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How International Sanctions Helped Putin at Home

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The United States imposed sanctions on Russia in response to the annexation of Crimea and subsequent involvement in the war in Ukraine. The sanctions have hit Russia’s economy hard largely due to foreign investors pulling $96 billion out of Russia since 2014.

The sanctions imposed by the United States have affected Russia as a whole, from the top to the bottom, from the government to the people. This is an important issue as the Russian government has no intention of backing down or moving away from its defiant stance.

The purpose of economic sanctions is to impose economic harm so as to effect policy change in the target nation. President Obama signed Executive Order 13660 on March 6, 2014, which authorized sanctions for violating the sovereignty and territorial integrity of Ukraine and/or stealing assets belonging to the people of Ukraine. The sanctions would restrict certain individuals’ travel, which included Russian and Crimean officials, as well as businessmen who were part of Putin’s “inner circle”, and would demonstrate the United States’ willingness to “impose a cost on Russia and those responsible for the situation in Crimea.” Also, certain Russian government officials’ assets would be frozen, thereby preventing them from buying or selling in the European Union.   Eleven days later, Executive Order 13661 was signed by President Obama which stated that Russia’s actions toward Ukraine undermined the democratic processes and institutions in Ukraine and thus expanded sanctions further against Russian entities such as parts of Russia’s financial, energy, and military industries.

Three days after President Obama signed Executive Order 13661, he issued Executive Order 13662 Directive 4. President Obama enlarged the scope of the national emergency declared in Executive Order 13660 and had then expanded in Executive Order 13661 to declare that Russia’s actions and policies toward Ukraine were a threat to American national security and foreign policy:

“The provision, exportation, or re-exportation, directly or indirectly, of goods, services, or technology in support of exploration or production for deepwater, Arctic offshore, or shale projects that have the potential to produce oil in the Russian Federation, or in a maritime area claimed by the Russian Federation and extending from its territory, and that involve any persons determined to be subject to this Directive, its property, or its interests in property is prohibited.”

A second round was applied on July 16, 2014, called sectoral sanctions. The sanctions prevent Russia from borrowing money to mitigate the blow of falling oil prices. Russian international reserves declined by $135 billion in 2014 and there has also been a huge outflow of capital from the country. Basic food prices have subsequently sharply increased since the sanctions began, with the price of buckwheat increasing as much as 70 percent, for example. The exchange rate in Russia jumps up and down, often by five percent a day, at times even ten percent, which is causing consumer panic. Incomes in Russia have also decreased. In 2014, real incomes decreased by 1% and already by 3.1% in the first half of 2015. This is the first time that has happened since Putin took office in 1999. Inflation also soared to 11.4% in 2014 and the ruble continued to decline, losing 40% of its value to the dollar. Those in the Russian government and the Russian people overall blame the United States for their worsening economy. Thus the blame for food shortages, inflation, devaluation of the ruble, decreasing real income, etc. also falls on the United States in their eyes.

The sanctions most likely will not do much to change the mind of the Putin administration but rather will continue to lower the quality of living for millions in Russia. Russia is highly dependent on food exports, especially from the United States and Europe. In 2013, Russia received $1.3 billion in food and agriculture exports from the United States and $15.8 billion in exports from the European Union. While Russia may try to increase its domestic production of food, it will not be able to fill the void that will be caused by such a loss. “Russia’s Central Bank pointed out that bans on imported food will push up Russia’s already high inflation rate, eroding the purchasing power of Russian citizens.”

The people of Russia have shown deep dissatisfaction with the United States and have increased their approval of Putin. According to the Levada Center polling organization, the Russian people have been decreasing their approval of the United States since the sanctions were imposed in 2014. From this data, it can be implied that the sanctions started the current downward trend of negative views on the US. Looking at the data from 1990, there are three spikes of anti-Americanism that occur prior to 2014. One in the late 1990s during the Kosovo War; one in 2003 when the United States invaded Iraq; and one in 2008 when the United States was critical of Russia’s conflict with Georgia. The difference between these spikes of anti-Americanism and the current trend is that this spike seems more intense and personal.

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The title of the graph roughly translates to “How do you view the US generally”; the blue line represents the percentage of Russians who say they view the US positively, while the red line is percentage of Russians who view the US negatively.

 

During the Kosovo war, Russian disapproval of America peaked at around 53% over a two-year period. In 2003, Russian disapproval of America peaked at around 66% over a five-month period. In 2008, Russian disapproval of America peaked at around 67% over a three-month period. Even though the disapproval lasted the longest in the late 1990s, only half of the population held these views. Since January 2015, Russian disapproval of America stands at 81% and has been increasing for almost a year. With this data, there is evidence to suggest that the level of anti-Americanism within Russia is strongly related to domestic economic conditions in the country. This further supports the primary hypothesis that current economic sanctions, and specifically their impact on the Russian people, will lead to intensifying levels of anti-Americanism.

Even though the sanctions have worsened the economic situation in Russia, they have also created a foreign policy backlash resulting in an increased approval rating for Putin:

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Fisher, M. (2015, February 9). Chart: Anti-Americanism is exploding in Russia

 

As seen in the chart above, Putin’s approval rating was slowly declining from 2008 to the beginning of 2014. In July 2008, Putin’s approval rating was at around 88%. By January 2014, his rating had dropped almost 28 percentage points. After the US sanctions were enacted in 2014, within eight months Putin was almost back to his 2008 rating. What this clearly shows is that there is definitely a sense of ‘nationalist backlash’ connected to the imposition of sanctions against Russia. Whereas there has always been something of a low-grade anti-Americanism in Russia for American global actions, these actions have always largely impacted Russian peripheral interests. The sanctions today, however, are direct and personal: they are seen as an explicit attempt by the United States to hurt Russia, not Russian interests. For that reason it is perhaps more surprising the West could not anticipate this attitudinal backlash. This is, it seems, political naiveté at its finest.

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On Russia’s Power: is Winter Coming?

Dr. Andrey KORTUNOV

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On November 11–12, 2018, Abu Dhabi hosted the fifth annual expert meeting within the strategic dialog organized by Emirates Policy Center with the support of the UAE Ministry of Foreign Affairs. Traditionally the event gathers a large number of specialists in international relations, regional security, and Middle Eastern issues. Andrey Kortunov, RIAC Director General, made a speech at the session devoted to the role of Russia in the modern world, including in the Middle East.

Talking about Russia’s power in the Middle East or in a broader global context, we should probably start with defining what power in the contemporary world politics really means. Is it about material resources that a nation can mobilize to shoulder its foreign policy aspirations — the total throw-weight of strategic missiles, the number of aircraft carriers and combined budgets of national assistance agencies? Is it about the size of your territory or about the natural resources that the territory contains? Is it rather about you GNP or about GNP per capita that defines your power in international relations? Probably not. If you happen to be an eight-hundred-pound gorilla in the jungle, this does not necessarily make you the strongest beast around. A lot depends on how functional these eight hundred pounds are. It may be pure muscle tissue, but it may also be accumulated belly fat.

There is another, more functional definition of power in world politics. Power is defined as ability of states or non-state actors to make other actors do certain things or abstain from doing some things in the interests of those exercising power. To put it in a broader context, you can define power as ability of actors to meet the goals they set for themselves in international relations.

From this vantage point, Russia has recently demonstrated that it is a powerful state, capable of using its power in an efficient way. No matter how we assess the Russian role in the contemporary international system — as a predominantly positive or a predominantly negative, — we should agree that Russia constantly punches above its weight, having more impact on the system that it theoretically should have according to its ‘objective’ economic, technological or demographic potential.

If I were to compare Russia to a large investment fund, I would venture to say that the price of its stocks today is significantly higher than the true value of its assets. Look, for instance, at the recent Russia’s posture in the Middle East region. In my view, we can label it as an exceptionally successful political start-up: with rather modest price paid in blood in treasure, Moscow has been able to turn itself from a marginal player in the region into the arguably most important external power broker.

This apparent gap between the operational power and its material foundation needs an explanation. To say that Vladimir Putin has been simply lucky, making full use of indecisiveness and inconsistencies of the West and exploiting many vacuums of power around the globe is to say nothing. There should be something here about the ability of the Kremlin to make fast and resolute decisions, about its capacity to promptly mobilize Russia’s political and military forces, about the quality of the Russian diplomacy and so on.

Russia’s highly centralized political system, impressive domestic and international state propaganda machinery, its consistency in supporting Moscow’s allies and partners — all these features of the ‘Putin’s style’ foreign policy puts Russia in a league of its own in world politics. It does not have many important features of a truly great power (above all, it lacks a solid and diverse economic foundation), but so far it has been able to capitalize exactly on what distinguishes it from a ‘standard’ Western democracy or a typical non-Western autocracy. In other words, Russia is powerful because Russia is different.

Nevertheless, the Russian way of maximizing its international power contains a number of risks that should not be underestimated. First, the set of instruments, which the Kremlin can use in international relations to advance its goals, is quite limited. Russia is a nuclear superpower, is has military power projection capabilities second only to the United States. It is a global leader in cyber warfare and in a number of futuristic weapons. It is a permanent member of the UN Security Council with a veto power, which it never hesitates to use. It is a member of other international groupings — ranging from G20 and APEC to SCO and BRICS. It is a global supplier of hydrocarbons, many other commodities, as well as of food stock. It is the largest country in the world with eleven time zones.

However, is this set enough for Russia to maintain its status in global politics for all of the XXI century? Until 2050? Until 2030? Probably, not. If so, in the rapidly changing international environment the Kremlin has to consider seriously a significant diversification of its foreign policy instruments with a special emphasis on soft power components (culture, education, social practices, technological edge, science and so on). The sooner we start moving in this direction, the more secure the country’s role is likely to be in the long-term future.

Second, many of current Russia’s foreign policy investments are high-risk investments bordering political speculations. Should Russia continue betting of leftist political regimens in Venezuela or in Nicaragua? Should it bet on Euro-sceptics and right wing populists in the European Union? Should it invest into failing autocracies in Africa? This opportunistic globalism is distracting Moscow from what is truly important for Russia: from resolving multiple crises on the territory of the former Soviet Union, from building stable partnerships with its immediate neighbors, from gradually restoring the troubled relationship with the West.

As for targets of opportunity overseas, any political engagement should be preceded, not followed by a careful consideration of exit strategy options. History teaches us repeatedly: countries that can win wars, quite often lose peace. If you take the ongoing conflict in Syria, it will not last forever. When the name of the game is no longer military operations, but a post-conflict reconstruction, new players will come to the stage, no matter who is charge in Damascus. External powers with deeper pockets than those that Russia has will claim a central role in the post-war Syria. The Kremlin should try very hard to convert its current military successes into less explicit, but a more lasting and a more stable political presence in the country.

Finally, neither Russia, not any other nation should forget that the real foreign policy power comes from the inside. Foreign policy victories might look great and they definitely appeal to the public, but they never become an adequate substitute for victories at home. In the end of the day, the ability to balance economic growth and social equity, preserving national identity and integration into the global community, political representation and efficient governance constitute the only reliable foundation for power in international relations. All other foundations turn out to be quite shaky and fragile.

I have no doubts that Russia has all needed ingredients to stay as a great power, no a global spoiler. It has the potential that makes it capable of being not a part of the problem, but a part of the solution for the international system of the XXI century.

However, the future of Russia’s power and that of Russia’s role will depend on the overall evolution of the system. In a popular American fantasy television series “The Game of Thrones”, characters from time to time remind each other — “Winter is coming”. By “Winter” (with a capital “W”) they mean something really bad, big and unavoidable looming on the horizon. They cannot prevent the Winter, so they have to learn who to survive in this extremely hostile and dangerous environment.

Today, there are many indicators that “Winter” might be the future of the world politics in years to come, that what we observe today is not a bad weather, but a profound climate change. The implosion of the state system in parts of the Middle East, the rise of right populism and nationalism in Europe, Brexit in UK the election of Trump in US, the coming collapse of the US — Russian strategic arms control, a renewed arms race in Asia — there are multiple symptoms of hard times ahead of us.

If the name of the game in the global politics is likely to be security, not development, if the prime goal of nations is going to be survival rather than prosperity, why should Russia change its current understanding of power in international relations? In a way, the Kremlin is better prepared to face the global Winter than most of its competitors and opponents are. To create incentives for the Russian foreign policy to reinvent itself, one has to prove that the global Winter is not the only option. Otherwise the world might face a self-fulfilling prophesy. As they say, “fate is shaped half by expectation, half by inattention.”

First published in our partner RIAC

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Russia and Comoro Islands Cooperate To Enhance Bilateral Relations

Kester Kenn Klomegah

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On November 8-10, Minister of Foreign Affairs and International Cooperation of the Comoro Islands, El-Amine Souef, paid his first official working visit to Moscow. Foreign Minister Sergey Lavrov held talks with him on November 9.

After the talks, Lavrov told the media conference that they had confirmed to continue promoting bilateral cooperation in many spheres and work together towards using the existing potential in both countries.

There is considerable potential for cooperation in fishing, renewable energy, the provision of fresh water and agriculture.

“We have agreed to help our business communities establish direct ties and we also exchanged opinions on international issues, reaffirming the identity or similarity of our views,” Lavrov said.

They exchanged of views on international and regional issues of mutual interest with an emphasis on preventing and defusing crises in Africa and the Middle East, struggling against piracy in the northwestern part of the Indian Ocean and countering terrorism and extremism.

Lavrov reminded that Moscow firmly supports the principle formulated by the African countries, that is “African solutions to African problems” and urged Africans to find ways of settling conflicts while the international community provides the necessary assistance through the African Union and sub-regional African organisations with the coordinating role of the UN.

Under a memorandum signed by the ministers, Russia will be training law enforcement personnel for the Comoro Islands.

Kelvin Dewey Stubborn, South African based Senior Analyst on BRICS and African policy, observes that foreign assistance is very essential to transform the economy and improve living standards of the population on the Comoro Islands.

Thus, Russia’s economic engagement is needed at this time, most importantly, to maintain stability and turn around the opportunities into an attractive place. With a relatively small investment, Russia could achieve important results for the Islands, so the first step should be genuine commitment, he told me in an emailed interview from Johannesburg.

One of the world’s poorest and smallest economies, the Islands are hampered by inadequate transportation links. It has a rapidly increasing population and few natural resources.

The low educational level of the labour force contributes to a subsistence level of economic activity and a heavy dependence on foreign grants and technical assistance. France, the colonial power, still remains a key trading partner and bilateral donor.

Russia established diplomatic relations with the Comoro Islands after it gained independence from France on 6 July 1975. In mid-2017, Comoros joined the Southern African Development Community with 15 other regional member states.

The most common language is Shikomoro, a Swahili dialect. French and Arabic are also widely spoken. About 57% of the population is literate. The Islands, with a population of about 1.2 million, situated off the southeast coast of Africa, to the east is Mozambique and northwest is Madagascar in the Indian Ocean.

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Russia’s Growing Clout in Asia Pacific Region

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In their strategic calculus, the Asia Pacific major powers as well as other countries do not consider Russia a major military power for the region. Although these Asia Pacific countries understand Russia’s military clout in Europe and Middle East, they somehow fail to see how overall Russian military might have an impact in the Asia Pacific region too.

Accordingly, the growing influence of Russia in the region finds less attention on the regional media outlets, the regional discussion platforms and the think tank papers produced across the region. This is a total contrast to Russian involvement in Europe and Middle East, something which receives huge coverage. Despite the low coverage of its engagement in the Asia Pacific, Russia’s geopolitical presence is increasing in the region.

Although its military and economic involvements in the Asia Pacific reduced significantly after the demise of the Soviet Union, Russia has over the last decade improved and enhanced its military might significantly, making its military a potent power in the region.

Russia has been selling weapons and other advanced military technology to the Asia-Pacific countries in order to bring these countries into its geopolitical orbit. Besides its close military relations with both China and India, Russia is increasingly building good relations with Bangladesh, Indonesia, Malaysia, Myanmar, Pakistan, the Philippines and Thailand.

Furthermore, Russia is on a spree of building certain infrastructures in several Asia Pacific countries which would make those countries dependent on Russia for the proper functionality of those infrastructures. Take Bangladesh’s nuclear plant for example. Russia is setting up a nuclear-powered power plant in Bangladesh, and this infrastructure would certainly make Bangladesh dependent on Russia for the technological aspects of the project. Bangladesh has also been purchasing heavy weapons and military vehicles from Russia.

Recently this year, many regional countries were alarmed by Russia’s large scale war games. The fact that the war games was conducted in the eastern part of Russia – which forms part of the Asia Pacific region, unlike Russia’s western part that forms part of Europe – makes it an alarming development for the Asia Pacific region.

According to an Australian news website, the war games, namely Vostok-2018 or East-2018, involved more than 300,000 troops, 36,000 tanks, 1000 aircraft, helicopters and drones and 80 warships and support vessels.

More alarming was the inclusion of the Chinese military into the war games alongside the Russians. Around 3500 Chinese troops were said to have taken part in the Russian war games. Troops from Mongolia too joined the drills.

Sergei Shoigu, Russian Defense Minister, boasted about the drills saying, “Imagine 36,000 military vehicles moving at the same time: tanks, armored personnel carriers, infantry fighting vehicles – and all of this, of course, in conditions as close to a combat situation as possible.”

Condemning the drills, NATO said the war games “demonstrates Russia’s focus on exercising large-scale conflict”.

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