Wednesday, October 19, 2011

Vladimir Putin sends 'what reset?' message....

Vladimir Putin sends 'what reset?' message....

By Pavel K Baev

Vladimir Putin made his first visit in his new status of president-all-but-elect to China last week and used the opportunity to emphasize the unprecedented level of trust between the leaders of the two world powers, which "learned to act hand-in-hand" on the international arena.

It is far from certain that Russia and China "absolutely lack any problems in the political and humanitarian sphere", as Prime Minister Putin asserted, but it is a fact that in many tough situations, for instance in casting a veto on the United Nations Security Council resolution imposing sanctions against the Syrian regime, Moscow and Beijing move in synch.

Putin negotiated a compromise solution in the dispute on prices

for Russian oil exported to China through the new Eastern Siberia-Pacific Ocean oil pipeline but hardly found much satisfaction in the deepening dependency on supplying raw materials to China’s industrial boom, continuing for 33 years. He was very careful in dispensing criticism of the United States' and the European Union's economic policies; nevertheless, the visit sent a pronounced message that Russia is ready for a cooling and reversing of the reset in relations with the West.

Supporting evidence for this estrangement can be found in the demonstrative support for ailing President Hugo Chavez of Venezuela and the new contract on supplying Russian arms to Venezuela. The main source of tensions, however, is the unbridgeable disagreement over the building of the European tier of the US missile defense system.

President Dmitry Medvedev's idea of making Russia responsible for a wide sector in this system is clearly unworkable, and Putin prefers to play hardball in this field without bothering to educate himself on the basic parameters of evolving strategic deterrence.

It is probably better for self-confidence to remain ignorant about the scale of the problems with deploying the new generation of submarines and missiles as well as about the limitations of Russia's much-advertised S-400/500 surface-to-air missiles (that have never been tested against ballistic missiles) that render the grand design for an air-space defense system far-fetched.

Putin is clearly irked by every new US step in deploying strategic assets, for instance in Spain, and signals that without a deal on connecting Russia to the joint defense against hypothetical missiles there will be no point for him to partake in the North Atlantic Treaty Organization summit in Chicago next May.

Another area where disengagement is occurring is the proto-partnership with the EU in advancing Russia's modernization as championed by Medvedev.

This cooperation has never gained any traction because Medvedev's project went directly against the preferences of the ruling bureaucracy. And now as Mikhail Khodorkovsky, Russia's most famous political prisoner, argues, there is no point in expecting any modernization "from above".

Putin is probably disappointed about the massive exodus of Western capital, but at a recent investment forum he could only dodge a tough question from a German businessman: "What signal do you need to send so that smart Russians stay in this country and smart investors come to Russia?". He hardly expects any pay-off from the key talking point in his trip that China could become Russia's privileged partner in modernization instead of the EU.

What denies Putin the opportunity to put more pressure on the depressed and divided Europeans is the saturation in the gas market, where Russian energy giant Gazprom is reluctantly yielding to many demands for discounts.

If there was a chance to undermine this position of consumers' strength by concluding the long-negotiated gas deal with China, Putin did not grasp it, presuming that Beijing demands concessions too far.

One way to compensate for this weakness of the "gas muscle" could be found in applying financial clout (valued at US$500 billion) toward the desperately indebted European states. Emergency credit of $3.3 billion has been quietly but efficiently provided for Cyprus, which is a major "safe haven" for money moving to and from Russia. A more "strategic", though improbable, proposition aired last week is for taking on a share of sovereign debt of Spain, where Russia has few financial or energy interests.

Such experiments probably appear interesting to Putin's lieutenants, impatient to demonstrate that the period of Medvedev's concurrence in foreign policy is over and that all kinds of "resets" that have exhausted their usefulness could be reconsidered.

What is missing in this desire to revive Putin's trademark style of toughness and tit-for-tat is a reckoning that while the EU and the US cannot find a way to reduce debt without slashing growth, every crisis is certain to hit Russia harder than Western counterparts.

The main lesson from the painful contraction of 2008-2009 drawn by the Kremlin is that its domestic political consequences are light and easily erasable, so nothing could possibly disturb the reconstitution of "strong presidency" in the next half year. Remarkably little effort is in fact geared toward securing the great-as-ever result at the parliamentary elections for the United Russia party of ruling bureaucracy; yet, the quota for Organization for Security and Cooperation in Europe election observers to Russia has been cut down to just 200 for the upcoming political race.

Putin informed the Chinese media that his decision to reclaim the presidency was "absolutely the correct one because it will not weaken, but rather strengthen the governance system in Russia", which was an odd way to formulate a rather questionable proposition.

He could have learned that the efficiency of the Chinese non-democratic system of governance is secured by the constant renewal of the ruling elite, but this lesson is lost on the crowd of his courtiers.

The Putin that is moving back to the Kremlin is not the hard-driven fast-climber of 2000; he is rather a spoiled and irritable over-stayer whose only agenda is to cling to the levers of power for as long as possible.

Dr Pavel K Baev is a senior researcher at the International Peace Research Institute, Oslo (PRIO).