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Foreign Policy in the Pressure Cooker

Though this paper bears a date of “June 2009,” I have just now come across it.  Stanislav Secrieru of the excellent Centre for European Policy Studies (CEPS) has a piece which considers whether or not the economic crisis and lower oil prices will motivate Russia to scale back its more aggressive foreign policy ambitions.  Secrieru envisions two scenarios:  one in which a more compliant Kremlin seeks to bridge the gap with the West, or second, that things remain the same with Russia maintaining its normative independence in foreign policy making.

Below is a quote, download the 10-page paper here:

Rationalists argue that power capabilities define the actors’ foreign policy goals. Accordingly, they assume that a decline in state resources will compel Russia to scale down its international ambitions. There are expectations that, as the crisis strikes with full force, Russian foreign policy will soften and Moscow will adopt a more conciliatory tone. Thus, the crisis is seen as an opportunity “for a new beginning” in relations with the West. It is considered that it would be wise for the US and EU to take several concrete steps to meet Russia’s regional and global concerns. Such an approach would neutralise the Kremlin’s suspicion that the West is likely to speculate on the vulnerabilities of a weakened Russia and extract more advantages. Alleviating these fears might help to find the right balance between the “three branches of European civilisation” – Russia, the EU and North America.

On the Russian side, the desire to overcome the all time low inrelations with the West could be a favourable factor. Nevertheless,such adjustments will take place not as the natural consequence of agradual convergence of values, but as the result of long-termcalculations driven by Russia’s economic vulnerabilities and securityimperatives.

Firstly, the crisis will sharpen the structural problems of theRussian economy and make diversification a vital task. Moscow is fullyaware that energy resources alone cannot generate a new cycle ofsustainable growth. Secondly, the Russian corporate sector has a $500billion debt, part of which might have to be restructured. Because ofthe heavy state presence in the economy, the debt is aquasi-governmental burden. This issue was raised with Minister Kudrinduring the G7 finance ministers’ summit in Rome in February 2009.Thirdly, if internal resources (the Reserve Fund, the National WealthFund and international reserves) shrink faster than anticipated and thecrisis deepens, the government will need massive international loans tofinance its budget deficits in the years to come. The profits made byGazprom – the main contributor to the federal budget – are expected todrop in 2009 by $29 billion. Finally, Russia will face serious securitythreats if the new US strategy fails in Afghanistan17 and some alliesdecide to withdraw by 2010-11.