Connect with us

Russia

The geopolitics of sanctions against Russia

Giancarlo Elia Valori

Published

on

The US and EU sanctions currently operating against the Russian Federation were imposed following the Russian support for the “separatists” of the Eastern areas of Donetsk and Lugansk, Ukraine, namely ethnically Russian areas, which wanted to separate – or more likely to become autonomous – from the rest of the country.

It is hard to say whether the Ukrainian conflict was started   at first by the Euromaidan‘s pro-Western militants or if either one or the former used violent ways and means  because, as usual, the issue of sanctions is mainly political: to force – with mandatory commercial limitations extra omnes or, in any case, for the countries adhering to the primary international organizations – to reduce the political, economic, financial and hence military potential of a target country.

With four executive orders, the United States has imposed a sequence of sanctions against Russia, while it is still unclear whether the sanction regime always fully hits the target country or if it manages to direct its negative repercussions only to the geopolitical sector to be targeted.

In the long history of sanctions the excess of punishments towards the target country has always been a classic strategy, which later succeeds inadvertently to create mass support for the “bad” leader or the “dangerous” party, regardless of its being populist, sovereignist, “racist” or otherwise.

Today the old ideologies of Evil do not apply any longer – hence we need to invent a new labelling for global defamation, well beyond the usual totalitarianism. Or we need to artfully create many media opportunities that often –  if photographed – have no actual relationship with the crimes perpetrated by the target State.

In a way, sanctions are essentially the planned exclusion of the target country from the world market: in the case of Russia, the US sanctions are aimed at restricting the Russian access to the international financial services, to the US energy industry and obviously to the military industry.

These goals purpose are attainable both by reporting and blocking the personal and financial movements of specific personalities, such as entrepreneurs, financiers and managers of the target State placed in specific lists, now often public.

Or goods and capital are blocked.

Or again, always according to the American operating tradition, the potential for debt of an enterprise of the enemy State may be reduced significantly, but only on the international market. Or there may be the prohibition of making certain goods, services and technologies available to the “target country”.

In essence, for the Russian Federation this still regards the extraction and refining of natural gas and oil.

Furthermore, the US sanctions against Russia are aimed at restricting the export of Russian military products and, in any case, imposing the block for spare parts or the construction of weapon systems that can ultimately be used in Russia as well.

In the United States the economic sanctions are administered by OFAC and export controls are managed by the US Department of Commerce, Bureau of Industry and Security, in addition to the US Department of State, Directorate of Defense Trade Controls.

Without further complicating the framework, Directive No. 1 of OFAC regards the financial and service sectors of the Russian economy.

It prohibits any transaction longer than thirty days with all the subjects included in the lists regarding people of Russian origin or, in any case, operating in favour of the Russian government.

Directive No. 2 prevents any type of economic or financial transaction for individuals and entities dealing with, offering or carrying out transactions, on behalf of the Russian system, relating to natural gas and oil coming from the Russian territory.

Following the same procedure of the above mentioned transactions, Directive No. 3 deals with control and exclusion of the Russian Federation from the global market of military technologies.

Finally, Directive No. 4 regards the ban on normal commercial relations with Russia regarding the oil and gas from the Arctic and the unspecified “neighbouring areas”.

In 2014, by imposing measures “against the Russian industrial sector”,   the above mentioned Bureau of Industry and Security (BIS) implemented and improved the sanctions imposing a specific license on Russia for some commercial products, especially if the exporters “know whether what they sell to Russia can be used, directly or indirectly, for gas and oil extraction or whether these exports can be used for deepwater exploration in Russia or anyway in the Arctic.

Furthermore, the aforementioned BIS blocks any export of products that may anyway contain parts which can be used in the current weapon systems.

After the “events” occurred in Crimea, the EU sanctions against Russia are quite different from the US ones, although they may often overlap.

This is the sign of a political and strategic overlapping that cannot takes us a long way and that, indeed, many military elites, including NATO’s, consider obsolete.

This is certainly not due to anti-Americanism, but to a complex assessment of the EU and US strategic and commercial goals.

Overlapping of new areas of influence or their natural future divergence? Naturally different interests between the EU and the United States in Africa and the Middle East or not?

The issue is complex and not well-defined yet.

Europe, however, has imposed more traditional sanctions  against the Russian Federation, regarding individuals and implying travel bans or freezing of funds.

Furthermore, measures are envisaged in the EU limiting the access to financial capital for specific Russian financial and defence institutions.

There are also restrictions on the export of dual-use goods and technologies that may somehow refer to war operations, as well as other restrictions relating to the technologies included in the Common Military List, and obviously other restrictions on oil technologies.

There are many differences between the two sanction regimes.

The United States scrutinizes both oil and those working in this industry, while Europe only oil.

With specific reference to the EU sanctions, however, the Duma proposes to block the “commercial paper” issued by GAZPROM, which would imply that the European oil companies could be sanctioned if they bought GAZPROM payment notes which, however, are extraterritorial.

For the EU, currently the companies Rosneft, Transneft and Gazpromneft are the only ones that have been sanctioned.

None of the two sanction regimes, however, makes explicit references to “natural gas” – only oil is always mentioned.

Moreover the EU legislation is not extraterritorial while, in case of suspicious dollar “transactions” through American  banks, the US legislation can manage these transactions as if they were made on its national territory.

Has the United States probably built the complex web of anti-Russian sanctions since 2004 with a view to weakening the European competition?

As we will see later on, this is another possible hypothesis.

Besides seriously harming the European economy, which some important media sources estimate at over 100 billion euro for the whole EU, as well as two million jobs lost, we must consider that the effects are even more complex for the United States.

For the Russian Federation, however, the sanction effects are quite complex, even though it is a simple “target country”.

In 2009 the Russian economy shrank immediately by 2.8%, following the classic rule whereby the economies subjected to sanctions are more sensitive to the asymmetric shocks coming from outside.

The following year, however, Russia grew by 4.5%, thus showing signs of recovery indicating a centralized and planned reaction to both the global crisis and the economic war operations, namely the sanctions against it.

Foreign investment in Russia is still falling and, according to the latest data of the Bank for International Settlements, loans from abroad have fallen from 225 to 103 billion euro.

Hence not many dangerous effects, except for the magnification of the negative fluctuations on international markets.

So far Russia has reacted to the closure of some Western markets with a brilliant and unexpected geopolitical move for the United States, namely the rapprochement with China.

In this regard, the effects are clear: the rapprochement has favoured the block of the Ukrainian crisis, which becomes secondary in the Kremlin scenario. It has also facilitated the entry – even informally – of a large mass of Chinese capital into Russia and has finally added strategic value to the economic relationship between Russia and China.

The rapprochement has favoured not only the commercial flows between the two countries, which had been falling since 2015, but has mainly given rise to old and new bilateral projects: a pipeline, other infrastructural networks and cross-border free trade areas.

Furthermore, Russia and China, which are alien and even opposed to the logic of sanctions, are creating financial and commercial institutions according to their autonomous criteria, which will certainly be immune from US and EU sanctions.

As Putin knows all too well, the problem is that the relationship with China is fully asymmetric and runs the risk of generating Russian dependence on China.

Furthermore Russia is not interested in the tension between China and the United States and does not want to be “involved” in the bilateral trade competition between China and the United States.

The positive aspects for Russia are the following: Russian weapons are particularly suitable for the Chinese market and the plans for the Siberian pipeline between Russia and China are still in place; Shanghai and Hong Kong will soon become the financial bases for many Russian companies; the vast commercial area thus created between South Korea, Vietnam and Taiwan already establishes a small Asian “EU system” that can act as an important stimulus for reviving the Russian economy.

On the other hand, China has never appreciated the Russian move on Crimea, even though it has never officially pronounced itself in this regard.

Never “make a sound in the East, then strike in the West”. Currently there are not the conditions for China to require – at  military and strategic levels – what the “Western devils” can already provide at economic level.

Moreover, the strategic suicide of the West is already fine as it is.

And again, the US and EU sanctions have enabled China to prevent its worst-case scenario in the Heartland, namely the final economic and political integration between Russia and Eastern Europe in the EU.

Moreover, this expansion east of the Russian Federation corresponds to a series of counter-sanctions  culminating, for Russia, in the ban on European fruit and vegetables. The agricultural sector has been systematically brought to its knees by the Russian policies, which have created farmers’ strong political pressure to lift the sanctions against the Russian Federation.

Political use of an economic choice, namely counter-sanctions where the European “enemy” is weaker,  that is in the protected and subsidized economy of the European agribusiness sector.

The Russian response has been the expansion of domestic production, with the strong help of Belarus supporting the “missing share” of the new “internal production”.

The countermeasures of Russian consumers are as follows: certainly prices have risen, but they buy less and even fish consumption is falling.

Nevertheless, if we go back to the general architecture of  sanctions against the Russian Federation, we can note many other facts.

For example, we can note that – apart from the weak traditional and media justification, with many “violent acts” artfully caused by militants of uncertain nature – the oil sanctions are designed to reach one single purpose, namely to make Europeans – who for too long have not “resorted to” the US producers – buy the shale oil and gas they are finally able to produce, indeed already in a situation of almost full energy self-sufficiency.

Hence sanctions decided in the United States to compete with the North Stream 2 between Russia and Germany, crossing the Baltic and cutting the cost of natural gas to such levels that only dumping from the United States can be  carried out to impose its gas against the one which can be found closer to our countries.

Dumping is useless: we can build an integrated economy between the United States, the EU and Russia, with new geopolitical “rules of engagement”.

Hence the US sanctions are sanctions against Europe to rebuild manu militari the transatlantic market that could not be put back together elsewhere, not even in the agri-food sector where, in fact, the laws  are already so differentiated between the United States and the EU to make any exchange impossible.

Economic war through rules and regulations.

However, while the dollar has risen to 76% against the ruble since the beginning of sanctions in 2014, it remains anyway excluded from the Russian domestic market – hence it is a Pyrrhic victory.

In short, the Russian Foreign Minister, Sergei Lavrov, is right when he says that “sanctions are used to impose a regime change in Russia”.

Between 2014 and 2017, some studies ascertained that there was a fall in the Russian GDP and some damage to its economy worth at least 170 billion US dollars.

Italy alone lost at least 1.25 billion euros, especially in the agri-food and small craft sectors.

However, let us revert to Lavrov: he is the right mediator and broker to gradually and reasonably put an end to the sanction regime imposed by the United States and the EU against the Russian Federation, of which he has been the Minister for Foreign Affairs since 2004.

Lavrov, who knows that “there are no alternatives to dialogue”, also knows that Russia has not well clarified the situation of Crimea – beyond the objective truth which is hard to verify.

In this case it is not a matter of discussing the right of the Russian-speaking populations in the region to join the motherland. The issue lies in finding how to create a united Ukraine, really respectful of its minorities and, above all, as autonomous from Russia as from the European and NATO designs.

A trilateral treaty between the EU, the United States and  Russia could be a good starting point.

Lavrov has the mediation skills and long experience needed for the job.

At strategic level, it must be clear that NATO no longer expands itself towards the Donbass area and the Ukrainian-Georgian region, while the Russian influence operations – either covert or not – on those countries’ governments will be prohibited.

Obviously old wounds and new appetites return: Poland’s  desire to regain Ukraine it misses; the US and NATO passion for encircling the Russian Federation which, however, has already emerged from this encirclement with a clear victory in Syria, which proves its great strategic wisdom.

The encirclement of Russia with the NATO and US autonomous power is fully irrational.

The US bases encircle also Iran, another Russian inevitable ally: but what is the US strategic logic?

Hence a mediation will be needed, implying to reassure the United States that in Ukraine and Georgia there will never be “anti-Western” regimes, but Russia must be sure that all EU, Polish, US and other countries’ operations will not be such as to try to convince Ukrainians and Georgians to let  Russia down in the region.

Moreover Russia shall make it clear that – after years of disastrous legacy of the “Cold War” – its policy is trying to let the United States enter again new and old regions. These regions, however, must not be thought as no longer being in a situation of equilibrium – as we could reason at the time of the “Cold War” and of the unfortunate post-Cold War period – since said equilibrium does no longer rely on strategic thinking, but on small territorial or positional conquests.

Furthermore, the United States could de-escalate tension with China through its new relations with Russia, which would act as an effective mediator and broker just because Russia has not – and will never have – common strategic and geopolitical interests with China.

If we begin to think in multipolar terms – where the United States has often developed its longest and most brilliant  geopolitical projects – everything gets clearer.

This could be Lavrov’s new job to be performed along with his US counterpart Tillerson.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs "La Centrale Finanziaria Generale Spa", he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group and member of the Ayan-Holding Board. In 1992 he was appointed Officier de la Légion d'Honneur de la République Francaise, with this motivation: "A man who can see across borders to understand the world” and in 2002 he received the title of "Honorable" of the Académie des Sciences de l'Institut de France

Russia

What Does 2018 Have in Store for the Kremlin?

Dr. Andrey KORTUNOV

Published

on

How does the world in 2018 look from the Kremlin? Judging from statements and interviews of Russian leaders, the world is not a very cool place these days. The international environment is more adversarial than cooperative; security challenges dominate over development opportunities; national survival rather than economic prosperity is the name of the game in global politics. The Kremlin’s perspective implies that the international system has entered an arguably long period of instability, increased volatilities, multiple regional crises and, more generally, a steep decline of the global and regional governance.

In my view, it would be wrong to dismiss this vision of the world as completely hypocritical or entirely self-serving; it reflects very real concerns and fears of the Russian leadership. Let me try to summarize the most often referred to manifestations of the 2018 international ill-beings, perceived roots of the problems and Kremlin’s suggestions on how to deal with multifaceted crises in 2018 and beyond.

Manifestations:

  1. The state crisis in the MENA region, in sub-Saharan Africa, in parts of the former Soviet Union. States are losing their sovereignty; they cannot provide law, order or basis social services to populations on their territories, turning into failed or semi-failed states. Failed states became hotbeds of conflicts that last for years and even decades with no solutions in sight.
  2. The growing unpredictability and volatility of global and regional economic and financial markets creates new risks; states, societies and individuals can no longer control their economic destinies or even to influence them in a significant way. We observe economic and social polarization among states and within them; polarization increases populism, radicalism and extremism of various kinds.
  3. The rise of non-state actors challenges state sovereignty and questions the fundamentals of the modern international system. Irresponsible non-state players (from international terrorism and religious fundamentalism to transnational crime and multinational corporations) are accountable to nobody and often have goals and aspirations incompatible with international peace, stability and prosperity. Any attempts to manipulate these players are counterproductive and dangerous.
  4. Uncontrolled and potentially disastrous environmental and climate changes, mounting challenges to biodiversity, environmental stability and resource sufficiency constitute another dimension to the crisis. We observe gross inequalities in resource distribution around the world, the looming resource crunch (food, energy, fresh water, etc.).
  5. The explosion of regional, continental and global migrations increasingly affect the world, which is completely unprepared to confront this challenge. It leads to an unavoidable economic, political, security, social and cultural implications of the coming migration crisis with most countries ill equipped to handle these implications.
  6. Another manifestation of the crisis is the ongoing decline of many international institutions — global and regional, security and economic alike; the growing inability of the UN based system to find effective solutions to mounting problems. In many cases, we witness a shift from legitimate institutions to illegitimate or semi-legitimate ad hoc coalitions.

Roots:

  1. The liberal economic and political paradigms have depleted their potential; they can no longer provide a stable economic growth, a fair distribution of wealth and an acceptable political inclusiveness. Spontaneous market forces and open political competition demonstrate their limitations.
  2. The Western triumphalism after the end of the Cold War led to an institutional overstretch and to ungrounded hopes for the West-centered world. The Western (both American and European) arrogance led to many crises that could otherwise have been avoided or at least mitigated.
  3. The selective use of international law, double standards in international relations, a lot of hypocrisy and double-speak contributed to the erosion of some of the fundamental norms of international public law. These factors produced diverging and even opposite narratives, contributed to more cynicism, opportunism and transnationalism in foreign policies.
  4. The rapid and chaotic process of globalization produced many negative side effects including a rapid decline of traditional values, a global revolution of expectations along with social and cultural polarization, growing vulnerability of an individual to extremism and political radicalism.
  5. The ongoing technological revolution created a whole spectrum of new opportunities for disruptive and subversive non-state actors — including new means of communications, new types of weapons, and new mechanisms of political mobilization. However, states turned out to be unprepared to regulate properly the technological revolution and to put its potentially dangerous repercussions under proper control.
  6. Most of the Western political systems do not allow for any long term planning; politicians in the West are looking for fast results and quick returns on their political investments. This feature of the modern liberal democracy contradicts the apparent need for large scale and long term political projects, including resource-consuming ones.

Solutions:

  1. We have to agree that the critical task of the day is the task to restore and to enhance the shattered global management. Without addressing this task, we are not going to succeed in any other undertakings. The central dividing line in the modern international system is not that between democracy and tyranny, but between order and chaos.
  2. The prime building blocks of the international system are and will continue to be nation states. Therefore, the principle of sovereignty should be fully adhered to and considered to be of paramount importance. Interdependence and integration can be accepted as long as they do not contradict the principle of sovereignty.
  3. The emerging international system should fully reflect the changing balance of powers in the world. The existing West-centered institutions should either undergo a profound transformation or be replaced by more universal, more inclusive and more representative organizations.
  4. We should fully reject the concept of Western (i.e. liberal) universalism of favor of developmental pluralism. The emerging concept of modernity should imply opportunities for preserving national traditions, culture, specific economic, social and cultural models distinctly different from the Western examples. No export of liberal democracy should be supported or even tolerated.
  5. Spontaneous market mechanisms, which set the rules for the global economic and financial systems today, should be complemented by appropriate regulatory frameworks; these are to be agreed upon by participating states. Non-state actors should be forces to moderate their ambitions and behave accordingly.
  6. The overall international system should constitute a pyramid with a number of interacting levels: (1) UN and its specialized agencies; (2) regional security and development institutions; (3) ad-hoc coalitions and alliances with an appropriate mandate; (4) a system of overlapping multilateral and bilateral agreements and other arrangements (regimes), and (5) a think network of contacts, interactions, partnerships, etc. of non-sate, sub-national and other actors.

Numerous critics of Vladimir Putin in the West would argue that this picture of the world in 2018 is one-sided, dogmatic, antiquated and misleading. They would also insist that Russia itself contributed a lot to many problems that the international community has to deal with in 2018 and beyond. Finally, they are likely to maintain that this vision is meant to justify the current Russia’s foreign policy and security posture, to keep the Russian political system intact and to put on a back burner all the badly needed economic and social reforms.

However, a more productive approach might be in trying to single out particular bits and pieces of this vision, which could constitute a basis for a substantive, albeit very limited, dialogue between Russia and the West on the fundamentals of the emerging world order. Even if this dialogue in any format starts this year, it is unlikely bear fruits anytime soon. Nevertheless, to understand Russia’s true concerns, fears, perceptions and expectations remains important, no matter how archaic, biased, opinionated or self-serving these might appear in the eyes of Russia’s critics.

Nikolai Lobachevski teaches us that two parallel lines can intersect, if we move away from the traditional Euclidean to a non-Euclidean geometry. Regardless of how each of us sees the world in 2018, it seems apparent that this world can no longer be explained within traditional IR paradigms. Once we shift to a non-Euclidean approach, parallel visions of the international system may gradually get closer to each other and finally intersect.

First published in our partner RIAC

Continue Reading

Russia

US Sanctions against Russia: The Forecast for 2018

Ivan Timofeev

Published

on

It must be clear that the letter and spirit of PL 115-44 define Russia in legislative terms as an adversary to the United States, which should be actively opposed and subjected to a comprehensive pressure. In fact, PL 115-44 sets the framework for US policies with regard to the Russian Federation, which to a great extent obviates opportunities for partnership and constructive cooperation. Russia should have no illusions about a reversal of course in the near future. We must also avoid underestimating the efficiency of the tools to pressure us. These trends need to be thoroughly analyzed and monitored.

So, the executive authorities will submit at least seven reports to Congress in 2018, which can be divided into three groups.

The first group includes reports drawn up mostly by the US Department of the Treasury. The U.S. Treasury is the key, if not the only, sanctions policy tool. Congress instructs the U.S. Treasury to work closely with the CIA, the Department of State and other agencies whose data may significantly expand capabilities of financial intelligence. The most expected document in this group is a report on Russian oligarchs and parastatal entities to be prepared by February 2018 and which contains a list of senior Russian political figures as well as oligarchs and entrepreneurs close to the “Russian regime.” Congress wants the submission of an assessment of the relationship between the said individuals and President Vladimir Putin or other members of the Russian ruling elite and an identification of any indices of corruption with respect to those individuals. The report should also include the estimated net worth and known sources of income of those individuals and their family members, including assets, investments, other business interests, and relevant beneficial ownership information and an identification of the non-Russian business affiliation of those individuals.

But being included in the report does not automatically mean that individuals or entities will face sanctions. Nevertheless, the Act unambiguously indicates that the report is a mechanism for their expansion. At least it is required to assess the potential impacts of imposing secondary sanctions with respect to Russian oligarchs, Russian state-owned enterprises, and Russian parastatal entities, including impacts on the entities themselves and on the economy of the Russian Federation, as well as on the economies of the United States and allies of the United States.

In theory, the report may include an unlimited number of Russian individuals and entities. But the algorithm and methodology of its compilation within so brief a timeframe is still a big question. It requires processing a huge amount of information, since, in fact, the case in point is Russia’s entire public sector. This significantly increases the risk of erroneous assessments, which may later affect the United States itself. In theory, the Americans may also choose to present a compact report that will include what they think are the most anti-Western figures. But one nicety involved is that the Act’s current wording does not imply that the report should be constantly updated and therefore the anti-Russia lobby can do what it will to expand the lists as much as possible.

The next report is to appear in February as well. It concerns opportunities for expanding sanctions against individuals or entities blacklisted by the Department of the Treasury under Presidential Executive Order No. 13662, which made it possible to impose sanctions to counteract Russian policies in Ukraine. The fine point is that the executive order imposed sanctions against Russia’s financial and energy sectors, while PL 115-44 added railways to the list, as well as the iron-and-steel and manufacturing industries. For the time being, the report is not to be expanded.

Unlike the previous two, the next report will require a longer preparatory period – until August 2018 – and is to be updated annually until 2021 (but there is nothing to prevent the timeframe from being extended). The report will concern any illicit financial transactions related to the Russian Federation or Russian nationals. It will contain data on specific violations, results of investigative actions, and outreach to the private sector to prevent these kinds of activities. Inclusion in the report involves criminal prosecution.

Importantly, it should disclose the outcome of US agencies’ cooperation with their counterparts in the EU and other countries. In other words, it internationalizes US practices. The report is also a mechanism for finding loopholes in law enforcement with regard to anti-Russia sanctions and has to include trouble-shooting proposals.

The next group is covered by the subtitle, Countering Russian Influence in Europe and Eurasia. The Act makes it incumbent on the US government to act as a protector of the sovereignty and security of all Eurasian countries that are or may become “victims” of Russian influence. The Department of State is the key agency responsible for this group. Policies in this area imply the broad use of soft power based on NGOs in the US and Eurasian countries (the Act lists some of these). The appropriations for these purposes in 2018 will add up to $250,000,000, a considerable sum given that it will be largely used for ideological and educational work rather than for infrastructure. At first glance, the money is spread across a wide spectrum of objectives and countries, such as protection of electoral infrastructure, the fight against corruption, legislative improvements, aid to NGOs and the media, and opposition to “propaganda.” However, given the low cost of these measures and their focus on countering Russia, they will become a serious source of pressure. At least this sum is much greater than Russia’s own “soft power” expenses. What’s more, Russian institutions are addressing the entire international agenda, while the West (let alone opposition to it) is not the first, nor the only target of its efforts.

PL 115-04 makes it incumbent on the State Department to report to Congress annually, including its performance, spending efficiency, and results. A separate report will cover cooperation with foreign entities and their contribution. In other words, the Americans expect that their spending should be reinforced by that of their allies in the EU and other countries. The report is due to be submitted on April 1.

The next two reports also need to be submitted annually by the US President.

The first is on the media organizations controlled and funded by the government of the Russian Federation. It is also a black list of sorts involving at least reputation effects and due to stigmatize both Russian media proper and those supported by Russia in some or other form.

The other concerns Russian Federation influence on elections in Europe and Eurasia. This is important as a tool for internationalizing the American approach to supposed Russian “electoral interference.” Unlike the United States, people in Europe and elsewhere are more or less skeptical of the US position. The annual report will make it possible to perpetuate the focus on this subject by aggregating events of any importance and prodding the related Western discourse towards the US stance.

Finally, yet another report is linked to a law on Ukrainian and other countries’ energy security interpreted as reduced reliance on Russian distribution or any ties with Russia. It is speaking about facilitation of Ukrainian energy sector reforms, the sector’s liberalization, enhanced efficiency, etc. But in the same breath it mentions counteraction to Russian energy projects (Nord Stream, etc.) and what it calls “Russian aggression.” It also says directly that the US policy should be aimed at promoting US energy exports to Europe, among other things, to create jobs in the United States. (This means that the Americans are using this political tool in market rivalry.) The Secretary of State is to report on the implementation of the Ukraine Freedom Support Act and on achievements in this area in February, with subsequent updates to be submitted every six months.

The bottom line is that PL 115-04 prescribes a specific bureaucratic procedure and narrative that will largely define US policy with regard to Russia in 2018 and thereafter. There will be at least seven reports submitted next year, each of which will most likely provide a pretext for the further alienation of Russia and the United States from each other. Russia needs a well-considered policy of clever actions that will make it possible to control confrontation, minimize damage, and retain foreign policy initiative.

First published in Valdai Discussion Club

Continue Reading

Russia

Russia- Europe: the Need for a Common Vision

Igor Ivanov

Published

on

Last days demonstrated yet another division in the transatlantic alliance — political leaders of major European countries explicitly distanced themselves from the new US position on the status of Jerusalem. Earlier they also opposed the new Trump assault against the Iranian nuclear agreement.

At the same time, the European Commission announced its plan to create a European Monetary Fund, to introduce a new position of the EU Minister of Finance in order to enhance the efficiency of the Union’s monetary policy. All the problems and complications notwithstanding, the EU — British negotiation on the modalities of Brexit go ahead narrowing the gap in positions of the two sides.

These and many other developments suggest that Europe has entered a period of a deep reassessment of both its institutional foundations that recently have demonstrated multiple malfunctions and its place and the role in the rapidly changing world of today and tomorrow. This reassessment will be difficult, sometimes painful and even risky, but Brussels cannot avoid or postpone it, if the European Union is to remain among global leaders drawing the counters of the new world order.

Russia, in its turn, has to confront serious challenges of both internal and external nature. Along with apparent recent successes in the international domain, the most manifestations of which being the fight against the terrorist threat in Syria and the advancement of Russia’s interests in the Asian Pacific region, Moscow faces an increasing risk of international isolation. Various sanctions and other restrictions applied to Russia have already caused significant negative consequences for the country. First, they distract substantial political and economic resources from dealing with urgent domestic problems. Second, they limit in many ways Russia’s capabilities to engage constructively in global and regional politics. Third, and this is arguably the most important, sanctions constrain political and economic reforms in Russia, which are badly needed and without which the country will find it increasingly difficult to stay in line with the most advanced nations in the world. To achieve this goal through keeping a robust military potential is clearly insufficient.

Of course, it is up to Brussels and to Moscow to figure out how to manage their respective domestic and foreign policy problems. However, in the modern interdependent world, where national and international factors are more and more intertwined, success or failure in addressing these problems will largely depend on external variables.

In the beginning of this century, Russia and Europe decided to build partnership relations with each other. It was not easy, given the remaining negative legacy of the Cold War, but it turned out to be possible due to the political will on both sides. At that point, everybody agreed that Russia could not become a full-fledged member of either the European Union or NATO and therefore we had to think about new mechanisms of cooperation. These new mechanisms had to help us to overcome institutional limitations and to open the door for a mutually beneficial cooperation.

Over two decades — and this is a very short period by history scales — together, we succeeded to shape a modern, well-structured normative base for our relationship that proved its efficiency in political, economic, and humanitarian domains. It is particularly important to note that we undertook a number of specific initiatives aimed at building a common and indivisible Euro-Atlantic security space.

Let me emphasize that Russia and Europe took all these steps not as concessions to the other side, but rather as a reflection of their respective interests and their understanding of long-term fundamental changes in the world.

Unfortunately, during the second decade of the XXI century a whole number of various reasons, which we have not yet analyzed in depth, led to increased tensions between Russia and Europe.   The previously accumulated positive potential in the relationship quickly evaporates; many established communication channels that have helped us to understand each other better and to find solutions to even the most divisive problems are now disrupted or blocked.   Why has it happened and could it have been avoided deserves a separate discussion. Of course, it is not exclusively or even largely about the Ukrainian crisis. The real troubles between Russia and Europe had started much earlier than 2013.

However, the most important question is not about the past, but about the future. What strategic trajectories can Europe and Russia choose from and how do these trajectories relate to each other?

One can easily imagine drifting further apart from each other guided by bitter disagreements about the past and their diverging perceptions of the future. The European Union will manage without Russia, and Russia will not collapse if it separates itself from EU. However, in this case our common continent will remain divided in the XXI century as it was for the most part of the XX century. The division will have a profound negative impact not only on Moscow and Brussels, but also on the nations in between. Furthermore, the inability or unwillingness of the two sides to make full use of their natural complementarity will inevitably negatively affect the ability of both Europe and Russia to remain vibrant parts of the highly competitive world that emerges right in front of our eyes.

The opposite trajectory implies both sides investing into bridging the gaps between each other, restoring communication links, identifying areas of mutual interest and gradually expanding cooperation in various fields. The progress is not likely to be fast; one can foresee many obstacles, procrastinations and setbacks on the way. The negative inertia of the current crisis will continue to intoxicate our relations for years, f not decades. Still, with due political will, stamina and patience exercised by both sides Russia and Europe can reverse many of the unfortunate developments we witnessed unfolding over last couple of years.

As they say, you should never waist a good crisis. One of the post important tasks for politicians, experts, public leaders and businesspersons on both sides is to rise beyond the passions of the day and to look at the Europe — Russia relations from a broader historic perspective. Only such an approach can enable them to focus our vision, to assess our long-term challenges, opportunities and capabilities –so that we could set our goals right.

First published in EFE Doc Análisis.

Continue Reading

Latest

Americas21 hours ago

US diplomacy of re-engagement continues: From ‘intent’ to withdrawal from Paris Agreement to ‘COP23’

In a major setback decision taken by Trump administration on June 1, 2017, showing his intention to withdraw in future...

Europe21 hours ago

New Concept for Europe: Sustaining European leadership and values into the 21st century

Europe’s leaders must embrace a bold and innovative programme of reform across the policy agenda to secure a peaceful, prosperous...

Newsdesk21 hours ago

Brand Africa and biodiversity focus of the 9th edition of INVESTOUR

Nearly 30 African Tourism ministers convened at INVESTOUR to debate and exchange experiences on the development of the sector in...

Economy21 hours ago

Radiation Processing Enables Small Businesses to Enter Global Value Chains in Malaysia

In today’s globalized world, becoming part of an international supply chain is key to the prospering of small businesses and...

Central Asia2 days ago

Religious buildings in Kazakhstan to be labeled 16+

New restrictions on religious activities are emerging in Kazakhstan. Will they help to fight extremism? According to the Government bill...

Intelligence2 days ago

What Role Should Criminology Play in Government Policymaking?

At this very moment in time, there is not much agreement over what the role of criminology should be in...

Intelligence2 days ago

Iranian Intelligence response to the new security challenges in the West of Asia

During the years after the Islamic Revolution of Iran, national security considerations have undergone various changes. Changes have been conducted...

Newsletter

Trending

Copyright © 2018 Modern Diplomacy