effects of import substitution as Russian goods
became more competitive), and favorable international oil and gas prices.
Later in 2000 and through 2001, the Russian economy confounded pessimistic
expectations as the effects of reduced costs and increased competitiveness
fueled growth driven to a greater degree by demand and consumption.
Industrial output grew 4.9% in 2001, and a growing percentage (over 61%) of
Russian enterprises are reported to be profitable. Real wages and real
disposable household incomes continue to grow in 2001 (at 16.7% and 5.4%
respectively), which contributed to continued strong domestic consumption.
Fixed capital investment increased 8.7% in 2001, and capital outflows
decreased from $2.3 billion per month at the beginning of 2001 to $1.5
billion per month in the third quarter (the most recent period for which
World Bank figures are available). Russia’s trade surplus was $51.1 billion
in 2001, and the government budget surplus was 2.4% of GDP.

However, despite the overall positive picture, there are clear problems.
Russia’s economy remains too concentrated in natural resources exports
(which account for 70% of the total), and the positive investment figures
remain concentrated in the extractive industries. Only energy and food
production have maintained their growth rates in the past year. And
although overall industrial growth was a respectable 4.9%, it was flat in
the fourth quarter. Russia’s lack of a system for financial intermediation
means that small and medium businesses still have a difficult time getting
started, limiting Russia’s ability to diversify its economy. Although
Russia will likely maintain economic growth even if the price of Urals
crude oil falls as low at $13/bbl, any reduction in global prices for
energy reduces resources: it is estimated that every $1 change in the price
of a barrel of crude oil is worth $1.2 billion to the Russian economy, with
about one-third of the amount going to the government budget in taxes and
duties. Inflation in 2001 was 16% (higher than the 12% government target),
and the ruble appreciated 7% in real terms in 2001, reducing import
substitution competitiveness. Indeed, Russian imports increased $7 billion
and exports decreased $2 billion in 2001. The country needs to invest some
$2.5 trillion over the next 20-25 years to replace aging Soviet
infrastructure and make up for the absence of investment in the 1990s.

Therefore, Russia is running a race it can only win by creating new
industries and developing new sectors, even as it remains dependent on
international energy markets. Energy exports create benefits that ripple
through the private economy and government budget, but they undermine
competitiveness by causing appreciation of the ruble. Eroding
competitiveness reduces production in the consumer sectors that did well
after August 1998, and their slowdown depresses demand in the machine
building sector. Without a system by which profits and savings can be
invested in new enterprises, investment and productivity will remain locked
in the extractive sectors.

In addition, it is important to understand that the manufacturing sectors
of the Russian economy that are internationally competitive are military
arms, nuclear power plants, and space technology. The domestic market for
all three is very limited, which is one reason why foreign markets are
important. The first two sectors pull Russian foreign policy toward
countries like China, Iran, and India, which have an interest in the goods,
ability to pay, and difficulties on Western markets. Russian arms sales in
2000 were about $4 billion, while the entire Russian defense budget was
just under $8 billion. Virtually none of Russian defense spending is for
procurement, which means that Russian foreign arms sales are keeping its
defense enterprises open and operating. This is significant not only in
economic terms, but also politically, because much of Russia's defense
plants are located in single-factory towns as a consequence of Soviet
industrial practices, and the populations of those towns are entirely
dependent on the military economy for survival.

Another sector of the Russian economy with a stake in Russian foreign
policy is the consumer sector that has been important for growth over the
past two years. Because of the import substitution effects, the sector has
done well, but as these effects diminish, the sector will need substantial
investment and advanced management skills to continue to succeed. This is
one of the sectors of the economy where business interests have pushed for
improvement in Russia's foreign investment climate. In 2000, Russia
attracted only $4.4 billion, or one-half of 1% of the global total. Much of
this investment has been concentrated in medium to small consumer oriented
industries in Russia's northwest regions, those near Europe. One success
story has been Cadbury's investment in the Novgorod region, and there are
others in food processing, breweries, and soft drink production. These
industries, their interest European business contacts, and their support
for corporate governance and banking reform necessary to attract foreign
direct investment are a fascinating foil to the interests of Russia's aging
but persistent defense industries.

The result is a Russian foreign policy dependent on foreign markets for
energy, yet at the same time seeking investment and trade across a broader
array of businesses. It is a Russian foreign policy that seeks to maintain
traditional trade partners in traditional sectors, yet seeks new
opportunities with countries – particularly those of Europe, developed
Asia, and the U.S. – that can bring capital and experience to diversify the
Russian economy. It is a Russian foreign policy that seeks to sell arms to
China, and join the WTO, all as part of the same set of incentives and
constraints.

Russia and Europe

Putin has pursued a vigorous diplomatic agenda in Europe. Putin has met
with the leaders of Germany, the United Kingdom, France, Italy, Sweden, and
Finland among others, and with several of them multiple times. He has held
five bilateral summit meetings with German Chancellor Gerhard Schroeder in
just over one year. Putin has emphasized repeatedly in his travels and
foreign policy statements that Russia is a European country and seeks to
develop ties with European partners. Commentators commonly attribute
Putin's European orientation to his St. Petersburg origins, or his KGB
service in East Germany, and they may play some role. But the more serious
questions of foreign policy interests are explained by Russia's economic
interests in Europe.

Europe has replaced the countries of the former Soviet Union as Russia's
primary trading partners. Russian exports to the EU countries amount to
about 13% of total Russian GDP. EU countries account for 34% of Russian
exports, and another 22% of Russian exports go to EU aspirant countries,
which means that in the next decade Russia may send well over half its
exports to the EU. Natural gas is a substantial part of this trade. EU
countries import 20% of the natural gas they use from Russia alone. In
2001, Russia and the EU agreed to develop a new gas pipeline through
Poland, one that would expand exports and bypass Ukraine (where old Soviet
era pipelines have been the main transit method for Russian natural gas
exports to Europe).

Russian relations with individual European countries have improved
considerably under Putin, but even more significant is the development of
the Russia-EU relationship. In the Yeltsin era, the EU was largely ignored,
and it remains little understood in Russian political circles. However, the
Putin government has worked to develop the potential created by the EU's
Partnership and Cooperation Agreement for developing business ties and
managing the potential negative effects on Russia of EU enlargement in
Central and Eastern Europe. Despite the problems it may create for trade
and travel in eastern Europe, Russian foreign policy is now more positive
on EU enlargement, and on EU programs for regional development in
northeastern Europe, particularly those addressing Russia's Kaliningrad
enclave in EU regional cooperation programs.

At the EU summit in Sweden in 2001, the emphasis was on involving Russia in
European affairs where possible, part of a consistent policy on the part of
EU members to move Russia more to the center of Europe's economic and
security policy. Russian Foreign Minister Ivanov declared that Russia views
the EU’s agreement to create a 60,000 strong rapid reaction force by 2003
in positive terms, and said that Russia was ready to study the possibility
of cooperating with or contributing to the EU force’s crisis operations.
This is an important development for a Russia that not long ago made little
distinction between the EU and NATO. Russia and the EU held a productive
summit in October 2001, including an agreement for regular meetings in the
political security spheres.

Russia's growing base of relations in Europe extends beyond the major
players of traditional Western Europe. Russia-Lithuanian relations are so
positive that Putin reminds Lithuanians that they are "European." Putin
recently assured Lithuanian President Valdas Adamkus that sovereign
countries have the right to enter whatever security arrangements they see
in their interests. Russian-Polish relations are constructive across a
broad range of political, security, and economic issues. Putin’s visit in
January 2002 was remarkable: in addition to discussions of how Poland can
facilitate solutions to problems Russia is likely to face with Poland’s
accession to the EU, Putin laid flowers at a monument to Poland’s WWII
resistance army, and visited a monument to victims of the 1956 Soviet
intervention.

More significantly, Putin's approach has meant that Russia has set aside
the geopolitical competition in relations with Turkey that Yeltsin's
government never quite achieved in order to focus on economic ties,
particularly Russian exports of natural gas. The potential of geopolitics
in the relationship has been real, with Turkey emerging as a potential
competitor in Central Asia and the Caucasus, and Russia willing to provide
Cyprus with air defense systems. Turkey's support for the Baku-Ceyhan
pipeline was a major irritant in Russian-Turkish relations, as was Russia's
war in Chechnya.

But Putin's government moved more strongly in the direction of cooperation
with Turkey. It pushed through passage of a package of tax credits to
support the building of Blue Stream, a natural gas pipeline under the Black
Sea to supply Turkey. In early 2002, Russia’s policy on the
Baku-Ceyhan-Tblisi pipeline has shifted to one not only of support, but
with oil companies YUKOS and LUKoil seeking to invest. This removes a major
source of competition and strain in the relationship. Russia is willing to
sell military helicopters to Turkey while NATO allies are reluctant because
of concerns about Turkish policy on its Kurdish minority. And despite
Chechnya, Russia and Turkey agreed in late 2000 to stronger cooperation in
counterterrorism.

Russia and Asia

At the same time, Russia has significant interests in relations with
countries in Asia. A major component of this interest is economic
opportunity. Russia sells natural resources, energy and conventional
weapons to China, India, and Iran. In late 2000, we saw Russian trade
agreements worth over $1 billion in arms sales with China, and a broader
package of trade agreements worth some $3 billion with India. Russian
officials have stated that they will pursue internationally legal sales of
conventional arms to Iran even at the risk of the US imposing sanctions.
Contracts discussed with Iran in 2001 could be worth over $4 billion in the
next few years. While on the one hand, poor U.S. relations with Iran are a
problem for Russia because Russian-Iranian relations are an irritant, on
the other Iran's isolation is one of the reasons its energy, military, and
regional security relations with Russia are so strong. Russia might welcome
removal of the irritant, but it might lose the practical advantages from
which it has managed to benefit so well.

In India, Putin succeeded in not only getting agreements on conventional
arms sales, but signed agreements on nuclear technology, trade, and
exploring joint efforts in information technology. Given Russia's limited
potential economic relations with China (which is geared far more toward
trade with the US), the Russian leadership's attempt to focus on India in
more areas than merely arms sales is evidence that the foreign policy is
driven by more than unidimensional military or geopolitical concerns.

Japan could well hold the key to keeping Russia whole: the Far East's
economy is in shambles, evidenced only most dramatically by the failure of
its electricity system last winter (with temperatures falling to 50 degrees
below zero, much of Russia's Far East went for days at a time with
electricity blackouts). Russian officials talk of Russia's timber and
hydroelectric resources, and even gas and oil (including development of
Sakhalin Island oil deposits for the Far Eastern energy market), as a
solution to Japan's perennial materials and energy dilemmas, and Japanese
investment as a solution to Russia's economic failures in Siberia and the
Far East. Japanese companies are involved in multinational business
projects to develop oil and natural gas off the Russian island Sakhalin.
The dispute over the Kurile Islands remains a serious obstacle to
improvement in Russian-Japanese relations, and no solution is in view, but
in the past few months there hae been a series of continuing official and
unofficial meetings on the issue, which at least preserve options to find a
solution. Unlike their fear of China's rise and potential designs on
Russian territory, many Russian Far East elites welcome the prospect of
Japanese -- and Korean -- investment.

Russia and Eurasia

The effects of Russian pragmatism are more difficult to find in its
relations with the countries of the former Soveit Union. In dealing with
the countries of Central Asia, the Caucasus, and its western borderlands,
Russian foreign policy displays a mix of economic and business realism
mixed with geopolitical pressure. In part, this is because security
concerns predominate in Russia’s preoccupations on its borders, and
traditional thinking remains influential in security thinking. Stability
(or at least the Russian version of it) is crucial. Among the consistent
first order threats to Russian security cited in its national security
concept, military doctrine, and foreign policy concept were instability,
primarily in Central Asia and the Caucasus, and armed conflict in
Tajikistan, Afghanistan, Chechnya, Abkhazia, and Nagorno-Karabakh.

Without doubt, Russian policy in the 1990s contributed to these threats
through the use of force and interference to maintain Russian influence and
presence in the region. But equally without doubt, these countries face
significant indigenous sources of instability and conflict. Despite their
existence as independent sovereign states, there is in fact little of
border security and controls between old Soviet and current Russian
borders, and the post-Soviet Eurasian space remains permeable and
vulnerable to armed conflict. Most striking has been the ability of the
Islamic Movement of Uzbekistan (IMU) to operate in Afghanistan and
Kyrgystan, as well as in Uzbekistan. Drug trafficking (in part enabled by
corrupt Russian officials and military) has fueled instability and
insecurity in the region. In the Caucasus, Georgia's inability to control
its own territory has enabled armed Chechen groups to use its territory at
least for refuge and possibly for launching attacks.

Russian behavior toward Georgia has become a bewildering array of
conflicting positive developments (such as a new willingness to conduct
dialogue with Shevardnadze, and a new positive attitude on Georgia’s role
in the Baku-Tbilisi-Ceyhan pipeline) and increasingly negative actions
(primarily support for Abkhazian separatism, and even possible direct
military intervention against Georgian territory in the Kodori Gorge).
Russian policy seems stuck between its own contribution to instability in
the region, and its newfound interest in economic and business priorities.
Russia also seems to be stuck in a situation where it cannot find a
solution to the dilemmas thus posed on its own, but still unwilling to
welcome Western involvement in the region for fear of being edged out. The
result is a costly stalemate and increasing concerns that Georgia may not
survive the crisis. While it is probably true that a withdrawal of Russian
forces from the Gudauta base and from the Abkhazian region of Georgia would
lead to new fighting, it is also the case that Russia has done little to
work for a long-term solution to conflict in the region that does not
depend on Russian military dominance.

Russia has long identified Islam and international terrorism as a threat.
The Chechen’ s separatist war, in this context of Russian security
perceptions, is just one manifestation of Islamic radicalism with
international ties and terrorist means stretching from Afghanistan to the
Black Sea. It is crucial to understand how instability, Russian weakness,
Islam, and international terrorism have been linked in the Russian
perception. A component of this perception has been for some time that the
West is a potential ally against this threat, because it too has been a
target. This perception is the reason Russian officials suggested joint
operations against Osama bin Laden in Afghanistan long before September 11th.

The mix of economic and security motives behind Putin's foreign policy are
apparent in the importance of the Shanghai Cooperation Organization in
Russia's policy in Eurasia. Bringing together the dominant regional powers
China and Russia, along with the Central Asian states of Kazakhstan,
Kyrgystan, Tajikistan, and Uzbekistan (Turkmenistan is not a member in line
with its policy of neutrality), the SCO is focused on a mix of regional
economic (primarily oil and gas) and security (primarily counterterrorism)
issues. While clearly an effort to keep a strong Russian hand in a region
it deems in its sphere of influence, the inclusion of China demonstrates
the pragmatism that runs through Putin's foreign policy. And the inclusion
of economic issues simply reinforces the theme: Russia's Eurasia foreign
policy is a marriage of security concerns and economic ambitions.

Part of Putin's Eurasia policy has been an active effort in relations with
the countries of the former Soviet Union. Russia has built an economic
union with Belarus and maintains strong military cooperation with it as
well. Moldova has moved to closer relations with Russia since communists
won elections in February 2001. Kazakhstan has been open to better
relations. Russian efforts to develop pipelines and new oil fields in the
Caspian have been successful. The Putin government appears to have chosen a
clearer course than the Yeltsin elite, which pursued contradictory policies
of exclusion and partnership at different times. The Putin political and
energy elite appears to be more consistently interested in participating in
extraction and pipeline projects in the region, although it continues to
oppose projects and routes in which it would not have a stake.

The forms of Russian influence in some of its neighbors also appears to be
shifting from its shear size and relative power to economic ties. Russian
businesses in Ukraine are buying into its energy and aluminum industries.
LUKoil, Gazprom, and United Energy Systems (the electricity monopoly) are
buying stocks and shares in many industries in countries in the former
Soviet Union. Russia has pressured both Georgia and Ukraine to pay their
debts by threatening and implementing cutoffs of energy delivery.

Russia and the United States

Given this, it should come as little surprise that Russian-U.S. relations
were problematic before September 11th. There was little to work with. We
are not as important an export market as Europe for energy, and our
business contacts have not focused on small and medium manufacturing where
new Russian businesses have been active with European partners (our energy
interests have bumped up against competitive and even illegal behavior in
Russia's energy markets). We are not a market for nuclear reactors or
conventional military arms. There is some potential for partnership in air
and space technology, most clearly demonstrated in Russia's important
involvement in the international space station and in Boeing's successful
investments in Russia, but the potential has not been realized because of
competition and security concerns.

In addition, because the Russian economy has been doing well the past two
years and because the government has run surpluses, the U.S. lost the
single most important lever of influence it wielded over Yeltsin in the
1990s: IMF credits, potential financial support, and debt reduction. The
Putin government not only had different political and economic priorities,
it found that it did not need the U.S. to achieve its priorities.

The agenda has been dominated by the after-effects of failed priorities in
economic relations with the Yeltsin government (primarily the IMF, debt
controversies, and money laundering scandals), or strategic issues
left-over from the Cold War, mainly START and the ABM Treaty. An indication
of just how poor U.S.-Russia relations had become was that when we wanted
to put some substance behind our criticism of Russia's war in Chechnya over
the past two years, we had no issues or incentives worth much to threaten
to link to Russia's brutal war. When the U.S. decided to withhold IMF
credits in early 2000 in response to the war, it had no effect on Russian
policy.

This had begun to change in the last year. One of the logical priorities
that follows from the Putin government's economic aspirations is greater
success in international trade markets. Russian economic officials believe
that Russian goods do not have equal access, and that in particular a
potentially successful sector of its export economy -- metals such as steel
and aluminum -- are unfairly targeted by anti-dumping measures in the West.
By joining the World Trade Organization, Russian officials believe that
they will benefit from the multi-party arbitration mechanisms that members
are entitled to, rather than the unilateral imposition of restrictions that
Russia, as a non-member, is subject to.

In addition, Putin's more pragmatic approach and stake in relations with
the European countries had shifted Russian strategy on both ABM Treaty
abrogation and NATO enlargement. While continuing to oppose both, Putin
shifted Russia policy to one that sought compromise and engagement with the
U.S. Recognizing that Russia could not prevent a U.S. decision to proceed
with missile defense, the Putin government sought to modify that decision
through negotiations, and when the American decision came to withdraw from
the treaty, calm acceptance. Since that decision, Putin’s military and
foreign policy team has been engaged with discussions on offensive nuclear
forces reductions, despite conditions that do not look very promising from
the Russian perspective. Putin’s practical approach has meant Russian
engagement in consultations that do not guarantee a legally binding
agreement or treaty, and that are likely to preserve a considerable
American "hedge force" beyond the targeted reductions to 2200 warheads.

Well before September 11th, Putin told several European leaders and publics
that although Russia did not want to see NATO enlargement, it would live
with it. Instead of threatening counter-military actions (such as deploying
tactical nuclear weapons in the region), Putin suggested that Russia should
be considered a candidate for NATO membership itself, particularly if the
alliance shifted further toward an political organization. More
practically, Russia has been engaged in discussions on the idea of a "NATO
at 20" which would involve Russia as an equal partner in a limited and
defined set of security issues that could be constructively discussed with
Russia at the table.

The basis of Russian shifts on missile defense and NATO, however, remained
Putin's foreign policy of diversification and practicality. The ability of
the U.S. to exercise linkage remained minimal. Russia relations with Iran
have continued apace, and even accelerated. Russia's war in Chechnya has
not ended, and to the extent that some concern for standards of
international human rights matter (for example, in investigations and
trials of military atrocities) the influence comes from the Council of
Europe and the OSCE. Russia and China signed an agreement on strategic
partnership that some read as the basis for alliance this summer. Meetings
between President Bush and President Putin this year in Ljubjana and Genoa
were promising, and there was much to work with, but the promise was in the
potential for overcoming problems, rather than a substantial positive
cooperative agenda.

What comes next

Much attention in the U.S. has focused on Putin's speech of September 24th,
declaring Russia's support of the U.S. war against international terrorism.
Putin's speech was a significant step. It contradicted and silenced voices
in Russia's security and military elites that had voiced doubts and even
opposition to U.S. counterterrorism. Putin made a decision to embrace the
common interests now apparent in confronting and defeating international
terrorism. Putin's speech, and subsequent Russian policy, creates a
historic opportunity to create meaningful cooperation between our two
countries.

However, most commentary is wrong in deeming this decision as a complete
break with Russian policies, and in claiming Putin is alone in charting
this course. As my analysis has shown, the foundations for a
Western-oriented policy have been laid over the past two years, and have
sturdy roots in Russia's emerging political and economic elites. Russia's
primary interests in economic development and in Eurasian stability give it
solid interests in the international status quo, including the fight
against global terrorism that threatens the existing global system.

However, it is crucial to understand that while international terrorism has
illuminated our common interests, it remains to be seen just how broad and
deep those common interests are. It is far from clear that the U.S. and
Russian define international terrorism and its sources in precisely the
same way. We probably do not agree on the nature and extent of terrorism in
Chechnya and the Caucasus, or in Iraq. We have agreement on fighting the
Taliban in Afghanistan, but that agreement may not extend to pursue
terrorism around the globe as the U.S. views as necessary.

Furthermore, it is important to understand that Putin's foreign policy is
based both on relations in the West and in Eurasia. Analyses often pose a
dichotomy between good Russian relations in the West versus an orientation
toward the East. For some time, Putin's foreign policy has not accepted
such a dichotomy, and has sought to craft a policy that seeks
self-interested economic and security relations with neighbors from Finland
to Japan. Simply because Putin has chosen to support the U.S. against
terrorism does not mean Russia loses its interests in relations with Iran,
China, and other Eurasian countries. We need to be prepared for Russia to
continue on the path of diversification and pragmatism it began over the
past years.

In addition, it is useful to keep in mind that U.S. policy and perception
of the primary threat to its national security has changed at least as much
as Russia's. Putin's conception of Russia's national interests as laid out
in his speech of the 24th of September has a basis in the foreign,
security, and military documents that Putin has approved in the past two
years. The attacks of 9/11 crystallized common interests that were in the
making, creating the opportunity for partnership and cooperation to achieve
our common security interests.

This should be viewed as good news: Russia's potential cooperation can be
rooted in an established set of priorities and goals that have been the
target of Russian foreign policy for some time. Putin took the lead on this
policy, and is not supported by all, but he is not alone. Significant
Russian business, political, and security interests were behind his
initiatives before 9/11, and they continue to be so now. We are not faced
with the dilemmas of the Yeltsin years, where the opportunity for
cooperation rested solely with one man. Putin needs our support to sustain
his choice, but he will also find support within Russia.

This is where obstacles meet opportunity. Three important constituencies in
Putin’s foreign and security policy – business, intelligence, and the
military – can be engaged by U.S. policy in the months and years to come.
As we approach the May summit, it is vital that American foreign policy not
focus only on the economic and business side of the relationship. US policy
now takes Russian international economic interests seriously, and that is a
very positive development. However, an economic policy and relationship is
not a substitute for a comprehensive foreign policy that engages Russia in
the political and security sphere as well. Putin’s coalition and
constituency is strongly economic, but it is by no means only economic.
Putin’s long term strategy is one of Western integration, but that does not
mean that Russia does not have political and security concerns that can be
ignored for the economic relationship. We have every interest in engaging a
pragmatic Russian foreign policy leadership in a pragmatic and
comprehensive security policy of our own that finds synergies in an
economic, political, and security engagement with Russia to reinforce the
positive developments that have emerged so clearly in the past year, and
that enables us to constructively solve the remaining areas of disagreement
in our relationship.

********

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