Russia Resurgent?


Amidst financial recession and national depression, Red scare has emerged anew. While Russia’s military thrust into Georgia was no doubt a catalyst, such fears have been steadily building since Putin’s rise. But recently, the tone has changed.

News sites seem almost to delight in displaying menacing photos of the country and its leaders: Russian military personnel guarding warheads and tanks; President Medvedev smirking as he greets Hugo Chavez on the deck of a massive Russian warship; even Putin stroking tiger cubs and striding shirtless through a bubbling brook. Headlines have increasingly highlighted Russian saber-rattling around the globe—in Venezuela, Cuba, Iran, and so on. Russia is resurgent, they say.

But quite frankly, the fear is overblown. Just as it was during the Cold War, Russia’s global assertiveness is accompanied by economic decay and fraying political relations back home. So perhaps before we fret over the emerging Russian threat, we should examine its economic future.

And it just happens to be bleak.

The price of oil has fallen from a high of $147 to $36 in mere months. This fact alone has placed petroleum-rich Russia in a precarious position and put the long-term stability of its government in question. Yet, in this ever-worsening global financial meltdown, the price of oil is just the beginning of Russia’s problems. The rouble has reached a three-year low relative to the dollar. Consumer confidence is at an extreme low: 88 percent believe the condition of the economy is between “fair” and “very bad,” and a third don’t even think the crisis has hit Russia yet. Worse still is a poll that, according to Vladimir Ryzhkov of the Moscow Times, indicated that one-fourth of the population “had [already] been laid off, hit with pay cuts or experienced delays in getting paid on time.” As the financial crisis further descends upon Russia, we will witness a country wholly unprepared to deal with such a situation. Seven hundred major Russian towns and cities are dependent on a single industry or factory, which means that minor disruptions in the Russian economy could devastate entire cities.

For years, Russia had relied on cheap credit, but the fall in the price of oil has frozen foreign lending and revealed major vulnerabilities in the economy. But thus far, the Russian government’s response has been nonsensical. Seeking to bolster domestic industry, they have instituted tariffs on foreign automobiles, which is perhaps the worst possible response to economic downturn. And with cash increasingly scarce because of the price of oil, the government has nonetheless announced large, sweeping increases to the military budget for the next number of years. While the government has allocated $200 billion for various rescue measures, the lack of accountability combined with the nation’s recent history of corruption and poor monetary policy ensure that little productive action will actually emerge.

The Russian people’s responses have differed greatly. Some, looking to assign blame, have resorted to anti-Americanism and conspiracy theory, playing directly into the hands of Putin’s regime. But many have funneled outrage into dissent against the government. Left with no means to engage the actual systems of power, citizens have taken to the streets, protesting tariffs and other economic policies. With further disruptions expected to occur in the banking and housing industries, public outrage will only increase in 2009. And Putin’s response? In classic totalitarian fashion, he has spread propaganda through the government’s tentacles in the television industry and has shut down newspapers and other media outlets with divergent opinions (the business newspaper Vedemosti was threatened for merely suggesting the possibility of unrest).

With economic downturn and perhaps all-out crisis an ever present possibility, the threat of Russian expansionism has been reduced. Instead, political instability and even regime collapse seem to be far more likely alterations to the status quo. With a shrinking population, endemic corruption, and a failing economy, tenuous times lie ahead for the Russian government. An enormous nuclear arsenal and strong nationalist movement may perhaps make domestic instability the greatest threat to the region and the United States. Thus, the incoming administration must not only present the United States as a credible deterrent and strong international actor but also engage Russia by encouraging democratic reforms and bilateral cooperation. Reliant on Russian petroleum, Europe’s hands remain tied, so the onus is on Obama to take the lead on NATO’s policy toward its Eastern neighbor. And although security must be prioritized, the United States must also avoid belligerence. For while the current Russian state may represent a major threat to our security, the danger posed by its rapid dissolution is greater still.