by Anders Aslund, Peterson Institute for International Economics
Commentary in the Daily Star
March 31, 2008
© Daily Star
On April 2–4, NATO will hold its biggest summit ever in Bucharest, the capital of its new member, Romania. Incredibly, NATO has invited its fiercest critic, Russian President Vladimir Putin, to attend. For the first time since 2002, he will. His presence is an embarrassment to NATO but an even greater disgrace for Russia.
The two biggest issues in Bucharest will be whether to invite Albania, Croatia, and Macedonia to join NATO and whether to offer applications to Ukraine and Georgia to start so-called membership action plans. These questions should be decided by NATO's members, not outsiders.
In February 2007, Putin, in an anti-Western tirade delivered in Munich, declared: "I think it is obvious that NATO expansion does not have any relation with the modernization of the alliance itself or with ensuring security in Europe. On the contrary, it represents a serious provocation that reduces the level of mutual trust."
So Putin's views about NATO are clear. He will scandalize the summit by seeking to intimidate the former Soviet clients in the room. Such an aggressive attitude benefits a country's foreign policy only up to a point, one that Putin passed long ago. Initially, he acted as an able diplomat and accommodator, but since his Munich speech, Putin has begun uniting the West against Russia.
In his speech on May 9, 2007, commemorating Russia's victory in World War II, Putin compared the United States with Nazi Germany: "We have a duty to remember that the causes of any war lie above all in the mistakes and miscalculations of peacetime, and that these causes have their roots in an ideology of confrontation and extremism. It is all the more important that we remember this today, because these threats are not becoming fewer, but are only transforming and changing their appearance. These new threats, just as under the Third Reich, show the same contempt for human life and the same aspiration to establish an exclusive dictate over the world."
Serious politicians do not speak like that. These are the rants of Putin's few remaining friends—Venezuela's Hugo Chavez, Iran's Mahmoud Ahmadinejad, and Belarus' Alexander Lukashenko. At home, awareness is rising that Putin is damaging Russia's interests by insulting and intimidating everybody. He is isolating his country among the world's pariahs. Worse yet, he has achieved little.
When Putin became president in 2000, he named accession to the World Trade Organization as his foreign policy priority. He failed, because he gave in to petty protectionist interests, imposing a timber embargo against Finland and Sweden, a fish embargo against Norway, and various agricultural embargos against Lithuania, Ukraine, Moldova, Georgia, and others.
Russia's foreign policy is focused on the interests of its state-dominated corporations, notably Gazprom, which has concluded agreements with many foreign countries and companies for monopolistic deliveries. But a Gazprom pipeline typically costs three times as much per kilometer as a similar Western pipeline, because of "leakage" (kickbacks and waste). The primary purpose of Russia's foreign policy seems to be to tap Russia's state companies for the benefit of Kremlin officials.
But customers do not trust suppliers who cut deliveries, raise prices unpredictably, expropriate competitors, and allow production to decrease in the way Gazprom and Russia's other state companies have done. As a result, Russia's gas exports to Europe have started declining.
Putin's foreign policy is also evidently intended to whip up populist chauvinism. Beating up on foreigners may boost his authoritarian rule, but this, too, has a price. Not only the United States and Europe but all former Soviet republics as well feel alienated by Putin's aggressive tactics. Many are seeking to shield themselves from Russia's capricious embargos—for example, by seeking alternative energy supplies.
Arguably, Russia has improved its relations with China under Putin, but at the cost of acceding to China's demands for two large disputed islands over which the two countries fought in 1969. Putin's apparent aim was to secure financing for Rosneft's purchase of the Yugansk oil field, which was part of the Yukos confiscation. Yet China, too, is wary of Putin and has been sending warm signals to leaders of former Soviet republics, such as Ukraine's Yuliya Tymoshenko.
Russia's nationalists are also outraged by Putin's foreign policy, because it has alienated former Soviet republics and weakened Russia's military. The nationalist Council for National Strategy published a devastating report on the decay of Russia's military under Putin. Russian military procurement, it claims, has plummeted. For example, only three new military aircraft have been purchased since 2000.
True, armaments costs have risen sharply, but only because Putin's KGB friends, who monopolize weapons production, have stolen inordinate amounts. Yet, despite this spending shortfall, Putin seems obsessed with making pointless and provocative gestures, such as resuming long-range nuclear bomber flights off the American coast.
In the early 1990s, many Westerners and Russians wanted Moscow to become a full-fledged member of both the European Union and NATO, on the condition that Russia became a full-fledged democracy. Unfortunately, the West never made that offer, and Russian democracy went astray. Russia should be given a new chance but only after Putin has departed. Russia is no enemy of the West; Vladimir Putin is.
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