[Senate Hearing 111-71]
[From the U.S. Government Printing Office]
S. Hrg. 111-71
PROSPECTS FOR ENGAGEMENT WITH RUSSIA
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
MARCH 19, 2009
__________
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COMMITTEE ON FOREIGN RELATIONS
JOHN F. KERRY, Massachusetts, Chairman
CHRISTOPHER J. DODD, Connecticut RICHARD G. LUGAR, Indiana
RUSSELL D. FEINGOLD, Wisconsin Republican Leader designee
BARBARA BOXER, California BOB CORKER, Tennessee
ROBERT MENENDEZ, New Jersey JOHNNY ISAKSON, Georgia
BENJAMIN L. CARDIN, Maryland JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania JIM DeMINT, South Carolina
JIM WEBB, Virginia JOHN BARRASSO, Wyoming
JEANNE SHAHEEN, New Hampshire ROGER F. WICKER, Mississippi
EDWARD E. KAUFMAN, Delaware
KIRSTEN E. GILLIBRAND, New York
David McKean, Staff Director
Kenneth A. Myers, Jr., Republican Staff Director
(ii)
C O N T E N T S
----------
Page
Cohen, Ariel, senior research fellow, Russian and Eurasian
Studies and International Energy Security, The Heritage
Foundation, Washington, DC..................................... 11
Prepared statement......................................... 13
Kerry, Hon. John F., U.S. Senator From Massachusetts............. 1
Kuchins, Andrew, director and senior fellow, Russia and Eurasia
Program, Center for Strategic and International Studies,
Washington, DC................................................. 23
Prepared statement......................................... 28
Lugar, Hon. Richard G., U.S. Senator From Indiana................ 3
Sestanovich, Hon. Stephen R., senior fellow, Council on Foreign
Relations, Washington, DC...................................... 5
Prepared statement......................................... 8
Additional Material Submitted for the Record
Responses to additional questions submitted for the record by
members of the Committee....................................... 42
(iii)
PROSPECTS FOR ENGAGEMENT WITH RUSSIA
----------
THURSDAY, MARCH 19, 2009
U.S. Senate,
Committee on Foreign Relations,
Washington, DC.
The committee met, pursuant to notice, at 10 a.m., in room
SD-419, Dirksen Senate Office Building, Hon. John F. Kerry
(chairman of the committee) presiding.
Present: Senators Kerry, Cardin, Casey, Webb, Kaufman,
Lugar, Corker, Isakson, and Barrasso.
OPENING STATEMENT OF HON. JOHN F. KERRY,
U.S. SENATOR FROM MASSACHUSETTS
The Chairman. Good morning. This hearing will come to
order.
It's a pleasure to be here this morning with my colleague,
Senator Lugar, to look at another country that has an enormous
importance in its relationship with the United States and with
the rest of the world.
Regrettably, in recent years America's relationship with
Russia has arguably reached the lowest and least productive
phase in two decades. President Obama has spoken, importantly,
of the need to reset United States-Russia relations, and we
agree wholeheartedly.
While it is not yet clear exactly what this new chapter in
our relations can bring, it is clear that our common interests
demand that we try to work together more constructively. Our
differences are real, but so, too, is our potential to
cooperate and particularly to lead together on important global
challenges.
From Iran's nuclear program to human rights in Burma to our
presence in Afghanistan, there is scarcely an issue of global
importance which could not benefit from greater cooperation and
participation from Russia. Our challenge is to ensure that, to
the extent possible, we enlist Russia to act, not just as a
great power individually, but as a global partner with us and
with our European allies.
This hearing will explore what we can hope to accomplish
through engagement, what motivates Russia at this moment in
time, if that's different from other moments, how we can best
respond to our continued disagreements, and how we can achieve
greater cooperation on the issues where our interests clearly
converge.
Nowhere is our shared challenge greater, or shared
leadership more vital, than in confronting the threat posed by
nuclear weapons and nuclear terrorism. Yesterday, we
celebrated, on the Senate floor, the 12,000th vote of my
colleague, Senator Lugar, which is a milestone. I think he was
telling us it places him as --the 13th in the record number of
votes cast. And he is the senior Republican in the United
States Senate. And obviously, Senator Lugar has been a leader
in this field.
And together with Sam Nunn, he sounded the alarm, early on,
that Russia's unsecured nuclear materials posed a major threat.
The Nunn-Lugar initiative was the start of a visionary effort
to dismantle excess weapons and secure dangerous materials. It
sparked long-term cooperation with Russia that has paid major
dividends for national and international security, alike. We
need more of that kind of vision now to rebuild relations with
Russia, and we actually need to continue to see that task to
its completion.
Russia and the United States ushered in the Nuclear Age
together. And now, together, America and Russia bear a special
responsibility to dramatically reduce our arsenals. We have to
make a serious joint effort to move the world in the direction
of zero nuclear weapons, with recognition that, while the
ultimate goal remains distant and complicated, every prudent
step that we take to move in that direction makes us safer. In
fact, America and Russia can accomplish a great deal together
on arms control right now. We need to reach agreement on a
legally binding successor to the START treaty, and President
Obama has committed to pursuing these negotiations with the
intensity that they deserve. With START set to expire in
December, we need to make it a priority to strike a deal, or at
least construct a bridge, before we lose the verification
regime that has been vital to maintaining each country's
understanding of the other's nuclear-force posture.
I'm convinced that we can go well below the levels
established by the Moscow Treaty. We should personally--I
think, personally, we should set a near-term goal of no more
than 1,000 operationally deployed warheads, and I'm confident
that this can be done in a way that increases our national
security rather than diminishes it. Obviously, we have to
pursue such a goal in close consultation with our allies and
our military, but that level, in my view, is more than enough
to deter aggression.
Vital to our efforts toward a nuclear-free world is a
greater effort from Russia to prevent a nuclear-armed Iran. The
President is right to open the door to direct engagement with
Iran, but it's imperative that we back a strategy of engagement
with a commitment to more effective multilateral sanctions if
negotiations prove incapable of bringing progress. To do this
effectively, we need Russia to be part of that process.
We must also think carefully about missile defense. I have
serious reservations regarding the rapid deployment of a
largely untested missile defense system in Poland and the Czech
Republic, and I intend for this committee to examine that
policy closely.
Many Russian leaders see these missile defense sites as
somehow directed at Russia, at them. In fact, they are not.
But, Russia can minimize our need for missile defense in Europe
by helping to convince Iran to change its nuclear and missile
policies. And both Russia and the United States could put more
effort into jointly developing an effective defense against
medium- and intermediate-range missiles.
Our former colleagues in the Senate, Gary Hart and Chuck
Hagel, are the coauthors of an insightful new report from the
Commission on U.S. Policy Towards Russia that explores, in
depth, many of these same avenues for greater cooperation. This
report warrants serious consideration as we look for the way
forward with Russia.
Of course, we are going to continue to have some
differences. Russia's neighbors have a right to choose their
own destinies, and America and the world community will
continue their support for sovereignty and for self-
determination. Georgia has a right to its territorial
integrity. I visited Georgia, just last December, and I shared
the concern of many over the failure to fully implement the
cease-fire agreement, as well as the continued lack of access
for international monitors in South Ossetia and Abkhazia.
Russia, in my judgment, was wrong to manipulate the flow of
energy to Ukraine for political purposes, and we should support
Ukraine's democratically elected government. We also have
genuine concerns about Russia's troubling backsliding on
democracy, human rights, and the rule of law.
As we consider the prospects for a new era in relations, we
need to understand the dynamics that are at work in Russia.
This includes Russia's politics and its economy, particularly
the impact of the steep drop in the price of oil, the decline
in Russia's foreign exchange reserves, and the 67-percent
decline in Russia's stock market. I'm eager to hear the
witnesses' thoughts on how those events are going to affect
Russian foreign policy and our prospects for better engagement.
Constructive relations and greater mutual confidence with
Russia are undoubtedly a challenge, but the mutual benefits of
doing this are clear, and they are compelling. In the 20th
century, America and the Soviet Union expended unbelievable
levels of resources, incalculable resources, and we expended
them on our rivalry. The days when Moscow stood on the opposite
site of our every single global crisis have passed. Now we need
to enlist Moscow to be on the same side, whenever possible, in
meeting the challenges of this new century.
We have three distinguished panelists today. Stephen
Sestanovich negotiated directly with the Kremlin as ambassador
at large and adviser to the Secretary of State during the
Clinton administration. Andrew Kuchins, director of the Russia
and Eurasia Program at CSIS, is the author of an interesting
and timely report entitled ``Pressing the Reset Button on U.S.-
Russian Relations.'' And Ariel Cohen is a senior research
fellow at The Heritage Foundation, and we look forward to the
testimony from each of you. Thank you for being with us today.
Before you testify, let me turn to my distinguished
colleague, Senator Lugar.
OPENING STATEMENT OF HON. RICHARD G. LUGAR,
U.S. SENATOR FROM INDIANA
Senator Lugar. Well, I join you, Mr. Chairman, in welcoming
our distinguished witnesses. It's good to see each one of you
here.
Russia represents significant challenges, as well as
opportunities, for the Obama administration. Moscow is at the
intersection of many of the most important foreign policy
issues facing the United States. We have common interests on a
number of economic and security issues, including arms control,
nonproliferation, antiterrorism, and global economic recovery.
Russia is experiencing severe pain from the global economic
downturn that would seem to increase incentives to cooperate on
a range of issues. The ruble has plunged 50 percent against the
dollar, the Moscow stock market has dropped as much as 80
percent at various points amidst a collapse in oil prices.
Although these economic conditions and common interests may
create openings, we should be realistic in assessing the
prospects for cooperation.
Negotiating with Russia will be a far more complex and
difficult proposition than simply appealing for a new
relationship. Russian actions related to Iran, Afghanistan, and
North Korea, for example, have exhibited a reflexive resistance
to United States positions, even when we have substantial
commonality of interests. Russia's repeated use of energy
exports as a political weapon, and its treatment of Ukraine and
Georgia, demonstrate an aggressiveness that has made
comprehensive negotiations on regional problems impractical.
In this context, we should avoid ratcheting between
excessive expectations and severe disappointment. Rather, we
should recognize that United States-Russian relations are
likely to be strained for some time. We should consider,
carefully, what initiatives can be advanced in such an
environment.
Our most time-sensitive agenda item with Russia is the
preservation of the START treaty. In December 5, the
verification regime that undergirds the START treaty will
expire. The Moscow Treaty, which reduces deployed warheads to
1,700, would also be a casualty, because it utilizes the START
process. In other words, the foundation of the United States-
Russian strategic relationship is at risk of collapsing in less
than 9 months.
The Bush administration made little progress on this issue
prior to its departure. I know that President Obama and Vice
President Biden understand the urgency of the problem. However,
everyone involved should recognize that we are dealing with a
timeline that leaves little room for error or delay. I support
efforts to negotiate lower United States and Russian nuclear
weapons levels, to reduce Russia's tactical nuclear weapon
stockpile, to cooperate on missile defense, and solve the
conventional weapons stalemate. But, with the December 5
deadline looming, we should carefully set priorities.
Solidifying the START verification regime must be the primary
focus. Both sides would benefit from a legally binding solution
in which the common commitment to the START and Moscow treaties
is retained.
Reaching common ground on START would provide a foundation
for continuing United States-Russian cooperation on reducing
the nuclear, chemical, and biological dangers facing the world.
Next year, nearly every nation will participate in a review
conference on the Non-Proliferation Treaty. The NPT is under
stress from the actions of Iran and North Korea and the
concerns of neighboring countries. The treaty is also
contending with the complications that arise out of an
expansion of global interests in nuclear power. The national
security of both Russia and the United States will suffer if
the world experiences a breakdown of the nonproliferation
regime.
Before the review conference, Moscow and Washington should
strive to achieve bilateral arms-control progress, as well as
strengthen cooperation on nonproliferation issues. One
important element of such cooperation is the establishment of
an International Nuclear Fuel Bank. A nuclear fuel bank would
help keep nuclear power safe, prevent proliferation, and solve
energy problems by providing nuclear fuel and fuel services at
reasonable prices to those countries that forgo enrichment and
reprocessing. Unless the United States and Russia provide
strong leadership in this area, the coming surge in demand for
nuclear power will lead more and more nations to seek their own
enrichment facilities, and that would pose unacceptable risk to
the security of both Russia and the United States.
If nonnuclear-weapon states opt for major nuclear power
programs and their own fuel-making capabilities, it would
produce enough nuclear material for tens of thousands of
nuclear weapons every year. This could generate a raft of new
nuclear-weapon states, exponentially increase the threat of
nuclear terrorism, and provoke highly destabilizing arms races.
The Obama administration must plan and carry out a
realistic strategy that promotes United States interests while
engaging with Russia in areas where we have common objectives.
I look forward to the insights of our witnesses on the
prospects for engagement with Russia and the priorities that we
should be pursuing.
And I thank the Chair and--very well, I'm advised that the
Chair would like for me to recognize Steve Sestanovich as our
opening witness, and I so do.
STATEMENT OF HON. STEPHEN R. SESTANOVICH, SENIOR FELLOW,
COUNCIL ON FOREIGN RELATIONS, WASHINGTON, DC
Ambassador Sestanovich. Thank you very much, Senator Lugar,
other members of the committee. I appreciate the opportunity to
discuss American policy toward Russia with you at this very
timely hearing.
I've prepared somewhat fuller remarks that I hope can be
entered into the record.
Senator Lugar [presiding]. They will be entered in the
record in full.
Ambassador Sestanovich. Of all the world's major states,
Russia is the only one whose relations with the United States
have deteriorated in the past 5 years. The worsening of
relations--of Russian-American relations has involved real
clashes of policy and perspective and angry rhetoric on both
sides.
Against this backdrop, the Obama administration's aim to
press the reset button--we're probably going to hear a lot of
that tired metaphor today--is welcome and needed. But, the
question is, Are we talking about a smooth process of
improvement, or a contentious one?
There are some reasons to hope that, despite years of
testiness, the resetting of relations between Russia--between
Moscow and Washington can be a relatively smooth process.
Leaders and policymakers in both countries seem, in general
terms, to want more productive relations. They regularly speak,
as you have, Senator Lugar, of a number of common interests,
from nuclear nonproliferation to counterterrorism to stable
international energy markets that ought to make it possible for
Russia and the United States to cooperate. Today, not
surprisingly, economic growth and recovery should be added to
this list. As Senator Kerry noted, no problem ranks higher on
the to-do list in both Moscow and Washington.
If President Obama and President Medvedev want to show that
Russian-American relations are rebooting nicely, it will be
easy for them to do so when they meet on the margins of the G-
20 summit in London in 2 weeks. They should, at that time, be
able to announce the prompt opening of talks on the extension
of the START I treaty, or, even better, on a successor
agreement that further reduces strategic arsenals. They could
also recommit themselves to practical measures to discourage
Iran from acquiring nuclear weapons, including diplomatic and
military cooperation, and, if the threat requires, missile
defense. They might further renew their determination to
support a successful counterinsurgency effort in Afghanistan
and encourage other states in the region and beyond to join
them. They can announce an agenda of steps to address the
concerns of both sides on issues of European security,
including strengthening the OSCE, reviving the CFE Treaty, and
consultations on Russia's proposals to enhance Europe's
security architecture. This is a very substantial, but hardly
exhaustive, list. It's not difficult to spell out comparable
measures in other areas, whether it's trade and investment,
energy cooperation, climate change, or the work of the NATO-
Russia Council.
Members of Congress, I might add, can do their part to
support the two Presidents. As you noted, Mr. Chairman, the
Congress has been a source of leadership in this area in the
past, especially in the visionary threat-reduction initiative
sponsored by Senators Lugar and Nunn.
Congress can, for one thing, indicate its reference--
readiness to graduate Russia and other states of the former
Soviet Union from the provisions of the Jackson-Vanik amendment
as soon as possible and without further conditions.
Congress can also make it clear that it's ready to support
the so-called 123 Agreement on civil nuclear cooperation that
the Bush administration sent up to the Hill last summer, only
to withdraw it when Russia invaded Georgia.
Mr. Chairman, the steps I've described for improving
Russian-American relations would amount to a textbook reset.
But, what if the process isn't so smooth? Perhaps, instead of
merely switching things off and starting over, we have to
inquire into the relationship's deeper underlying problems.
Some thoughtful observers argue that we need to pay closer
attention to the way in which Russia defines its interests, and
I completely agree. Moscow's actions and statements over the
past several months have given us a feel for its thinking and
suggests that its approach to security may actually complicate
the rebooting of Russian-American relations.
Consider, for example, the criticism of President Obama's
suggestion that if the problem posed by Iranian nuclear and
missile programs went away, so, too, would the need for
American radars and interceptors to counter them. Or, consider
the fact that, for 4 years, Russian policy has called for the
curtailment of Western access to Central Asian airfields to
transport men and materiel to Afghanistan, despite the negative
impact this would have on our counterinsurgency campaign in
that country.
Other Russian policies demonstrate the same approach to
security. We see it in the regularly repeated demand that
Ukraine give up ownership of gas pipelines on its territory. It
shows up in the suggestion that Europe needs new security
institutions to limit NATO's ability to carry out the agreed
policies of its members.
What ties all these policies together, from missile defense
to energy to Afghanistan, is a seeming conviction that Russian
interests and those of other states, especially the U.S. and
its European allies, are inevitably in conflict. Russian
security continues to be viewed in unusually prickly zero-sum
terms. The result is that real cooperation with other states is
often considered risky and undesirable, even dangerous. This
Russian outlook does not mean that a new American approach
cannot succeed, and it certainly does not mean that we should
not make the effort.
As both Senator Kerry and Senator Lugar have noted, our
interest in expanded cooperation with Russia is real, and it
calls for sustained diplomacy to create a more productive
relationship. Yet, the mismatch between our strategic outlook
and Russia's does have implications for the way we think about
this effort. Our goal is not simply the mundane mutual
accommodation of interests that our diplomats pursue on a daily
basis with other states. Alone among the great powers, Russia
presents us with the challenge of trying to get its leaders to
conceive of their interests in a fundamentally different, less
confrontational way.
Expanded cooperation with Russia is possible even within
its current conception of its interests, but far more would be
possible if its leaders viewed security in ways more congruent
with the outlook of other European states.
Is such a transformation possible? Of course. Nothing is
more contrary to historical experience, or, for that matter,
more insulting to Russia, than to suggest that it alone among
the world's major states must remain permanently hostage to
outdated, counterproductive conceptions of its interests,
goals, and identity.
American policy, then, should pursue practical
opportunities for cooperation with Russia. That means advancing
its interests into multilateral institutions of international
life, where it's ready to contribute to them. Right now,
Russia's accession to the World Trade Organization is the most
important unexploited opportunity.
We should do better in expanding bilateral cooperation, as
well. Here, as Senators have noted, arms-limitation talks offer
significant possibilities.
And we should not miss openings to address the connection
between the country's internal transformation and its play in
the world. On this point, there's no more tantalizing
invitation than President Medvedev's observation that whether
Russia enjoys respect abroad depends on whether it observes the
rule of law at home.
In pursuing these cooperative steps, we should not forget
the larger goal of our engagement with Russia--that is a
relationship not limited to refighting battles of the last
decade or the last century. That reset button remains to be
pushed.
Thank you, Mr. Chairman.
[The prepared statement of Ambassador Sestanovich follows:]
Prepared Statement of Hon. Stephen Sestanovich, Senior Fellow, Council
on Foreign Relations/Columbia University, Washington, DC
Mr. Chairman, I appreciate the opportunity to discuss American
policy toward Russia with you and your colleagues at this very timely
hearing.
Of all the world's major states, Russia is the only one whose
relations with the United States have deteriorated in the past 5 years.
It's not a case, moreover, of what the child development specialists
call a ``failure to thrive''--sickly underperformance without specific
ailments. Nor is the problem simply the result of inattention by
leaders in both Washington and Moscow who have other pressing things to
worry about. The worsening of Russian-American relations has involved
real clashes of policy and perspective--and active involvement by
policymakers on both sides.
Although contemporary scholars of international relations
believe that our time is marked by an absence of fundamental
antagonisms among the great powers, Russian officials are
saying, in effect, that they disagree. For them, security--and
what they insist is an American drive to weaken them--is still
the core problem of Russian-American relations.
In his famous speech in Munich 2 years ago, then-President
Putin also complained that the United States ``imposes itself
on other states, in the economy, in politics, and in the human
rights sphere.'' On another occasion, he compared American
policies to those of the Third Reich.
Here in Washington, Russia's image has suffered very severe
damage as well. Moscow's frictions with its neighbors are
widely seen to reflect neoimperialist aspirations--and are,
yes, sometimes compared to the policies of the Third Reich.
Against this backdrop, the Obama administration's aim to press the
``reset'' button is welcome and needed. Many opportunities are
available for refashioning the relationship in ways that benefit both
countries. But it should probably be said at the outset that neither in
coping with modern gadgetry nor in diplomacy is pressing a ``reset''
button a guarantee of improved performance. In my experience, the
``reset'' button is something you press when you don't really know what
went wrong in the first place--what caused your computer to freeze up,
or your daughter's hair-dryer to shut down, or the lights in part of
your house to go off.
Sometimes, of course, you don't need to understand what your
gadget's problem is in order to fix it. If you're lucky, all it takes
to get a computer running smoothly again is to reboot: Turn it off,
wait a minute, then turn it on again. At other times, however, you may
reset a fuse only to find that it immediately blows again. At that
point, you need an expert who can tell you what the trouble is--and how
big the repair bill is likely to be.
There are some reasons to hope that, despite several years of
testiness, the resetting of relations between Moscow and Washington can
be a relatively smooth process, certainly smoother than many people
expect.
Leaders and policymakers in both countries seem, in general
terms, to want warmer, more productive relations.
They regularly speak of a number of common interests--from
nuclear nonproliferation to counterterrorism to stable
international energy markets--that ought to make it possible
for Russia and the United States to cooperate.
Today, not surprisingly, economic recovery and growth also
make the list of goals that could, and should, unite Russian
and American policy.
If President Obama and President Medvedev want to show that
Russian-American relations are rebooting nicely, it will be easy enough
to do so when they meet on the margins of the G-20 summit in London in
2 weeks.
They should at that time be able to announce the prompt
opening of talks on the extension of the START I treaty--or,
even better, on a successor agreement that further reduces
strategic arsenals.
They could also recommit themselves to practical measures
that will discourage Iran from acquiring nuclear weapons,
including diplomatic and military cooperation--and (if the
threat requires) missile defense.
They might further renew their determination to support a
successful counterinsurgency effort in Afghanistan, and
encourage other states to join them.
They can announce an agenda of steps to address the concerns
of both sides on issues of European security, including
strengthening the OSCE, revival of the CFE Treaty, and
consultations on Russia's proposals to enhance Europe's
``security architecture.''
This is a very substantial but hardly exhaustive list. It's not
difficult to spell out comparable measures in other areas, whether it's
trade and investment, energy cooperation, climate change, or the work
of the NATO-Russia Council.
Members of Congress, I might add, can do their part to support the
two Presidents.
They should, for one thing, indicate their readiness to
graduate Russia and other states of the former Soviet Union
from the provisions of the Jackson-Vanik amendment--as soon as
possible and without further conditions. In the past this
legislation played an extremely honorable and effective role in
strengthening American policy toward the U.S. S.R. It plays no
positive role in our policy toward Russia today.
Congress can also make clear that it is ready to support the
so-called ``123'' Agreement on civil nuclear cooperation that
the Bush administration sent up to the Hill last summer, only
to withdraw it when Russia invaded Georgia. The U.S. definitely
needs more tools to provide support for Georgian sovereignty.
Among the instruments available for achieving this goal,
however, the 123 Agreement is not a useful one.
Mr. Chairman, the steps I have described for improving Russian-
American relations would amount to a textbook ``reset.'' But what if
the process isn't so smooth? Perhaps, instead of merely switching
things off and starting over, we actually have to inquire into the
relationship's deeper underlying problems? Some thoughtful observers
argue that we need to pay closer attention to the way in which Russia
views its interests. The Commission on U.S. Policy Toward Russia,
chaired by former Senators Hart and Hagel, made this point just days
ago, and I completely agree with it.
To get a feel for Russian thinking, it's not necessary to explore
the dark recesses of relations with the Bush administration over the
past 8 years. Even in the past few months, Moscow's actions and
statements have provided ample evidence of an approach to security that
is likely to complicate the rebooting of Russian-American relations.
Consider, for example, the Russian response to President
Obama's suggestion that if the problem posed by Iranian nuclear
and missile programs went away, so too would the need for
American radars and interceptors to counter them. For many
Americans, this linkage is no more than a statement of the
obvious--and a constructive, commonsense place to start
discussion. Yet Russian spokesmen, including President Medvedev
himself, have rejected it.
Or consider the use of Central Asian airfields by the United
States and NATO to transport men and materiel to Afghanistan.
For 4 years, Russian policy has called for the curtailment of
such access, despite the negative impact it would have on our
counterinsurgency campaign in that country. It's possible that
President Medvedev did not actually demand that Kyrgyzstan shut
its base at Manas to Western troops before receiving increased
economic assistance. But he did not have to. In deciding to
take this step, the Government of Kyrgyzstan knew that it was
granting an openly articulated goal of Russian foreign policy.
Other Russian policies demonstrate the same approach to
security. We see it in the regularly repeated demand that
Ukraine give up ownership of the gas pipelines on its
territory. It shows up in the suggestion that Europe needs new
security institutions so as to limit NATO's ability to carry
out the policies of its members.
What ties all these policies together--from missile defense to
energy to Afghanistan--is a seeming conviction that Russian interests
and those of other states, especially the U.S. and its European allies,
are inevitably in conflict.
This is why, when Russian officials propose to work with us
on countering a possible missile threat from Iran, their
proposals always involve reliance on Russian radars, usually on
Russian territory.
And it's why, for more than a decade, Russian policy has
sought to block the construction of pipelines that would bring
oil and gas from Central Asia and the Caucasus to international
markets without crossing Russian territory.
For the same reason, Russia has not tried to block the flow
of supplies to Western forces in Afghanistan, except when that
flow leads to closer relations between the United States and
other post-Soviet states.
We saw the same pattern this week when President Medvedev
addressed the Defense Ministry, explaining his proposals for
military reform as a response to the growing threat from NATO.
Russian security, in short, continues to be viewed in unusually
prickly zero-sum terms. The result is that real cooperation with other
states is generally considered risky and undesirable, even dangerous.
This Russian outlook hardly means that a new American approach
cannot succeed. And it certainly does not mean we should not make the
effort. Our interests in expanded cooperation with Russia are real, and
they call for sustained diplomacy to create a more productive
relationship.
Yet the mismatch between our strategic outlook and Russia's does
have implications for the way in which we think about this effort. Our
goal is not simply the mundane mutual accommodation of interests that
our diplomats pursue on a daily basis with other states. Alone among
the great powers, Russia presents us with the challenge of trying to
get it to conceive its interests in a fundamentally different, less
confrontational way.
Some commentators deride this idea, suggesting instead that we can
do all the business we need with Russia as we find it (better this,
they say, than obsessing about the Russia we wish for). And in any
case, they believe, the interests reflected in Russian policy are
largely immutable.
Neither of these propositions is correct. Expanded cooperation with
Russia is possible even within the prevailing conception of its
interests, but far more would be possible if its leaders viewed
security in ways more congruent with the outlook of other European
states. Is such a transformation possible? Of course. Nothing is more
contrary to historical experience--or for that matter, insulting to
Russia--than to suggest that it alone among the world's major states
must remain permanently hostage to outdated, counterproductive
conceptions of its interests, goals, and identity.
American policy, then, should pursue practical opportunities for
cooperation with Russia. That means advancing its integration into the
multilateral institutions of international life where it is ready to
contribute to them. (Right now, Russia's accession to the World Trade
Organization is the most important unexploited opportunity.) We should
do better in expanding bilateral cooperation as well. (Here, arms
limitation talks offer significant possibilities.) And, particularly
where Russia's leaders have themselves acknowledged the legitimacy of
the enterprise, we should not miss openings to address the connection
between the country's internal transformation and its place in the
world. (On this point, there is no more tantalizing invitation than
President Medvedev's observation that whether Russia enjoys respect
abroad depends on whether it observes the rule of law at home.)
In pursuing these cooperative steps, we should not forget the
larger goal of our engagement with Russia--a relationship not limited
to refighting battles of the last decade, or of the last century. That
``reset'' button remains to be pushed.
Thank you, Mr. Chairman.
The Chairman [presiding]. Thank you very much, Mr.
Sestanovich, I appreciate it.
Mr. Cohen, you can be next. If I could ask you, also, the
next two witnesses, to do as Mr. Sestanovich with a good
summary like that; your full testimonies will be placed in the
record as if stated in full, but that'll give the committee
more time to engage, and we appreciate it.
Mr. Cohen.
STATEMENT OF ARIEL COHEN, SENIOR RESEARCH FELLOW, RUSSIAN AND
EURASIAN STUDIES AND INTERNATIONAL ENERGY SECURITY, THE
HERITAGE FOUNDATION, WASHINGTON, DC
Mr. Cohen. Thank you, Mr. Chairman, Senator Lugar. You've
contributed so much for the improvement of United States-
Russian relations. Unfortunately, they're not in best shape
today. Thank you, Senators, I am delighted to be here and will
request that my full remarks will be entered into the record. I
would also to append a forthcoming report coming out this week
that The Heritage Foundation is publishing, ``Russia and
Eurasia: A Realistic Policy Agenda for the Obama
Administration.''
President Obama expressed a desire to constructively engage
Russia, and these concerns, of course, are valid. However, when
we are looking at Russia's behavior over the last several
years, especially with regards to its neighbors and the
rhetoric that, frankly, is quite disconcerting with regards to
the revision of the global security and economic architecture,
questions arise what Russia is really trying to accomplish.
Russia's opposition to missile defense in Central Europe, only
10 interceptors, Russia's efforts, together with China, to push
United States bases out of Central Asia; 2005 they accomplished
our eviction from the K2 base in Uzbekistan, and this year the
announcement about the Manas base in Kyrgyzstan.
Russia is using European increased dependence on gas,
natural gas, and energy in general, as a political tool. It's
not just Ukraine, Mr. Chairman, it's also a country as
significant as Germany.
After the Georgian war, Russia does not respect the terms
of the Medvedev-Sarkozy agreement and is planting five bases,
military bases, in Abkhazia and South Ossetia, three in
Abkhazia, the naval base in Ochamchire, the Bombora air base
near Gudauta, and alpine Special Forces base in the Kodori
Gorge, and two bases in South Ossetia.
NATO's desire to cooperate with Russia on bringing under
control the Iranian nuclear program is understandable; however,
Russia not only supplied a civilian reactor to Iran, the
Bushehr reactor, it also trained hundreds of scientists and
engineers from Russia to work in dual-use technology fields,
both nuclear and ballistic missiles. Russia has multibillion-
dollar interests in Iran, and is using Iran as a battering ram
for its interests in the Middle East.
The relationship between Russian and Iran is strong, and
unless the great bargain is really achieved between our
countries and--when I--I'm talking about the ``great bargain,''
I would caution that giving up the missile defense in Europe is
probably a price too high to pay to enact it, but, overall, I
am pessimistic in looking at the chances of achieving Russia's
disengagement from Iran or getting Russia on our side.
So, if we're looking at the complexity of Russian foreign
policy, including the renewed patrols of Russian strategic
bombers along the Atlantic and Arctic coastlines and into the
Caribbean, when we're hearing the announcement that Russia may
renew its basing for the strategic bombers in Venezuela and
Cuba, the question arises, What can we accomplish?
Looking internally in Russia, what President Medvedev
himself called ``legal nihilism'' is dangerous for the flow of
investment, both foreign and domestic, for protection of
property rights and for defense of human rights. The notorious
cases of murder of journalists such as Anna Politkovskaya, a
murder in which two of the accused co-conspirators were
acquitted by a Russian court, by a jury, the murder in which
the people who ordered the murder, the killing, and the
triggermen were not even put on trial, the killing of human
rights attorney Markelov--and the list is long. One of the more
media-exposed cases, a case of the two YUKOS trials, the YUKOS
company was raided and dismantled by the law enforcement in
2003-2004, its assets were auctioned off at prices under the
going market prices, and today the second trial in which the
partners in YUKOS, Khodorkovsky and Lebedev, are facing very
long sentences that effectively may be the life sentences,
whereas justice is not applied equally to other oligarchs who
may have been involved in alleged crimes as bad or worse than
these two.
So, the Obama administration is facing tough policy
changes. What can it do? It can certainly explore the ways to
cooperate with Russia on Afghanistan. The threat of the Taliban
is significant for Russia's allies in Central Asia. Taliban was
the only country that recognized the secessionist Chechen
regime in Chechnya. Russia would benefit from cooperation with
NATO on Afghanistan, and Russia would benefit, in cooperation
with us, to prevent Iran from becoming a nuclear power on its
borders.
However, on some of other issues that were mentioned here,
such as the 123 Agreement, we need reciprocity from Russia. We
need to stop Russian cooperation on Iran. We would like to see
adequate liability protection for United States companies doing
business in Russia, and provision of two-way market access to
American companies in the Russian nuclear market.
The Obama administration should communicate in the current
negotiations that Russia's close ties with Venezuela, Cuba,
Iran, and even Hamas and Hezbollah, are counterproductive.
Russian embrace of Iran and Syria--I did not mention that
Russia is planning to put two naval bases in Syria, is
considering return to an anchorage in Libya, and is considering
replanting its base, as it used to have during the cold war, at
the Sokotra Island, near the entrance to the strategic Babel-
Mandeb Strait between the Red Sea and the Indian Ocean.
So, when we're talking about pushing the reset button, we
have to undertake a full assessment of our goals, vis-a-vis
Russia, and formulate the policy, just as in the nuclear field
we need to undertake the reassessment of our nuclear policy and
targets. Unfortunately, this reassessment was not taken before
the rhetoric about pushing the reset button began.
Furthermore, we need to make clear to Russia that a new
military venture against Georgia will not be tolerated. We need
to boost our presence in the Arctic, because the Russians are
talking about territorial claims in the Arctic the size of
almost all of Western Europe, and the Arctic is very rich with
hydrocarbons and strategic mineral reserves
To conclude, Russia is, and will remain, one of the most
significant foreign policy challenges for the Obama
administration for years to come. Despite the recent toned-down
rhetoric stemming from the economic downturn--and the economic
downturn in Russia, relatively speaking, is worse than here--
there are rumblings in the Russian military, now, that the
Medvedev-Putin administration is trying to calm down by talking
about a massive bailout, a rearmament package that'll kick in,
in 2011. But, the global--the importance of Russian policy in
the global Obama agenda needs to be high and needs to be given
a lot of attention. Unfortunately, the key officials to deal
with that have not been nominated yet.
Last, we should not forgo a core American foreign policy
objective with regards to Russia--promoting democracy, good
governance, transparency, and the rule of law. History has
shown that the most dangerous times are ones when new powers--
or, in this case, a resurgent one--is attempting to challenge
the status quo. The United States and our allies must remain
vigilant and willing to defend freedom and prevent Russia from
engendering shifts in the global power structures detrimental
to our national security interests.
Thank you.
[The prepared statement of Mr. Cohen follows:]
Prepared Statement of Ariel Cohen, Ph.D., Senior Research Fellow,
Russian and Eurasian Studies and International Energy Security, The
Heritage Foundation, Washington, DC
how the obama administration should engage russia
``Barack Obama and Joe Biden will address the challenge posed by an
increasingly autocratic and bellicose Russia by pursuing a new,
comprehensive strategy that advances American national interests
without compromising our enduring principles.''
--``Meeting the Challenges of a Resurgent Russia'' http://
www.barackobama.com.
President Barack Obama has expressed a desire to constructively
engage Russia and has also expressed concerns over Russia's
increasingly truculent behavior and the threat it poses to the current
international system. These concerns are valid and the threat of a
resurgent Russia is palpable.\1\ Moscow's efforts at carving out a
``sphere of privileged interests'' in Eurasia and rewrite the rules of
European security have negative implications for United States-Russia
relations, international security, the autonomy of the independent
former Soviet states, and Europe's independence.
Despite these circumstances, the Obama administration seems to be
rushing ahead with a ``carrots-and-cakes'' approach to the Kremlin,
judging by Vice President Joe Biden's recent speech at the annual
Munich international security conference. In this speech, the Vice
President outlined the Obama administration's foreign policy vision for
the first time on the world stage and suggested that America push ``the
reset button'' on relations with Russia.\2\ Notably absent from this
speech was any mention of any recent events in Eurasia.
While in Moscow, U.S. Under Secretary of State for Political
Affairs William Burns mirrored this approach. Burns stated that the
U.S. was willing to review ``the pace of development'' of its missile
defense shield in Europe in exchange for Russian cooperation on
dissuading Iran from pursuing a nuclear weapon, and downplayed the
importance of a U.S. air base in Kyrgyzstan from which the U.S.
military has just received an eviction notice.\3\ Other diplomatic
efforts to thaw United States-Russian relations are underway as well.
According to The New York Times, President Obama sent a ``secret,''
hand-delivered letter to President Dmitry Medvedev 1 month ago. The
letter reportedly suggests that if Russia cooperated with the United
States in preventing Iran from developing long-range nuclear-missile
capabilities, the need for a new missile defense system in Europe would
be eliminated--a quid pro quo that President Obama has denied. The
letter proposes a ``united front'' to achieve this goal.\4\ Responding
to the letter, Medvedev appeared to reject the offer and stated that
the Kremlin was ``working very closely with our U.S. colleagues on the
issue of Iran's nuclear program,'' but not in the context of the new
missile defense system in Europe. He stated that ``no one links these
issues to any exchange, especially on the Iran issue.'' Nevertheless,
Medvedev welcomed the overture as a positive signal from the Obama
administration.\5\
Secretary of State Hillary Clinton met with Sergei Lavrov, Russia's
Foreign Minister, in Geneva on March 6, following a gathering of NATO
Foreign Ministers in Brussels.\6\ As a token, Secretary Clinton brought
a yellow box with a button and the words ``reset'' on both sides in
English and Russian. Apparently, the State Department got the Russian
word for ``reset'' wrong and instead it said ``overload.'' This is
highly symbolic, as haste and incompetence in foreign affairs are the
enemies of wisdom, or as the Russian proverb goes, ``Measure seven
times before cutting.''
President Obama is also likely to meet President Medvedev in London
at the G-20 summit in April.\7\ This meeting will build on the progress
made in Geneva and on other initiatives such as those in the secret
letter. These meetings will also occur in a context where both the
Obama administration and Russia want a new legally binding treaty for
limiting strategic nuclear arms. Ostensibly, this new treaty will be
designed to replace the 1991 Strategic Arms Reduction Treaty
(START).\8\ START is scheduled to expire late this year, unless it is
extended, which the Obama administration sees as problematic.
Russian media leaks seem to reciprocate American overtures and
suggest that the Kremlin may not deploy its Iskander short-range
missiles in Kaliningrad; various speeches and comments by President
Medvedev, and Prime Minister Vladimir Putin's statements in Davos on
January 28 that ``great powers need to cooperate to find an exit from
the current global economic crisis'' may be signals that Moscow is
exploring ways to improve relations with Washington, albeit driven by
the plummeting economy at home.\9\
While an improvement in United States-Russian relations is
certainly desirable, haste is ill advised for the Obama administration,
which has not yet announced its key officials concerning Russia, nor
conducted a comprehensive assessment of United States-Russian
relations. Such an improvement cannot come at the expense of defending
the U.S. and our allies from the threat of Iranian missiles; the
independence and sovereignty of countries in the region; or the
acceptance of a purported Russian sphere of influence. Foremost, the
Obama administration must not allow Moscow to rewrite the geopolitical
map of Europe or to pocket the gains that it has recently made in
Georgia, including expanding and building military bases on Georgian
territory and evicting the U.S. from Kyrgyzstan.
Privileged Sphere of Influence
Since the watershed war with Georgia last August, Russia has been
on the offensive across Eurasia and has been seeking to reimpose itself
over much of the post-Soviet space. The Kremlin is so concerned with
the expansion of its exclusive sphere of influence that even the severe
economic crisis--which has sent the ruble plunging 50 percent against
the dollar and dropped Moscow stock market capitalization 80 percent--
has not slowed Russia's push into the ``near abroad.''
Currently, Russia has a number of military bases in Europe and
Eurasia. The Russian military recently announced the establishment of
three military bases in the secessionist Abkhazia and is building two
more in South Ossetia: A naval base in Ochamchire; the Bombora air base
near Gudauta; an alpine Special Forces base in the Kodori Gorge; and
the two bases in South Ossetia: In Java; and in the capital
Tskhinvali.\10\ Not only do these deployments violate the spirit and
the letter of the cease-fire\11\ negotiated by French President Nicolas
Sarkozy after the 2008 Russo-Georgian war, but they extend Russia's
power projection capabilities into the Southern Caucasus, threatening
the already precarious strategic position of Georgia and the East-West
energy and transportation corridor of oil and gas pipelines and
railroads from the Caspian Sea to Turkey and Europe.\12\
More recently, Washington received an eviction notice for the U.S.
military from Kurmanbek Bakiyev, President of Kyrgyzstan. With Russian
President Dmitry Medvedev at his side, Bakiyev announced in Moscow last
month that he wants the U.S. to leave Manas Air Base, a key military
cargo hub at the airport of the Kyrgyz capital Bishkek that has been
used by NATO and U.S. troops in Afghanistan since 2001.\13\ With this
move, the Kremlin signaled the West that to gain access to Central
Asia, Western countries must first request permission from Moscow and
pay the Kremlin for transit.
NATO's desire to cooperate with Moscow is understandable in view of
what's going on with Afghanistan and Iran. However, part of the problem
was ``Made in Moscow'': After the ``Yankee Go Home'' announcement by
the Kyrgyz, Moscow offered to use its cargo planes and air space to
resupply Afghanistan. And it is refusing to compromise on Iran. This is
Tony Soprano geopolitics: ``Use my trucks and my garbage dumps--or you
can't do business on my turf.''
Closing Manas Air Base for the U.S. military will complicate
efforts to send up to 30,000 more troops to Afghanistan--a key
objective of the Obama administration. Russia's pressure on the Kyrgyz
government to evict the U.S. from this base raises questions about
long-term strategic intentions of the Moscow leadership, and its
willingness to foster a NATO defeat in Afghanistan.
Russia may mistakenly believe that, together with China and Iran,
it would be able to pick up the pieces in Afghanistan and prevent the
Taliban from extending their influence over allies in Central Asia and
the Caucasus. However, radical Islamists--not America--are the long-
term systemic threat toward the ``soft underbelly'' of Russia's south--
a threat for which Moscow lacks answers.
Russia has taken additional steps to secure its clout from Poland
to the Pacific. It initiated a joint air-and-missile defense system
with Belarus, which may cost billions, and initiated a Collective
Security Treaty Organization's (CSTO) Rapid Reaction Force (RRF),
intended to match the forces of NATO's Rapid Response Force. The CSTO's
RRF not only could be used to fight external enemies, but is likely to
be available to put down ``velvet revolutions'' and quell popular
unrest.\14\ Russia also announced the creation of a $10 billion
stabilization fund for the seven countries which are the members of the
Eurasian Economic Community (EEC), most of which ($7.5 billion) Moscow
will front.\15\ The reason for the spending spree is simple: Money and
weapons consolidate control over allies.
Russia's effort to secure a zone of ``privileged interests'' is
consistent with policies formulated almost two decades ago by Yevgeny
M. Primakov, leader of the Eurasianist School of Foreign Policy, Boris
Yeltsin's spy chief, later a Foreign Minister, and then Prime Minister.
In 1994, under Primakov's direction, the Russian Foreign Intelligence
Service published a report calling for Russian domination of the ``near
abroad''--referring to the newly independent states that emerged from
the rubble of the collapsed Soviet empire.
Since the Iraq war, the Kremlin championed the notion of
``multipolarity,'' in which U.S. influence would be checked by Russia,
China, India, and a swath of authoritarian states. Today, Putin and
Medvedev are calling for a new geopolitical and economic architecture--
not only in Europe but throughout the entire world--based on massive
spheres of influence.
Russia's interests in Iran are commercial and geopolitical and
militate against substantial cooperation or any potential ``grand
bargain.'' The so-called bargain would involve the U.S. delaying or
canceling plans for European missile defense, scaling back relations
with Russia's ``near-abroad'' and overlooking Russia's domestic human
rights situation in exchange for Russian cooperation on preventing Iran
from going nuclear. Any such bargain is doomed to failure.
Russia's commercial interests in Iran are well known and span from
billions in arms sales and sales of nuclear technology to lucrative oil
and gas contracts for Russian companies on- and offshore. Yet, while
profitable, these commercial interests often have a geopolitical angle
as well. While the Kremlin ostensibly seeks to help the West in
stopping Iran from enriching uranium, it also supports Iran's nuclear
program, knowing that sanctions will help to keep Iran in Russia's
commercial sphere of influence. This serves the dual purpose of keeping
the U.S. and its allies preoccupied and preventing Western companies
from helping Iran to send its gas west through the proposed Nabucco gas
pipeline.
Beyond this, Russia sees Iran as a key platform to revive its
regional and international influence and block or challenge U.S.
influence at the same time.\16\ Russia uses Iran as a geopolitical
battering ram or wedge against the U.S. in the gulf region. Therefore,
Russian arms sales to Iran are not only an economic and export issue,
but a geopolitical one. It is necessary to understand that Russia and
Iran favor a strategy of what their leaders call ``multipolarity,''
both in the Middle East and worldwide. Thus, the Kremlin believes that
it is not in Russia's national interest to have a ``pro-Western'' Iran
on its soft underbelly. In addition to these factors, any effort to
enter such an arrangement will demand an excessively high price from
Moscow that will continue to rise; it will also undercut America's
friends and allies.\17\ These factors must be taken into account when
considering any version of a ``grand bargain.''
Global Revisionism
Despite the economic crisis that provided a reality check for
Moscow, Russia is doing its best to continue to pursue a broad, global,
revisionist foreign policy agenda that seeks to undermine what it views
as a U.S.-led international security architecture. Russia's rulers want
to achieve a world order in which Russia, China, Iran, Syria, and
Venezuela will form a counterweight to the United States. Moscow is
doing so despite the dwindling currency reserves and a severe downturn
in its economic performance due to plummeting energy and commodity
prices.\18\
In December 2008, the Russian navy conducted maneuvers in the
Caribbean with Venezuela, while the Russian air force's supersonic
Tupolev TU-160 ``Blackjack'' bombers and the old but reliable TU-95
``Bear'' turboprop bombers flew patrols to Venezuela, as well as close
to U.S. air space in the Pacific and the Arctic.\19\
A top Russian Air Force general recently announced that the Kremlin
is considering a Venezuelan offer to base strategic bombers on a
military airfield on La Orchila island off the coast of Venezuela. The
Russian Government is also considering basing bombers out of Cuban
territory, where there are four or five airfields with 4,000-meter-long
runways. The Air Force official remarked that ``if the two chiefs of
state display such a political will, we are ready to fly there.'' \20\
Russia is also developing the Syrian ports of Tartus and Latakia in
order to manage an expanded Russian naval presence in the
Mediterranean, and may possibly revive an anchorage in Libya and
Yemen.\21\ These are only some examples of how Moscow is implementing
its global agenda. While some of these moves may be mostly symbolic,
combined with a $300 billion military modernization program they signal
a much more aggressive and ambitious Russian global posture. Russia is
also overtly engaging the Hezbollah and Hamas terrorist groups.
If Moscow's vision were to be realized, given the large cast of
state and nonstate ``bad actors'' currently on the international stage,
Russia's notion of ``multipolarity'' would engender an even more
unstable and dangerous world. Additionally, the very process of trying
to force such a transition risks destabilizing the existing
international system and its institutions while offering no viable
alternatives.
Russia's Strategic Energy Agenda
On the energy front alone, the Obama administration will face a
multiplicity of challenges emanating from Moscow. The Bush
administration signed a ``123 Agreement'' on civilian nuclear
cooperation and nonproliferation with Russia in May 2008, before the
war in Georgia. The 123 Agreement, so called because it falls under
section 123 of the U.S. Atomic Energy Act, is necessary to make nuclear
cooperation between the countries possible. The agreement would
facilitate Russia's foray into international nuclear waste management
and reprocessing business by potentially providing Russian access to
U.S. commercial technologies.\22\
The agreement, however, ran into severe congressional opposition:
Representative John Dingell (D-MI), then-chairman of the Energy and
Commerce Committee, announced that, ``Even without Russia's incursion
into Georgia, Russian support for Iranian nuclear and missile programs
alone is enough to call into question the wisdom of committing to a 30-
year agreement to transfer sensitive nuclear technologies and materials
to Russia.''\23\ As the Obama administration is signaling a new thaw in
the relationship, senior Russian officials hope that the administration
will revive the agreement, which could bring billions of dollars to the
lean Russian coffers.\24\
Europe's Dependence on Russian Gas. The Europeans, especially the
Germans, are concerned with carbon emission reductions, while
downplaying nuclear energy and coal as alternative sources of energy to
natural gas. Russia is the primary source of Europe's gas habit. Thus,
an environmental concern becomes a major geopolitical liability.
Bulgaria, Slovakia, and Finland depend on Russian gas for up to 100
percent of their imports, and are not pursuing alternatives, such as
liquefied natural gas (LNG). Germany depends on Russian gas for 40
percent of its consumption, a share that is set to increase to 60
percent by 2020.
Russia strives to dominate Europe, particularly Eastern and Central
Europe, including Germany, through its quasi-monopolistic gas supply
and its significant share of the oil market and of other strategic
resources. Russia controls a network of strategically important
pipelines and is attempting to extend it by building the Nord Stream
pipeline along the bottom of the Baltic Sea to Germany; the South
Stream pipeline across the length of the Black Sea; and even control
gas pipelines from North Africa to Europe.
Russia has shown a pattern of using revenues from its energy
exports to fuel its strategic and foreign policy agendas. It grants
selective access to Russian energy resources to European companies as a
quid pro quo for political cooperation and government lobbying on the
Kremlin's behalf. It has selectively hired prominent European
politicians, such as the former German Chancellor Gerhard Schroeder and
former Finnish Prime Minister Paavo Lipponen, to promote Russian
interests and energy deals and has offered positions and lucrative
business deals to other European political heavyweights, such as the
former Italian Prime Minister Romano Prodi.
Russian energy giant Gazprom has been on a shopping spree,
acquiring European energy assets. Europe is projected to be dependent
on Russia for over 60 percent of its gas consumption by 2030, with some
countries already 100 percent dependent on Gazprom.\25\ Russia has
shown a willingness to use this dependency and its energy influence as
a tool of foreign policy, shutting down or threatening to shut down the
flow of gas to countries perceived to be acting against Moscow's
interest, as in the cases of Ukraine, Georgia, and Azerbaijan.
Russia is in the process of creating an OPEC-style gas cartel with
Iran, Qatar, and other leading gas producers, to be headquartered in
Moscow. This cartel would allow Moscow and Tehran to dictate pricing
policy, weigh in on new projects, and oppose any new pipelines they
want. This may bring about even greater domination of Europe's gas
supply than they currently enjoy, and eventually, domination of the
global LNG markets as well.\26\ Any EU dependence on such a cartel will
diminish its ability to support gas-exporting countries whose pipelines
bypass Russia, will challenge EU energy liberalization and gas
deregulation policies, and may have dire foreign policy consequences.
The U.S. certainly should explore all available diplomatic avenues
to curb Russian anti-American policies, yet the new administration must
be prepared for the contingency that the United States may have no
choice but to counter Russian revisionism through disincentives, rather
than limiting itself to persuading the Kremlin to embrace the
international system.
The Rule of Law: Backsliding to ``Legal Nihilism'' \27\
The Obama administration should not neglect the deterioration of
the rule of law in Russia, which has been taking place for the past 6
years. The rule of law is necessary to foreign and domestic investment
in Russia; to protect the rights of investors, including property
rights; and to facilitate the development of civil society and human
rights. Russia's track record of the rule of law under the Communist
regime was abysmal, and even before that was problematic at best. Under
President Medvedev, originally a law professor, there will hopefully be
some change for the better.
Under the administration of Boris Yeltsin (1992-1999), the Russian
courts, despite their corrupt practices and lack of judicial
sophistication, slowly but surely were becoming more independent. In
2002-2003, however, a reversal began to take place. Specifically, the
state increasingly used so-called telephone justice--a practice in
which senior officials of the executive branch call upon judges or
their staff, including in the Supreme Court system, and tell them how
to decide cases.\28\ The state also began interfering more heavily even
in relatively small disputes under the guise of protecting ``paramount
state interests.'' Russia's judges are dependent on the state for their
careers and social benefits, such as appointments, apartments, cars,
vacations, promotions, etc. Thus, the state yet again has brought the
courts under its control and subjugated the judicial branch to the
executive.
State officials have been increasingly involved in hostile
takeovers and appropriations ranging from intellectual property in film
(even cartoons); to lucrative trademarks, such as the Stoli vodka; and
most of all, to companies developing natural resources.\29\
The Watershed. The first Yukos case (2003-2004), in which the most
successful and transparent Russian oil company was taken over, was a
watershed in the downturn of Russian rule of law, and symbolizes its
demise. Yukos was broken up based on trumped-up tax charges, although
many government officials clearly stated that its owner, Mikhail
Khodorkovsky, was perceived as a political threat, because he supported
liberal political parties, Internet projects, and institutions of civil
society, among other reasons.\30\
The persecution of Yukos undermined the notion of justice being
universal because it selectively targeted a politically inconvenient
corporation. Other Russian oligarchs, who were often involved in
unsavory business practices but were politically loyal to the regime,
were not prosecuted.
Yukos property was sold at auction to the state oil company Rosneft
at prices considerably lower than the market value. Rosneft is
controlled by President Putin's confidantes and political allies. It is
hardly accidental that after the Yukos affair, Russian and Western oil
companies came under tremendous pressure from the Russian state, which
used the bureaucracy, such as tax and environmental protection
agencies, to strip them of their property rights. The victims of this
policy included Exxon, Shell, British Petroleum, William Browder's
Hermitage Capital, and the Russian companies Rusneft and Metchel, to
mention a few.
Having targeted Khodorkovsky, the richest and most successful man
in the country, the executive branch demonstrated that it can do
anything to anybody--all the oligarchs and politicians quickly got the
message that, in the words of Star Trek's The Borg, ``Resistance is
futile.''
Today, Khodorkovsky is facing a new trial scheduled to begin around
April 1--around the same time Presidents Obama and Medvedev meet in
London for the first time. The trial is widely believed to be a
political vendetta and to have no legal merit. As the new trial gets
underway, the only hope expressed by Russian experts is that President
Medvedev, who spoke about the ``legal nihilism'' which is plaguing
Russia, may order an impartial trial, or pardon Khodorkovsky
afterward--a long shot indeed.\31\
Journalists Murdered. Unfortunately, President Medvedev seems not
to be excessively concerned about the October 2006 murder of crusading
journalist Anna Politkovskaya, whose killers were acquitted by a Moscow
jury this past February.\32\ Moreover, the prosecutors never presented
the court with the names of those suspected of ordering her murder, nor
that of the suspected gunman, while an internal security service
colonel closely connected to the conspiracy was never put on trial for
her murder.
Nor has Medvedev pressed to find the killers of human rights lawyer
Stanislav Markelov, who was gunned down a stone's throw from the
Kremlin together with another journalist, Anastasia Baburova, this past
February.\33\
Nothing was done to solve the murders of other journalists,
including defenestration of Kommersant Daily's military correspondent
Ivan Safronov, the poisoning of Yuri Shchekochikhin, Deputy Editor of
Novaya Gazeta,\34\ where Politkovskaya and Baburova worked, or the
fatal 2004 shooting of Paul Klebnikov, an American of Russian descent
who was editor in chief of Russian Forbes.\35\ It took an intervention
by Mikhail Gorbachev to stop, at least for now, threats against Yulia
Latynina, a brave writer and investigative journalist. Violations of
Russian law and constitution tragically continue, despite all the talk
of restoring legal norms and fighting corruption. No progress was
reported in the mysterious poisoning. No progress was reported in the
Russian cooperation over the mysterious assassination of Alexander
Litvinenko, a Russian former secret service officer poisoned in the
United Kingdom with the help of the radioactive element polonium. It is
still unclear who authorized, ordered, and supervised this
assassination. In fact, the suspected assassin is running for the mayor
of the Russian Olympic town of Sochi.\36\
Yet, without a fundamental legal reform, a fight against
corruption, and return to judiciary independence, Russia will linger at
the bottom of the Transparency International Corruption Index, and The
Heritage Foundation's Index of Economic Freedom.\37\ If Russia does not
return to internationally recognized legal practices, investment
inflows are likely to slow down, and capital will continue to flee.
According to a recent study, the Russian courts acquit 1-2 percent of
the accused, whereas, for comparison, even under the Soviet dictator
Joseph Stalin, Soviet courts acquitted 10-12 percent of those accused,
and in Europe, the acquittal rates are 20-40 percent. This is hardly a
picture of the rule of law.\38\
Russia Policy for the Obama Administration
To meet today's challenges and preserve the security of Europe and
Eurasia, the Obama administration should conduct a comprehensive
assessment of United States-Russian relations and then prepare a
detailed foreign policy agenda that protects American interests; checks
the growing Russian influence in Europe, the Middle East, and Eurasia;
deters aggression against the U.S., its allies, and its strategic
partners; encourages Russia to adhere to the rule of law at home and
abroad; and to act as a responsible player in the international system.
Specifically, the Obama administration should use its political
capital to maintain and expand transatlantic unity by showing
leadership within NATO. Russia is seeking to divide the United States
and its European allies, not only through energy sources, but also by
exploiting existing differences over missile defense, the Iraq war, and
other issues. In its attempt to undermine the global posture of the
U.S. and its allies, the Kremlin offers incentives for European powers
to distance themselves from the United States. Germany, with its
growing dependence on Russian natural gas and its opposition to further
NATO enlargement and missile defense deployment in Central Europe is a
good example. Essentially, in order for Russia to successfully carry
out its foreign policy agenda it needs to delay and thwart any strong,
unified energy-policy response from the United States and its allies.
Moscow is seeking to gain power and influence without being countered
by any significant challenge. The National Security Council and the
U.S. State Department should develop a mechanism for regular
consultation with our allies with regards to Russia, with coordinated
initiatives toward regional conflicts, institutional enlargement,
conventional weapons control, and energy policy.\39\
The Obama administration should refrain from resubmitting the 123
nuclear agreement with Russia for congressional approval until Russia
meets the following three conditions:
(1) Russia discontinues its support of Iran's military nuclear
energy program and provides full disclosure. Indeed, it is Russian
nuclear fuel that undermines Iran's claim that it needs uranium
enrichment. Russia must discontinue any efforts that advance Iran's
heavy-water-reactor program, enrichment activities, spent-fuel
reprocessing programs, missile technology transfer, or engineer and
scientist training for nuclear and missile technology. Russia must
disclose its past activities in support of the Iranian program, as well
as what it knows about any third party assistance. Russia should work
with the United States and other nations to compel Iran to discontinue
any fuel enrichment or spent-fuel reprocessing, which would give Iran
access to bomb-grade material. The U.S. should use the prospect of the
123 Agreement as an incentive to halt Russia's interactions with Iran
on nuclear issues.\40\
(2) The Obama administration through the Office of the United
States Trade Representative should also request that Russia provide
adequate liability protection for U.S. companies doing business in
Russia. Even with a 123 Agreement in place, U.S. companies would likely
forgo commercial activities in Russia due to a lack of liability
protection. Indeed, many countries use the lack of liability protection
for U.S. companies as a means to protect their domestic nuclear
industry from U.S. competition.\41\
(3) The U.S., through the Office of the United States Trade
Representative, should demand that Russia provide two-way market access
to American companies. This agreement should not be simply an avenue to
bring Russian goods and services to the U.S. market; it is equally
important that U.S. companies are allowed to compete for business in
Russia. While Russian nuclear technology is second to none, foreign
competition will assure that the highest quality standards are
maintained throughout the country.\42\
The Obama administration, through the National Security Council and
the U.S. State Department and Departments of Energy, should work with
American allies and partners to diminish dependence on Russian energy
and shore up the East-West energy corridor. This is a vital component
of any strategy designed to stem Russian aspirations to neutralize and
``Finlandize'' Europe by weakening its strategic alliance with the
United States. The U.S., under President Obama's leadership, should
encourage its European allies to diversify their sources of energy, to
add LNG and non-Russian-controlled gas from the Caspian, and nuclear
energy and coal, as well as economically viable renewable energy
sources. The U.S. should also encourage Russia to act as a responsible
supplier of energy by opening development of its resources to
competitive bidding by Russian and foreign companies, whether private
or state-owned. Since the U.S. is interested in a level playing field
in the energy and natural resources area, the Obama administration
should offer political support by encouraging European and American
companies' efforts to bring natural gas from the Caspian to Europe.
Washington should also encourage Moscow to decouple access to Russia's
natural resources sectors from the Kremlin's geopolitical agenda in
compliance with the Energy Charter that Russia signed, but did not
ratify.
The Obama administration, through the National Security Council and
the U.S. State Department, should oppose the Kremlin's support of anti-
American state and nonstate actors (Venezuela, Cuba, Iran, Syria,
Hamas, Hezbollah). Russia's revisionist foreign policy agenda has
extended to cultivating de facto alliances and relationships with a
host of regimes and terrorist organizations hostile to the United
States, its allies, and its interests. Even as the United States seeks
Russia's assistance in ending Iran's nuclear program, Moscow is selling
Tehran sophisticated air-defense systems and other modern weapons and
technologies, including dual-use ballistic missile know-how, ostensibly
for civilian space purposes. Russia cannot improve relations with the
United States while maintaining ties with aggressive powers and
terrorists. The Obama administration should advise Russia to distance
itself from the likes of Hugo Chavez, Mahmoud Ahmadinejad, and other
troublemakers with global reach.
Washington should undertake necessary strategic planning before
initiating new strategic nuclear-arms-control negotiations with Russia.
The White House and the Kremlin appear eager to negotiate a new arms
control treaty governing strategic nuclear forces on both sides. But at
this early juncture in the Obama administration, the White House has
not conducted the necessary reviews of the broader national security
strategy, let alone more technical analyses regarding the future
military requirements of the U.S. strategic nuclear force. At the
outset, the Obama administration needs to establish a new policy that
pledges to the American people and U.S. friends and allies that it will
serve to ``protect and defend'' them against strategic attack. The
administration, therefore, should defer negotiations on a new strategic
nuclear arms treaty with Russia until after it has drafted the national
security strategy, the national military strategy, issued a new
targeting directive, and permitted the military to identify and
allocate targets in accordance with the protect-and-defend
strategy.\43\
Further, the Obama administration need not be overly concerned
about the expiration of START. U.S. and Russian strategic nuclear
weapons, specifically those that are operationally deployed, will be
controlled under the 2002 Strategic Offensive Reductions Treaty (SORT,
commonly called the Moscow Treaty for the city where it was signed).
The Moscow Treaty requires both sides to reduce the number of
operationally deployed strategic nuclear warheads to between 1,700 and
2,200. It will not expire until the end of 2012. Thus, there is no
reason for the U.S. and Russia to negotiate a new treaty limiting
strategic nuclear arms against the artificial deadline of START's
expiration. Indeed, it would be unwise to do so because an effective
arms control treaty requires careful planning and preparation.
Washington should maintain missile defense plans for Poland and the
Czech Republic. If a ``grand bargain'' between Moscow and Washington
abandons the third site in Poland and the Czech Republic, it would
compromise American interests, damage relations with important allies
and open up the United States to extortion. Moreover, Russian interests
in Iran militate against such a deal. Nor should the administration
cancel America's ballistic defense program in response to Russian
threats--or in response to recent promises by President Medvedev not to
deploy short-range ballistic missiles to the Belarussian-Polish border
or to the Kaliningrad exclave. To cancel this program as a concession
to the Russians would send a clear signal of American weakness,
encouraging further aggression against Russia's neighbors. Russia must
not come to believe it can succeed in altering U.S. policy through
threats, or it will continue to use these and other destabilizing
gestures more consistently as tools of foreign policy--to the detriment
of American and world security. Backing down on missile defense would
also strengthen the pro-Russian political factions in the German
Foreign Ministry, dominated by Social Democrats, in the German business
community, and elsewhere in Europe. However skeptical some in the Obama
administration may be of the functionality and cost-effectiveness of
the missile-interceptor system, the fact is that this is the only
defense the U.S. and its allies currently have against a potential
Iranian ballistic missile launch, as well as a powerful symbolic
bargaining chip in discussions with Russia. The U.S. should also engage
Russia in discussions on ballistic missile cooperation--without
granting Moscow a veto over missile deployment in Europe.
Washington should support Georgia's and Ukraine's territorial
integrity and sovereignty. Such support should involve the Departments
of State, Defense, Energy, and USAID and be coordinated by the National
Security Council. During the Presidential campaign, Candidate Obama
made multiple laudable statements expressing firm support for Georgia's
territorial integrity, denying the validity of Russia's recognition of
Abkhazia and South Ossetia, and expressing a willingness to extend NATO
Membership Action Plans (MAPs) to Georgia and Ukraine (which were
recently replaced by the Bush administration with Strategic Cooperation
Charters). Likewise, Secretary Clinton's words on her recent visit to
Brussels were encouraging: ``We do not recognize any sphere of
influence on the part of Russia, or their having some kind of veto
power over who can join the EU or who can join NATO.'' Yet there are
lingering doubts whether the U.S. will follow through on its stated
principles of supporting Georgia, especially its NATO aspirations and
defense reform plans.
President Obama should now provide the firm foundation for a policy
devoted to deterring Russia from taking similar action in the future,
for example against Ukraine or Azerbaijan. The Obama administration
should implement the Strategic Cooperation Charters signed with Ukraine
and Georgia on December 19, 2008, and January 9, 2009, respectively. In
negotiations with Russia, the Obama administration should also stress
that the U.S. will not tolerate any foreign adventures in Georgia. If
such admonitions are not made, this may be taken as a de facto green
light for a new conflict.
While there is little chance that Russia will renounce its
recognition of Abkhazia or South Ossetia, the Obama administration
should explore every option for making Russia pay a diplomatic and
economic price for its recent acts of aggression against Georgia's
territorial integrity, sovereignty, and international law. To do
otherwise will only invite Russia to try more of the same in the
future. The White House should rethink the format of the G-8. It should
expand the current G-8 to G-20, in which Russia, China, Brazil, India,
and other major powers participate, while holding future meetings of
the leading industrial democracies in the G-7 format. This will send a
clear signal to Moscow that if it chooses to remove itself from the
boundaries of acceptable behavior in the club of the largest
democracies, it will no longer enjoy the benefits of being part of that
club.
The United States must boost its presence in the Arctic. Russia has
designs on a great part of the Arctic--an area the size of Germany,
France, and Italy combined. Recently, the deputy chairman of the Duma,
the polar explorer Artur Chilingarov, announced that Russia will
control the Northern Sea Route, which is in international waters.\44\
The Arctic has tremendous hydrocarbon and strategic mineral reserves.
Controlled by Moscow, the Arctic would offer Moscow another means of
consolidating Russia's global energy dominance. The United States
should ensure that its interests are respected in the region by
modernizing and expanding its icebreaker fleet, updating its surveys of
strategic resources, and expanding efforts with NATO and other Nordic
states (Canada, Norway, and Denmark, etc.) to develop and coordinate
Arctic policy. As much as the Arctic may seem a distant priority given
the economic and defense challenges facing the Obama administration,
the United States cannot afford to ignore this strategically vital
region.
Finally, The administration should appeal to President Medvedev to
stop what he himself has called law enforcement's ``nightmarish
practices'' toward business; start reforming the legal system; ban the
so-called power ministries (i.e., the secret police and law
enforcement, including the Investigatory Committee of the Ministry of
Internal Affairs) and their leaderships from engaging in expropriations
and extortion; fight corruption in the judiciary and in law
enforcement; and allow enforcement of foreign arbitral awards in
Russia. The Obama administration should also request that President
Medvedev order renewed investigations of the Politkovskaya and the
Markelov cases, and ask for the release of Khodorkovsky from
incarceration through either a fair trial or a Presidential pardon.
While unlikely, these measures, if undertaken, would be a strong signal
to the U.S., to the Western business community, and to the Russian
people, that when it comes to the rule of law, a clean break with the
lawless past is underway, and that Russia may be joining the community
of civilized nations.
Conclusion
Russia is and will remain one of the most significant foreign
policy challenges facing the Obama administration. Despite the recent
toned-down rhetoric stemming from the economic downturn, the Kremlin
needs an ``outside enemy'' to keep its grip on power at home. Yet, this
truculence clashes with Russia's need to fight the financial crisis in
cooperation with major economic powers; attract foreign investment;
switch the engine of its economic growth from natural resources to
knowledge and technology; and ensure steady commodities exports. From
the Kremlin's perspective and due to the democracy deficit in Russia,
the legitimacy and popularity of the current regime necessitates
confrontation with the West, especially with the United States. The
image of an external threat is exploited to gain popular support and
unite the multiethnic and multifaith population of the Russian
Federation around Prime Minister Putin and President Medvedev.
Despite the need to attract investment, the Kremlin is likely to
pursue an antistatus quo foreign policy as long as it views the United
States as weakened or distracted due to the combined effects of the
economic crisis; U.S. involvement in Afghanistan and Iraq; the presence
of the Taliban and al-Qaeda in Pakistan; the need to deal with the
fast-developing prospect of a nuclear-armed Iran; and preoccupation
with the Arab-Israeli conflict.
The Obama administration must raise the profile of Russian,
Eurasian, and Caspian energy on the U.S. foreign policy agenda. Further
failures to stem Russia's revisionist efforts will lead to a
deteriorating security situation in Eurasia and a decline of American
influence in Europe and the Middle East.
With regards to renewed U.S. engagement with Russia and pressing
the ``reset button,'' there is concern that there may be naivete about
what can be accomplished or achieved with Russia. An improvement of
United States-Russia relations is certainly desirable, but it should be
calibrated with concrete Russian actions that support U.S. interests.
If Russia, reconsiders its anti-American stance, the United States
should be prepared to pursue matters of common interest, such as the
recent agreement on military supplies to Afghanistan and the strategic-
weapons-limitations agreement.
Lastly, the Obama administration should not forgo a core American
foreign policy objective with regards to Russia: Promoting democracy,
good governance, and the rule of law. As events have shown in recent
years, the prospects for Russia becoming a law-governed society have in
many ways receded. Yet, the United States has a strong interest in
Russia's eventual transformation into a liberal, free-market, law-
governed democracy. Such a transformation will improve its relations
with the United States, its neighbors and enable Russia to make a more
substantial contribution to the international system.
History has shown that the most dangerous times are the ones when
new powers (or in this case, resurgent ones) attempt to overturn the
status quo. The United States and its allies must remain vigilant and
willing to defend freedom and prevent Russia from engendering shifts in
the global power structure detrimental to U.S. national security
interests.
------------------
\1\ Ariel Cohen, ``The Russian-Georgian War: A Challenge for the
U.S. and the World,'' Heritage Foundation WebMemo No. 2017, August 11,
2008, at http://www.heritage.org; Ariel Cohen and Owen Graham,
``European Security and Russia's Natural Gas Supply Disruption,''
Heritage Foundation WebMemo No. 2194, January 8, 2009, at http://
www.heritage.org; Ariel Cohen, ``U.S.-Russian Relations After Manas: Do
Not Push the Reset Button Yet,'' Heritage Foundation WebMemo No. 2286,
February 10, 2009, at http://www.heritage.org.
\2\ Joseph R. Biden, ``Speech at the 45th Munich Security
Conference,'' February 7, 2009, at http://www.securityconference.de
(February 27, 2009).
\3\ Ross Colvin, ``U.S. May Moderate Shield Plan if Russia Helps on
Iran,'' Reuters, February 13, 2009, at http://uk.reuters.com(February
27, 2009).
\4\ Peter Baker, ``Obama Offered Deal to Russia in Secret Letter,''
The New York Times, March 2, 2009, at http://www.nytimes.com(March 3,
2009), and ``Russian President to Face Questions Over U.S. Letter,''
International Herald Tribune, March 3, 2009, at http://www.iht.com
(March 3, 2009).
\5\ Peter Baker, ``Russian President Reacts to U.S. Offer on
Iran,'' The New York Times, March 3, 2009, at http://www.nytimes.com
(March 3, 2009).
\6\ Sue Pleming, ``Clinton Plans Meeting With Russian Minister,''
Reuters, February 13, 2009, at http://www.reuters.com (February 27,
2009).
\7\ ``Obama, Medvedev Likely to Meet in London,'' United Press
International, February 14, 2009, at http://www.upi.com (February 27,
2009).
\8\ Baker Spring, ``Concerns on Proposed Reduction of U.S. Nuclear
Stockpile to 1,000 Weapons,'' Heritage Foundation WebMemo No. 2274,
February 5, 2009, at http://www.heritage.org
\9\ ``Russia: Missile Plans Depend on U.S.,'' International Herald
Tribune, February 6, 2009, at http://www.iht.com (February 27, 2009).
\10\ Ariel Cohen, ``Swords and Shields: Russia's Abkhaz Base
Plan,'' Georgian Daily, February 4, 2009, at http://www.heritage.org;
Ariel Cohen, ``Russia Regains Key Air Base to Project Power in
Caucasus,'' United Press International, February 5, 2009, at http://
www.upi.com/Security (February 27, 2009).
\11\ U.S. State Department, ``Russian Bases in Georgia,'' February
6, 2009, at http://www.state.gov/ (February 27, 2009).
\12\ Svante E. Cornell, ``Pipeline Power: The War in Georgia and
the Future of the Caucasian Energy Corridor,'' Georgetown Journal of
International Affairs, Vol. 10, No. 1 (Winter/Spring 2009), at http://
www.isdp.eu (February 27, 2009).
\13\ Cohen, ``U.S-Russian Relations after Manas: Do Not Push the
Reset Button Yet.''
\14\ ``Russia, Belarus to Create Joint Air Defense System,''
International Herald Tribune, February 3, 2009, at http://www.iht.com
(February 27, 2009); Vladimir Isachenkov, ``7 Ex-Soviet Nations to Form
Rapid Reaction Force,'' Associated Press, February 4, 2009, at http://
www.google.com (February 27, 2009).
\15\ Sergei Blagov, ``Russia Pledges to Rescue Post-Soviet
Economies,'' Eurasia Daily Monitor, February 13, 2009, at http://
www.jamestown.org (February 27, 2009). EEC includes Russia, Belarus,
and the five Central Asian republics.
\16\ Leon Aron, ``Why Obama's First Outreach to Russia Is Bound to
Fail,'' USA Today, March 10, 2009, at http://aei.org (March 16, 2009).
\17\ David Kramer, ``No Grand Bargain,'' The Washington Post, March
6, 2009, at http://www.washingtonpost.com (March 16, 2009); Stephen
Blank, ``Russia and Iran's Missiles,'' World Politics Review, February
9, 2009, at http://www.worldpoliticsreview.com (March 16, 2009).
\18\ Catherine Belton, ``Russian Economy: The Putin Defense,'' The
Financial Times, December 28, 2008, at http://www.ft.com (February 27,
2009).
\19\ ``Russian Strategic Bombers Land in Venezuela,'' Novosti,
September 10, 2008, at http://en.rian.ru (February 28, 2009).
\20\ Ellen Barry, ``Russia Is Weighing 2 Latin Bases, General
Says,'' The New York Times, March 15, 2009, at http://www.nytimes.com
(March 16, 2009).
\21\ David Eshel, ``Russian Mediterranean Naval Build-Up Challenges
NATO Sixth Fleet Domination,'' undated, http://defense-update.com
(February 28, 2009).
\22\ Guy Faulconbridge, ``Russia Hopes U.S. Congress Will Pass
Nuclear Pact,'' Reuters, February 19, 2009, http://www.reuters.com
(March 9, 2009)
\23\ Steven Lee Myers and Brian Knowlton, ``U.S. Backs Off Civilian
Nuclear Pact With Russia,'' The New York Times, September 9, 2008, at
http://www.nytimes.com (March 9, 2009).
\24\ Faulconbridge, ``Russia Hopes U.S. Congress Will Pass Nuclear
Pact.''
\25\ Jeffrey Mankoff, Eurasian Energy Security (Washington, D.C.:
Council on Foreign Relations Press, 2009), p. 12, at http://www.cfr.org
(February 18, 2009).
\26\ Ariel Cohen, ``OPEC Redux: Responding to Russian-Iranian Gas
Cartel,'' Heritage Foundation WebMemo No. 2118, October 27, 2008, at
http://www.heritage.org.
\27\ ``Medvedev Calls for Strengthened Fight Against Corruption in
Russia,'' International Herald Tribune, January 22, 2008, at http://
www.iht.com.
\28\ Alena Ledeneva, Telephone Justice in Russia, Journal of Post-
Soviet Affairs, Bellwether Publishing, Volume 24, Number 4 (October
09December 2008), pp. 324 09350.
\29\ Andrew E. Kramer, ``Former Russian Spies Are Now Prominent in
Business,'' The New York Times, December 18, 2007, at http://
www.nytimes.com.
\30\ Artyom Liss, ``Yukos Trial Raises New Questions,'' BBC News
Service, June 1, 2005, at http://news.bbc.co.uk.
\31\ ``New Trial of Jailed Oligarch Could Reveal Medvedev's True
Intentions'' The Sunday Herald, March 15, 2009, at http://
www.sundayherald.com.
\32\ ``Politkovskaya Suspects Acquitted,'' BBC News, February 19,
2009, at http://news.bbc.co.uk (March 17, 2009).
\33\ ``In the Center of Moscow, the Attorney Stanislav Markelov
Murdered and A Colleague Severely Wounded,'' Novaya Gazeta, January 19,
2009, at http://www.novayagazeta.ru (March 17, 2009).
\34\ ``Interview--Russian Newspaper Fights on for Fallen
Comrades,'' Reuters, March 10, 2009, at http://www.reuters.com (March
17, 2009).
\35\ Heidi Brown, ``Who Killed Paul Klebnikov?'' Forbes, June 5,
2006, at http://www.forbes.com (March 17, 2009).
\36\ ``Alexander Litvinenko Murder Suspect Bids for Control of
Russian Olympic City of Sochi,'' Times Online, March 13, 2009, http://
www.timesonline.co.uk (March 18, 2009).
\37\ Terry Miller and Kim R. Holmes, 2009 Index of Economic Freedom
(Washington, D.C.: The Heritage Foundation and Dow Jones & Company,
Inc., 2009), at http://www.heritage.org.
\38\ Anastasia Kornia, ``They Arrest More and More,'' Vedomost,
March 16, 2009, at http://www.vedomosti.ru (March 17, 2009).
\39\ Janusz Bugajski, ``U.S.-Europe-Russia: The Uneasy Triangle,''
in Ariel Cohen, ed., ``Russian and Eurasia Policy Project: A Realistic
Agenda for the Obama Presidency,'' Heritage Foundation Special Report,
March 2009, Forthcoming.
\40\ Jack Spencer, ``Russia 123 Agreement: Not Ready for
Primetime'' Heritage Foundation WebMemo No. 1926, May 15, 2008, at
http://www.heritage.org.
\41\ Ibid.
\42\ Ibid.
\43\ Baker Spring, ``Concerns on Proposed Reduction of U.S. Nuclear
Stockpile to 1,000 Weapons,'' Heritage Foundation WebMemo No. 2274,
February 5, 2009, at http://www.heritage.org; Baker Spring,
``Congressional Commission Should Recommend a Damage Limitation
Strategy,'' Heritage Foundation Backgrounder No. 2172, August 14, 2008,
at http://www.heritage.org/f.
\44\ Paul Goble, ``Moscow Moves to Assert Russian Control of
Northern Sea Route,'' Georgian Daily, February 17, 2009, at http://
georgiandaily.com (March 2, 2009).
The Chairman. Thank you very much, sir.
Mr. Kuchins.
STATEMENT OF ANDREW KUCHINS, DIRECTOR AND SENIOR FELLOW, RUSSIA
AND EURASIA PROGRAM, CENTER FOR STRATEGIC AND INTERNATIONAL
STUDIES, WASHINGTON, DC
Mr. Kuchins. Mr. Chairman, Senator Lugar, members of the
committee, thank you very much for the opportunity to share a
few thoughts with you this morning about Russia and the
prospects for engagement, or pressing this so-called ``reset
button.''
I suppose I'm somewhat a bit more optimistic than Ariel on
this, but, you know, the analogy, certainly, of a reset button
is not perfect. There is an awful lot of toxic waste under the
bridge in the United States-Russian relationship. There's no
way that we can simply clear this up by--overnight, and some of
the legacies of the past are not going to go away immediately.
But, if the sentiment simply implies that there is an
opportunity for the Obama administration to improve relations
with Russia, that's one which I heartily agree with, and I want
to spend a few minutes arguing more broadly as to why I think
that's the case, rather than focusing on specific issues. I've
made lots of recommendations in a couple of recently published
reports, one of which you referred to.
Now, a good part of the rationale that there is an
opportunity here is simply that relations had reached such a
low point in the wake of the Georgia war in the fall that there
was only virtually one direction to go in, and that was up,
unless we wanted a new cold war, or perhaps something worse,
with the Russians.
I've also sensed, here in Washington over the course of the
last 6 months, the emergence of a broadening consensus in the
middle of our political spectrum about the need, the importance
of having a more constructive relationship with the Russians,
and I think the report that you referred to by your former
colleagues, Senators Hart and Hagel, is an example of that.
But, more fundamentally, the global situation has changed
quite drastically in the last year, and, I think, in ways that
have altered the calculations of friends in the Kremlin. Russia
had been on an extraordinarily--extraordinary economic role,
for the past decade, that saw its GDP grow by a factor of more
than eight in less than 10 years. Simultaneously, they had
perceived United States power in the world as ebbing, they saw
us mired in difficult military engagements in Iraq and
Afghanistan, and then, more recently, they saw our economy
begin to flounder with the subprime mortgage crisis, which
foreshadowed the global economic--global financial crisis.
I think, for the last several years--the 5 years or so,
particularly, which Steve mentioned, the worsening--the
deterioration of United States-Russia relations--the Russians
have overestimated their strength, and they have overestimated
our weaknesses. But, their hubris, I think, has been rocked as
the crisis has hit them extraordinarily hard, revealing their
vulnerabilities, as well as deep integration into the global
economy.
Now, Russia is notoriously difficult to comprehend, as many
famous observers far smarter than I have noted over the years.
My favorite line about Russia comes from Will Rogers, ``Russia
is the only country about which, no matter what you say about
it, it's true.''
My argument today is that maybe Russia's not so mysterious
to understand and that's it's really its economic
circumstances, as well as its articulated goals, that hold the
answer about this question of ``Whither Russia?''
Two thousand eight was the most contentious year in
Russian-Western relations since the collapse of the Soviet
Union; yet, while these political relations have continued to
worsen, economic integration between Russia and the West
continue to deepen and to widen as trade and investment volumes
reached all-time highs.
In the summer of 2008, the Russian Government published a
long report detailing Russia's economic goals to the year 2020.
The most striking finding, for me, in this report is that
Europe especially, but the West more broadly, would be, far and
away, the most important partners for Russia to achieve their
best-case-growth scenarios in the coming 12 years. And it
seemed that the current trends--and this goes back to before
the Georgia war--the current trends of deepening economic
integration, on the one hand, and worsening political
relations, on the other hand, between Russia and the West, were
contradictory and not sustainable.
Now, Mr. Medvedev was inaugurated as Russian President back
in May. A couple of weeks later, the Russian stock market hit
its all-time high. A couple of months after that, oil price
went up to $147 a barrel. The Russian Government had more money
than it knew what to do with. And the report on Russia's
strategic economic goals to 2020 called for similar growth
levels that would ultimately make Russia the fifth largest
economy in the world and the largest in Europe. Our friends in
the Kremlin were talking about themselves as a safe haven or an
island of stability in the widening economic crisis.
But, how quickly things have changed. And both Senator
Kerry and Lugar pointed to a number of these data points about
the impact of the economic crisis on Russia. I would only add
to that, that most prognoses for economic performance in 2009
predict negative growth. And because of the expected--because
of the ruble devaluation which has taken place, and possible
ruble devaluation in the future, the nominal dollar GDP of
Russia is likely to drop 20 to 25 percent after averaging more
than 25 percent growth for the last 9 years. And the Moscow-
based investment bank, Troika Dialog, which actually is one of
the most--one of the more optimistic prognostications about the
Russian economy, have the numbers for the economy coming in,
last year, 2008, at almost 1.7 trillion, and the prediction for
next year is 1.25 trillion. Now, this is quite a reversal of
fortune. The Russian Government is looking at deficits of 5 to
10 percent in 2009, and possibly deficits in 2010 and 2011. And
we've seen the growing impact of the crisis on the Russian real
economy.
Now, all national economies are struggling to adjust to the
deepest global slump in several generations, but the drastic
change in momentum for policymakers in Moscow is especially
stark and challenging. Since so many millions of Russians have
benefited from the economic prosperity of the last decade, the
impact of the current crisis affects a far greater percentage
of the population than the last economic crisis, back in 1998.
And I think, in the coming year ahead, Mr. Putin's vaunted
``vertical of power'' will be tested as never before.
Now, it's important for us to think carefully about what
are the foreign policy implications of this extraordinary
economic whiplash?
The crisis should have a major impact on Russia's external
behavior and, therefore, U.S. interests. As of this moment,
many analysts have concluded, as Dmitri Simes did back in
December, that in Russia hard times normally produce hard
lines. I don't think that the historical record actually
supports that that's the case, and I think that history
provides more evidence that economic downturns in Russia have
often--corresponded with periods of greater cooperation.
Economic stagnation in the late 1980s was associated with the
end of the cold war. And the contraction of the 1990s
correlated with an accommodating foreign policy under Boris
Yeltsin. Since the first oil crisis back in the 1970s, there
has been a powerful correlation, I would argue, between a high-
oil-price environment and a more assertive and aggressive
Russian foreign policy, and this dynamic corresponds to the
late Brezhnev years and to the Putin period, especially since
2003-2004.
Now, nothing is predetermined, but this historical
perspective suggests that the current economic downturn could
push Russia towards a more cooperative stance, vis-a-vis the
West, including the United States, especially in terms of
economic cooperation.
Just 9 months ago, with the oil price so high, the Russians
had very little incentive to cooperate and engage economically
with us. Russia was such an attractive market that it did not
need to make any effort to lure Western investors; money flowed
into its markets, regardless of its policies; its economy grew
at a rapid clip, despite the stagnation of the structural
economic reform agenda; and it no longer needed financing from
an international--international institutions to ensure fiscal
health. In short, Russia's boom provided little incentive to
reach out to the West. Today, that situation is quite
different.
I think there were also implications of this for Russia's
domestic economic and political policies. I think evidence also
supports that, since the first oil crisis, back in 1973,
periods of low international oil prices and/or economic
downturns in Russia correlate with greater incentives for
structural economic reform, and those usually correspond with
greater degrees of political pluralization.
It was the crash of the oil price, back in 1986, that took
place shortly after Mikhail Gorbachev assumed leadership, and
this dramatic drop in hydrocarbon revenue starkly revealed all
the structural deficiencies of the Soviet economy. The rapidly
eroding balance sheet clearly made imperative the--reform much
more urgent. It's hard to imagine that Mr. Gorbachev would have
embarked on such a radical set of reforms, absent this
impending sense of economic crisis.
So, at least in the short term, or for however long this
economic downturn lasts, the Russians are going to feel far
more economically constrained than recently. And even when
global demand begins to recover, the Russians are going to be
competing for investment with all economies whose assets have
dramatically declined in value, as opposed to 10 years ago,
where Russia was more unique as a large emerging market with
undervalued assets.
There's another major difference that Russia faces today
with its recovery than 11 years ago, and that is that, for the
near and mid term, the prospects for production growth of both
oil and gas resources are rather grim. And particularly in the
oil sector, after the financial crash in 1998, Russian oil
companies, led by YUKOS, Mr. Khodorkovsky at the time, achieved
remarkably rapid growth in production with application of
modern technologies to the old Soviet wells in western Siberia.
That feat cannot be repeated again today, and future production
will have to come from new green fields in geologically and
climatically challenging conditions that could be the most
expensive and complicated projects in history, and they can't
do it alone.
I think as commodity prices have fallen sharply, I think
it's clear to the--our leaders in the Kremlin, that the status
quo is not a viable option. Russia cannot continue to depend to
such an extent on its resource of wealth, which is vulnerable
to the cycles of booms and busts. They know it, but doing
something about it is a bit more complicated.
Now, in--to conclude, here, my view, since the Soviet Union
collapse, has been, and remains, that, in the long term,
Russia's strategic economic and security interests lie in
closer partnership with the West, not necessarily to the
exclusion of its partnerships and relations with other key
countries, like China, India, and Iran and others. But,
historically, culturally, economically, demographically, Russia
has always leaned to the West, and its roots are as a European
great power. And a particularly telling data point from the
Russia 2020 strategy supports this conclusion. Even in the
best-case scenario, what they call the ``innovation scenario of
growth to 2020,'' which calls for an average of 7-percent
growth to that year, Russia's share of global GDP would rise
from only 2.5 percent today to a bit less than 4 percent in
2020. My conclusion from this fact is that Russia will not have
the financial or human resources to wage any kind of new cold
war and contest United States power around the globe, as it did
for most of the second half of the last century. And it was
Russia's excessive--Soviet Union's excessive militarization of
its economy and society to support its overarching global
confrontation with the United States that was a major cause of
its collapse, and this lesson is not lost on current Russian
leaders.
Why have we failed to establish a firmer partnership with
Russia over the past generation? Well, there's lots of fault to
go around, but I think one factor that we should keep in mind
is that, while many observers have been quick to refer to Mr.
Putin's Russia as neoimperial in its policies, I think
fundamentally what the Russians are still dealing with is the
collapse of empire in a post-imperial syndrome. The Soviet
Union was the last empire to collapse. And, like many empires
before them, it will take more than one generation for Russia
to fully adapt to its post-imperial status. As then-Deputy
Secretary of State Strobe Talbott said, back in the 1990s, ``We
need to have strategic patience with Russia.''
The other thing I would point to is that Russia's heavy
dependence on energy exports also contributes to contradictory
tendencies in its internal organization and its foreign policy.
For the last near-decade, in fact, Russia has defied
modernization theory, in that its democratic institutions have
weakened as its people have become considerably more
prosperous. Social scientists point to this $10,000 per-capita
income level at the point, generally, at which most developing
countries become more democratic. I think it is oil and gas
dependency which has made Russia an outlier in this regard.
In conclusion, while I'm reasonably confident about the
broader framework of my argument, there are two important near-
term caveats I'd like to make.
First, there is the danger that the Kremlin may not be able
to react quickly or effectively enough to the growing social
and political impact of an extended downturn, especially if
there's a second wave of dramatic difficulties later this year
or next year.
Now, one may fault the Russian leadership for being in
denial for too long or spending too much of its reserves on
defending the ruble. Their response has been broadly in line
with what other national governments are doing with stimulus
packages and other measures, bailout packages, and some
economic indicators, such as the value of the ruble, the
Russian stock market, have stabilized. Still, there is
considerable potential for greater hardship and social unrest
that may invite a tougher crackdown in response, that could be
accompanied by greater international isolation, and this would
short-circuit any reset button.
The second caveat concerns differences over our policies
towards Russia's near neighbors, which I would expect would
continue to be the most contentious point of our relationship.
Now, while Russia has been harder hit than many developed and
large emerging market economies, many of its neighbors have
been hit harder, which may actually be increasing Russia's
leverage with them. And, I think, already we see signs of this
in ties with Ukraine and Kyrgyzstan earlier this year.
Tougher economic conditions also may increase Moscow's
incentives to control oil and gas production and transport
infrastructure with its neighbors, and conflict between
Washington and Moscow over the post-Soviet space will likely
continue to be the most volatile set of issues in the bilateral
relationship, as well as within Europe. I think we are unlikely
to see consensus in Europe anytime soon.
With that, let me conclude so we can leave more time for
discussion and questions.
Thank you.
[The prepared statement of Mr. Kuchins follows:]
Prepared Statement of Dr. Andrew C. Kuchins, Director and Senior
Fellow, Russia and Eurasia Program, Center for Strategic and
International Studies, The Heritage Foundation, Washington, DC
Last month in Munich Vice President Biden talked about ``pressing
the reset button in United States-Russia relations.'' While the State
Department was challenged to find the correct translation of ``reset
button,'' those of us in the Russia-watching community have been
debating whether such a button exists, and if so, what ``pressing'' it
might really mean. The analogy that Vice President Biden used a month
ago at the Munich security conference is not perfect, since there is
too much toxic waste under the bridge of United States-Russian
relations to be cleaned up over night. But the sentiment implies that
there is a real opportunity for the Obama administration to improve
relations with Russia, and with this I very much agree.
A good part of the rationale is simply that relations had reached
such a low point, lower than any point in at least two decades, in the
wake of the Georgia war last year, that there was virtually only one
direction the relationship could go before igniting a new cold war or
worse. I also sensed in the fall/winter the development of a solid
consensus in the center of the U.S. political spectrum that it was
imperative for the incoming Obama administration to develop a more
constructive relationship with Moscow, in order to address more
effectively a number of pressing security challenges including
Afghanistan, the Iranian nuclear program, and nuclear security more
broadly, among other issues.
In addition, the global situation has drastically changed in ways
that probably have altered the calculations in the Kremlin. Russia had
been on an extraordinary economic roll for the past decade that saw
their GDP grow by more than eight times. Simultaneously they perceived
U.S. power to be ebbing as we became mired in the Iraq and Afghanistan
wars and our economy began to flounder with the subprime problems,
foreshadowing the global financial crisis. Most likely they
overestimated their strength as well as our weakness, but Russian
economic hubris has been rocked as the crisis has hit them extremely
hard, revealing their vulnerabilities as well as deep integration with
the global economy. For the first time in years I think there is a
greater sense in Moscow that Russia needs better relations with the
United States and the West more broadly.
economic factors key to unraveling the russian riddle
Russia is notoriously difficult to comprehend, as many famous
observers far smarter than I have noted over the years. My personal
favorite is from Will Rogers, ``Russia is a country that no matter what
you say about it, it's true.'' My argument today is that understanding
Russia's economic circumstances as well as its articulated goals hold
the answer today to the eternal question ``Whither Russia?''
Two thousand eight was the most contentious year in Russian-Western
relations since the collapse of the Soviet Union. From differences over
Kosovo, NATO enlargement, and missile defense in the spring to the
Georgia war in August to concluding the year and opening the new one
with another gas war between Russia and Ukraine, tensions and
differences escalated. Yet while political relations continued to
worsen, economic integration between Russia and the West continued to
deepen and widen as trade and investment volumes reached all time
highs. In the summer of 2008 the Russian Government published a long
report detailing Russia's economic goals to the year 2020. The most
striking finding in that report is that Europe especially, and the West
more broadly, would be far and away the most important partners for
Russia to achieve their best-case growth scenarios in the coming 12
years. The current trends of deepening economic integration amidst
worsening political relations did not seem sustainable in the summer of
2008, and now after the war in Georgia and the impact of the economic
crisis they seem even less so.
Dmitri Medvedev was inaugurated as Russia's new President in May,
later in the month the Russian stock market hit its all-time high, and
in July the oil price peaked at $147/per barrel. The Russian Government
had more money than it knew what to do with as foreign currency
reserves peaked at nearly $600 billion with another $200 billion in two
funds that were formally the Stabilization Fund. The Russian GDP (in
nominal dollar terms) had increased by a factor of eight in less than a
decade, and the report on Russia's strategic economic goals to 2020
called for similar growth levels that would ultimately make Russia the
fifth largest economy in the world and the largest in Europe. Our
friends in the Kremlin talked about Russia possibly being a ``safe
haven'' or ``island of stability'' as the impact of the U.S. mortgage
crisis widened to the global economy.
But how quickly things change. Russia's economic hubris has been
smashed, as their economy in the last few months has been amongst the
hardest hit of large emerging markets. The Russian stock market has
lost about 70 percent of its value since its peak (worst performance of
all large emerging market economies). It is estimated the Russian
Central Bank spent about $200 billion--first defending the ruble, and
then allowing gradual devaluation, until the ruble eventually dropped
50 percent against the U.S. dollar. Most prognoses for economic
performance in 2009 predict negative growth, and because of ruble
devaluation, the nominal dollar GDP is likely to drop 20-25 percent
after averaging more than 25 percent growth for nearly a decade. The
Moscow-based investment bank Troika Dialog, for example, calls for a
drop in nominal dollar GDP from nearly $1.67 trillion in 2008 to $1.25
trillion in 2009--and Troika's prognostications are relatively more
optimistic than most.
After a decade of budget surpluses, the Russian Government is
anticipating a deficit of 5-10 percent in 2009 and the possibility of
deficit in 2010 and 2011. In the fall, Russian enterprises began major
layoffs and the unemployment rate will likely exceed 10 percent this
year. After a decade of dramatically reducing the poverty level, Russia
will likely see it increase once more, from 12 percent to 15 percent
according to the most recent World Bank projections. There is growing
concern about the potential social impact in one-company towns with
massive layoffs resulting from shutdowns of their major local
enterprise.
All national economies are struggling to adjust to the deepest
global slump in several generations, but the drastic change in momentum
for policymakers in Moscow is especially stark and challenging. Since
so many millions of Russians have benefited from the economic
prosperity of the past decade, the impact of the current crisis affects
a far greater percentage of the population than the last economic
crisis in 1998. Vladimir Putin's vaunted ``vertical of power'' will be
tested like never before as the prospects for social unrest and even
bankruptcy are ever more possible, if the slump endures for more than
12-18 months.
foreign policy implications of the economic downturn
It is important that U.S. policymakers understand the implications
of this unprecedented economic whiplash. The crisis could have a major
impact on Russia's external behavior, and therefore U.S. interests. As
of this writing, many analysts have already concluded that the crisis
will spur a new period of aggressiveness in Moscow's external
stance.\1\ Most agree with Dmitri Simes' maxim that ``In Russia, hard
times normally produce hard lines.''\2\
Thus far the crisis has indeed correlated with assertiveness in
Russian foreign policy. For example, Russia has engaged in a highly
destructive ``gas war'' with Ukraine, at one point going so far as to
completely cut off deliveries to Europe, which caused rationing in some
countries that are completely dependent on Russian gas, such as
Bulgaria. The recent announcement that Kyrgyzstan would close the U.S.
base at Manas under apparent Russian pressure would also indicate a
more assertive line. Moscow seems at least in part motivated by a
revanchist instinct to keep its ``near abroad'' under tighter political
control.
Despite these assertive moves, it is too early to draw definitive
conclusions about the future trajectory of Russian policy. History
provides evidence that economic downturns in Russia have corresponded
with periods of greater cooperation. Economic stagnation in the late
1980s was associated with the end of the cold war, and the contraction
of the 1990s correlated with an accommodating foreign policy under
Boris Yeltsin. Since the first oil crisis in the early 1970s, there has
been a powerful correlation between a high oil price environment and a
more assertive and aggressive Soviet or Russian foreign policy. This
dynamic corresponds to the later Brezhnev years and the Putin period,
especially since 2003.
Although nothing is predetermined, this historical perspective
suggests that the current economic downturn could push Russia toward a
more cooperative stance vis-a-vis the West, especially in terms of
economic cooperation. Just 9 months ago when oil was over $140 per
barrel, Moscow had fewer incentives to engage with the West on economic
issues. Russia was such an attractive market that it did not need to
make an effort to lure Western investors; money flowed into its markets
regardless of its policies. Its economy grew at a rapid clip despite
the stagnation of the economic reform agenda and it no longer needed
financing from international institutions to ensure fiscal health. In
short, Russia's boom provided little incentive to reach out to the
West.
With its economy in deep trouble and oil under $50, this situation
has significantly changed. Clearly economic troubles are not exclusive
to Russia, but the whiplash factor has altered the incentive structure
to perhaps a greater degree than in many other countries. Recovery from
the crisis could require a considerably more economic engagement with
the West than the boom did. In sharp contrast to the precrisis period,
Russia may now need resources that only international, and particularly
Western, investors, institutions and trading partners can provide. This
is a potentially powerful incentive for pursuing greater cooperation.
Three examples illustrate the point.
First, since its budget appears likely to run a large deficit this
year, Moscow may need to turn to international lenders to shore up its
fiscal position, especially if its stabilization funds and foreign
currency reserves continue to be depleted at such a rapid clip. After
having paid off virtually all its debts to other states and
international financial institutions ahead of schedule in the first few
years of this decade--a move intended both to prevent incoming oil and
gas revenues from spurring inflation and to increase geopolitical
freedom of maneuver--Russia could now once again turn to international
markets and lenders for credits. According to the World Bank, Russia
will be forced to do so if oil prices average below $30 for the
year.\3\
Second, Russia's stock market can only recover if foreign, and
particularly Western, investors return.\4\ The massive expansion of
Russia's market over the course of the period from 1998 to mid-2008 was
to a significant extent driven by Western investors. Many Russians
firms held IPOs in London and New York, some listing directly on
Western exchanges. After the ``ring fence'' that prevented foreigners
from trading in its shares on the Russian market was lifted in December
2005 and the government consolidated its 51 percent stake, leaving the
remainder to be purchased by private investors, Gazprom rapidly became
one of the most desirable stocks in emerging markets. In May 2008, its
market capitalization peaked at $315 billion, making it the third
largest company by market cap in the world. In this period, Russia was
viewed as one of the most attractive emerging markets. Portfolio
foreign investment stood at $4.2 billion in 2007, a 31.8-percent
increase from the previous year.\5\
The economic circumstances that allowed the Russian Government to
interfere in the market with impunity are long gone. In the context of
the current economic crisis and the bottoming out of the RTS at around
500 points (compared to its high of approximately 2,500 points in May
2008), Russia needs to attract foreign, and particularly Western,
investors back to the market. Without a return of foreign capital, the
Russian market is unlikely to recover in the medium term. Even if oil
prices increase significantly, investors have little money to spend,
and if Russia remains a risky investment they will be loath to spend it
there.
Third, Russian corporations and financial institutions need to
refinance loans obtained from Western lenders. Russian firms obtained
nearly $500 billion in private credits in the years of plenty leading
up to the crisis.\6\ U.S. estimates that around 40 percent of that went
to the energy sector, mostly to Gazprom and Rosneft.\7\ Western lenders
competed fiercely with one another to finance Russian companies' rapid
expansion, tempted by the impressive cash flows on their balance
sheets.
When the value of collateralized assets sank as investors fled the
Russian stock market over the summer of 2008, Russian companies
scrambled to make their (dollar-denominated) repayment schedules.
Credit dried up fast and margin calls on 10 of the 25 wealthiest owners
of large private companies forced even more asset sell-offs. As one
brokerage house put it, ``Russia has a solvency problem. Simply put, in
August Moscow was flooded with international bankers competing to
provide funding to Russian entities. By October, the only financiers
visiting were those trying to get their money back.''\8\ In addition to
cash shortage problems, Russian corporations will face difficulties
refinancing as a result of the global credit crunch. Russian firms have
about $130 billion in debt coming due in 2009, more than double the
total owed by the governments and companies of Brazil, India, and China
combined.\9\
domestic economic and political impact of downturn
Evidence since the first oil crisis in 1973 also suggests that
periods of low international oil prices and/or economic downturns in
Russia correlate with greater incentives for structural economic reform
and political pluralization. The crash of the oil price in 1986 took
place shortly after Mikhail Gorbachev assumed leadership of the Soviet
Union. The dramatic drop in hydrocarbon revenues starkly revealed all
the structural deficiencies of the Soviet economy. The rapidly eroding
balance sheet clearly made the imperative of reform far more urgent--it
is hard to imagine that Gorbachev would have embarked on such a radical
set of reforms absent impending sense of economic crisis.\10\
At least in the short-term, or however long this global recession
lasts, the Russians will feel far more economically constrained than in
the recent halcyon years. Even when global demand begins to recover,
Russia will be competing for investment with all economies whose assets
have dramatically declined in value, as opposed to 10 years ago when
Russia was more unique as a large emerging market with undervalued
assets.
The second major difference the Russians will face is that for the
near and mid-term, prospects for production growth of oil and gas
resources are grim. Particularly in the oil sector after the financial
crash in 1998, Russian oil companies, led by Yukos at the time,
achieved remarkably rapid growth in production with application of
modern technologies to old Soviet wells. That feat cannot be repeated,
and future production will have to come from new greenfields in
geologically and climatically challenging conditions that could be the
most expensive and complicated projects in history.
Russia has reached the end of the road in resource-based
development and catchup growth, but it remains only semimodernized and
highly vulnerable to external circumstances beyond its control,
primarily the oil price. About 85 percent of its exports are based on
energy and commodities such as metals and chemicals. With the exception
of the arms industry, Russia's manufacturing has largely failed to
develop because of an adverse business climate (widespread corruption
and onerous state intervention) and a lack of comparative advantages
outside of the commodity sector.
The global financial crisis has hit Russia hard. As commodity
prices have fallen sharply, the status quo is not a viable option.
Russia cannot continue to depend to such an extent on its resource
wealth, which is vulnerable to cycles of booms and busts. No other
large emerging market or developed economy is so dependent on a single
volatile factor (the oil price) as is Russia.
Sustaining economic growth for the country's increasingly
prosperous population will have a direct influence on popular support
for the government. A recent study by Daniel Treisman, a political
scientist at UCLA, found that the popularity of Russian Presidents
``closely followed perceptions of economic performance, which, in turn,
reflected objective economic indicators.'' Thus the Presidential
approval rating depends on the Russian people's sense of material well-
being; ``most other factors''--such as the war in Chechnya, in the case
of Putin in 1999--``had only marginal, temporary effects.''\11\
Russia faces two starkly different choices for its economy. One
option is to continue the current course toward increased state control
and renationalization, which would result in economic domination by
large monopolistic state corporations. In that case, the country would
have little need for the WTO and increasing isolationism would be the
natural outcome. Russia's economic growth, however, would probably
wither, because such a system breeds stagnation.
The alternative would be to return to the liberal economic reform
agenda that Putin abandoned in 2003. Indeed, then-Presidential
candidate Dmitri Medvedev's February 15, 2008, speech in Krasnoyarsk
called for the revival of such a program.\12\ In his speech in Davos on
January 28, 2009, Putin further stated: ``The crisis has exposed the
challenges we have. They are: An excessive orientation of exports
towards natural resources and, of the economy as a whole, a weak
financial market. There is a greater demand for the development of
basic structures . . . ''\13\ Major elements of such a policy would be
the control of corruption, deregulation of the domestic economy, and
the reinforcement of private property rights. Such an economic choice
would most likely accompany political liberalization and enhanced
international integration.
whither russia?
My view since the collapse of the Soviet Union has been and remains
that in the long term, Russia's strategic economic and security
interests lie in closer partnership with the West--not to the exclusion
of its important interests in constructive relations with China, India,
Iran, and many other countries to its East and South. Historically,
culturally, economically, demographically, Russia has and continues to
lean strongly to its roots as a European great power.
Another telling data point from the Russia 2020 strategy supports
this conclusion. Even in the best-case innovation scenario that calls
for average 7 percent annual growth and a more diversified economy,
Russia's share of global GDP would rise from only 2.5 percent of global
GDP today to about 4 percent in 2020. Russia will not have the
financial or human resources to wage any kind of new cold war and
contest U.S. power around the globe as it did for most of the second
half of the last century. The Soviet Union's excessive militarization
of its economy and society to support its overreaching global
confrontation with the United States was a major cause of its collapse,
and this lesson is not lost on most of the current Russian elites.
And it would also seem that Russia's genuine security challenges
are principally to its South in the form radical Islamic groups
supporting terrorist and oppositionist activities in its neighborhood
as well as in the Northern Caucasus, the most vulnerable and unstable
region of Russia. Longer term, there is tremendous insecurity about the
rapid rise of China to its East. Russia may not have been thrilled with
the notion of ``junior partnership'' with Washington, but a subordinate
role to Beijing is far less palatable.
So why have we failed to establish a firmer partnership with Russia
over the past generation? There is lots of fault to go around, and
certainly our own unipolar hubris in the wake of the great victory of
the cold war played a considerable role. As for Russia, while many
observers have been quick to label Putin's Russia as ``neo-imperial,''
fundamentally the Russians are still dealing with collapse of empire
and post-imperial syndrome. The Soviet Union was the last empire to
collapse, and like many empires before them, it will certainly take
more than one generation for Russia to fully adapt to its post-imperial
status. As then-Deputy Secretary of State Strobe Talbott wisely advised
more than a decade ago, we need to have ``strategic patience'' with
Russia.
Russia's heavy dependence on energy exports also contributes to its
contradictory tendencies. For the last near decade, Russia has defied
modernization theory in that its democratic institutions have weakened
as its people have become considerably more prosperous. Social
scientists point to a $10,000/year income as the point at which most
developing countries become more democratic. The oil and gas income
dependency is probably the factor that makes Russia an outlier.
caveats
While I am reasonably confident about the broader framework of my
argument, there are two important near-term caveats. First, there is
the danger that the Kremlin may not be able to react quickly or
effectively enough to the growing social and political impact of an
extended downturn, especially if there is a second wave of dramatic
difficulties this year or next. While one may fault the Russian
leadership for being in denial for too long or spending too much of its
reserves on defending the ruble, their response has been broadly in
line with what other national governments are doing with stimulus
packages and other measures, and some economic indicators such as the
value of the ruble and the Russian stock market have stabilized. Still,
there is considerable potential for greater hardship and social unrest
that may invite a tougher crackdown in response that could be
accompanied by greater international isolation. This would short-
circuit any ``reset button'' in United States-Russian relations for a
time.
The second caveat concerns differences over our policies toward
Russia's near neighbors. While Russia has been harder hit than many
developed and large emerging market economies, many of its neighbors
have been harder hit which may be increasing Russia's leverage with
them. Already we see signs of this with Ukraine and Kyrgyzstan early
this year. Tougher economic conditions may increase Moscow's incentives
to control oil and gas production and transport infrastructure with its
neighbors. Conflict between Washington and Moscow over the post-Soviet
space will likely continue to be the most volatile set of issues in the
bilateral relationship as well as with and within Europe. We are
unlikely to see European consensus over Russia policy any time soon.
conclusion
I believe we have an important opportunity to turn around United
States-Russian relations. Despite lingering revanchist tendencies,
Moscow harbors powerful motivations to improve its ties with the United
States and the West to both enhance its security and facilitate its
economic development. The Russian leaders wish to be seen in public on
an equal footing with global leaders, especially the United States
President. Furthermore, and more importantly, they understand that
Russia cannot afford to fall back into another long-term confrontation
with the West: Integration with the West remains Russia's best chance
to develop and reach its ambitious target of becoming the fifth largest
economy in the world by 2020.
For the United States, the motivation for closer cooperation with
Russia is grounded in the reality that the world's most pressing energy
and security challenges cannot be addressed effectively without
Moscow's cooperation and trust. This is most obvious in the realm of
nuclear nonproliferation and European security.
In conclusion, my final caveat is that rebuilding trust and
reaching concrete agreements about cooperation will not be easy, and we
must beware of overly high expectations lest we be disappointed as we
were with two previous opportunities to improve ties with Russia: After
the collapse of the Soviet Union in 1991-92 and after 9/11 in 2001. The
powerful cold war legacies have now been overlaid with nearly two
decades of mutual disappointment in Russia and the United States. Even
in areas that we presumably share broadly common goals such as
promoting nuclear security, stabilizing Afghanistan, restoring global
economic growth and order, and expanding economic and trade ties, the
going will be tough. Strong leadership and support in the Congress will
be essential as well as firm Presidential leadership supported by a
well-organized bureaucracy in the executive branch.
----------------
Note: Much of this testimony derives from two recent reports which
I coauthored: Samuel Charap and Andrew C. Kuchins, ``Economic Whiplash
in Russia: An Opportunity for U.S.-Russian Commercial Relations?,''
(Washington DC: Center for Strategic and International Studies,
February 2009) and Anders Aslund and Andrew C. Kuchins, ``Pressing the
Reset Button in U.S.-Russia Relations,'' (Washington DC, Peterson
Institute for International Economics, March 2009. See these reports
for a comprehensive set of specific policy recommendations regarding
U.S.-Russia relations.
\1\ E.g., Clifford G. Gaddy and Barry W. Ickes, ``Putin's Third
Way,'' The National Interest, January 21, 2009, http://
www.nationalinterest.org and Leon Aron, ``Russia's Woes Spell Trouble
for the U.S.,'' Wall Street Journal, December 31, 2008.
\2\ Dimitri K. Simes, ``Uncertainty in Moscow,'' The National
Interest, December 24, 2008, http://www.nationalinterest.org.
\3\ ``Vsemirnyi bank ponizhaet protsenty,'' Vzglyad, December 19,
2008, http://vz.ru. Russian officials claim that their stabilization
funds will be adequate to cover budgetary shortfalls for 2009-2011.
Courtney Weaver, ``Oil Funds Will Cover Shortfalls for 3 Years,''
Moscow Times, February 4, 2009, http://www.moscowtimes.ru.
\4\ If oil prices remain low, domestic investors alone will be too
cash-poor to return the market to its previous levels. Gaddy and Ickes,
``Putin's Third Way.''
\5\ Interfax, February 2, 2008.
\6\ Gaddy and Ickes, ``Putin's Third Way.''
\7\ Ben Aris, ``RUSSIA 2009: Paused Before A Rally,'' Business New
Europe, December 20, 2008, http://www.businessneweurope.eu.
\8\ Renaissance Capital, ``2009 Outlook: What's Next,'' December
16, 2008, p. 8.
\9\ World Bank, ``Russia Economic Report,'' no. 17, November 2008,
p. 15. http://www.bloomberg.com.
\10\ Andrew C. Kuchins, ``Alternative Futures for Russia to 2017,''
(Washington DC: Center for Strategic and International Studies, 2007).
\11\ Daniel Treisman, ``The Popularity of Russian Presidents,''
presentation at the Frontiers of Political Economics conference, New
Economic School, Moscow, May 30-31, 2008.
\12\ Transcript of the speech of the first deputy chairman of the
Government of Russia, Dmitri Medvedev, at the 5th Krasnoyarsk economic
forum ``Russia 2008-2020. Management of Growth,'' February 15, 2008.
(Stenogramma vystupleniya Pervogo zamestitelia Predsedatelia
Pravitelstva Rossiyi Dmitriya Medvedeva na V Krasnoyarskom
economicheskom forume ``Rossiya 2008-2020. Upravleniye rostom'')
Available at http://www.rost.ru (Accessed on February 9, 2009).
\13\ ``Putin's Speech at Davos World Economic Forum,'' Russia
Today, January 28, 2009, www.russiatoday.com (accessed on February 2,
2009).
The Chairman. Thank you very much, Mr. Kuchins.
With that, actually, I'm not sure where we are with Russia.
[Laughter.]
Listening to you, in the back and forth of these last three
testimonies, it kind of leaves a lot up in the air, which is
what we're going to try to narrow down.
Now, we have a problem that's developed. The Senate is
going to have three votes at 11 o'clock. What I'd ask
colleagues to do is, if we can stay until the back end of the
first vote, and then we'll have a recess for the period of the
second vote, and then we'll vote at the front end of the third
vote and come right back, so we'll have a minor recess in order
to try to accommodate the process. And I apologize to witnesses
for that.
Let me try to jump in very quickly here. You said, at the
end of your testimony, Mr. Kuchins, that, you know, Russia's
going to have, perhaps, little ability to contest American
power around the world. Is that--isn't that old thinking? I
mean, is it--is that really their objective, to contest our
power? Or is it perhaps to assert their interests, as they see
them, in certain places? Which may, on occasion, contest our
power, but it seems to me that's not their fundamental
organizing principle, or is it? I'd like to get a sense of
that.
You know, countries respond to other countries' actions,
and countries make determinations about what their interests
are, and make determinations about their perception of a threat
to them. The fact is that the Bush administration did a number
of things that Russia was pretty much dead-set against, and
stated so before they happened, and we did 'em anyway. The
independence of Kosovo is an example. I'm not saying it was the
wrong thing to do, but, in terms of their perceived interests,
it certainly clashed. The NATO expansion, we were pushing like
crazy; in the last months, we were pushing like crazy to get a
couple of countries in that they obviously saw as a major
threat to their perceived interests. Abrogated the ABM Treaty,
unilaterally, boom, gone. What does that say? Missile defense--
talked about putting it in, said it's about Iran, but people
had questions. I mean, other countries are going to respond, it
seems to me, to the things that we do unilaterally, and I
wonder to what degree that is perceived by any or all of you as
sort of a legitimate perception problem in these relationships,
and something we need to think about as we go forward.
Mr. Kuchins.
Mr. Kuchins. Thank you very much, Mr. Chairman. It's an
excellent question. And I didn't mean to imply, in my remarks,
that I saw as a core organizing principle for Russian foreign
policy to contest United States power around the world.
I think, broadly speaking, for the last couple--the last
nearly 20 years, since the collapse of the Soviet Union, we've
had a--almost sort of very divergent, almost psychologies and
narratives about our positions in the world, and the United
States-Russian relationship, in particular, which have made it
more complicated for us to have a meeting of the minds. And,
you know, for the Russians, going into the 1990s, through a
very difficult time, where their power was a low ebb, while, at
that time, in the 1990s, we are experiencing the so-called
``unipolar moment'' and a certainly amount of hubris on our
part, I think it contributed to a lot of misunderstanding in
the relationship.
It's hard for us to----
The Chairman. Is it not fair to say that our policy could
have been perceived as being driven by a significant amount of
ideological energy during that period?
Mr. Kuchins. I understand that--how the--from the Russian
standpoint, how they could--they could perceive that. Let me
talk specifically about their views on NATO enlargement and
missile defense, because, again, very fundamentally, I see that
Russia's security interests, in the long term, would be best
answered by closer ties with us, given their existing threats
in the south of instability, Islamic--radical Islam and
terrorism, et cetera, which we care about, as well as their
deep concern about the rising power of China in the East. And I
think, for the Russians, when they look at the issues of NATO
enlargement and missile defense----
The Chairman. Let me just say to you, timewise, we're not
going to be able to chew up, so that everybody gets an
opportunity here.
Mr. Kuchins. The point I want to make is that the Russians
view these policies, rightly or wrongly, as, to a considerable
extent, as the expansion of a--sort of the unilateral expansion
of a United States-led global security system, and they see
themselves as excluded. I think, fundamentally, they want to be
included in the development of a European, a Eurasian and
broader global security system.
The Chairman. Which speaks to our unilateralism, correct?
Mr. Kuchins. Yes.
The Chairman. Mr. Cohen.
Mr. Cohen. I think, to answer your question adequately, you
need to look at what happened after the collapse of the Soviet
Union, in terms of the transformation of foreign policy elites.
And if you compare it to other revolutions, the Russian foreign
policy elite remained more or less the Soviet elite. Maybe a
little bit younger, maybe with a little bit bigger bank
accounts and better watches and clothes, but the outlook--I
would call it a quasi-Soviet or neo-Soviet outlook with a good
layer of Russian imperialism that views the former Soviet
Union, as President Medvedev said on the 31st of August of last
year in the nationally televised address, the exclusive sphere
of influence of--the privilege--I'm sorry--the privileged
sphere of influence of the Russian Federation.
That includes the view of the United States, as they say
openly, the leadership and the military and the security
services, the ``principal adversary.'' Yes, this is old-think,
but this is an old-think that informs the fundamental
decisionmaking that goes into the questions such as how much
money to spend on multiple warhead, heavy intercontinental
ballistic missiles, what kind of navy they have to build, how
they build the basing policy in the ``near abroad'' and beyond
in the Mediterranean, as I mentioned, et cetera.
So, before we examine our foreign policy mistakes--and I
admit, everybody makes foreign policy mistakes--the Bush
administration, and I'm afraid, in the future, maybe the Obama
administration--we need to look at how much the Russian world
view changed. And as the tutor to the heir--the future young
tsar told the boy, Russia has--in the 19th century, ``Russia
has only two allies, the army and the navy.'' And
unfortunately, Mr. Chairman, I am afraid that that world view
still informs a lot of decisionmaking in Russia.
The Chairman. It may well. I'm not going to disagree--I
mean, we all know where the leadership's roots are. I don't
disagree that they're informed by that history and by those
views and perceptions, and nobody is pretending that there's
all of a sudden, just because the Soviet Union disappeared, a
rosiness and a capacity to have a complete, easy relationship
in all of these regards.
The issue is, how do you find those places, notwithstanding
that view, where you have a mutual interest and have the
ability to be able to cooperate, rather than finding a way to
just poke your finger in an eye and find the worst of the
situation? And it seems to me that we did a good job of
avoiding the ability to find the best, and found the worst,
again and again.
To that end, I want to--as you answer your question,
because my time is up and I want Senator Lugar--as you answer
that part of the question, I want you to involve in this--it
seems to me we all have a singular most important unifying
principle, at this point in time--or two, if not one. One is, I
have heard every major country in the region in the Middle East
and surrounding neighbor, from India to Russia, say that it is
not in the interests of the world or them individually for Iran
to have a nuclear weapon or capacity. That's No. 1. And No. 2,
the rise of religious radical extremism, fundamental, or
whatever you want to call it. Those are huge interests. And we
seem to have left those on the sidelines of these other
disputes.
And I just want you, as you answer it--and then, Senator
Lugar, you pick up. Does Russia indeed perceive that as a
threat, this potential? And do we not have an ability to
cooperate there, as a starting point to change this
relationship?
Ambassador Sestanovich. Senator, I think you're absolutely
right, that the issue isn't whether we have disagreements, it's
whether there is a kind of common purpose that allows the two
sides to view those disagreements as less important and less
mutually threatening.
We should remember that a lot of the disagreements that you
talk about--NATO enlargement and the abrogation of the ABM
Treaty--took place at a time when, actually, relations were
very good. The peak----
The Chairman. Right.
Ambassador Sestanovich [continuing]. The peak of Russian-
American relations, since the cold war, came in 2002 and 2003,
when the Russians had a lot of things to complain about in our
policy. Even so, relations were very positive, because there
was a kind of strategic convergence between the two sides.
We're certain to find that we won't be able to resolve all
of our disagreements. But, can we, and do the Russians, in
particular, see a common purpose that makes the remaining
disagreements less grating and less disruptive of the overall
relationship? One can identify a number of common purposes
today. You've talked about Iran. The international economic
crisis is something that is very much on the Russians' mind as
a reason to expand cooperation. How those will play out, you
know, depends a little bit on diplomacy, but I completely
accept your premise that the way to restructure the
relationship is through identifying some common interests that
we can act on--not necessarily on backing away from our
position on areas where we disagree. We may simply have to
disagree.
The Chairman. Senator Lugar.
Senator Lugar. Just following on the Chairman's questions,
given your points on domestic Russian governance, it would
appear that the downturn in the economy has put some stresses
on what we always saw as sort of an implicit bargain between
President, now Prime Minister, Putin and the general public;
namely, that a certain degree of civil rights suspension or
difficulties with the lack of democracy and so forth were
acceptable to the Russian public so long as there was security,
prosperity, and a general good feeling that many people in
Russia feel they had not had before. The dilemma for the
current Russian leadership, the current president or prime
minister--is that the downturn, not so much of the stock
market, which affects some wealthy persons, but the ruble,
which affects many Russians and reminds people of '98 and other
crashes when the middle class was wiped out, gives a great deal
of pause. And they've been going on national television in
Russia to try to express the desire to hold things within a 25-
percent decline and maybe they'll succeed, or not.
I mention this because this seems to me to make the thought
of a strategic partnership, which is often expressed as our
goal, extremely difficult. The current regime may have stress
if the world crisis continues for a period of time, of simply
hanging absent very tough measures to repress the public.
Now, beyond that, there might be use by the regime of the
so-called ``near abroad policy'' or the Russian sphere of
influence--that is, the useof Russian nationalism as a way of
trying to suppress domestic difficulty.
I wouldn't say we could lose on both grounds, but those who
are optimistic about the strategic partnership under these
current circumstances, I'm not certain have much going for
them. What is it that we might talk about? Prospects for arms
control have arisen, simply because, as we expressed in our
opening statement, the START regime ends December 5th. Our
government is hardly prepared, at this point, and we hope to
have, the nomination of Rose Gottemoeller coming over soon,
someone who might form a negotiating team, because time is
slipping away, and it may not be a lay down hand finding an
agreement, even on a narrow START situation, quite apart from
one that's more ambitious.
But, that's sort of an existential problem in which 90
percent of all the nuclear weapons are still with the Russians
and ourselves. Russian Foreign Minister Lavrov and others have
indicated that he'd like to work on this. But, beyond that,
this is going to be pretty rough terrain. And the question for
us will be: What happens, for example, ifthere are further
problems in Georgia with the buildup of the bases in Abkhazia,
for example? Or, what if a relatively dysfunctional government
in Ukraine becomes weaker still and problems in Crimea begin to
arise? And therefore, Russian aspirations really challenge our
foreign policy in very strenuous and dangerous ways. Do any of
you see any more optimistic scenario with regard to the
domestic scene or the ``near abroad'' business that I've talked
about?
Ambassador Sestanovich. I do.
The Chairman. Stephen.
Ambassador Sestanovich. Senator, I wouldn't bet the
mortgage on this hope, but I would note, first, there is
political tension growing in Russia within the elite about how
to deal with this crisis, and second, that so far the results
are, broadly speaking, to empower liberals and Western-style
policy solutions. Andy mentioned that the Russian response to
the economic crisis has been like that within the developed
world. This crisis emboldens some people to argue that Russia
has lost time in not dealing with corruption. President
Medvedev has been particularly active and vocal on that front,
and his advisors have emphasized how much Russia is weakened by
the rigidity of its system. One of them said, a couple of weeks
ago, ``We need a new elite.'' So, there's ferment, and that is
something we ought to keep our eye on. Now, is there anything
that we can do to encourage greater integration and
cooperation, greater acceptance by Russia of international
norms?
I mentioned the WTO accession of Russia and that would be
helpful. Even before it occurs, I would urge that the Congress
not continue to link WTO accession and the lifting of the
Jackson-Vanik amendment. I would also note that Russian
policymakers have said they don't expect energy prices to come
back soon, and that means they've got to create a positive
environment for foreign investment. They're talking about
constructive adaptation to economic adversity.
So, I think there is a narrow path through this crisis that
could end up with positive political results.
Senator Lugar. What if Russia just takes membership in the
World Trade Organization and the Jackson-Vanik legislation off
the table and says, ``Thank you very much,'' but--why is there
any change in the predicament after the Russia's pocket those
two situations?
Mr. Kuchins.
Mr. Kuchins. Let me--I think it gets--it gets to, What are
the sources in the--of the credibility and legitimacy of the
existing regime? Or, put it more simply, Why is Mr. Putin and
Mr. Medvedev--why have they been very popular? And I think it
fundamentally has to do with the fact that Mr. Putin's
leadership of the Russian Federation has coincided with one of
the most prosperous periods----
Senator Lugar. Right.
Mr. Kuchins [continuing]. In Russia's 1,000-year history.
You take away that economic growth and prosperity that millions
of Russians have been experiencing and he would not be nearly
so popular.
Now, the nationalistic elements, the--kind of the--the
looking tough and all of that, well, that helps, to some
degree, but it's fundamentally the economy which is driving the
popularity. There are some interesting studies which bear that
out. And I am absolutely convinced that the guys in the
Kremlin, and in the White House--excuse me, the Russian White
House--they are deeply aware of that. They do all kinds of
polling and public-survey research, and they understand that
the fundamental deal--it's not so much that the regime can
restrict, you know, political rights and cut down the
opposition, but as long as the economy is good, then the people
will be more quiescent. And if those--and that fundamental
situation is very, very different day, and I think that really
affects the whole spectrum of domestic, economic, and political
relationships, as well as the drivers behind Russian foreign
policy.
Senator Lugar. My time is expired and----
The Chairman. Well, let me just ask one thing I want to
ascertain for colleagues. Which colleagues are going to be able
to come back? Because if people can't come back, I don't want
to detain our witnesses. Are--is anybody--you're next, Ben, and
you're going to be able to get your questions in. But,
whether--you're going to come back----
Senator Casey. I'm going to try.
The Chairman. OK. Do you know? You can't come back. So,
one--all right.
Senator Cardin. And maybe you can answer in the course of
Senator Cardin.
Senator Cardin. Thank you, and I'll try to be brief. I just
want to agree with our leaders on this committee about the
importance of improving our relationship with the--with Russia.
And effective relationship is very important for us on security
issues, whether it's Iran or energy.
There are many concerns. A lot of them have been brought
out. We have human rights concerns, from how they treat their
journalists to the right dissent. And we talk about the repeal
of Jackson-Vanik and PNTR.
Let me just point out, we still have lingering concerns.
Let me just mention one, the Chabad-Lubavitch community has a
legitimate concern about the return of the Schneerson
collections. And when you see parts of the Schneerson
collection show up on the black market, it has an impact on
whether we're prepared to permanently repeal Jackson-Vanik.
In regards to security issues, we've talked a little bit
about Georgia and NATO. I want to bring up an issue I brought
up, that's brought up in the OSCE. I chair the Helsinki
Commission, and we have established direct relationships with
Duma members. And I must tell you, there is skepticism by my
colleagues in Russia as to the sincerity of our reaching out,
at this point. Russia has brought forward a new security
initiative for Europe which would--which has been supported, at
least encouraged, by France. So, I guess my question to you is
whether there is any hope in a security initiative that would
include Russia and Europe, in which the United States would
participate in, not as a substitute to NATO, but as a manner in
which we're all at the same table, hopefully changing our focus
from the interior threats within Europe to the concerns of the
Middle East and other areas where we have, I think, a more
direct interest of concern about security risk, whether these
initiatives hold out promise.
Mr. Cohen. To address the issue of Mr. Putin's popularity,
absolutely he was the very popular because of the Russian
prosperity, also because he brought the war--the second war in
Chechnya to the ending, but he was also popular because of the
increasing control of mass media and electronic media. If
President Bush controlled ABC, CBS, NBC, and CNN, he would be
more popular than his popularity used to be. So, you cannot
decouple a leader's popularity from the control of the media,
especially television.
To the Senator's excellent question about European security
initiatives, this is, in my view, in my reading of the Russian
initiative, it's something to keep the United States out. As
Lord Ismay said, the emergence of NATO was to keep Germany in--
U.S. in, Germany down, and Russia out. This initiative is to
keep--get Russia in and United States out. And as such, I don't
think we should support it.
Ambassador Sestanovich. I have a slightly different take on
this. I actually think that the concerns that Ariel mentions
are entirely appropriate. And for some Russians, the goal of
this initiative is openly to subordinate NATO. And we don't
have any particular interest in that.
But, do we have an interest, and can we manage a process,
in which we put the Russian initiative on the table and talk
about it in a Europeanwide setting, exploring all of the
complexities, and insisting on the principles that the Russians
will find very difficult to oppose, of national sovereignty,
independence, respect for human rights, reaffirming the
original Helsinki final act. I think this is a process that
actually has some potential for us, and I'm not so afraid of
the devilish Russian diplomatic cleverness that will, in the
dead of night, lead us to sacrifice NATO for the sake of a new
forum in Vienna. We've been through more than one Helsinki
round in the past, and we've protected our alliance extremely
successfully.
Senator Cardin. Let me----
Ambassador Sestanovich. If I could--the original Helsinki
negotiations were intended by the Russians to subordinate NATO,
and they ended up becoming a tool for human rights activists
throughout the Soviet bloc.
Senator Cardin. I think it's a very valid point. And no one
here will weaken our involvement in NATO. And I understand what
the Russians intents might be. But, when you look at the direct
military threat against America from Europe, it's not in
Europe, it's the Middle East. And if--we certainly have our
concerns in Europe, and they're not going to be reduced. But, I
do hope that we can engage, and not be worried about an
engagement here. I do think it does give us the opportunity to
work on an effective relationship with Russia, which we need to
improve.
And thank you, Mr. Chairman. I appreciate the opportunity.
The Chairman. Thank you very much, Senator. And thank you
for your workon the Helsinki Commission.
Senator Kaufman. I just have a real short question, a
followup on Senator Lugar's question.
It all sounds very organized, ``We're going to have this
economic downturn, we're doing the polling data, everything's
going to be just fine,'' but what are the possibilities that--
you say that they're behaving like a developing country--but,
that this turns bad for the United States? In other words, that
Putin, because he's got the problems--Medvedev--if they turn on
the United States, it's kind of the problem that's causing
this, as opposed to us causing the problem. Is that a prospect,
of that happening? And what do you think the probability of it
is?
Mr. Kuchins. It's certainly a possibility. The worst-case
scenario, to me, in the near to medium term, were to be if, as
I suggested, one of the caveats, if the Kremlin found itself
really under siege, not able to respond quickly enough, growing
social unrest, and there was the crackdown in response, greater
centralization of power, greater oppression, et cetera, et
cetera, and then, not too long after that, there might be a
spike in the oil price and suddenly the Russian economy is on
much firmer footing, not necessarily because of anything they
do to promote, you know, diversification, more sustainable
sources. That would be the worst-case scenario, which the
justification for the crackdown would have greater credibility
and legitimacy simply because of the flow of oil money. It's a
possibility, and we have to be ready for it and consider it.
But, you know, absent that, I think--I mean, just the--the
constraints the Russians face today on longer-term economic
growth, as opposed to 1998, they're far greater, and they
really do, I think, push them more towards--more toward
cooperation, even if it's kicking and screaming.
The Chairman. Yes, quickly. We've got 3 minutes left on the
vote. We have a little grace period. So, if you can wrap it up,
that'd be helpful.
Mr. Cohen. Yeah. We tend to give a lot of credit to
President Medvedev, and duly so, because he is the president.
However, when you look at who is really running Russia today,
these are all Mr. Putin's allies, and there is a lot of anti-
Americanism and nationalism. How do I know? When I go to
Russia, I'm a Russian speaker, I flip television channels, and,
lo and behold, I find out from Russian state-run television,
that the United States funded the Bolshevik Revolution when it
is a consensus in the historic community that it was German
general staff that provided money and the sealed carriage for
Lenin.
When I'm looking at who of the Russian allies emerge over
the last 3 or 4 years, I'm looking at Chavez, I'm looking at
Iran, we're looking at OPEC. Now Russia is in a very intense
dialogue with OPEC and the world view of a multipolar world;
translate, less and less American power. I am not saying that
the economic crisis will bring it about, but the tendency was
there when the prices were high. The question is, What is the
perceived national interest? What we consider rational, do they
consider the same thing rational? And I'll leave it at that.
The Chairman. Well, it's very provocative and helpful and
important, and it's an important dialogue. And we,
unfortunately, have not been able to complete it, and I regret
the schedule, because of the votes now, and the number of
Senators coming back, what we're going to do is adjourn rather
than recess, but we're going to leave the record open. A number
of colleagues have said they want to submit questions for the
record, which I'd like to do.
This will not be our only hearing with respect to this
question, so we will pursue further, and we might even engage
you folks in a roundtable that we want to have on this topic at
some point in the near term, because we've put a number of very
important thoughts out there, which really need to be developed
a little more.
Nevertheless, we did cover a lot of territory, and I think
we began to lay the predicate, so we're grateful to you for
being here to help us do that today. And we'll stand adjourned,
with the record staying open for a week.
Thank you.
[Whereupon, at 11:20 a.m., the hearing was adjourned.]
----------
Additional Material Submitted for the Record
Responses to Additional Questions Submitted
for the Record by Members of the Committee
responses to questions submitted to andrew kuchins by senator kerry
Question. The closure of Manas Air Force Base was immediately
followed by the offer to negotiate the transportation of equipment
through Russia and on their terms. Obviously it was a power play, but
what does it say about Russia's strategic goals in Central Asia and
what sort of role are they seeking in Afghanistan?
Answer. First, we should acknowledge that the Kyrgyz have their
interests in this as well, and they principally entail getting as much
money as possible. Russia's strategic goals in Central Asia are to
strengthen their role as the hegemonic regional great power. Regarding
Afghanistan, they would like to control/coordinate the transit
cooperation with NATO, Russia, and Central Asian states. Ideally they
would like to do this through the CSTO (Collective Security Treaty
Organization).
Question. The Moscow Treaty limits only apply for a single day in
December 2012, and allows each party to define for itself what counts
as an operationally deployed warhead. Does that arrangement provide
enough stability and predictability in our strategic relationship?
Answer. In my view the Moscow Treaty is not adequate to provide
sufficient stability and predictability in our strategic relationship
with Russia. We need a treaty relationship that provides more
verification and monitoring measures than the Moscow Treaty, but one
that is simpler to negotiate and execute than START
Question. President Medvedev spoke last year about a new European
security architecture. Russia has been suspicious of the OSCE and
highly critical of NATO. Is there a positive vision for a new
architecture? What kind of organization is the CSTO?
Answer. I think President Medvedev has a ``positive vision,'' but
it is hard to say how widely that is shared amongst his colleagues in
the leadership, including Mr. Putin. But even in the case of Medvedev,
it appears there is little specificity to what this architecture would
entail. I have a hard time gleaning real content in the Russian
proposals. They are right to the extent that existing security
institutions have not been fully successful in maintaining peace and
security in Europe, as the Georgia war last summer tragically
illustrated. Russia could go a long way to strengthening European
security by developing a stronger relationship with NATO and not trying
to undercut the OSCE.
Below is how I describe the CSTO in my forthcoming book, The Russia
Balance Sheet (co-authored with Anders Aslund, April 2009):
The CSTO, originally established in 1992 as the CIS
Collective Security Treaty, was founded in 2002 by the
presidents of Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia,
and Tajikistan; Uzbekistan joined in 2006. It should certainly
not be compared with the Warsaw Pact as there is neither
political control exercised by Moscow nor an integrated
military structure. The CSTO is a consultative body where
Moscow is not challenged, but where national interests clearly
prevail over collective ones. Tellingly, no member of the CSTO
apart from Russia has recognized the independence of Abkhazia
and South Ossetia.
The only addition I would make to this is that early this year the
CSTO agreed to establish a 10-12,000 man rapid reaction force, so this
would, if it does indeed happen, would provide some operational
capability to the organization.
Question. To what extent does Russia perceive Iran's nuclear
program as a threat to international peace? Do Russia's estimates of a
timeline of Iran reaching nuclear weapons capability differ from our
own? If so, do you think such an estimate changes the urgency of the
situation in Russia's view?
Answer. Russia does not view the Iranian nuclear program with the
same degree of urgency as Washington, and they are far more inclined to
view Iran as a regional geopolitical partner. They do not want to see
Iran become a nuclear power, but I think they are more reconciled that
this is an inevitability given that Tehran's efforts go back decades to
the time of the Shah, and that military efforts to prevent it would be
more destabilizing than stabilizing for the region and international
security more broadly. Moscow regards a nuclear-armed Pakistan as more
threatening to their interests as well as to the nuclear
nonproliferation regime.
Moscow also benefits from the rather unstable status quo with Iran
being regarded as a ``rogue state'' by the West, and this leaves more
room for Moscow to assert economic and political influence. But there
is very little trust between Moscow and Tehran, and the Russians have
been increasingly frustrated with Iranian intransigence on the nuclear
issue with their refusals to take up Russian proposals for an
international fuel bank for the processing of Iranian and other
countries nuclear fuel.
__________
responses to questions submitted to andrew kuchins by senator feingold
Question. In recent testimony, the DNI noted that Moscow's
engagement with both Iran and Syria, including advanced weapons sales,
has implications for U.S. nonproliferation interests. Equally as
relevant are press reports that Russian President Medvedev has
announced his intention to strengthen Russia's conventional military
force. How should the Obama administration interpret these signals and
what actions might result in more effective cooperation with Russia on
Iran?
Answer. Regarding the Medvedev announcement about increasing budget
for military modernization, this is being done in the context of a
broader military reform that will reduce forces considerably and force
retirement for many officers. The reform is a long overdue measure
unpopular with most of the uniformed military, and the increase in
spending is both to sweeten the pill and address some of the
shortcomings of Russian military forces that have been starved of
procurement since the Soviet collapse.
Arms sales have been principal means of supporting what is left of
Soviet military industrial complex for nearly two decades. A major
piece of arms sales is its role as a jobs program. Some of the sales to
Iran, Syria, and others are clearly problematic, but I think the
decision of the Russians to deliver the A-300 anti-air system to Iran
is the most important one to watch in terms of U.S. interests and
Russian intentions. The Russians have held back this delivery perhaps
waiting to see what Obama administration policy towards Russia will be
like.
Question. If Iran continues to move forward in the direction it is
currently headed and does not cease uranium enrichment, do you think
Russia would be supportive of more punitive actions if need be,
including sanctions through the UN Security Council even though it has
resisted harsher measures in the past?
Answer. I can say with some degree of certainty that absent a
broader improvement in U.S.-Russia relations, I think the Russians
would be reluctant to support tougher sanctions without more clear
proof of Iranian efforts to develop a weapons program. If the Obama
administration does have some success in improving the relationship,
then certainly the likelihood of the Russians being more open to
tougher sanctions on Iran are increased--how much is impossible to say.
Question. With the media reporting that Russia will now allow the
United States to ship non-lethal supplies through its territory to
Afghanistan--via Kazakhstan and Uzbekistan--what kind of support is
feasible from Russia. Is it appropriate to see Russia as an equal
partner with regard to Afghanistan and if so what steps should we take
to ensure that's the case?
The Russians have indicated they are prepared to discuss/negotiate
shipment of lethal military goods through their territory, so I think
this is a possibility. The Russians are also probably prepared to serve
as contractors for reconstruction efforts in some areas. The Russians
are probably most interested in stronger efforts to curtail narco-
trafficking out of Afghanistan. It is not clear what being an ``equal
partner'' really means (effectively no country is operationally an
```equal partner'' to the U.S.), but probably our benchmark for what
can be done should start with the areas of cooperation in taking out
the Taliban we did engage in with Russians in fall/winter of 2001/02.
Question. Russian officials said earlier this year that they are
scaling up their diplomatic involvement to solve conflicts in Africa,
and they recently appointed a special envoy to Sudan. However, their
record to date toward Sudan and specifically the situation in Darfur
has been unhelpful to say the least. They have provided political cover
for the regime in Khartoum at the UN Security Council and, according to
the organization Human Rights First, they have continued to provide
arms to the Government of Sudan used in Darfur in direct violation of
the UN arms embargo. How can the Obama administration better press
Russia on the Security Council and bilaterally to change their approach
to Sudan? And just as with the Chinese, how can we engage and identify
opportunities to partner with the Russians as they increase their
involvement in African affairs?
Answer. The most important drivers in growing Russian interest and
influence in Africa are commercial and economic. Fully understanding
their economic interests, where in some cases they are competing
against the Chinese, can yield clues about partnership opportunities.
The extent to which Moscow perceives us as taking their interests
seriously and in some cases helping to advance them, the more likely
they will be prepared to support us on regional issues we consider
priorities.
Question. The State Department's yearly report on human rights
noted for 2008 that ``the Russian Federation has an increasingly
centralized political system. with a compliant State Duma, corruption
and selectivity in enforcement of the law, media restrictions, and
harassment of some NGOs [all of which have] eroded the government's
accountability to its citizens.''
The 2008 report also documents numerous reports of government and
societal human rights problems and abuses during the year. The last
administration pretty much gave Russia free pass but this is not
expected to be the case with the new administration. How do you
anticipate these restrictions will be addressed in any new U.S. policy
towards Russia?
Answer. Certainly the Russian leadership does not view itself as
having received a ``free pass'' by the Bush administration on these
issues. The previous administration did far more to hurt the
advancement of American ideals by failing to live up to them in very
public ways. This is a hard set of issues as we have so little leverage
over them, and it is a real dilemma to ascertain to what extent our
efforts to support more reform-oriented individuals and groups actually
empower them or are counterproductive for their agendas. Our influence
on domestic issues in Russia is further reduced when the bilateral
relationship is overall so negative--it is too easy then for the
Russian leadership to paint Washington in the ``enemy image'' that
seeks to sabotage and weaken Russia.
The new administration will have an advantage in this regard from
the outset since the global financial crisis has hit Russia especially
hard and will likely force the Kremlin to be more attentive to good
policy decisions that improve the investment climate. The Kremlin does
understand that their principal ``accountability'' to the Russian
people is continued prosperity, and for the last five years of rising
oil prices, until last summer, there has been far less incentive for
the Russian government to make what we would regard as good policy
decisions.
__________
responses to questions submitted to ariel cohen by senator kerry
Question. In your testimony, you state that the United States does
not need to replace the START treaty because the 2002 Moscow Treaty
will continue in force after START's expiration. However, the Moscow
Treaty has no verification mechanism of its own; it relies entirely on
START's verification provisions.
Without START's verification provisions, or something similar to
them, won't the U.S. lose valuable information about Russia's strategic
forces?
Answer. The recent upsurge in international calls for the total
elimination of nuclear weapons has added to the administration's hope
to be able to develop a new workable agreement with the Russian
Federation by December 5, 2009, when START is set to expire according
to its Article XVII, which is reflected in the U.S.-Russian joint
statements of April 1st. A second treaty in existence limiting the
strategic nuclear forces of the U.S. and Russia to levels below START--
the Strategic Offensive Reductions Treaty (SORT), frequently referred
to as the Moscow Treaty for the city where it was signed, will remain
in force until the end of 2012. However, SORT lacks verification and
control measures foreseen in START. Since at least mid-2006, Moscow has
been calling for maintaining START verification and transparency
measures, albeit with modifications that will reduce the expense and
cumbersome nature of some requirements.
The most immediate issue for the U.S. and the Russian Federation
(RF) regarding strategic nuclear arms reductions is that START,
ratified in 1994, is set to expire in December. This is not an issue
regarding the numbers of weapons deployed. Both sides are well below
the START limits and working toward to the lower limits established by
the Moscow Treaty. The problem is that the Moscow Treaty uses the
verification and transparency provisions in START to inform each side
of the reductions they are making. The issue is complicated by the fact
that the START verification and transparency provisions do not reflect
the Moscow Treaty's different definition of the weapons to be limited,
which is referred to as operationally deployed warheads. While Article
XXVII of START allows the parties to extend the treaty, a simple
extension will not resolve the problem with verification and
transparency mechanism. This is because the START verification and
transparency provisions are not ideally suited to verifying the
reductions required by the central provisions of the Moscow Treaty and
simple extension of START will leave this mismatch in place. While
START will expire in December, it would be best to let it lapse rather
than negotiate a new agreement with Russia under a tight deadline, as
rushed agreements on matters as technical as arms control almost always
end up flawed.\1\
---------------------------------------------------------------------------
\1\ Andrei Shoumikhin, Ph.D. and Baker Spring, ``Strategic Nuclear
Arms Control for the Protect and Defend Strategy,'' forthcoming
Backgrounder from The Heritage Foundation.
---------------------------------------------------------------------------
Letting START expire will remove an unrealistic deadline for the
conduct of negotiations with Russia regarding strategic nuclear arms
limitations. Negotiating a new treaty under such a deadline will
prohibit a careful review of the proper strategic force posture for the
U.S., which will not be concluded until the completion of the required
Nuclear Posture Review at the end of this year or early next year. As a
result, hasty negotiations are much more likely to result in a treaty
that contains significant flaws that make it inconsistent with U.S.
security requirements. Finally, there is no compelling reason to keep
START in place. Its expiration will not result in the abandonment of
numerical limitations on U.S. and Russian operationally deployed
strategic nuclear warheads because the Moscow Treaty will remain in
force through the end of 2012.
Instead, the Obama administration should negotiate a verification
and transparency protocol (as a treaty document) to the Moscow Treaty.
This treaty limits nuclear forces to levels below those allowed by
START. Although it will remain in force until 2012, the Moscow Treaty
uses verification and transparency provisions taken from START, which
are not suited to verifying the reductions it requires. START limits
warheads on the basis of the capacity of strategic delivery systems,
whereas The Moscow Treaty limits all operationally deployed strategic
nuclear warheads. Correcting this should be the first order of business
for arms control talks with the Russians. Unless the Obama
administration and Russia badly mishandle the negotiations, this Moscow
Treaty protocol is likely to enjoy the necessary support in the Senate.
Question. The Moscow Treaty limits only apply for a single day in
December 2012, and allows each party define for itself what counts as
an operationally deployed warhead.
Does that provide enough stability and predictability in our
strategic relationship?
Answer. Under the Moscow Treaty, both the U.S. and Russia are on
the path to reducing their respective operationally deployed strategic
nuclear warheads to between 1,700 and 2,200. The Obama administration
has declared its determination ``to stop the development of new nuclear
weapons; work with Russia to take U.S. and Russian ballistic missiles
off hair trigger alert; and seek dramatic reductions in U.S. and
Russian stockpiles of nuclear weapons and material.''\2\ In line with
these goals and the promise ``to extend a hand if others are willing to
unclench their fist,'' the administration has rushed to renew strategic
arms control negotiations with Russia on a follow-on agreement to the
Strategic Arms Reduction Treaty (START) and broader areas of
cooperation to reduce the number of nuclear weapons and prevent further
proliferation in accordance with joint statements issued by President
Obama and Russian President Dmitri Medvedev in London on April 1, 2009.
---------------------------------------------------------------------------
\2\ The White House, ``The Agenda: Foreign Policy,'' at http://
www.whitehouse.gov (March 19, 2009).
---------------------------------------------------------------------------
The administration needs to fashion an arms control policy
specifically tailored to meeting the current and projected defense
needs of the U.S. This policy should be based on the in-depth
professional analysis of political, legal, economic and all other
pertinent aspects and implications of the existing and future
negotiations and agreements with the Russian Federation, and the
Russian internal and foreign policies, including their motivations and
goals in arms control. It should proceed on the basis of clearly
defined U.S. security goals and requirements, in particular, to be
established in the next Nuclear Posture Review. It also needs to have
as comprehensive and accurate understanding of Russian interests, goals
and methods in future negotiations as possible.
Haste in redefining the parameters of the U.S.-RF strategic
relationship, for the sake of political expediency, is inadvisable and
potentially dangerous for the U.S. national security interests. The
Obama administration seems to be on the cusp of defining its planned
negotiations with Russia on strategic nuclear arms reductions as the
barometer of its initiative of ``resetting'' U.S.-Russian relations. If
these negotiations are defined in that broader context, process will
come to dominate substance. The likely result will be a treaty that
fails to serve either the central purposes of arms control or the
interests of the U.S. The Obama administration needs to pursue the now-
established strategic nuclear arms control negotiations with Russia
with both care and patience. The negotiations on the fate of the
Strategic Arms Reduction Treaty should be driven not by chronological
deadlines but by the clear understanding of how this process and its
expected results would comply with the security interests and defense
requirements of the United States and its allies.
The Obama administration should defer negotiations on a treaty to
reduce strategic nuclear weapons below those required by the Moscow
Treaty. The administration, despite the implied goal of the April 1st
joint statement on arms control, is not in a position to negotiate a
new treaty with Russia that would effectively serve as a successor to
the Moscow Treaty. It has yet to see the final report of the
congressionally-appointed Strategic Posture Commission, which could
include consensus-based recommendations regarding these matters.
Further, it has yet to produce its own National Security Strategy and
Nuclear Posture Review. All of these reviews are necessary parts of
establishing a broader policy governing the strategic posture of the
U.S. and defining the proper role for arms control in that context.\3\
---------------------------------------------------------------------------
\3\ The Dmitrii Medvedev government seems to be deeply involved in
some doctrinal drafting that may eventually change Russian approaches
to arms control in a significant way. At the meeting of the RF Security
Council on March 24, 2009, the Kremlin announced the preparation of the
new ``National Security Strategy to 2020'' and the new ``Military
Doctrine'' to be submitted to the President for signing before the end
of 2009. Both documents are supposed to complement each other. As
reported, ``Russia does not intend to get involved in burdensome
confrontation or new the arms race,'' however it is supposed to respond
adequately to the ``serious conflict potential in a number of world
regions. international terrorism, and the unending attempts to expand
NATO's military infrastructure in close proximity to Russian borders.
See: ``Russia Refused to Renew the Arms Race,'' Lenta.ru, March 24,
2009, available at: http://lenta.ru.
---------------------------------------------------------------------------
Further, there is no need to rush this broader strategic arms
control process. By allowing START to expire and concluding a narrow
treaty regarding verification and transparency measures under the
Moscow Treaty, no immediate deadline looms. This breathing space can be
used to establish a new and carefully prepared policy for arms control
with Russia and beyond. This is the opportunity the Obama
administration can use to fashion an arms control policy that is based
on the Constitution's requirement that the federal government provide
for the common defense. It would be an arms control policy that would
serve as an arm of a broader national security policy and strategic
posture that is designed to protect and defend the people, territory,
institutions and infrastructure of the U.S. and its allies against
strategic attack. The arms control element of such a policy can also
seek to encourage more defensive strategic postures by all other
nuclear-armed states, starting with Russia.
The Heritage Foundation believes that between now and the end of
2012, that the SORT Treaty will provide for stability in the U.S.-
Russian bilateral relationship, assuming the conclusion of a
verification and transparency protocol to SORT as we recommended
earlier.
Question. Has Russia demonstrated the successful use of an ``energy
weapon'' in its recent disputes with Ukraine, Georgia, Estonia and
Lithuania? Or has Russia awakened Europe to the danger of over-
dependence on Russian energy supplies? Has Russia over-played its hand?
Answer. Yes, it certainly did. Since the late 1990s, the Kremlin
has repeatedly demonstrated that it is willing to use energy as a
weapon to accomplish its political objectives. In fact, the Kremlin has
institutionalized this behavior. At the same time, Ukraine, the Baltic,
Central and Western European states are not without fault as they have
largely neglected the steps that would have reduced vulnerabilities.
Anyone aware of Russia's past behavior and fervent opposition to
U.S. missile defense plans in Europe could easily adduce it was no
coincidence when Transneft, Russia's monopoly oil exporter, reduced oil
deliveries to the Czech Republic by 40 percent the day after Prague
signed a deal with the U.S. Furthermore, after Lithuania sold is oil
facilities to a Polish company instead of a Russian company in 2006, it
was no coincidence when the Kremlin cut off the flow of oil. The
Kremlin had already cut off oil to Lithuania no less than nine times
between 1998 and 2000 in an attempt to engender favorable conditions
for Russia's companies to benefit from Lithuania's privatization. A
similar incident happened earlier in 2004, which was barely noticed in
Europe, when Russia cut oil deliveries to Latvia in 2004. Here, the
Kremlin was trying to procure an oil port for a Russian company during
Latvia's privatization.\4\
---------------------------------------------------------------------------
\4\ Keith Smith, ``Russia and European Energy Security: Divide and
Dominate,'' Center for Strategic and International Studies, October 27,
2008, at http://www.csis.org (April 19, 2009).
---------------------------------------------------------------------------
With regard to Georgia, the August 2008 war and President Dmitry
Medvedev's August 31 statement on national television of Russia's new
foreign policy principles were intended to send clear signals to
multiple audiences. The message to the world was that Russia has a
``zone of privileged influence'' and that it holds the veto over the
aspirations of the people living in it. Second, initiating democratic
reforms or pursuing a pro-Western policy in Russia's backyard is
dangerous. Thirdly, that Moscow can disrupt the flow of energy and
goods through the East-West energy and transportation corridor of oil
and gas pipelines and railroads from the Caspian Sea to Turkey and
Europe. Turkmenistan agreement to sell the majority of its gas to
Moscow, and the recent Memorandum of Understanding between Azerbaijan
and Russia on sale and export of gas demonstrate this important point.
(More below on how this war has impacted energy policy and influenced
investors and regional governments alike).
Russia also sought to enhance its strategic position by shutting
off the flow of natural gas to Ukraine and the European Union in
January 2006 and January 2009. While legitimate commercial issues were
involved in the January 2009 gas war, such as Ukrainian indebtedness,
the siphoning of so-called ``technical gas'' and the price of transit
fees, there is little doubt that powerful political considerations and
concerns over huge sums of money featured largely in the Kremlin's
calculus.\5\ On energy, the Russian leadership sought to show Europe
that Ukraine is an unreliable transit state and that expensive Russian-
proposed gas pipe lines bypassing Ukraine are justified.
---------------------------------------------------------------------------
\5\ Ariel Cohen and Owen Graham, ``European Security and Russia's
Natural Gas Supply Disruption,'' Heritage Foundation WebMemo No. 2194,
January 8, 2009, at http://www.heritage.org.
---------------------------------------------------------------------------
While Russia has clearly been willing to use energy as a weapon,
fault can still be distributed widely. For example, the Baltic States
and most of the Central European states are dependent on Russia for
virtually all of their gas imports. However, only the Czech Republic
invested heavily during the 1990s to diversify their supply source.
Prague invested in an oil pipeline from Germany and began buying gas
from Norway long before it was in vogue to diversify away from Russia.
This policy proved to be farsighted, especially after Transneft reduced
its oil supplies to the country following the missile defense deal.
Yet, Central European and Baltic states haven't pursued Liquified
Natural Gas (LNG) solutions. So far, Prague is the outlier. Even
following the 2006 gas cut-off, there was little investment in
pipelines, especially interconnecter pipelines, or LNG; indeed, the
Baltic States still remain on the old Soviet electric grid to this
day.\6\
---------------------------------------------------------------------------
\6\ Keynote Address by Czech Ambassador-at-Large for Energy
Security Vaclav Bartuska, Conference on ``Energy Security Challenges to
Europe and America in Eurasia,'' The Jamestown Foundation, National
Press Club, Tuesday, February 17, 2009, at http://www.jamestown.org
(April 22, 2009).
---------------------------------------------------------------------------
In the case of Ukraine, the government is also at fault for having
left the country vulnerable. There has been no fundamental reform in
the Ukrainian energy sector since the Orange Revolution over four years
ago. The Ukrainian state-owned energy sector remains corrupt,
inefficient, overly politicized, and mismanaged, regardless of who's in
power in Kyiv. Worse, Kiev has failed to develop a coherent policy
toward its Russian supplier. One of the major reasons for this the
ongoing influence of shady intermediary companies like Swiss-based
RosUkrEnergo.
Despite the supposed termination of this company in the Russian-
Ukrainian gas trade, stipulated in December 2008, it remained active in
importation of Turkmenistani gas. It was also reported that
RosUkrEnergo likely played a prominent role in the gas war. In fact,
one prominent analyst stated that Putin cut off the gas to Ukraine
because he became so furious with Dmitry Firtash, one of the
RosUkrEnergo principals, because he could not control him any
longer.\7\ While the facts and potential violations of the law by
RosUkrEnergo's involvement in the gas war are murky and deserve a
thorough international investigation through a combination of law
enforcement and intelligence means, experts agree that Ukraine should
have taken steps by now to fully eliminate the role of shady middlemen,
in addition to modernizing the energy sector.
---------------------------------------------------------------------------
\7\ Remarks by Anders Aslund, ``Energy Security Challenges to
Europe and America in Eurasia,'' The Jamestown Foundation, National
Press Club, Tuesday, February 17, 2009, at http://www.jamestown.org
(April 22, 2009).
---------------------------------------------------------------------------
Has Europe awakened? It has become cliche to say that the latest
natural gas row between Russia and Ukraine should have been a wake-up
call for the EU. However, the 2006 gas cut-off and the watershed
Russian-Georgian war of August of 2008 should have also been wake up
calls. They are not.
Despite calls in 2006 and the prioritization for a unified EU
energy strategy, including diversification of transit routes not under
Russian control, the EU member states continue to take a largely go-it-
alone approaches to energy. Every capital is trying to cut its own deal
with Gazprom, and energy policy is influenced by the level of
dependence on Russian gas.
During the January crisis, however, the EU did find a common voice
for a short time. At the height of the crisis, Russia called for an
Energy Summit to help resolve the crisis. EU member states declined to
attend delegating the role to the Commission and the Presidency. While
those advanced some positive measures, such as setting up gas meters
and sending observers to the border where gas is crossing from Russia
to Ukraine, comprehensive energy security solutions still elude
Brussels.
More recently, Brussels achieved an ephemeral ``unity'' by
supporting funding for the proposed Nabucco pipeline, which will carry
gas not under Russian control from the Caspian region to Europe.
However, this measure, part of a four billion Euro plan to boost
Europe's economy, was achieved only after overcoming strong German
objections. In fact, German Chancellor Angela Merkel was lobbying
actively for one month against Nabucco, and Germany is trying to
undermine the project. Nabucco has been labeled as a strategic priority
project by the EU Commission. In addition to lobbying against Nabucco,
Merkel has been trying to get the proposed Nord Stream pipeline
elevated to become a priority project. It should be noted that unlike
Nabucco, Nord Stream would be an exclusive pipeline between two
countries, with spurs to Germany's neighbors.
Only after coming under pressure from EU Commissioners and other
officials and receiving phone calls did Frau Merkel reverse course. In
the end, the package for Nabucco went from $250 million to $200
million. It should also be noted that Germany ironically objected to
including Nabucco in the spending package on the basis that it would
not immediately stimulate the economy.
The reality is that some member states, namely Germany, Italy and
France are growing increasingly dependent on Russian energy and this
militates against common efforts on the energy front. Unfortunately,
many Germans seemed to have concluded from the recent gas war that the
solution is their capitulation on the ``Eastern Front.''
Another reason the 2009 crisis has not interrupted business as
usual is that blackmail occurs only occasionally. It appears that many
governments prefer to weather a temporary storm rather than take the
hard steps necessary to achieve greater energy independence, preferring
to believe that they are drawing Moscow into a relationship of
``interdependence'' which benefits Europe in the long term. It appears
that it is going to have to take a crisis of much greater magnitude to
shake some member states free from their slumber.
Has Russia overplayed its hand? When asking this question, it is
necessary to put it into context. Since 1999, Moscow has ridden an
energy boom and mounted a proactive energy agenda throughout Eurasia,
in which foreign policy priorities predominated. Indeed, the Kremlin
has been working very effectively to advance their interests throughout
Eurasia.
Moscow's fortunes began to reverse, however, with Putin's shakedown
of the Mechel Corporation, the fallout from the fight for control of
TNK-BP oil joint venture, the August war with Georgia, the latest gas
war, and the start of Mikhail Khodorkovsky's second trial. These
events, taken cumulatively, have caused international investors to
reel, the Russian stock market to plunge, and capital to flee, sending
shock waves through the Russian leadership.
After the gas war, the International Energy Agency observed that
Russia is not a reliable supplier. Investors also took notice of
Russia's behavior and state of corporate management and voted with
their feet. Nevertheless, Russia will remain the primary supplier of
gas to Europe for the foreseeable future. Moreover, demand for Russian
gas will only grow as Europe seeks to meet its stringent carbon
emissions reduction targets.
Moscow's effective energy offensive, coupled with the West's low
level of engagement on Eurasian energy diplomacy, continues to pay
dividends to Russia. With the significant exception of Senator Lugar,
there has been scant engagement from the U.S. Congress, and
insufficient and inefficient involvement by the administration, as well
as by European states, in Eurasian energy diplomacy, including Turkey.
This lack of attention has given Moscow an added advantage. To
contrast, high-level delegations from Russia, starting with Putin and
other bosses of the Kremlin, as well as from Gazprom, Rosneft,
Transneft, etc., have been making regular visits to the capitals of key
energy producing states in Eurasia.
Moreover, Moscow's demonstration of force in the Southern Caucuses
last August is one more factor that is driving this trend: Turkey's
recent efforts to tie progress on Nabucco to gaining EU membership.
Currently, Ankara is stalling on signing an intergovernmental
agreement on Nabucco myopically tying it with negotiating the Energy
Chapter of Aquis Communitaire with the EU. Without such an agreement,
Azerbaijan's access to Western markets outside of Russian controlled
transit will be seriously compromised.\8\
---------------------------------------------------------------------------
\8\ Steven Blank, ``Germany and Turkey Keep Nabucco on the Rocks,''
March 25, 2009, CACI Analyst, at http://www.cacianalyst.org (April 22,
2009).
---------------------------------------------------------------------------
This action coupled with the Georgia war may be pushing Baku closer
towards Russia in Baku's ever delicate balancing policy. In a meeting
on March 27 between Gazprom chief Alexei Miller and Socar chief Rovnag
Abdullayev, Gazprom won an agreement from Azerbaijan to begin talks on
buying Azeri gas.\9\ On April 18, Azerbaijani President Ilham Aliev
flew to Moscow in a follow-up meeting and met with his Russian
counterpart Dmitry Medvedev. At this meeting, President Aliev confirmed
his interest in selling gas directly to Gazprom.\10\
---------------------------------------------------------------------------
\9\ ``Azeris Agree To Consider Gazprom,'' The Moscow Times, March
30, 2009, at http://www.themoscowtimes.com (April 3, 2009).
\10\ Anatoly Medetsky, ``Aliyev Proposes Selling Gas to Europe,''
The Moscow Times, April 20, 2009, at http://www.moscowtimes.ru (April
22, 2009).
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It should also be noted that the number one priority for Azerbaijan
is resolving Nagorno-Karabakh. Unlike the West, Moscow has been moving
very rapidly on this issue, promising Baku an acceptable outcome. This
Russian-Azeri gas deal could potentially undercut Nabucco.\11\
---------------------------------------------------------------------------
\11\ Alexandros Petersen, ``Nabucco Pipeline: Over Before It
Started?,'' April 8, 2008, at http://www.acus.org (April 22, 2009).
---------------------------------------------------------------------------
In addition to Azerbaijan, Turkmenistan is critical to filling
Nabucco. On April 9, a segment of the Central Asia-Center pipeline
exploded, halting Turkmen natural gas exports to Russia.\12\ Following
the incident, the Turkmen Foreign Ministry remarkably blamed Russia for
the explosion. The U.S. should have begun a much more active diplomacy
with Ashgabat a long time ago. Not only there were no high level visits
of U.S. officials to Turkmenistan, as the time of this writing, there
is no full-time U.S. Ambassador to Turkmenistan.
---------------------------------------------------------------------------
\12\ John C.K. Daly, ``Pipeline explosion reveals Turkmenistan-
Gazprom rift,'' April 13, 2009, UPI, at http://www.upi.com (April 22,
2009).
---------------------------------------------------------------------------
The West needs to step up its energy diplomacy in Eurasia. The
appointment of Ambassador Richard Morningstar as Special Envoy for
Eurasian Energy is a good start. The Obama administration should
continue to encourage Europe to diversify their sources of energy, to
add LNG and non-Russian-controlled gas from the Caspian, and nuclear
energy and coal, as well as economically viable renewable energy
sources. The administration should also encourage efforts to build
interregional pipeline connections and storage facilities in Europe
that will increase flexibility during future supply disruptions.
Lastly, Washington and Europe should encourage Moscow to decouple
access to Russia's natural resources sectors from the Kremlin's
geopolitical agenda in compliance with this convention.
Question. Given the poor state of the rule of law, democracy and
human rights in Russia, how can or should the U.S. act to support those
who would stand up for fundamental rights? What works and what doesn't?
Answer. So far, the Obama administration has not publicly raised
questions about human rights violations, tight state controls of
national TV channels, political repression, or rule of law issues in
any significant way. In fact, so far despite the rhetoric, under
President Medvedev human rights activists were assassinated, murderers
of others (Politkovskaya) were acquitted in what appears as
deliberately botched prosecutions, while the Khodorkovsky-Lebedev trial
is moving ahead full steam.
The Obama administration appears to be meeker than the Bush
administration in addressing these issues. I believe that in the
``euphoric'' stage of bilateral relations, determined to press the
``reset'' button and pursue arms control initiatives, the Obama
administration may be all but mum in this area. This should not be the
case though.
An important question to ask is what priority should the U.S. place
on democratization and protecting civil liberties in Russia.
Additionally, there is an important corollary to this question: If the
Obama administration focuses too much on these areas, do we risk
alienating Russia on important security issues, like Iran's nuclear
threat, arms control, or Russian policy towards its neighbors?Indeed,
some argue, that if the Obama administration focuses ``too much'' on
democratization and civil liberties in Russia, then the U.S. may risk
alienating the Russian leadership on security, foreign policy, energy
and business issues. All these priorities have to be taken into
account, and with this in mind, the Obama administration should not
forgo a core American foreign policy value and objective with regards
to Russia: promoting democracy, good governance, transparency and the
rule of law. The United States should seek to advance these principles
when it can and in realistic and practical ways.\13\
---------------------------------------------------------------------------
\13\ Donald N. Jensen, ``Russian Democracy in Crisis: The Outlook
for Human Rights, Political Liberties, and Press Freedom,'' in ``Russia
and Eurasia: A Realistic Policy Agenda for the Obama administration,''
The Heritage Foundation, Special Report #49, March 27, 2009, at http://
www.heritage.org (April 13, 2009).
---------------------------------------------------------------------------
Bargaining away human and civil rights issues to secure Russia's
cooperation in other areas may not only be immoral, but ineffective. It
is necessary to ask two questions. Why does the internal political
situation and rule of law within Russia matter? Why should the U.S.
care if Russia is growing more authoritarian, retarding or undermining
democratic institutions or ignoring the rule of law?
First, the United States has a strong interest in Russia's eventual
transformation into a more liberal, free-market, law-governed society.
Such a transformation is likely to improve its relations with its
neighbors, with the United States, and enable Russia to make a more
substantial contribution to the international system. It is often
argued, moreover, that democracies are more stable and responsible
actors on the world stage. Second, internal developments within Russia,
such as the critical lapses in the rule of law and extra-legal battles
over property and wealth are important because they help shape the
Russian foreign policy agenda and, thus, the state's behavior. They
negatively affect Western investment activity and Russian economic
development.
In the West, there is a strong distinction between political power
and private property. The two are separated by the rule of law and
strong property rights. If there is a property dispute, the two parties
go to court. In Russia, power and property are intertwined for
centuries, as many of the elites running the country largely own it as
well. This ancient patrimonial system has a profound affect on how
Kremlin elites define their interests and, thus, the national
interest.\14\
---------------------------------------------------------------------------
\14\ Ibid.
---------------------------------------------------------------------------
Kremlin elites define their interests in terms of wealth
distribution and revenue flows--who gets the money? The control of
energy production and transit then becomes a critical foreign policy
question. This is crucial, for example, in Moscow's policies toward
Ukraine. Thus, are geopolitical considerations for example, governing
Moscow's policies toward Kyiv stemming from security concerns or are
vested interests over revenue flows dominating? This phenomenon is most
evident in the Russian-Ukrainian gas trade, where the use of opaque
companies like RosUkrEnergo and its massive revenues streams becomes a
key factor in foreign policy. This approach also affects Russia's
pipeline policies in the Caucasus, where Georgia is a key oil and gas
transit state, and in Central Asia.
Thus, a Russia with a stronger rule of law, clear property rights
and a vibrant media to check corruption, expose abuses and reflect
political diversity becomes a critical interest for the United States.
A more democratic Russia with strong, rule-governed institutions such
as a pluralist media is also a prerequisite to Russia becoming a more
reliable partner for the U.S. and a constructive actor on the world
stage.
With this in mind, the Obama administration faces the challenge of
finding the right mix of policies that will advance these goals while
not alienating the more liberal factions of the Russian leadership and
elite. A good point of departure on this track is to begin addressing
President Medvedev's own concerns and goals. Himself a lawyer,
President Medvedev has spoken with concern about Russia's ``legal
nihilism,'' law enforcement's ``nightmarish practices'' and rampant
corruption.\15\ The Obama administration could emphasize that without
fundamental legal reform, a fight against corruption, and a return to
judiciary independence, Russia will keep lingering at the bottom of the
measuring scales, such as Transparency International Corruption Index,
The Heritage Foundation's Index of Economic Freedom and other
international financial indices.
---------------------------------------------------------------------------
\15\ Ariel Cohen, ``Reversing habit of `legal nihilism','' The
Heritage Foundation, April 2, 2009, at http://www.heritage.org.
---------------------------------------------------------------------------
It should also emphasize that if Russia does not return to
internationally recognized legal practices, investments are likely to
slow down, and capital will continue to flee. For example, the Obama
administration could, first, explore behind closed doors, and if not
proven effective, publicly call for vigorous investigations into the
deaths of slain journalists, such as Anna Politkovskaya, Yuri
Shchekochikhin, et. al, restoring property rights of defrauded
investors, some of whom were barred from entering Russia, and releasing
Mikhail Khodorkovsky from jail. These measures are, first and foremost,
in Russia's national interest. They would send a strong signal to the
U.S., to the Western business community, and to the Russian people,
that a clean break with the lawless past is underway, and that Russia
may be joining the community of civilized nations.
Lastly, the Obama administration should not be deterred from
advancing democracy and rule of law in the face of Russian objections.
Democracy promotion and emphasizing the rule of law and good governance
are a core element of U.S. bipartisan foreign policy over the last
three decades, and Moscow must eventually come to accept to this fact.
Russia needs to return to a vibrant, multiparty system it had for a
short time in the 1990s, despite a dismal economic performance then. If
Russia wishes to be treated as a true partner and enjoy a greater
international status, it must be held to the same standards as other
states.
Question. A recent report on U.S.-Russia relations by the Belfer
and Nixon centers advocated prompt congressional action on lifting
Jackson-Vanik amendment sanctions against Russia in order to help re-
set the relationship.
Would Russia simply welcome the concrete benefits provided by
lifting Jackson-Vanik and provide little in return to the United
States? What could be on the table in such a situation?
Answer. Congress should act to lift Jackson-Vanik as it was
promised a long time ago. Russia would certainly welcome this and the
benefits it will provide. However, this measure should be part of a
larger package and a quid pro quo should be negotiated. The larger
package would be aimed at gaining Russian cooperation on Iran and other
Middle East security.
There are two approaches possible. One approach could be viewed as
fulfillment of past promises and lifting of Jackson Vanik
unconditionally. This would contribute to further improvement of
bilateral relations and set the stage for future progress on a variety
of important issues on the Washington-Moscow agenda.
The second approach would include the lifting of Jackson-Vanik;
U.S. support for Russia's entry into the World Trade Organization
(WTO), provided Moscow meets the WTO criteria; and a revival of the
bilateral 123 nuclear agreement with Russia and offer to resubmit it
for congressional approval. However, this package should only be
offered after Russia meets several conditions. Specifically, Moscow
should:
Support a robust U.S. sanctions and an intrusive inspections regime
at the IAEA. This inspections regime, which should include the
right to visit all areas and sites, including those not
officially declared to IAEA, would have to provide assurance
that there is no indigenous enrichment or covert nuclear
programs are taking place. Russia should work with the United
States and other nations to compel Iran to discontinue any fuel
enrichment or spent-fuel reprocessing, which would give Iran
access to bomb-grade material.\16\
\16\ Jack Spencer, ``Russia 123 Agreement: Not Ready for
Primetime'' Heritage Foundation WebMemo No. 1926, May 15, 2008, at
http://www.heritage.org.
---------------------------------------------------------------------------
Stop all arms and nuclear and other WMD technology sales to Iran
and Syria and provide full disclosure of past sales, as well as
what it knows about any third party assistance. In particular,
Russia must stop the delivery of the SAM-300 surface-to-air
missiles and other destabilizing systems to Iran.
Stop any new anti-aircraft weapons systems sales to Syria.
Cease diplomatic contacts with Hezbollah and Hamas.
Russia provide adequate liability protection for U.S. companies
doing business in Russia. The U.S. should demand that Russia
provide two-way market access to American companies.
The second approach, while more comprehensive and more risky, would
demonstrate to Moscow that the U.S. can pursue policies that benefit
Russia economically and help it to overcome the severe economic crisis
which is negatively affecting its economy, employment, and even social
stability. The administration should formulate clear and verifiable
benchmarks to pursue such a course. Yet, to succeed in this approach,
Moscow needs to put cards on the table and clearly commit to
cooperation with the United States on Iran (Note: For more on the
inherent risks to this approach as well the multi-faceted Russian-
Iranian relationship and the potential for cooperation, see my recently
published article: ``The Russian Handicap to U.S. Iran Policy,''
Jerusalem Issue Briefs, Vol. 8, No.28, April 22, 2009, The Jerusalem
Center for Public Affairs, at http://www.jcpa.org.
__________
responses to questions submitted to ariel cohen by senator feingold
Question. In recent testimony, the DNI noted that Moscow's
engagement with both Iran and Syria, including advanced weapons sales,
has implications for U.S. nonproliferation interests. Equally as
relevant are press reports that Russian President Medvedev has
announced his intention to strengthen Russia's conventional military
force. How should the Obama administration interpret these signals and
what actions might result in more effective cooperation with Russia on
Iran?
Answer. Following the commencement of the Iraq war and Putin's
reelection in 2004, Moscow has pursued a much more active if not
aggressive policy in the Middle East. Moscow policies since this time
have extended to cultivating de facto alliances and relationships with
a host of regimes and terrorist organizations (Iran, Syria, Hamas, and
Hezbollah) hostile to the United States, its allies, and its interests.
The warming of relations with these states did not endear Moscow to the
major Sunni powers in the region, such as Saudi Arabia, Jordan, Egypt
and the United Arab Emirates. To offset this, Moscow has sought to
court these powers as well by offering them weapons, nuclear reactors,
and energy cooperation. Broadly speaking, Moscow is taking advantage of
the U.S. strategic overstretch and is seeking to restore its influence
and prestige in the region.\1\
---------------------------------------------------------------------------
\1\ Robert O. Freedman, ``Russia and the Middle East: A Possible
U.S. Partner for Peace?,'' in Russia and Eurasia: A Realistic Policy
Agenda for the Obama administration, The Heritage Foundation, Special
Report #49, March 27, 2009, at http://www.heritage.org (April 13,
2009).
---------------------------------------------------------------------------
Moscow's engagement with Syria and Iran, in particular, bodes ill
for the U.S. interests in general and U.S.-Russian cooperation in
particular. After the Operation Iraqi Freedom, Putin's first move was
to improve relations with Syria. Moscow forgave 90 percent of the
country's $7 billion debt and sold Damascus anti-tank missiles and
surface to air-missiles. Some of these weapons were transferred to
Hezbollah and were used in the 2006 war against Israel--despite
Russia's assurance to the contrary. Moscow has also protected Syria on
the UN Security Council (UNSC) and obstructed sanctions against
Damascus for its role in the assassination of former Lebanese President
Rafiq Hariri.
In Iran, Moscow has completed the Bushehr reactor and supplied the
nuclear fuel. It has also provided cover for Tehran in the U.S. by
obstructing or providing very limited support for weak sanctions
regimes. Importantly, Moscow has also provided protection for Tehran by
supplying sophisticated weapons to protect Iran's nuclear facilities.
(Note: The multi-faceted Russian-Iranian relationship and the question
over Russia's potential cooperation are addressed at greater length
below).
In light of Russia's behavior, the following concrete Russian
actions should result in more effective cooperation with Moscow over
Iran. Only by changing what it does, not what is says, can Russia
become a significant partner with the U.S. on Iran. Specifically,
Moscow should:
Support a robust U.S. sanctions and an intrusive inspections regime
at the IAEA. This inspections regime, which should include the
right to visit all areas and sites, including those not
officially declared to IAEA, would have to provide assurance
that there is no enrichment or covert nuclear programs taking
place.
Stop all arms and nuclear and other WMD technology sales to Iran
and Syria and disclose past sales. In particular, Russia must
stop the delivery of the SAM-300 surface-to-air missiles and
other destabilizing systems to Iran.
Stop any new anti-aircraft weapons systems sales to Syria.
Cease diplomatic contacts with Hezbollah and Hamas.
Question. If Iran continues to move forward in the direction it is
currently headed and does not cease uranium enrichment, do you think
Russia would be supportive of more punitive actions if need be,
including sanctions through the U.N. Security Council even though it
has resisted harsher measures in the past?
Answer. At best, judging by the past behavior, Russia will support
very limited sanctions against Iran. Some in Washington, however, have
interpreted recent Russian statements as signs that the Kremlin may be
more willing to cooperate on Iran than in the past. According to the
President of the Nixon Center Dimitry Simes, in a recent closed-door
meeting at the Kremlin, Russian President Dmitri Medvedev purportedly
expressed ``concern'' and ``alarm'' in ``very graphic language'' over
Iran's satellite launch. He stated that this launch represents how
``far-reaching Iran's nuclear ambitions are. . . . ''\2\ This
statement, however, sounds like it was produced for the outside
consumption and may have been aimed in enticing the Obama
administration to offer concessions to the Kremlin in exchange for
promises of Russia's engagement on Iran.
---------------------------------------------------------------------------
\2\ Phillip P. Pan and Karen De Young, ``Russia Signaling Interest
in Deal on Iran, Analysts Say,'' The Washington Post, March 17, 2009,
at http://www.washingtonpost.com (March 30, 2009).
---------------------------------------------------------------------------
Only a few days later Russia's Deputy Foreign Minister Sergei
Ryabkov publicly stated that ``We still believe that at this point in
time there are no signs that this [Iranian nuclear program] has
switched to a military purpose. . . . ''\3\ This public statement is in
accordance with previous Russian leaders' public statements and
assessments of Iran's nuclear and ``civilian space'' program as
peaceful.\4\ During a number of visits to Moscow in 2004-2009, I heard
the highest levels of the Russian leadership explain that there is no
Iranian threat; ``there is an Iranian problem.'' For years, top Russian
officials tried to convince American visitors that Iran would ``never''
be able to develop long-range ballistic missiles. The recent Iranian
satellite launch has proven them wrong--or deliberately misleading.
Russia simply does not view the situation through the same lens as the
U.S.
---------------------------------------------------------------------------
\3\ ``No sign Iranian nuclear programme has military intent:
Russia,'' AFP, March 20, 2009, at http://www.spacewar.com (March 30,
2009).
\4\ Stephen Blank, ``Russia and Iran's Missiles,'' World Politics
Review, February 9, 2009, at http://www.worldpoliticsreview.com (March
16, 2009).
---------------------------------------------------------------------------
The Kremlin sees Iran not as threat but as a partner and an ad-hoc
ally to challenge U.S. influence.\5\ It also sees Iran as a key
platform to expand its regional and international influence and
prestige. While the Iranian agenda is clearly separate from that of
Russia, the Kremlin uses Iran as geopolitical battering ram against the
U.S. and its allies in the Gulf region and the Middle East. Therefore,
Russian support for Iran's nuclear program and arms sales are not only
economic and defense exports issues, but reflect a geopolitical agenda
which is at least 20 years old.
---------------------------------------------------------------------------
\5\ Stephen Blank, ``Russia and Iran's Missiles'', World Politics
Review, February 9, 2009, at http://www.worldpoliticsreview.com (March
16, 2009).
---------------------------------------------------------------------------
Moscow has yet another powerful motive for providing Iran with
diplomatic, technological and military support (to defend their missile
and nuclear programs from attack), and not to achieve concrete results
on cooperation: In the era of expensive oil, more tension at and around
the planet's ``gas station'' (the Persian Gulf) drive energy prices
up--a boon to the energy export revenue-dependent Russia.
An arms race in the Gulf may benefit Russia's weapons exports.
After all, Moscow sold weapons to both sides during the 1980-1988 Iran-
Iraq War. The perceived geopolitical and economic benefit of an
unstable Persian Gulf, in which American influence is on the wane,
outweighs Russia's concerns about a nuclear armed Iran.
The Obama administration should use extreme caution in negotiating
Russian cooperation on Iran. Moscow's interests in Iran are commercial
and geopolitical in nature. In addition to nuclear technology and arm
sales and geopolitical objectives, the Kremlin has major plans
cooperating with Tehran in the energy sector. The Kremlin is in the
process of creating an OPEC-style gas cartel with Iran and other
leading gas producers, to be headquartered in Moscow. By launching this
cartel, Moscow hopes to enhance its energy superpower status.\6\ In
addition to nuclear sales, Russia is also engaged in oil and gas
``swap'' deals with Iran that are accruing Russia influence in Teheran,
in the Caspian Basin and the Persian Gulf.\7\
---------------------------------------------------------------------------
\6\ Ariel Cohen, ``Gas OPEC: A Stealthy Cartel Emerges,'' Heritage
Foundation WebMemo, April 12, 2007 http://www.heritage.org (March 24,
2009).
\7\ ``Russia, Iran signed hydrocarbon memorandum allowing for swap
operations,'' Itar-Tass, March 15, 2009, at http://www.itar-tass.com
(April 1, 2009); ``Iran: Is Tehran Using Russia as Insurance Against
Tougher Sanctions?'' Eurasia Insight, March 17, 2009, at http://
www.eurasianet.org (April 1, 2009).
---------------------------------------------------------------------------
Moscow and Iran also are planning a massive energy and
transportation corridor (The North-South Corridor) to connect the
Indian Ocean, the Caspian, and Europe.\8\ The chances of Russia risking
this ambitious agenda will depend on what the Obama administration
offers in exchange--and whether Moscow can pocket the concessions and
continue its multi-faceted relationship with Teheran.
---------------------------------------------------------------------------
\8\ Ariel Cohen, Lisa Curtis and Owen Graham, ``The Proposed Iran-
Pakistan-India Gas Pipeline: An Unacceptable Risk to Regional
Security,'' The Heritage Foundation, Backgrounder #2139, May 30, 2008,
at http://www.heritage.org (April 14, 2009); For more information, see
official International North-South Transport Corridor Web site at
http://www.instc.org.
---------------------------------------------------------------------------
It will be important to remember that Russia can pocket American
concessions and continue its old strategy of obfuscation, cooperating
only as much as is necessary to accomplish its objectives (e.g.,
convincing the U.S. to abandon the missile defense sites in Eastern
Europe, roll back U.S. influence in Eurasia, get Washington to ignore
Russia's domestic situation, including violation of civil liberties and
human rights) but not enough to actually stop the nuclear program in
Iran.\9\
---------------------------------------------------------------------------
\9\ Kim R. Holmes, ``U.S. backtracks on missile shield,'' February
20, 2009, The Heritage Foundation, at http://www.heritage.org (April
14, 2009).
Question. With the media reporting that Russia will now allow the
United States to ship non-lethal supplies through its territory to
Afghanistan--via Kazakhstan and Uzbekistan--what kind of support is
feasible from Russia. Is it appropriate to see Russia as an equal
partner with regard to Afghanistan and if so what steps should we take
---------------------------------------------------------------------------
to ensure that's the case?
Answer. When judging Russia's potential to support operations in
Afghanistan or whether it can be an equal partner, it is important to
examine Russia's actions vs. Russia's declarations and place these
issues in the context of the U.S. 's violent history in the 1979-1989
invasion of Afghanistan.
Moscow does have good reasons to be alarmed at a possible U.S.
defeat in Afghanistan, which could mean the destabilization of good
parts of Central Asia and the export of the Taliban/Al Qaeda jihad to
Central Asia and the Caucasus. The Kremlin is also concerned with the
unimpeded flow of narcotics into Europe and Eurasia, which the Russians
and local border guards along the Afghan border fail to control. Yet,
while the Kremlin is allowing the transit of non-lethal war supplies
and military materiel through its territory and has stated on multiple
occasions its desire to cooperate more, its actions have evinced more
of a negative tone, as well as conflicting priorities and overriding
goals.
For example, it is important to remember that at the same time the
Kremlin was voicing support for cooperation in Afghanistan, it was also
working hard behind the scenes in Kyrgyzstan to evict the U.S.--and
NATO--from the key airbase in Manas.\10\ This action was consistent
with Medvedev's August 31 statement of Russia's new foreign policy
principles and policies in which he called for a ``zone of privileged
interests.''
---------------------------------------------------------------------------
\10\ Mikhail Sergeyev, ``West Makes the Most of Conflict,''
Nezavizimaya Gazeta August 24, 2008.
---------------------------------------------------------------------------
With Russian President Dmitry Medvedev at his side, Kurmanbek
Bakiyev, President of Kyrgyzstan, announced in Moscow that he wants the
U.S. to leave Manas Air Base. With this move, the Kremlin signaled the
West that in order to gain access to Central Asia, Western countries
must first request permission from Moscow and pay the Kremlin for
transit. For Moscow, this is a critical issue of status, prestige, and
influence in the region. This move also signaled that Moscow has
different priorities than the U.S. vis-a-vis Afghanistan.
The creation of the sphere of influence (economically, politically,
and militarily) in the former Soviet space is a major priority for
Moscow. Incidentally, this territory is almost identical to that of the
Russian Empire. President Dmitry Medvedev announced as much in his
televised speech on August 31, 2008, calling for a ``privileged sphere
of interests.''
Russia is pursuing this path through multilateral integration with
the former Soviet states (including those bordering Afghanistan)
through Moscow-dominated international bodies, such as the Commonwealth
of Independent States (CIS), the Eurasian Economic Community (EurAsEC)
and the CIS Collective Security Treaty Organization (CSTO, a Moscow-
based military alliance, also known as the Tashkent Treaty.
In Moscow's quest to regain its status in the region and become an
equal partner with the U.S., it may cooperate on its own terms. This is
what Moscow did after 9/11 attacks. Like then, today the demand to
recognize its political supremacy in the former U.S. has not changed.
Two of these conditions may involve the acceptance by NATO of the CSTO
as the primary security provider in the entire former Soviet space,
including denial of NATO membership to Ukraine and Georgia, and the
carving up of Afghanistan into spheres of responsibility between NATO
and the CSTO.\11\ Indeed, on the latter, Moscow may be seeking to
extend its sphere of influence into the Tajik-dominated northern part
of Afghanistan.
---------------------------------------------------------------------------
\11\ Stephen Blank, ``What Does Moscow Want in Afghanistan?,''
Perspective, Boston University, April 2009, at http://www.bu.edu (April
17, 2009).
---------------------------------------------------------------------------
Influential Russian experts have discussed spheres of
responsibility in Afghanistan and in Eurasia between Russia and NATO.
On the former, the well connected Sergei Rogov, Director of the state-
run Institute for the Study of the USA and Canada, laid down his
formula for what greater U.S.-Russian cooperation would look like in
Afghanistan. He suggested including Russia in the NATO political-
decision making process or by giving additional functions to the NATO-
Russia Council. His prescription to achieve stability was to divide up
Afghanistan into spheres of responsibility between Russia and NATO,
with Russian reconstruction and security forces in the North.\12\
Another insight into Russian terms came from then-Defense Minister
Sergei Ivanov in 2006 when speaking about security guarantees in
Eurasia at large. He stated that,
---------------------------------------------------------------------------
\12\ Ibid.
The next logical step on the path of reinforcing
international security may be to develop a cooperation
mechanism between NATO and the CSTO, followed by a clear
division of spheres of responsibility. This approach offers the
prospect of enabling us to possess a sufficiently reliable and
effective leverage for taking joint action in crisis situations
in various regions of the world.\13\
---------------------------------------------------------------------------
\13\ Ibid.
These Russian visions of what greater Russian-NATO cooperation may
look like bode ill to American global agenda and to U.S. allies in
Central and Eastern Europe and the former Soviet Union. They point to
vastly different views on the sovereignty of nation states and their
right to choose politico-military relationships. One would hope that
the Obama administration would reject such proposed divisions of the
world, which remind one of the 19th century Count Otto von Bismark's
Weltanschauung and the darker episodes of the early 20th century
history.
There, however, areas of potential cooperation which are feasible.
The highest levels of the Russian leadership have voiced the need to
stem the flow of narcotics and other illicit goods from Central Asia to
Russia. Anti-narcotics are an area where the U.S. and Russia have
shared interests and cooperation should be possible. The U.S. and NATO
could engage in intelligence sharing initiatives on both of these
fronts. Some have also suggested that it may be possible to work with
Moscow on border security initiatives.\14\ For now, Moscow has been
acting unilaterally to harden and strengthen border and defense ties
with Central Asian states after having arrived at the conclusion that
cooperation with NATO on this effort is does not benefit it.\15\
---------------------------------------------------------------------------
\14\ Borut Grgic and Alexandros Petersen, ``A strategy for Central
Asia,'' April 9, 2009, The Washington Times, at http://
www.washingtontimes.com (April 17, 2009).
\15\ Stephen Blank, ``What Does Moscow Want in Afghanistan?,''
Perspective, Boston University, April 2009, at http://www.bu.edu (April
17, 2009).
---------------------------------------------------------------------------
Therefore, while cooperation is certainly desirable, Moscow's
overriding goals, past behavior and conflicting priorities must be
thoroughly examined, with understanding that today it can not be an
equal partner in Afghanistan.
Question. Russian officials said earlier this year that they are
scaling up their diplomatic involvement to solve conflicts in Africa,
and they recently appointed a special envoy to Sudan. However, their
record to date toward Sudan and specifically the situation in Darfur
has been unhelpful to say the least. They have provided political cover
for the regime in Khartoum at the UN Security Council and, according to
the organization Human Rights First, they have continued to provide
arms to the Government of Sudan used in Darfur in direct violation of
the UN arms embargo. How can the Obama administration better press
Russia on the Security Council and bilaterally to change their approach
to Sudan? And just as with the Chinese, how can we engage and identify
opportunities to partner with the Russians as they increase their
involvement in African affairs?
Answer. Russia is indeed steeping up its activity in Africa in a
bid to demonstrate its independence on the international stage and get
Russian state-controlled companies involved in oil, gas, mineral and
arms deals. As you state, Russia is also providing political support
and cover to some problematic actors such as Zimbabwe and Sudan.
First, Russia's energy agenda in Africa is of particular
importance. Russia's strategy is to maintain its dominance as the
single largest gas supplier to Europe. Russia leverages Europe's
dependence as a foreign policy tool to pressure states that would adopt
policies against Russia's national interests.\16\ The Kremlin uses this
leverage to divide Europe on key issues, thus weakening Europe's
bargaining power in economic and geopolitical relations with Russia.
This dependence, most clearly demonstrated during the 2006 and 2009
interruptions of Gazprom's gas supply to Ukraine, increases Europe's
``continental drift'' away from the U.S. by limiting the foreign policy
options available to America's European allies, and forcing them to
choose between an affordable energy supply and siding with the U.S. and
NATO on key strategic issues, such as missile defense or opposing
Russia's treatment of Georgia.
---------------------------------------------------------------------------
\16\ Ariel Cohen, ``Europe's Strategic Dependence on Russian
Energy,'' Heritage Foundation Backgrounder No. 2083, November 5, 2007,
athttp://www.heritage.org.
---------------------------------------------------------------------------
In order to maintain this dominant position in the European gas
market and prevent alternative gas transit solutions, the Kremlin is
investing heavily in Africa. Russia is already controlling the transit
of gas supplies to Europe from the East (Central Asia) and is deftly
conducting what some analysts have called a ``pincer'' pipeline attack
on Europe, moving to dominate the supply routes to Northern Europe via
the proposed Nord Stream gas pipeline along the bottom of the Baltic
Sea.
In the southern vector, Gazprom is seeking to dominate the supply
routes to Southern Europe via the proposed South Stream gas pipeline
and a pipeline from Libya that travels under the Mediterranean to
Sicily.\17\ In Libya, Gazprom originally offered to buy all of the
country's gas. Thus far, it has successfully used debt forgiveness and
arms sales to accelerate this effort and ``lock in'' supply.\18\
Gazprom has also inked a deal to help Nigeria fund a 2,700 mile trans-
Saharan pipeline to Europe. Russia has additional deals in Algeria,
Angola, Egypt and the Ivory Coast. Already controlling most of Central
Asia's export routes to Europe, if Moscow succeeds in North Africa,
Europe will be geopolitically surrounded.
---------------------------------------------------------------------------
\17\ Nord Stream is a proposed pipeline that would transport gas
from Vyborg, Russia, along the Baltic seabed to Greifswald, Germany.
South Stream is a proposed and expensive pipeline that will cross the
Black Sea to Varna, Bulgaria, with one branch running south to Italy
via Greece and the other running north to Austria via Serbia and
Hungry.
\18\ Ariel Cohen, ``The Real World: Putin in Libya,'' Middle East
Times, April 18, 2008, http://www.metimes.com.
---------------------------------------------------------------------------
In addition to Russia's strategic energy agenda, Moscow is
providing political cover to the Sudanese government and is selling it
arms. Russia has provided critical political support to Zimbabwe as
well by vetoing Security Council sanctions against Robert Mugabe's
dictatorship. While in many respects, Russian behavior does not appear
amendable to substantial cooperation, it may, however, be worthwhile to
attempt to engage the Russians on various anti-piracy initiatives.
Beyond this, it will also be important to hold hearings on Russia's
activities in Africa and expose the discrepancies between words and
actions and shame certain behaviors.
Question. The State Department's yearly report on human rights
noted for 2008 that ``the Russian Federation has an increasingly
centralized political system. with a compliant State Duma, corruption
and selectivity in enforcement of the law, media restrictions, and
harassment of some NGOs [all of which have] eroded the government's
accountability to its citizens.''
The 2008 report also documents numerous reports of government and
societal human rights problems and abuses during the year. The last
administration pretty much gave Russia free pass but this is not
expected to be the case with the new administration. How do you
anticipate these restrictions will be addressed in any new U.S. policy
towards Russia?
Answer. So far, the Obama administration has not raised questions
about human rights violations, absence of pluralistic national TV
channels, political repression or rule of law issues in any significant
way. In fact, so far the Obama administration more meek than the Bush
administration in addressing these issues. I think that in the
``euphoric'' stage of relations, determined to press the ``reset''
button and pursue arms control initiatives, the Obama administration
may be all but mum in this area. This should not be the case though.
An important question to ask when formulating foreign policy is
what priority should the U.S. place on democratization and protecting
civil liberties in Russia. There is an important corollary to this
question: If we focus too much on these areas, do we risk alienating
Russia on important security issues, like Iran's nuclear threat?
If the Obama administration focuses ``too much'' on democratization
and civil liberties in Russia, some believe that the U.S. may risk
alienating the Russian leadership on security issues. With this in
mind, the Obama administration should not forgo a core American foreign
policy values and objectives with regards to Russia: promoting
democracy, good governance, transparency and the rule of law. The
United States should seek to advance these principles when it can and
in realistic and practical ways.
Some may argue that Russia's domestic situation and deteriorating
rule of law do not really matter and should not figure highly in U.S.
policy toward Russia as these are Russia's ``internal affairs''.
However, the 1975 Helsinki Agreements put human rights and civil
liberties squarely into the ``third basket'' of East-West relations.
To counter this philosophical position which makes its adherents
more receptive towards a ``grand bargain'', it is necessary to ask two
questions. Why does the internal political situation and rule of law
within Russia matter? Why should the U.S. care if Russia is growing
more authoritarian, retarding or undermining democratic institutions or
ignoring the rule of law?
First, the United States has a strong interest in Russia's eventual
transformation into a liberal, free-market, law-governed society. Such
a transformation will improve its relations with the United States, its
neighbors and enable Russia to make a more substantial contribution to
the international system. It is axiomatic, moreover, that democracies
are more stable and responsible actors on the world stage.
Second, internal developments within Russia, such as extra-legal
battles over property and wealth are important because they help shape
the Russian foreign policy agenda and, thus, the state's behavior.
In the West, there is a strong distinction between political power
and private property. It is separated by the rule of law and strong
property rights. If there is a property dispute, the two parties go to
court. In Russia, power and property are blended, as many of the elites
running the country largely own it as well. This patrimonial system has
a profound affect on how Kremlin elites define their interests and,
thus, the national interest.
Kremlin elites define their interests in terms of wealth
distribution and revenue flows--who gets the money? The control of
energy production and transit then becomes a critical foreign policy
question. This is crucial, for example, in Moscow's policies toward
Kyiv. Thus, are geopolitical considerations for example, governing
Moscow's policies toward Kyiv stemming from security concerns or are
vested interests over revenue flows dominating? This phenomenon is most
evident in the Russian-Ukrainian gas trade, where the use of opaque
companies like RosUkrEnergo and its massive revenues streams becomes a
key factor in foreign policy.
Thus, a Russia with a stronger rule of law, clear property rights
and a vibrant media to check corruption, expose abuses and reflect
political diversity becomes a critical interest for the United States.
A more democratic Russia with strong, rule governed institutions such
as a pluralist media is also a prerequisite to Russia becoming a more
reliable partner for the U.S. and a constructive actor on the world
stage.
With this in mind, the Obama administration faces the challenge of
finding the right mix of policies that will advance these goals while
not alienating the more liberal factions of the Russian leadership and
elite. A good point of departure on this track is to begin addressing
President Medvedev's own concerns and goals. President Medvedev has
spoken with concern about Russia's ``legal nihilism,'' law
enforcement's ``nightmarish practices'' and rampant corruption. The
Obama administration could emphasize that without fundamental legal
reform, a fight against corruption, and a return to judiciary
independence, Russia will keep lingering at the bottom of the
Transparency International Corruption Index, The Heritage Foundation's
Index of Economic Freedom and other international financial indices. It
should also emphasize that if Russia does not return to internationally
recognized legal practices, investments are likely to slow down, and
capital will continue to flee. For example, the Obama administration
could, first, explore behind closed doors, and if not proven effective,
publicly call for vigorous investigations into the deaths of slain
journalists, restoring property rights of defrauded investors, some of
whom were barred from entering Russia, and releasing Mikhail
Khodorkovsky from jail.
These measures are in Russia's national interest. They would send a
strong signal to the U.S., to the Western business community, and to
the Russian people, that a clean break with the lawless past is
underway, and that Russia may be joining the community of civilized
nations.
Lastly, the Obama administration should not be deterred from
advancing democracy and rule of law amidst of Russian objections.
Democracy promotion is a core element of U.S. bipartisan foreign policy
over the last three decades, and Moscow must eventually come to accept
to this fact. Russia needs to return to a vibrant, multiparty system it
had for a short time in the 1990s, despite a dismal economic
performance then. If Russia wishes to be treated as a true partner and
enjoy a greater international status, it must be held to the same
standards as other states.
__________
responses to questions submitted to ariel cohen by senator casey
Iran
Question. Russia has given mixed signals about the steps it is
ready to take in order to contain Iran's nuclear ambitions. On one
hand, Russia is building a nuclear reactor for Iran at Bushehr, and has
obstructed efforts in the UN Security Council to impose tougher
sanctions on Iran for continuing its nuclear enrichment program. On the
other hand, after Iran's clandestine nuclear program came to light,
Russia withheld the delivery of nuclear fuel for the Bushehr reactor
and eventually agreed to limited UN Security Council sanctions, when
Iran refused to accept a Russian proposal that would have allowed Iran
to reprocess uranium at facilities on Russian territory. In recent
weeks, senior Russian officials, including President Medvedev, have
indicated that Russia is prepared to support additional sanctions on
Iran if it does not stop enrichment of uranium.
How do you interpret Moscow's vacillation on stopping Iran's
enrichment program? Why has Moscow historically been unwilling to agree
to tougher sanctions on Iran? Are Moscow's motivations for building a
nuclear reactor for Iran strategic, financial, or both?
Answer. Past Russian vacillations, such as delaying and temporarily
withholding delivery of nuclear fuel to Iran, postponing the transfer
of sophisticated S-300 anti-aircraft batteries to Iran and providing
limited support for weak sanctions regimes, indicate that Russia is
trying to have its cake and eat it to. It demonstrates responsiveness
to the U.S. and occasionally, even Israeli, pressures and entreaties,
while inexorably enabling Iran to get its wishes.
The challenge in assessing Russia's willingness to cooperate with
the West on Iran is to examine and interpret Russia's actions versus
its rhetoric and to place both in the context of Russia's perceived
interests and its strong and multifaceted relationship with Iran.
Russia's ambitions in Iran go back to the czarist and Soviet eras,
when in the eightieth century South Caucasus and the Caspian littoral--
until then under Persian hegemony--came under the sway of St.
Petersburg. The Soviets occupied northern Iran during World War II.
Later, Soviet intelligence predicted the victory of the Khomeini
Revolution long before Washington realized the scope of the
geopolitical disaster it faced after the abandonment of its ailing
ally, the Shah. Moscow sold weapons to both Baghdad (its principal
client) and to Teheran during the Iran-Iraq war of 1980-1988. Today,
Russia's commercial interests in Iran span from billions in arms sales
and transfer of nuclear and space technology to lucrative oil and gas
contracts for state-controlled Russian companies. These ties, and the
potential of bilateral trade, are greater than the US economic
``carrots'' offered under the Bush administration, let alone the
economic links with Israel.
The Kremlin sees Iran not as threat but as a partner or as an ad-
hoc ally to challenge U.S. influence.\1\ It also sees Iran as a key
platform to expand its regional and international influence or
prestige. While the Iranian agenda is clearly separate from that of
Russia, the Kremlin uses Iran as geopolitical battering ram against the
U.S. and its allies in the Gulf region and the Middle East. Therefore,
Russian support for Iran's nuclear program and arms sales are not only
economic and export issues, but reflect a geopolitical agenda which is
at least 20 years old.
---------------------------------------------------------------------------
\1\ Stephen Blank, ``Russia and Iran's Missiles,'' World Politics
Review, February 9, 2009, at http://www.worldpoliticsreview.com (March
16, 2009)
---------------------------------------------------------------------------
This agenda is part of a strategy aimed at creating a ``multi-polar
world,'' a strategy which came about as a reaction to the decline of
Soviet stature in the waning years of the Cold War, and was called by
this author ``The Primakov Doctrine.'' Named after foreign minister
Evgeny Primakov, this doctrine was a response to the emergence of
independent states in Eastern Europe and Eurasia and the enlargement of
NATO. In early 1997, Primakov and his Iranian counterpart, Ali Akbar
Velayati, issued a joint statement calling the U.S. presence in the
Persian Gulf ``totally unacceptable.''\2\
---------------------------------------------------------------------------
\2\ Ariel Cohen and James Phillips, ``Russia's Dangerous Missile
Game in Iran,'' The Heritage Foundation Executive Memorandum, November
13, 1997, http://www.heritage.org (March 17, 2009)
---------------------------------------------------------------------------
Today, both Russia and Iran favor a strategy of ``multipolarity,''
both in the Middle East and worldwide. This strategy seeks to dilute
American power, revise current international financial institutions
which comprise the post-Bretton Woods world order, shift away from the
dollar as a reserve currency, weaken or neuter NATO and Organization
for Security and Cooperation in Europe, while forging a counterbalance
to the Euro-Atlantic alliance, with Russia, Iran, Venezuela, Syria and
terrorist organizations, such as Hamas and Hezballah, while hoping to
attract China, India, and other states to this anti-U.S. coalition.
Russia is playing a sophisticated game of Star Trek's
multidimensional chess. It combines a Realpolitik recognition of
Moscow's relative weakness vis-a-vis Washington with a desire to push
America out of its zone of military and political predominance--the
Persian Gulf.
Moscow has yet another powerful motive for providing Iran with
diplomatic, technological and military support (to defend their missile
and nuclear programs from attack), and to not provide concrete results
on cooperation: In the era of expensive oil, more tension at and around
the planet's ``gas station'' drive energy prices up--a boon to the
energy export revenue-dependent Russia. And an arms race in the Gulf
may benefit Russia's weapons exports. After all, Moscow sold weapons to
both sides during the Iran-Iraq War. The perceived geopolitical and
economic benefit of an unstable Persian Gulf, in which American
influence is on the wane, outweighs Russia's concerns about a nuclear
armed Iran. (Note: The Russian-Iranian relationship and the question
over Russia's potential cooperation are addressed at greater length
below).
Question. President Medvedev recently suggested that Russia is open
to cooperating with the United States on Iran. However, he also scoffed
that the U.S. should not link cooperation on Iran to U.S. missile
defense plans in Eastern Europe. In other words, the Russian leadership
continues to maintain that U.S. missile defense sites do not counter
the Iranian threat, but rather threaten Russia.
In your view, did the Obama administration present the Kremlin a
fair deal by offering to scrap U.S. missile defense plans in Eastern
Europe for greater cooperation on combating the Iranian nuclear and
ballistic missile threat?
Answer. President Obama's letter to President Dmitry Medvedev and
subsequent statements suggested that if Russia cooperated with the
United States in preventing Iran from developing long-range nuclear-
missile capabilities, the need for a new missile defense system in
Europe would be eliminated--a quid pro quo. This arrangement is ill-
advised for several reasons.
First, Russia could pocket any delay or cancellation and continue
its old strategy of obfuscation, cooperating only as much as is
necessary to kill the missile sites in Eastern Europe, but not enough
to actually stop the nuclear program in Iran.\3\
---------------------------------------------------------------------------
\3\ Kim R. Holmes, ``U.S. backtracks on missile shield,'' February
20, 2009, The Heritage Foundation, at http://www.heritage.org (April
14, 2009).
---------------------------------------------------------------------------
Second, this course would seriously damage bilateral and NATO
relations with Poland and the Czech Republic, two important allies.
Canceling the deployment would show that the United States is
unreliable and that NATO is an alliance without a credible security
guarantee. Moreover, accommodating Russia on this deployment would
split NATO and show that it is a two-tiered alliance--one for members
within Russia's sphere of influence and one for those outside of it.
The question of Russian cooperation in exchange for missile defense
plans in Europe will be fleshed out in greater detail in the next
answer as it is critical to address the potential for any ``grand
bargain.''
Question. Do you take President Medvedev at his word when he
indicates that Russia might agree to additional sanctions? Or is the
Kremlin expecting a carrot from the Obama administration in exchange
for its cooperation?
Answer. Some in Washington have interpreted recent Russian
statements as signs that the Kremlin may be more willing to cooperate
on Iran than in the past. According to the President of the Nixon
Center Dimitry Simes, in a recent closed-door meeting at the Kremlin,
Russian President Dmitri Medvedev purportedly expressed ``concern'' and
``alarm'' in ``very graphic language'' over Iran's satellite launch. He
stated that this launch represents how ``far-reaching Iran's nuclear
ambitions are. . . . ''\4\ This statement may have been aimed in
enticing the Obama administration to offer concessions to the Kremlin
in exchange for promises of Russia's engagement on Iran.
---------------------------------------------------------------------------
\4\ Phillip P. Pan and Karen De Young, ``Russia Signaling Interest
in Deal on Iran, Analysts Say,'' The Washington Post, March 17, 2009,
at http://www.washingtonpost.com March 30, 2009).
---------------------------------------------------------------------------
Only a few days later Russia's Deputy Foreign Minister Sergei
Ryabkov publicly stated that ``We still believe that at this point in
time there are no signs that this [Iranian nuclear program] has
switched to a military purpose. . . . ''\5\ This announcement is in
accordance with previous Russian leaders' public statements and
assessments of Iran's nuclear and ``civilian space'' program as
peaceful.\6\ Russia simply does not view the situation through the same
lens as the U.S.
---------------------------------------------------------------------------
\5\ ``No sign Iranian nuclear programme has military intent:
Russia,'' AFP, March 20, 2009, at http://www.spacewar.com (March 30,
2009).
\6\ Stephen Blank, ``Russia and Iran's Missiles,'' World Politics
Review, February 9, 2009, at http://www.worldpoliticsreview.com (March
16, 2009)
---------------------------------------------------------------------------
The Obama administration should use extreme caution in negotiating
Russian cooperation on Iran. Moscow's interests in Iran are commercial
and geopolitical in nature, and until now mostly militated against
substantial cooperation or any potential ``grand bargain.'' This so-
called bargain would involve the U.S. delaying or canceling plans for
European-based U.S. missile defense and barring NATO's doors to Ukraine
and Georgia.
Russia is also demanding that the West scale back relations with
Russia's ``near-abroad'' countries and overlook Russia's domestic
abysmal rule-of-law situation and the security services' human rights
excesses--in exchange for Russian cooperation on preventing Iran from
going nuclear. To the Realpolitik school, including octogenarians: the
former Secretary of State Henry Kissinger, former President Jimmy
Carter's National Security Advisor Zbigniew Brzezinski, and former
President George H.W. Bush's National Security Advisor Brent Scowcroft,
this looks like a plausible bargain--if Moscow delivers. And herein
lies the rub.
In addition to the previously mentioned nuclear and arm sales and
geopolitical objectives, the Kremlin has major plans with Tehran in the
energy sector. The Kremlin is in the process of creating an OPEC-style
gas cartel with Iran and other leading gas producers, to be
headquartered in Moscow. By launching this cartel, Moscow hopes to
enhance its energy superpower status.\7\ In addition to nuclear sales,
Russia is also engaged in oil and gas ``swap'' deals with Iran that are
accruing Russia influence in Teheran, in the Caspian Basin and the
Persian Gulf.\8\ Moscow and Iran also are planning a massive energy and
transportation corridor (The North-South Corridor) to connect the
Indian Ocean, the Caspian, and Europe.\9\ The chances of Russia risking
this ambitious agenda will depend on what the Obama administration
offers in exchange--and whether Moscow can pocket the concessions and
continue its multi-faceted relationship with Teheran.
---------------------------------------------------------------------------
\7\ Ariel Cohen, ``Gas OPEC: A Stealthy Cartel Emerges,''Heritage
Foundation WebMemo, April 12, 2007 http://www.heritage.org (March 24,
2009).
\8\ ``Russia, Iran signed hydrocarbon memorandum allowing for swap
operations,'' Itar-Tass, March 15, 2009, at http://www.itar-tass.com/
eng/ (April 1, 2009); ``Iran: Is Tehran Using Russia as Insurance
Against Tougher Sanctions?'' Eurasia Insight, March 17, 2009, at http:/
/www.eurasianet.org (April 1, 2009).
\9\ Ariel Cohen, Lisa Curtis and Owen Graham, ``The Proposed Iran-
Pakistan-India Gas Pipeline: An Unacceptable Risk to Regional
Security,'' The Heritage Foundation, Backgrounder #2139, May 30, 2008,
at http://www.heritage.org (April 14, 2009); For more information, see
official International North-South Transport Corridor Web site at
http://www.instc.org.
---------------------------------------------------------------------------
This is not the time for navete. Given the substantial Russian
interests and ambitions, a grand bargain may require an excessively
high price paid by the United States to the detriment of its friends
and allies. It will also open up the U.S. to extortion as Russia's
price for cooperation is likely to continue to rise. For example,
Russia is already demanding a fundamental revision of the European
security architecture (see below).
Today, some foreign policy experts tend to overemphasize Russia's
ability to ``deliver'' Tehran and play a constructive role. Before
bargaining away real U.S. interests and allies, it will be important to
recall that there have been little concrete steps from Russia thus far
to stem Iran's nuclear ambitions. What is more likely under any such
bargain is that Russia's will achieve its desired status as
international broker but cooperate only enough to accomplish its
objectives but not enough stop the military nuclear program in Iran. In
other words, Russia will continue to try and have its cake and eat it
too.
Question. What, if anything, should the Obama administration offer
Russia for enhanced efforts to stop Iranian enrichment?
Answer. In exchange for concrete Russian help on Iran, the U.S.
could support Russia's entry into the World Trade Organization (WTO),
provided Moscow meets the WTO criteria. Russia's entry into the WTO is
currently on hold because of the invasion of Georgia.\10\ Given the
economic challenges still facing Russia and the Kremlin's efforts to
move Russia to a high-tech, non-resource-based economy, entry into the
WTO would clearly be a boon for Russia.
---------------------------------------------------------------------------
\10\ Mikhail Sergeyev, ``West Makes the Most of Conflict,''
Nezavizimaya Gazeta, August 24, 2008.
---------------------------------------------------------------------------
In addition, the U.S. Congress could repeal the obsolete Jackson-
Vanik Amendment, which denies Russia a Permanent Normal Trade Relations
status leaving the President to waive the amendment each year in the
absence of a congressional vote. While such a move is currently off the
table because of the invasion of Georgia, it could be restored if
Russia demonstrates a genuine change in policy.
The Obama administration could also revive the bilateral 123
nuclear agreement with Russia and offer to resubmit it for
congressional approval. However, this should only be done once Russia
meets the following three conditions:
1) Russia discontinues its support of Iran's military nuclear
energy program and provides full disclosure. Indeed, it is
Russian nuclear fuel that undermines Iran's claim that it needs
uranium enrichment. Russia must discontinue any efforts that
advance Iran's heavy-water-reactor program, enrichment
activities, spent-fuel reprocessing programs, missile
technology transfer, or engineer and scientist training for
nuclear and missile technology. Russia must disclose its past
activities in support of the Iranian program, as well as what
it knows about any third party assistance.\11\ Russia publicly
pledges to not deliver the sophisticated S-300 air defense
system to Iran.
---------------------------------------------------------------------------
\11\ Jack Spencer, ``Russia 123 Agreement: Not Ready for
Primetime'' Heritage Foundation WebMemo No. 1926, May 15, 2008, at
http://www.heritage.org.
2) The Obama administration should also request that Russia
provide adequate liability protection for U.S. companies doing
business in Russia. Even with a 123 agreement in place, U.S.
companies would likely forgo commercial activities in Russia
due to a lack of liability protection. Indeed, many countries
use the lack of liability protection for U.S. companies as a
means to protect their domestic nuclear industry from U.S.
competition.\12\
---------------------------------------------------------------------------
\12\ Ibid.
3) The U.S. should demand that Russia provide two-way market
access to American companies. This agreement should not be
simply an avenue to bring Russian goods and services to the
U.S. market; it is equally important that U.S. companies are
allowed to compete for business in Russia. While Russian
nuclear technology is second to none, foreign competition will
assure that the highest quality standards are maintained
throughout the country.\13\
---------------------------------------------------------------------------
\13\ Ibid.
---------------------------------------------------------------------------
Priorities in the U.S.-Russian Relationship
Question. Russia has also vocally expressed its displeasure with
the United States' promotion of democracy, both in Russia and in
Russia's near abroad. It is a common view in Moscow that the U.S. was
responsible for facilitating the colored revolutions that removed
authoritarian leaders in Ukraine, Georgia, and Kyrgyzstan, and some
officials in the Kremlin, particularly inside Prime Minister Putin's
inner circle, fear a similar revolt in Russia. I disagree with Russia's
claims, but I cannot ignore Russia's less than remarkable record on
democratic reform and civil liberties. Opposition leaders, even those
who pose no threat to the entrenched political establishment, are
routinely jailed and harassed. In addition, several Russian journalists
have been murdered under murky circumstances suggesting government
involvement.
In your assessment, what priority should the U.S. place on
democratization and protecting civil liberties in Russia? If we focus
too much on these areas, do we risk alienating Russia on important
security issues, like Iran's nuclear threat?
Answer. If the Obama administration focuses ``too much'' on
democratization and civil liberties in Russia, then the U.S. may risk
alienating the Russian leadership on security issues. With this in
mind, the Obama administration should not forgo a core American foreign
policy value and objective with regards to Russia: promoting democracy,
good governance, transparency and the rule of law. The United States
should seek to advance these principles when it can and in realistic
and practical ways.
Some may argue that Russia's domestic situation and deteriorating
rule of law do not really matter and should not figure highly in U.S.
policy toward Russia. This philosophical position makes its adherents
more receptive towards a ``grand bargain.''
To counter this position, it is necessary to ask two questions. Why
does the internal political situation and rule of law within Russia
matter? Why should the U.S. care if Russia is growing more
authoritarian, retarding or undermining democratic institutions or
ignoring the rule of law? \14\
---------------------------------------------------------------------------
\14\ Donald N. Jensen, ``Russian Democracy in Crisis: The Outlook
for Human Rights, Political Liberties, and Press Freedom,'' in ``Russia
and Eurasia: A Realistic Policy Agenda for the Obama administration,''
The Heritage Foundation, Special Report #49, March 27, 2009, at http://
www.heritage.org (April 13, 2009).
---------------------------------------------------------------------------
First, the United States has a strong interest in Russia's eventual
transformation into a liberal, free-market, law-governed society. Such
a transformation will improve its relations with the United States, its
neighbors and enable Russia to make a more substantial contribution to
the international system. It is axiomatic, moreover, that democracies
are more stable and responsible actors on the world stage.
Second, internal developments within Russia, such as extra-legal
battles over property and wealth are important because they help shape
the Russian foreign policy agenda and, thus, the state's behavior.
In the West, there is a strong distinction between political power
and private property. It is separated by the rule of law and strong
property rights. If there is a property dispute, the two parties go to
court. In Russia, power and property are blended, as many of the elites
running the country largely own it as well. This patrimonial system has
a profound affect on how Kremlin elites define their interests and,
thus, the national interest.\15\
---------------------------------------------------------------------------
\15\ Ibid.
---------------------------------------------------------------------------
Kremlin elites define their interests in terms of wealth
distribution and revenue flows-who gets the money? The control of
energy production and transit then becomes a critical foreign policy
question. This is crucial, for example, in Moscow's policies toward
Kyiv. Thus, are geopolitical considerations for example, governing
Moscow's policies toward Kyiv stemming from security concerns or are
vested interests over revenue flows dominating? This phenomenon is most
evident in the Russian-Ukrainian gas trade, where the use of opaque
companies like RosUkrEnergo and its massive revenues streams becomes a
key factor in foreign policy.
Thus, a Russia with a stronger rule of law, clear property rights
and a vibrant media to check corruption, expose abuses and reflect
political diversity becomes a critical interest for the United States.
A more democratic Russia with strong, rule governed institutions such
as a pluralist media is also a prerequisite to Russia becoming a more
reliable partner for the U.S. and a constructive actor on the world
stage.
With this in mind, the Obama administration faces the challenge of
finding the right mix of policies that will advance these goals while
not alienating the more liberal factions of the Russian leadership and
elite. A good point of departure on this track is to begin addressing
President Medvedev's own concerns and goals.
President Medvedev has spoken with concern about Russia's ``legal
nihilism,'' law enforcement's ``nightmarish practices'' and rampant
corruption.\16\ The Obama administration could emphasize that without
fundamental legal reform, a fight against corruption, and a return to
judiciary independence, Russia will keep lingering at the bottom of the
Transparency International Corruption Index, The Heritage Foundation's
Index of Economic Freedom and other international financial indices. It
should also emphasize that if Russia does not return to internationally
recognized legal practices, investments are likely to slow down, and
capital will continue to flee. For example, the Obama administration
could call for vigorous investigations into the deaths of slain
journalists, restoring property rights of defrauded investors, some of
whom were barred from entering Russia, or releasing Mikhail
Khodorkovsky from jail.
---------------------------------------------------------------------------
\16\ Ariel Cohen, ``Reversing habit of `legal nihilism','' The
Heritage Foundation, April 2, 2009, at http://www.heritage.org
---------------------------------------------------------------------------
These measures are in Russia's national interest. They would send a
strong signal to the U.S., to the Western business community, and to
the Russian people, that a clean break with the lawless past is
underway, and that Russia may be joining the community of civilized
nations.
Lastly, the Obama administration should not be deterred from
advancing democracy and rule of law amidst of Russian objections.
Democracy promotion is a core element of U.S. bipartisan foreign policy
and Moscow must eventually come to accept to this fact. Russia needs to
return to a vibrant, multiparty system it was for a short time in the
1990s, despite a dismal economic performance, if Russia wishes to be
treated as a true partner and enjoy a greater international status, it
must be held to the same standards as other states.
NATO-Russian Relations
Question. On March 5, 2009, NATO Foreign Ministers agreed to resume
formal meetings of the NATO-Russia Council, after suspending its
activity following Russia's invasion of Georgia in August 2008.
Ministers gave the signal that business would return to normal, even
though serious disagreements with Moscow remain. I am interested in
your assessment of ``business as usual.'' For example, it is promising
that Russia agreed to allow NATO Allies to transport non-lethal
military equipment to Afghanistan across Russian territory. Yet, Russia
continues to demand that NATO abandon its plans to offer Ukraine and
Georgia membership in the Alliance, in spite of the fact that at the
2008 NATO Summit, Allied Heads of State made explicitly clear that both
countries would one day join NATO. The possibility of enlargement
always threatens to derail NATO's relationship with Russia.
How do you assess the future of NATO's relationship with Russia,
considering all that we know about Moscow's red lines? Will the NATO-
Russian relationship be complicated by President Medvedev's proposal
for a European Security Treaty that would presumably seek to give
Russia a veto over Alliance decisions on enlargement, missile defense,
and other contentious issues?
Answer. Yes, a revision of NATO-centered security architecture may
create very serious problems as far as European defense in concerned.
The existing international security architecture served the U.S. and
Europe well for 60 years. It is already sufficient and does not need
the revisions Moscow seeks. Russia is systematically obstructing
activities within the Organization for Security and Cooperation in
Europe (OSCE) and is seeking to undermine NATO and what it views as a
U.S.-led international security and economic world order.
Testifying before the U.S. Senate's armed services committee, U.S.
Army General John Craddock, NATO's supreme allied commander Europe,
said in written testimony that ``Russia seems determined [to] see Euro-
Atlantic security institutions weakened and has shown a readiness to
use economic leverage and military force to achieve its aims.''\17\
---------------------------------------------------------------------------
\17\ ``Russia-NATO Relations to Strain Further, Says General,''
Reuters, March 26, 2009, at http://www.moscowtimes.ru (March 26, 2009).
---------------------------------------------------------------------------
He added that while Russian leaders, political and military signal
a willingness to engage in closer cooperation, ``their actions in
Georgia in August 2008 and with European natural gas supplies in
January 2009 suggest that their overall intent may be to weaken
European solidarity and systematically reduce U.S. influence.''
Seen against this background, Moscow's calls for new pan-European
security architecture should give the U.S. and NATO pause.\18\ The
concept would marginalize NATO and weaken the human rights jurisdiction
of the Organization for Security and Cooperation in Europe (OSCE). The
concept seeks an absence of ``blocs'' in European security (i.e.,
abolition of NATO) and security that is not at the ``expense'' of some
countries (i.e., Russia).\19\ It proposes national armed forces to be
deployed on a ``common perimeter'' and a ``demilitarized zone'' inside
the perimeter. To be sure, the Kremlin seeks to marginalize NATO and
restrain America's influence. To paraphrase Lord Ismay, Russia's
proposed security system would keep Germany up, the U.S. out and Russia
in.
---------------------------------------------------------------------------
\18\ ``Medvedev Urges EU to Create New Intl-legal Security
Architecture,'' ITAR-TASS, February 6, 2009, at http://www.itar-
tass.com/eng/ (March 27, 2009).
\19\ ``Rogozin Spells out New European Security Concept,'' ITAR-
TASS, November 11, 2008.
---------------------------------------------------------------------------
Beyond Europe, Russia is doing its best to pursue a broad, global,
revisionist foreign policy agenda in which Russia, China, Iran, Syria,
and Venezuela will form a counter-weight to the United States. The
Kremlin also continues to call--as it has since the St. Petersburg
Economic Summit in 2007--for revising the global economic system,
replacing the dollar as the world's reserve currency and creating a
supranational currency run by the IMF, as regional currencies, with the
ruble as one of them.
Question. Should the U.S. have blocked consensus at NATO on
restoring full relations with Russia, when Russia continues to base
troops in South Ossetia and Abkhazia, both of which are still
internationally recognized as Georgian sovereign territory?
Answer. We were surprised by the speed with which NATO restored
full relations with Moscow. America's Central European NATO allies view
with concern the most recent moves to resume full NATO-Russia ties. The
allies are justified in their concerns about Russia. The ``Guns of
August'' in Georgia demonstrated that Russia tore apart the 1975
Helsinki accords, which guaranteed inviolability of the borders in
Europe. We also did not agree with the speed and decision of the 27 EU
member countries to restart negotiations with Russia for a new
partnership agreement after they had been halted due to the Russia-
Georgia war.
By resuming formal NATO-Russia ties, NATO sends the wrong signal to
Russia, who is still in violation of the terms of the ceasefire
negotiated by French President Nicolas Sarkozy after the 2008 Russo-
Georgian war. Rather than withdraw to status quo, as envisaged in the
Sarkozy-Medvedev agreement, the Russian military has announced the
deployment of five bases: three in Abkhazia and two in South Ossetia.
These bases violate the spirit and the letter of the ceasefire.
This message has been reinforced by the Strasbourg-Kehl declaration
of the most recent NATO summit. The declaration formally announced the
immediate reconstitution of the NATO-Russia Council (NRC) and pledged
to upgrade and expand relations between NATO and Russia through the
Council. Despite some language in the Declaration inserted by Central
and Eastern European nations criticizing Russia for its military build-
up in South Ossetia and Abkhazia, the tone could be characterized as
conciliatory. An improvement of U.S.-Russia and NATO-Russia relations
is certainly desirable, but it should not come at the expense of key
allies, interests and existing rules of international diplomacy and
European security.
__________
responses to questions submitted to ambassador
stephen sestanovich by senator kerry
Question. How realistic is it to pursue a revival of Russia's
implementation of the Treaty on Conventional Force in Europe given
Russia's actions in Georgia?
a. Are there specific actions the United States should take?
b. Are there compromises we should be willing to accept?
Answer. The Senator is right: it is completely incompatible with
the CFE treaty for one signatory to have troops and military equipment
on the territory of another without the latter's consent. That is why
the United States sought Russia's commitment at the Istanbul Summit of
the OSCE in November 1999 to withdraw such forces from both Georgia and
Moldova. Unless those commitments are eventually fulfilled, it is hard
to see how the CFE treaty can survive in its present form. But we can
approach the problem one step at a time. The first step has to be for
Russia to restore the military status quo antebellum of last year.
Question. You called on the committee to support the U.S.-Russia
agreement on civilian nuclear cooperation. What should we say to those
who worry that Russia is still helping Iran, if not with direct
assistance to Iran's nuclear program, than at least by offering air
defense systems and rejecting effective sanctions?
Answer. I favor Congressional approval of the 123 agreement on
civil nuclear cooperation. Implementation of the agreement--and
approval of individual cooperative projects--obviously has to take into
account the broader framework of relations between Russia and the
United States. These are not going to develop positively if Russia
keeps increasing the technical sophistication and capabilities of the
weapons it sells to Iran. From the hesitation that Russian officials
have shown about going forward with the S-300 air-defense system, I
think it's clear that they understand this problem.
Question. It's been more than seven months since Russian forces
went into Georgia. Was Russia trying to send its neighbors a message?
Did the West's muted reaction to the events in Georgia also send a
message to the region? What has been the impact?
Answer. I think Russian leaders may actually have sent more of a
message than they intended, both to their immediate neighbors and to
others beyond the region. How Russia views the sovereignty of other
states is, understandably, a more open question than it was even a year
ago. What message other states end up receiving about American policy
will depend on how we treat the problem of Georgia's security going
forward. We have to make clear that we are not simply going to forget
about this incident and accept its consequences.
__________
responses to questions submitted to ambassador
stephen sestanovich by senator feingold
Question. In recent testimony, the DNI noted that Moscow's
engagement with both Iran and Syria, including advanced weapons sales,
has implications for U.S. nonproliferation interests. Equally as
relevant are press reports that Russian President Medvedev has
announced his intention to strengthen Russia's conventional military
force. How should the Obama administration interpret these signals and
what actions might result in more effective cooperation with Russia on
Iran?
Answer. President Medvedev's military policies are confusing--and
require continuing, careful watching to understand their real meaning.
His statements continue to refer to a threat from NATO, but most
serious Russian observers of his plans conclude that Russia is
abandoning the idea of preparing for a war against it. The rhetoric
aside, that's probably good news.
Question. If Iran continues to move forward in the direction it is
currently headed and does not cease uranium enrichment, do you think
Russia would be supportive of more punitive actions if need be,
including sanctions through the UN Security Council even though it has
resisted harsher measures in the past?
Answer. Russia has consistently watered down sanctions resolutions
in the Security Council, while ultimately supporting them. That seems
the most likely pattern for the future--support for measures that put
little pressure on Iran. A dramatic action by Iran--expulsion of
inspectors, say, or enrichment to higher, weapons-grade levels--might
change Moscow's outlook in ways that we can't predict at this time.
Question. With the media reporting that Russia will now allow the
United States to ship non-lethal supplies through its territory to
Afghanistan--via Kazakhstan and Uzbekistan--what kind of support is
feasible from Russia. Is it appropriate to see Russia as an equal
partner with regard to Afghanistan and if so what steps should we take
to ensure that's the case?
Answer. It's encouraging to see Russia starting to allow supplies--
non-lethal and perhaps at a later date lethal, too--to pass through its
territory in support of NATO operations in Afghanistan. At the same
time, it's discouraging to see Russia continuing to oppose the use of
airfields in Central Asia for transporting the very same supplies. As
long as it continues to have this split-screen view of the matter, it
will be hard to think of Russia as a partner in the enterprise.
Question. Russian officials said earlier this year that they are
scaling up their diplomatic involvement to solve conflicts in Africa,
and they recently appointed a special envoy to Sudan. However, their
record to date toward Sudan and specifically the situation in Darfur
has been unhelpful to say the least. They have provided political cover
for the regime in Khartoum at the UN Security Council and, according to
the organization Human Rights First, they have continued to provide
arms to the Government of Sudan used in Darfur in direct violation of
the UN arms embargo. How can the Obama administration better press
Russia on the Security Council and bilaterally to change their approach
to Sudan? And just as with the Chinese, how can we engage and identify
opportunities to partner with the Russians as they increase their
involvement in African affairs?
Answer. Right now, the outlook isn't brilliant, and Russian
resistance to Security Council pressures will continue. Finding a
small, non-controversial peacekeeping operation in which Russian and
other countries can participate side by side may be the most promising
first step in whetting the Russian military's appetite for further
cooperation. Remember, Russian forces served under an American command
in both Bosnia and Kosovo: it can happen again.
Question. The State Department's yearly report on human rights
noted for 2008 that ``the Russian Federation has an increasingly
centralized political system. with a compliant State Duma, corruption
and selectivity in enforcement of the law, media restrictions, and
harassment of some NGOs [all of which have] eroded the government's
accountability to its citizens.''
The 2008 report also documents numerous reports of government and
societal human rights problems and abuses during the year. The last
administration pretty much gave Russia free pass but this is not
expected to be the case with the new administration. How do you
anticipate these restrictions will be addressed in any new U.S. policy
towards Russia?
Answer. President Medvedev's regular--and seemingly sincere--
statements about the importance of strengthening the rule of law in
Russia may be a good opening for a new policy. His use of this theme is
so strong and so frequent that we should try to think ambitiously about
how to build on it.
__________
responses to questions submitted to ambassador
stephen sestanovich by senator casey
Iran
Question. Russia has given mixed signals about the steps it is
ready to take in order to contain Iran's nuclear ambitions. On one
hand, Russia is building a nuclear reactor for Iran at Bushehr, and has
obstructed efforts in the UN Security Council to impose tougher
sanctions on Iran for continuing its nuclear enrichment program. On the
other hand, after Iran's clandestine nuclear program came to light,
Russia withheld the delivery of nuclear fuel for the Bushehr reactor
and eventually agreed to limited UN Security Council sanctions, when
Iran refused to accept a Russian proposal that would have allowed Iran
to reprocess uranium at facilities on Russian territory. In recent
weeks, senior Russian officials, including President Medvedev, have
indicated that Russia is prepared to support additional sanctions on
Iran if it does not stop enrichment of uranium.
How do you interpret Moscow's vacillation on stopping Iran's
enrichment program? Why has Moscow historically been unwilling to agree
to tougher sanctions on Iran? Are Moscow's motivations for building a
nuclear reactor for Iran strategic, financial, or both?
Answer. Russia has for years wanted to find a formula that brings
Iran's nuclear activities under greater international control and
inspection without worsening its own relations with Iran if this effort
fails. It has not wanted to be seen by Teheran as an agent of American
policy--that's why, it has always wanted the list of sanctions voted by
the Security Council to be shorter and milder than those sought by the
U.S. As for its motivations in building the Bushehr reactor, they are
surely both commercial and strategic.
Question. President Medvedev recently suggested that Russia is open
to cooperating with the United States on Iran. However, he also scoffed
that the U.S. should not link cooperation on Iran to U.S. missile
defense plans in Eastern Europe. In other words, the Russian leadership
continues to maintain that U.S. missile defense sites do not counter
the Iranian threat, but rather threaten Russia.
In your view, did the Obama administration present the Kremlin a
fair deal by offering to scrap U.S. missile defense plans in Eastern
Europe for greater cooperation on combating the Iranian nuclear and
ballistic missile threat?
Answer. What President Obama has said (and he repeated it in his
Prague speech) is this: There would be no need for defensive systems
against Iranian nuclear-armed missiles if Iran never acquired nuclear
weapons nor long-range missiles in the first place. The U.S. has
suggested to the Russians that this ought to be a reason for them to
cooperate with us to constrain Iranian capabilities. This seems to me a
good deal for everyone. An offer to scrap our missile defense plans
just because the Russians offer ``help'' does not seem like such a good
deal. Suppose we--and they--fail?
Question. Do you take President Medvedev at his word when he
indicates that Russia might agree to additional sanctions? Or is the
Kremlin expecting a carrot from the Obama administration in exchange
for its cooperation? What, if anything, should the Obama administration
offer Russia for enhanced efforts to stop Iranian enrichment?
Answer. I'm skeptical of quid pro quo deals of this kind.
Successful diplomacy rarely involves trades of completely unrelated
issues. I'm also unconvinced that Russia has a great deal of leverage
over Iran. Most Russian officials and experts that I talk to dispute
the idea.
Priorities in the U.S.-Russian Relationship
Question. Russia has also vocally expressed its displeasure with
the United States' promotion of democracy, both in Russia and in
Russia's near abroad. It is a common view in Moscow that the U.S. was
responsible for facilitating the colored revolutions that removed
authoritarian leaders in Ukraine, Georgia, and Kyrgyzstan, and some
officials in the Kremlin, particularly inside Prime Minister Putin's
inner circle, fear a similar revolt in Russia. I disagree with Russia's
claims, but I cannot ignore Russia's less than remarkable record on
democratic reform and civil liberties. Opposition leaders, even those
who pose no threat to the entrenched political establishment, are
routinely jailed and harassed. In addition, several Russian journalists
have been murdered under murky circumstances suggesting government
involvement.
In your assessment, what priority should the U.S. place on
democratization and protecting civil liberties in Russia? If we focus
too much on these areas, do we risk alienating Russia on important
security issues, like Iran's nuclear threat?
Answer. Russian internal political developments have definitely
been going in the wrong direction for some time now. But the reason to
think hard about what if anything we can do to support a more positive
evolution is not that our efforts annoy Russia's leaders and make them
less likely to help us with Iran. The real reason is that these efforts
simply haven't been working very well. And in fact President Putin has
been able to use Western sympathy and support to weaken those who are
trying to move Russia in a more democratic direction. It's obviously
impossible for Americans to be silent about these matters, but we need
to think a lot harder about what we can say and do that will actually
have the desired effect.
NATO-Russian Relations
Question. On March 5, NATO Foreign Ministers agreed to resume
formal meetings of the NATO-Russia Council, after suspending its
activity following Russia's invasion of Georgia in August 2008.
Ministers gave the signal that business would return to normal, even
though serious disagreements with Moscow remain. I am interested in
your assessment of ``business as usual.'' For example, it is promising
that Russia agreed to allow NATO Allies to transport non-lethal
military equipment to Afghanistan across Russian territory. Yet, Russia
continues to demand that NATO abandon its plans to offer Ukraine and
Georgia membership in the Alliance, in spite of the fact that at the
2008 NATO Summit, Allied Heads of State made explicitly clear that both
countries would one day join NATO. The possibility of enlargement
always threatens to derail NATO's relationship with Russia.
How do you assess the future of NATO's relationship with Russia,
considering all that we know about Moscow's red lines? Will the NATO-
Russian relationship be complicated by President Medvedev's proposal
for a European Security Treaty that would presumably seek to give
Russia a veto over Alliance decisions on enlargement, missile defense,
and other contentious issues?
Answer. Russian policymakers are suspicious of NATO enlargement
because they remain ambivalent--and more typically, hostile--to NATO
itself. As long as they do, prospects for a productive relationship
between Russia and NATO will be limited. But I wouldn't be too fearful
that Russia will, merely by convening a conference on European
security, be able to acquire a veto over NATO decisions. The other
members of NATO have no more interest in such a result than we do, and
they've all got diplomats just as smart as ours to make sure that it
doesn't happen.
Should the U.S. have blocked consensus at NATO on restoring full
relations with Russia, when Russia continues to base troops in South
Ossetia and Abkhazia, both of which are still internationally
recognized as Georgian sovereign territory?
Answer. What bothered me about this decision is not that NATO
failed to use the resumption of ``normal'' relations with Russia as
leverage to get Russian troops out of Georgia. It's that most NATO
members seem to have stopped treating this as a problem issue in their
relations with Moscow. Russian troops are not only occupying sovereign
Georgian territory--they are occupying territory from which President
Medvedev promised to withdraw last summer. Members of this committee
may want to learn more about what our representatives at NATO have done
to keep this issue on the agenda of the NATO-Russia Council.
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