Country Report: Russia (March 2015)

An article by Gleb A. Ivashentsov attacks US moves in the Indian Ocean, while siding completely with China and suggesting that its plans fully meet Russia’s aspirations.

In No. 2, Mezhdunarodnaia zhizn’ he discusses the situation in the Indian Ocean, which is described as the liveliest trade route in the world and the only year-round maritime route between European Russia and the Russian Far East. He asserts that from the 1960s the US Navy built up its forces there in order to pose a strategic threat to the Soviet Union from the south, although there was no Soviet threat to the United States in this ocean even if Moscow did begin to counter the threat there in the 1980s before withdrawing after the Cold War. In contrast, the US presence grew, and Obama has identified the threat from Russia as more serious than that of ISIS. Taking advantage of weak states—a zone of instability and chaos—, Washington aims to control Eurasia from the south, the article asserts. It attacks sovereign states without their permission—as in the raid against Osama Bin Laden—and leaves a trail of disorder rather than peace and prosperity wherever its Pax Americana has been imposed, most recently in Ukraine. Whereas Washington insists on control, India, China, and Iran reject such domination, the article contends. Washington is opposed to China’s presence, but it encourages India’s with alarmism about what China is doing. While India is not interested in a wide-ranging Chinese presence, it has no disagreement with China on maritime issues. The article blames Washington for interfering in China’s territorial disputes with the states of ASEAN in the South China Sea, charging that Western propagandists depict the “Maritime Silk Road” as an effort, along with the “string of pearls” to give China control over the region’s ports. In this argument, China is the country for free trade, economic integration, linkages of maritime routes with the Eurasian Economic Union championed by Russia, and initiatives that fully correspond to Russia’s long-standing objectives. The Cold War has returned, but this time Moscow is but one of many strong partners. The exact position of India is left vague, although it too is not depicted as pro-US.

In the same issue of Mezhdunarodnaia zhizn,’ Aleksandr Lukin puts Russia and China at the center of the consolidation of the non-Western world against the background of the Ukrainian crisis. Arguing that the significance of this crisis is difficult to exaggerate, he sees it as accelerating Russia’s turn to Asia—no longer with claims that the USA and EU remained the main partners—; drawing Russia and China much closer—a process long under way as both oppose a unipolar world, as both stand firmly behind state sovereignty and the Security Council and against “humanitarian intervention,” share views on North Korea, Iran, and other regional problems, and favor reform of the international financial system. The two also need each other as economic partners, as cooperation between border regions is rapidly growing and both increasingly reject “universal values” and the secular, relativist ideology of the West used to control other countries. Yet, Lukin points to clashing opinions in Russia on what the growing closeness to China signifies. Some warn that this threatens to turn Russia into a satellite and raw material supplier to a powerful and aggressive China, as if turning to a much more aggressive West means joining the “world economy” and the “civilized world.” Those opposed to the West are focusing on the struggle for an independent course without paying attention to China, serving their bipolar ideological scheme rather than analysis of the actual situation. Lukin also reminds readers that the Sino-Russian convergence has been proceeding for more than 30 years for fundamental reasons. Agreeing with the analysts who find an overlap in worldview, Lukin finds it far-reaching and also long-lasting, not a recent outgrowth of the Ukraine crisis.

Lukin enumerates eight common interests: 1) aspirations to leave a unipolar world, which is seen as not meeting their security and economic interests and dictating to them decisions monopolized by one center; 2) aspirations to maintain sovereignty and the role of the Security Council as the nucleus of internationalism, opposing “humanitarian intervention” and other means to impose one country’s will on the internal affairs of another; 3) overlap in approaches to regional conflicts, such as the Korean nuclear problem, Iran’s nuclear program, and the situation in Libya and Syria; 4) support for a much increased role of non-Western states in international financial institutions and for a more regional approach to international trade; 5) the fact that they are necessary for each other as trade and economic partners, despite the lower level of Chinese dependence on Russia, given goods that it could not get elsewhere or prefers to get as a means of “diversification”; 6) rapid growth in the cooperation between border areas important for local development in both; 7) the realization of common aims through cooperation in Central Asia and in the SCO; and 8) increased rejection of “universal” values and secular relativist values, e.g., in favor of Russia’s traditional religious ones or of traditional morality based on Confucian values. While some acceleration in convergence between the two may have come as a result of the crisis and sanctions over Ukraine, major recent agreements over gas and oil were long under negotiation, and the above factors have been in effect for a while.

Lukin asserts that the recent gas contracts have enormous significance in showing the West, especially Europe, that Russia has an alternative. If EU countries turn elsewhere for supplies, they will pay more, and Russia’s budget will not suffer a serious loss. Both government officials and the leaders of big business recognize the practical necessity of close Chinese ties, whereas in the past Chinese were denied investments in Russian energy companies over concern for national security. Under G. N. Timchenko, who has been hit with US sanctions, the Russo-Chinese business council has grown much more active, and his Volga-Group is looking for experts on Chinese business. Along with rising interest in China specialists by the business world, the degradation of Chinese studies and of decision making about China has come under close scrutiny. The two articles by Alexander Gabuev in late 2014 on the study of China in Russia and Russia in China, which would have gone little noticed before, have aroused great attention. He was tasked with bringing experts together by the Ministry of Economic Development to discuss the possibilities for cooperation with China and increases in financing for Chinese studies. This is being coordinated by Vice-Minister S.S. Voskresenskii as part of the overall direction for Asia under Deputy Premier I.I. Shuvalov, who is considered to have successfully organized the APEC meetings in Vladivostok. In August 2014, Moscow State University and the Beijing Polytechnic University agreed to jointly establish a university in Shenzhen to prepare, under the highest educational standards of Russia’s top university, specialists with knowledge of Chinese and Russia, who will be in demand not only in Russia and China but around the world. It will be located in a special economic zone with open doors to Russian companies. China already has joint universities with the United States and European countries, and now Russia has a similar project.

Lukin adds that despite language difficulties and the unfamiliarity of Chinese customs, the necessity of cutting established ties with Europe and abandoning hope in cooperation with the West means that the problems in turning sharply to China are manageable. This, he explains, should be done without illusions that China will not staunchly insist on satisfying its own interests. China will not cut its relations with the West necessary for the development of its economy. Russians can see the rise of nationalism in China, including in the army. There is still a strong group in Russia calling for maintenance of close ties with the United States and the European Union, some with property or business interests there. Lukin places Putin in the middle between them and those actively pursuing Eurasian integration, suggesting that he seeks ties not only with China but also with South Korea, India, Iran, Turkey, and the ASEAN states (pointedly omitted is Japan). Yet, he insists that the tide has turned for good: the shift to China will not be reversed, trust in the West is broken, public opinion views the United States and European Union antagonistically. There is a direct threat to the very existence of Russia, he asserts. The challenges from China are much less serious than those from the West and can be compensated by economic and political cooperation with other Asian states and sincere exchanges with China, which often considers Russia’s wishes and fears. This means a return to Soviet type “peaceful coexistence,” which Lukin also sees operating in Sino-US relations, where ideological discussions are useless. As for possible challenges from China’s rising power and nationalism, he proposes: 1) diversification of relations with Asia (here he does mention Japan), including states with which China has a problem: 2) strengthening of traditional ties, including with Iran and the DPRK, although it is under too much influence from China; 3) open discussions with China of Russia’s fears about the intensification of conflicts with Japan and in the South China Sea, which would be unfavorable for Russia and for China too since conditions for US interference would increase; and 4) the need for continued integration of the Russian and Chinese economies, which would not lead to one-sided dependence that would damage relations and not be advantageous for China. Lukin’s reasoning gives China every benefit of the doubt.

Finally, the article depicts Russia as strongly supporting the SCO, expecting the simultaneous inclusion of India and Pakistan soon, although China earlier had been hesitant about India. This would put to rest that the SCO is a non-democratic entity and would be a new step in the consolidation of the non-Western world. Lukin sees the collapse of the Soviet Union as creating a vacuum, leading to greater instability and even states feeling threatened. With the Ukrainian crisis, BRICS is strengthening amid growing awareness of the West trying to forge a unipolar world. Russia wants it to consolidate. For the development of Siberia and the Russia Far East at a time when China is reducing imports of Russian coal, Russia needs wider horizons. The article does not explain how BRICS or other regions might serve this objective as if somehow Russia has multiple options, even as prices for its exports keep falling.

Valerii Denisov asked in the same issue of Mezhdunarodnaia zhizn’ whether there is a way out of the dead-end for the nuclear problem on the Korean Peninsula. Not blaming the North, he describes a deteriorating situation on the peninsula and also in the region, which has become extremely dangerous and presents Russia as having multiple goals as if they are all compatible. Citing South Korean figures that the North’s nuclear program alone costs USD 3 billion a year, Denisov does not explain how it obtains that money. He is forthright in reporting on US overtures, contradicting much Russian coverage that pretends that no such offers are on the table, but then he adds that it has reasons based on prior US failure to fulfill agreements, giving the example of the 2002 Bush decision while ignoring the North Korean behavior that provoked that decision and repeating the mantra that Washington does all it can to destroy the regime. Seemingly giving equal weight to North Korea’s complaints and South Korean and US complaints of what the other side is doing, he blames strident rhetoric on both sides for raising tensions. Denisov also finds merit in the argument of North Korea that the United States, South Korea, and Japan failed to fulfill their promises in the September 19, 2005 agreement, which provoked it to resume its nuclear activity and, therefore, demands that the North meet the precondition of fulfilling its own obligations are unfair. Blaming South Korea along with the USA for pressuring the North, which has the opposite effect, Denisov even charges that their talk of a preemptive strike in case they detect an attack coming could lead to using such a claim as a pretext and he disregards South Korea’s claim to be developing its own anti-ballistic missile defense as a bluff to hide the fact it really is joining the US system. The real dangers do not come primarily from the North, he concludes, detailing US-ROK steps that allegedly do not contribute to peace in the region.

A second theme in Denisov’s article is the deterioration of Sino-DPRK relations, which are partly explained by past problems between the two, by the DPRK not wanting to live under China’s thumb, and by China’s dissatisfaction that the DPRK does not take its interests into account. In other words, North Korea is again left with little blame. Also it was disconcerted by more active Sino-US contacts on the North Korean theme, which could lead to a deal between the superpowers. Yet, he concludes that China has not altered its basic course, which regards North Korea as a strategic partner and a geopolitical buffer against US efforts to counter China’s influence. Restarting the Six-Party Talks remains China’s goal—a matter of prestige and of strengthening its leading role on the peninsula. Russia, it is noted, also seeks the resumption of these talks and refrains from imposing sanctions except those linked to the rocket and nuclear activities of North Korea. With this article, Denisov justifies Russian warming to North Korea, explains North Korea’s wariness of China without putting much blame on China, and puts the onus on the United States and others.

While Russia calls on North Korea to agree to abandon its nuclear program, it says that the United States, ROK, and Japan should take adequate steps too: to guarantee the survival of the DPRK government, to provide economic assistance, to normalize relations, and to accept the DPRK’s use of atomic energy for peaceful purposes. It still sees a chance for compromise through Six-Party Talks, refocusing on the 2005 Joint Statement with the North agreeing to a moratorium on rocket and nuclear activities, the United States negotiating normalization of relations and removal of barriers to cooperation, and Japan negotiating improved relations. Only as a fourth step does Denisov mention the need for North Korea to take concrete measures to fulfill its 2005 promises, leading to a fifth step of the United Nations reducing and then removing the sanctions. With Moscow and Pyongyang also working on improving ties and the 2005 agreements monitored, conditions will be ripe for pursuit of Russia’s initiative for establishing a mechanism for peace and security in Northeast Asia through a working group within the framework of the Six-Party Talks. This appears to be a revival of the fifth working group of 2007-2008, which Russia headed, based on new optimism that a stronger China, a weaker United States, and a new balance of power on the Korean Peninsula could allow Russia to steer this group along a new path. The prospect of South Korea absorbing the North is utterly at odds with this plan.

In the January 28 Nezavisimaya gazeta, Valerii Kistanov posited Abe’s two challenges of 2015 as improving relations with all of the Asian countries, including Russia, and strengthening political-military ties with the United States—both against the calls in the background of right-wing conservatives to reassess Japan’s aggression in Asia at the time of the seventieth anniversary of the war’s end. While much of the article is a broad overview of Japan’s relations with China, South Korea, North Korea, and the United States, Kistanov turns to relations with Russia toward the end. He notes the July 7, 2014 statement from the Russian Foreign Ministry of its watchfulness over the Abe cabinet’s foreign policy direction and any possibility of reducing recognition of the crimes of Japanese militarism. He also mentions that Abe has been invited to the May Moscow war anniversary commemoration, but, in light of the Ukraine situation, it is unclear if he will accept, despite the potential consequences for the planned visit of Putin to Japan this year. The article gives the impression that Russia with difficulty decided to prolong political contact with Japan, given that its economic sanctions are not causing real losses for Russia. In light of the sanctions from the West, Russia is interested in normal relations with all of its neighbors in the Far East and the Third (economic) World—a revival of Cold War language assuming that the era of bipolarity has returned. (The article emphasizes closer Japan-US military ties; so it is not really considered part of any third grouping.) Kistanov observes that if Abe accepted the invitation to Moscow, he would be aware of possible meetings there with the leaders of China, South Korea, and especially North Korea. The major dilemma for Abe, however, Kistanov describes as the juxtaposition of seemingly incompatible things: his inclination to reevaluate the war’s history for Japan and his presence at an occasion to mark its crushing defeat. Holding out hope that he will attend, Kistanov explains that Abe has already demonstrated his ability to juggle clashing objectives, as in February 2014 speaking in Japan of demands for the return of the “Northern Territories” and on the same date flying to the Winter Olympics in Sochi when other leaders of the West ignored it. In a similar vein, Koizumi, whom the author calls more conservative, visited Moscow on the sixtieth anniversary in 2005.

In the same newspaper on February 27, Varvara Remchukova said that the Russian public first learned of the TPP when in China at the APEC summit Putin described it in negative terms with doubt that an agreement would be reached. The article then describes the TPP as another US attempt to forge a regional architecture beneficial to itself and warned that the absence of major regional powers such as China and Russia would hardly allow it to be effective. TPP is reviewed as a mechanism to strengthen US military alliances and to put economic pressure on other states. Given difficult compromises and balances reached over FTAs, replacing them with the TPP is seen as problematic. It would destroy the WTO, only serve the interests of the big powers, and dictate to others how they have to proceed. The US interest, we are told, is to strengthen its geopolitical position against the rising military power of China, as a quotation claims that TPP will serve the interests of countries fearful of an aggressive China and is more about security than increased trade. Yet, pointing to security as the motivation of many countries, Remchukova also adds that many are objecting to focusing on containment of China, not wanting to become hostages to US foreign policy thinking. After all, economic relations with China are critically important. The article warns that Washington is trying to set the economic rules for the world, implying that Russia is firmly opposed and China has to be as well.

On March 6 in Lukin posted another article, asking if Putin would become Russia’s Deng Xiaoping, noting that in the face of sanctions against China after 1989 Deng had rejected autarchy and launched reforms expanding ties with the West. It was not that Chinese were demanding democracy, but that economic reasons and opposition to corruption led to disorder, and Deng took measures to address these causes. Rather than listening to those who had opposed market reforms and stood in favor of classical socialism with class struggle inside the country against “world imperialism,” Deng in 1992 deepened the opening of the country to the outside world. Inefficient state enterprises were reorganized, foreign trade became easier, the state let credit and banking proceed with less interference, tax laws changed, and international investors were better protected. He turned the situation around.

Lukin draws the following lessons from China’s experience. Confrontation with the West is inevitable if a major state follows an independent course and does not agree to the fate of a satellite of the United States. This confrontation facilitates rethinking its strategy of economic development, and it offers a chance to become more active in the world economy. China and Russia are different, he notes, but China has demonstrated that building a strong economy requires being part of the world economy, unlike the mighty USSR, which fell into ruin without it and served as a lesson to Deng. Lukin adds that Russia now has an advantage after 15 years of favorable conditions for development, given that its resources are required by the West, as China had with its factory production in great demand. Now Lukin concludes, Russia must reduce its dependence on natural resources, develop small and medium level businesses, improve the investment climate, create an independent judicial system, struggle against corruption, and also stimulate production and import substitution. There has long been talk of these imperatives, but in many spheres the situation has only grown worse. Politics has interfered with the economy, he concludes.

Change does not require the introduction of Western models in managing the economy. China shows the way. Failure would mean more dependence on foreign centers of power, which is more dangerous than reforms. In Russia, as in China in its time, supporters of open state nationalism and an autarchic, Soviet type of system are rearing their heads with proposals that seemed stupid just a few years ago. They are opposed by oligarchs and corrupt figures, who are afraid of losing their London palaces, and by ideologue monetarists striving to continue the experiments that they conducted in the 1990s. Deng found the only correct path, not subordinating his country to the West (but also not rushing into a confrontation) and pursuing economic development. Of late the Russian leadership’s inclination seems to be that there are no special problems with the Russian economy. It is not clear that Deng’s path will be followed, Lukin warns, but he invokes this parallel with a quarter century ago as instructive for what Russia should now decide.