We May Have Stumbled, but We Have Not Fallen Down
On Friday November 9, 2018, Chancellor of Austria Sebastian Kurz made a statement about the detention of a retired Austrian officer on suspicion of spying for Russia. Minister of Foreign Affairs of Austria Karin Kneissl cancelled her December visit to Russia. That very same day, the Ambassador of the Republic of Austria to Russia, Johannes Aigner, was summoned to the Ministry of Foreign Affairs of the Russian Federation. Journalists expressed concern that the situation would have an impact on the development of relations between Russia and Austria and further effect the EU–Russia relationship. Minister of Foreign Affairs Sergey Lavrov expressed his regret that the West was increasingly turning to “microphone and megaphone diplomacy” instead of turning to Russia directly for clarification, which has always been the case in international relations.
The fallout from this incident will only become clear later. It is unlikely that it will result in any serious consequences, for example, a new round of sanctions or a sharp deterioration in relations. At the very least, Friday’s events did not affect the development of interaction at the level of track one and a half diplomacy. On Monday November 12, the Russian International Affairs Council (RIAC) hosted a seminar entitled “EU–Russian Relations in the Context of the Republic of Austria’s Presidency of the Council of the European Union.” The meeting was organized by RIAC in conjunction with the Embassy of the Republic of Austria in Russia and the European Union Delegation to the Russian Federation. It was attended by Deputy Minister of Foreign Affairs of the Russian Federation Alexander Grushko, Ambassador of the Republic of Austria to Russia Johannes Aigner and the Head of the European Union Delegation to the Russian Federation Markus Ederer. Participants included ambassadors of EU countries and Russian experts on EU–Russia relations. During the closed-door discussion, the ambassadors and experts talked about factors influencing the development of bilateral relations between Russia and Austria, and between Russia and the European Union, and outlined a number of development trends. It is important to note here that Friday’s incident was not brought up or discussed at the meeting.
Austrian Presidency of the Council of the European Union
Presidency of the Council of the European Union changes hands among EU member countries on a rotating basis every six months. During the six-month presidency, the country chairs meetings of the Council at all levels, ensuring consistency of the European Union’s work within the Council. To this end, the European Union employs a mechanism of a “trio presidency,” or simply Trio. Trios set long-term goals and draw up a common agenda on the main issues to be considered by the Council over the course of the next 18 months. Each country then prepares a more detailed programme on the basis of this agenda for their respective six-month terms. Presidency of the Council of the European Union entails, first and foremost, supervising the Council’s work on the development of EU legislation. The president country chairs meetings of the Council’s various structures, with the exception of the Foreign Affairs Council. However, it does work in close cooperation with the High Representative of the Union for Foreign Affairs and Security Policy and supports its work.
Austria took over presidency of the Council of Europe for the second half of 2018, being part of the trio that includes Estonia and Bulgaria. Contacts between the Ministry of Foreign Affairs of the Russian Federation and the European External Action Service have been adequately maintained during the Republic of Austria’s presidency. Dmitry Medvedev has met with Jean-Claude Juncker, Sergey Lavrov has met with Federica Mogherini and regular working meetings and expert discussions have taken place. Indeed, Russia has a special relationship with Austria. Throughout the crisis, Austria has been a bridge between Russia and the European Union, maintaining an objective and loyal attitude towards the country and not succumbing to the general hysteria sweeping the continent. Austria has always believed that it is important to preserve communication channels with Moscow. For example, Austria did not follow the lead of other Western countries that expelled Russian diplomats in a display of solidarity with the United Kingdom following the Skripal case. In the context of the crisis in EU–Russia relations, it is in the interests of both sides to have a neutral mediator. We have to hope that Austria will continue to fulfil that role.
Islands of Cooperation between Russia and the EU
The discussion at the seminar once again demonstrated that Ukraine remains a sticking point in EU–Russia relations. Moscow and Brussels differ in their opinions on the reasons for the crisis in their relations, as well as on the reasons for the Ukrainian crisis and current events around it. As far as the European Union is concerned, the crisis has been primarily caused by Russia’s policy towards Ukraine. Russia, meanwhile, believes that the causes of the crisis had been simmering long before the events in Ukraine, owing to the accumulated problems between Russia and the West. Key among these problems, according to Russia, is the eastward expansion of NATO in total disregard of Russia’s security interests. Moscow regards the events in Ukraine in 2014 as a coup d’état that threatens the Russian-speaking population and ethnic Russians living in Ukraine, while the European Union sees them as a popular protest against the regime. Both Russia and the European Union call for the resolution of the Ukrainian crisis and the implementation of the Minsk agreements. However, the approaches of the two sides are irreconcilable. Russia believes that Kiev’s policies are blocking the implementation of the Minsk agreements. The European Union sees otherwise, blaming Russia’s policies for impeding the proper fulfilment of the agreements. Russia does not even see itself as a party to the conflict. Moscow is in favour of improving relations with the European Union, as it believes that further deterioration is not in the interests of any of the parties. For the European Union, improving relations involves changing Russia’s policies.
Despite the deep crisis in EU–Russia relations, there do exist certain “islands of cooperation.” First and foremost, humanitarian cooperation remains one of the few areas of regular interaction between the two sides. This includes cooperation in science, culture, education and academic exchanges. Liberalizing the visa regime would contribute to greater mobility and success in this area, but it is highly unlikely in the foreseeable future given the current political climate.
When states experience difficulties in their official relations, non-governmental channels are often used to maintain a dialogue – non-profit organizations, analytical centres, contacts among academic institutions and scientists, expert dialogues, etc. The political situation could very well change at some point in the future, which is why it makes sense now to work out a strategy for cooperation if and when that does happen, at least at the expert level.
Russian experts and members of the political community support the idea of cooperation between the European Union and the Eurasian Economic Union (EAEU), seeing it as a niche area of interaction with the participation of Russia and the European Union. However, European experts and EU officials have expressed their concerns that the EAEU is not a purely economic integration association. In particular, many European experts see the creation of the EAEU as an attempt to restore Russian influence in the post-Soviet space. At the political level, the reaction is more restrained. The Global Strategy for the Foreign and Security Policy of the European Union states that the European Union supports regional integration and is prepared to cooperate with regional associations. However, the Eurasian Economic Union is not named as one of those associations. EU officials complain that the interests and positions of the EAEU member countries are not aligned, which makes it difficult to cooperate with it as an association. At the same time, attempts have been made to cooperate with the Eurasian Economic Union at the technical level. It is probably best in this situation to work out issues of interaction at the level of track one and a half diplomacy beforehand, involving representatives from interested EU and EAEU countries in the process.
Russia and the European Union have common interests with regard to China. In particular, many experts believe that both players could take a more proactive stance on China’s Belt and Road Initiative to strengthen connectivity in the Eurasian region. Cooperation could be built in the format of the European Union, Russia, the Eurasian Economic Union, China and Central Asian states.
Of course, this set of initiatives is not enough for a full-fledged cooperation agenda, but it is a niche for interaction during the crisis in the relations between Russia and the West. Limited interaction between Russia and the European Union is evident against the background of a rapidly changing world, the growing threat of terrorism and extremism, the conflict in the Middle East, the technological revolution in the military sphere, the growing threats in cyberspace and the significant changes in the foreign policy of the United States under the Donald Trump administration, which has seen the country increasingly becoming a factor of instability and unpredictability in global politics. It is in the interests of both Russia and the European Union to come together to resolve these issues, as well as many others, in a coordinated fashion.
First published in our partner RIAC
Don’t Kid Yourself, Russia will Never Abandon Belarus
The world has been rivetted by the largest protests in Belarus’ history over the course of the past month. Dubbed “Europe’s Last Dictator” by former German Foreign Minister Guido Westerwelle, its President Alexander Lukashenko has ruled Belarus ever since winning the country’s first and only democratic election in 1994. But is this the end for Lukashenko? Certainly, some have already dubbed this as another “Color Revolution” moment in reference to similar civil society “People’s Power” protests that were able to bring down post-Soviet governments from Kyrgyzstan to Serbia, and most recently the pro-Russian administration of Viktor Yanukovych in Belarus’ multiethnic southern neighbor Ukraine in 2014. But that will not happen in Belarus. This article does not mean to be callous but frank. The stark reality is that Belarus is an ethnically homogenous country that is vital to Russia’s national security interests. It will never surrender that to the opposition in Minsk or the West and NATO.
First, culturally Belarus is overwhelmingly Russian. Belarus’ population of 9.5 million people, 84% are ethnic Belarussians and 70% are native Russian speakers, Belarus’ only official language. Unlike Ukraine or the Baltic countries, Belarus lacks a strong ethnic base to sustain a pro-European political movement. Moscow will never abandon these Russians either, if needed it will intervene militarily under the guise of securing their rights, as it has done already in Eastern Ukraine. Such a maneuver would lead to a devastating conflict, with serious regional implications, and could begin a cascade of interventions to protect Russian speaking minorities on its borders.
Moreover, Belarus’ location situated right on Russia’s western frontier makes it is too strategically important for Moscow to allow it to join the fold of NATO. The Belarussian steppe is an invasion and counterattack route that quickly conveys invading European armies to the gates of Moscow, or Russian forces into Western Europe. Belarus was the first to fall during Operation Barbarossa, Nazi Germany’s invasion of the Soviet Union, and it is in Belarus during Operation Bagration that the Red Army opened the road to Berlin. Today, Belarus’ existence within Russia’s political orbit is vital to provide it a buffer with NATO’s Eastern frontier. Without it, NATO could deploy forces just about 200 miles from Moscow. Thus, for Russia, any political change is a strategic threat. If Russia was willing to annex Crimea to, in part, protect its naval station at Sevastopol, after theUkrainians overthrew their pro-Russian leader Yanukovych, then it will do the same and more to Belarus in the event of Lukashenko’s ouster.
Additionally, a stable Belarus is vital to Russia’s core economic interests. It is through Belarus that major oil and gas pipelines transit from Russia to Eastern Europe, Central Europe, and the Baltic States. At least 10% of Europe’s oil needs come through the Druzhba pipeline in southern Belarus. And although Russia has also worked to diversify its avenues to export gas directly to the energy consuming countries of Europe, including with the construction of the Nordstream II and Turkstream pipelines, Belarus’ central location will always remain important as the most direct route to transport gas to Europe. In fact, Russia is already in a contentious dispute with Ukraine over gas pipelines, and it will not stand to also lose Belarus as a stable gas corridor.
And if that was not enough, one must remember Belarus is institutionally tied to Russia. It was at a hunting lodge in the Belarussian forest that in 1991, the leaders of the Soviet Union’s three Slavic republics: Belarus, Russia, and Ukraine came together to formally end the Soviet Union by declaring their independence together in the Belzahevy Accords. Five years later, Belarus then reversed its separation from Russia when it formed a Commonwealth in 1996, and finally the “Union State of Russia and Belarus,” or simply the “Union State” in 1999. This experiment in reestablishing the Soviet Union as a unitary political entity includes Schengen Area-style freedom of movement and a single executive that until a recent constitutional referendum, Russian President Vladimir Putin looked prepared to strengthen and assume the leadership of in order to stay in power. Now, Putin has raised the possibility of further integration as an antidote to the current protests. Belarus’ fate is thus closely tied to Russia’s own future as a nation state.
Notably, Belarus is also a party to the Collective Security Treaty Organization (CSTO), a Russian led security alliance of regional states including Armenia, Kyrgyzstan, Kazakhstan and Tajikistan. From the CSTO countries, Belarus can request an international (albeit Russian-led) “Collective Rapid Reaction Force,” to intervene and stabilize the country. As an elected leader, Lukashenko would be well within his rights to request the CSTO to intervene, and Russia already noted weeks ago that it forces remained ready in “reserve” at Belarus’ request. This would be an entirely legal use of military force to quell the domestic unrest and secure Lukashenko’s rule.
Lukashenko is the human embodiment of Russia’s interests in Belarus. He has made possible the expansion of Russia’s influence in the country since his election in 1994 and has had the unenviable task of placating Russia, balancing Europe and preserving his own independence, to some degree, from Moscow. He is the only ruler modern Belarusians have ever known, and the only one who can be trusted to steward the interests of Moscow and ethnolinguistic Russians. He is therefore the lynchpin of any strategy to preserve Russia’s interests in the country. Whether Moscow likes it or not, Lukashenko is irreplaceable. Frankly, sanctions will not convince him to retire, but only remind him that to fail, to lose power, will lead to his demise, and possibly his imprisonment or death for only Russia can affect the situation on the ground in Belarus.
Most of all, Lukashenko is the only one trusted by the military. As noted by Belarus’ Soviet-era leader Stanislav Shushkevich, the Belarussian army is manned and led by Lukashenko loyalists, it is one of the largest military force per-capita for its population, and its general staff leadership are well paid for their service to the state. Their fates are inexorably tied: a large, well-paid, ethnically homogenous military and their patron leader President Lukashenko. It is highly unlikely they will defect to the opposition, but even if so, that will only lead to a civil war and a Russian intervention. The presence of Lukashenko loyalists in the military ensures buttressed by the Russian speaking population ensures he will always have a strong power base in the country.
There may be a tendency in the West to think the Belarussian opposition will win. This belief is what guided overwhelming international support for Juan Guido in Venezuela to take power from the government of Nicholas Maduro. But Maduro held firm, knowing his allies in the military will decide his and the country’s future. They stayed in lockstep with the government, and despite massive opposition protests and the defection of much of Maduro’s political base, his government did not yield. They mortgaged the country’s future to survive –but survive they did.
The US especially must learn from Venezuela, or for that matter the rest of the interventions on its diplomatic resume. It is not a simple matter of course to remove governments even when the population is resoundingly opposed to their rule. Unless NATO, the US, and Europe plan on supporting a military opposition against Russia (which nobody is proposing), risking a direct confrontation with Moscow as well, there is little to no chance of changing the rulers in Minsk.
Of course, for the West, it still makes sense to support the opposition vocally, even if their defeat is inevitable. At the very least, it is a chance to draw attention to a crisis on Russia’s doorstep, at most, it will grant it an ally in a revolutionary Belarussian government –for all of five minutes that is, before Russian soldiers duly force it from office and restore Lukashenko to power. Belarus is in Russia’s backyard. The West should not forget that as it watches events unfold in Minsk.
Navalny, Nord Stream 2 and Moscow’s Response
As expected, Alexei Navalny’s case is seriously tearing apart relationship between European Union and Russian Federation. The alleged “poisoning” of the opposition leader Alexei Navalny, on August 20 in Tomsk (Siberia), has similarities to the murder of former Russian spy Alexander Litvinenko, and that of Sergei Skripal, a former Russian military officer and double agent for the UK’s intelligence services, and his daughter, Yulia Skripal, in the city of Salisbury, England. Russia’s political history is dotted with that well-colored inerasable image.
Navalny is a Russian opposition politician and anti-corruption activist. He came to international prominence by organizing demonstrations and running for political office, to advocate reforms against corruption in Russia. As a citizen, he has the fundamental right to freedom of expression and to associate with social and political groups. But his activities has angered the officialdom and becomes most hated politician. He has been detained several times by Russian authorities.
Now Navalny, who was “allegedly poisoned” in August, stands a determining factor shaping the relationship between Western world and European Union and Russia. Sanctions are the punitive measures against Russia. When he was first treated in a Russian hospital in Omsk, the doctors claimed that there were no traces of poison in his body, a claim that Russian authorities continue to endorse.
Specialist labs in France and Sweden have confirmed Russian opposition leader Alexei Navalny was poisoned with the Soviet-era nerve agent Novichok, the German government Spokesman Steffen Seibert said mid-Sept, and confirmed that the Hague-based Organization for the Prohibition of Chemical Weapons had also received samples and was taking steps to have those tested at its reference laboratories.
According to Seibert, the European Union’s summit, set to take place on September 24-25. The world would be looking for what measures be collectively adopted with regard to Navalny and against Russia.
On Sept 17, Russian Foreign Ministry spokesperson Maria Zakharova told the local media that there were another series of anti-Russian sanctions being initiated by the West amid the situation involving Russian opposition politician Alexei Navalny, all these designed to deliver a blow to relations between Russia and the European Union.
“The main goal today, at least it appears to be this way, is to deliver a blow to the relations between our countries and the European Union, and countries that are part of the union. Everything is going in this framework,” Zakharova said in the 60 Minutes show on the Rossiya 1 (VGTRK) television channel.
On Sept 15, during its session the European Union planned to create a global regime sanctioning human rights violations around the world and the intention to name it after Alexey Navalny. The Russian Foreign Ministry believes that will erode the basic principles of international law and undermines the prerogatives of the UN Security Council through endless illegitimate unilateral sanctions imposed by Brussels and Washington.
As for whether it would be advisable to name this sanctions regime after Alexei Navalny, it viewed “this exclusively as an undisguised attempt to give a manifestly anti-Russia tonality to the new EU restrictions. At the same time, Berlin persists in brushing off proposals to work together in order to get to the bottom of what happened, using clearly far-fetched pretexts. We hope that common sense will prevail in the European Union and our partners will renounce the arbitrary practice of assigning blame and in the future will draw conclusions based on real and confirmed facts.”
That however Moscow readies to hit back on EU sanctions. Local daily newspaper Izvestia also wrote that Russia vows to retaliate against potential European Union sanctions. Even though the European Union is trying to elbow Russia out of the gas market, it is unlikely that the Nord Stream 2 gas pipeline project will be abandoned over the incident with Russian opposition figure Alexey Navalny, quoting sources in the Russian Federation Council (Upper House of Parliament).
The resolution approved by the European Parliament (EP) stresses the need for an international investigation into the alleged poisoning of Navalny with a Novichok-type toxic agent. European MPs called for suspending Nord Stream 2 and slapping sanctions on Russia. Meanwhile, Moscow is urging Berlin to cooperate in the investigation of what happened to Navalny. If the EU levies sanctions on Russia, Moscow can provide a tit-for-tat response, Russian MPs told the paper.
“I don’t think this option will come to life, because it is difficult to connect the situation with Navalny to the construction of Nord Stream 2. This is just an excuse to push Russia out of the gas market. We need to react calmly and not be dragged into those discussions,” Deputy Chairman of the Russian Federation Council’s Committee on Foreign Affairs Vladimir Dzhabarov told Izvestia, commenting on the resolution.
Similarly, Deputy Chairman of the State Duma’s Foreign Affairs Committee Alexei Chepa explained to Izvestia that in the event of any real anti-Russian sanctions, Russia could provide a tit-for-tat response. For example, if the European Union approves personal restrictions and a sanctions list, Moscow will do the same.
“Of course, we will respond. However, this will impact both our economy and the economy of Germany and the European Union. No one wins here. However, there may be a tit-for-tat blacklist that would include, for example, the MPs that called for anti-Russian sanctions or for the suspension of Nord Stream 2,” the MP said, stressing that Moscow will only retaliate if the European Union introduces real sanctions against Russia.
Russian newspaper Kommersant wrote that European Union to loosen legal mechanism for new sanctions against Russia. It said that the European Commission is working on broadening its legal instruments that would enable the introduction of personal sanctions against human rights violators in different countries, counting Russia among them. President of the European Commission, Ursula von der Leyen, has announced plans to adopt Europe’s version of the Magnitsky Act and suggested adjusting the mechanism for approving sanctions in such a way that does not require the support of all European Union member states.
According to Kommersant, this amendment, if adopted, will no longer allow Moscow to count on friendly European countries that have called on European Union allies not to impose tough sanctions on Russia. According to von der Leyen, the proposals for a European ‘Magnitsky Act’ will be ready soon. She explained the European Union should be able to respond clearly and quickly to what is happening anywhere, whether in Hong Kong, Moscow or Minsk.
The German Council on Foreign Relations, does not believe that the European Union will be able to agree on an extensive package of sanctions against Russia soon. Rather, an agreement on a blacklist similar to the ‘Magnitsky list’ could be expected. According to experts, regarding the Nord Stream 2 pipeline, Germany and the European Union would rather allow the project be implemented in full, and then introduce some measures to restrict or prohibit transportation of gas through the pipeline.
“With the crises around Navalny and Lukashenko unfolding, the freezing of Nord Stream 2 seems to be in the cards. Nevertheless, we are not talking about a complete breakdown of relations. Even during the Cold War, economic ties between the USSR and the West were not completely severed,” Head of the European Political Studies Department at the Institute for World Economy and International Relations (IMEMO),Nadezhda Arbatova, told Kommersant newspaper. “Today’s confrontation between Russia and the West is a struggle of ideology and real politics. Minimal interaction will be maintained, but this will not change the quality of relations between Russia and the EU,” she predicted.
European Union and Russia have strategic partnership agreement signed in 2011 but that was later challenged following the annexation of Crimea and the war in Donbass. Russia has five member states: Estonia, Finland, Latvia, Lithuania and Poland share its border. The relations are determined by European Union member on bilateral basis, but all the members adopt common or collective policies toward the Russian Federation.
Forgiving Old Debts: Russia’s Diplomatic Maneuver
With economies experiencing contractions across the globe and with governments in the third world most vulnerable, discussions of debt relief have been revived. Yet, forgiving old debts is nothing new to the Kremlin. For the Russian government, it has been just one part of a wider diplomatic toolkit to rekindle ties that have faltered since the end of the Cold War.
Once the primary backer of numerous states over large swathes of the globe, Moscow largely retreated from the non-Soviet space during the presidency of Boris Yeltsin and it continued to not be a primary concern during Vladimir Putin’s first two terms as head of state. However, Russia’s resurgence on the international arena over the past few years has not only made the country more willing to re-engage with the region but also more capable.
International media has primarily viewed this through the lens of military strength. Whether it is sending trainers and advisors to the Central African Republic, allegedly supporting rebels in Libya, or deploying Wagner Group forces to fight an Islamic State-offshoot in Mozambique, the focus has primarily been conflict-oriented. However, less explored is the quieter and more economic measures that the Russian government has taken in order to win hearts and minds outside of the West.
As part of a debt-for-development programme, Russia has forgiven approximately $20 billion worth of debt to various African governments that was accrued during the Soviet period. Beneficiaries include the Commonwealth nation of Tanzania and Francophonie member Madagascar, along with others. In forgiving these loans, the Kremlin has acknowledged a reality that many countries continue to deny: such debts are unpayable. At the first ever Russia-Africa Summit, Putin stated explicitly that “It was not only an act of generosity, but also a manifestation of pragmatism, because many of the African states were not able to pay interest on these loans.”
These measures have yielded concrete benefits for the previously indebted countries. For example, the decision to forgive Mozambique’s $40 million debt was done in conjunction with the United Nations World Food Programme, with the money that was intended for debt repayment instead being used to provide free school meals for 150,000 children over the course of five years.
While Russia will potentially be losing some money in the short term, debt forgiveness is likely to open new doors moving forward. Many of the countries that have seen their debts written off have significant economic and geopolitical potential. With improved political relations as a consequence, it is hoped that Russian companies will get preferential treatment should contracts be offered to international firms. This could help explain the Kremlin’s decision to forgive 90% of North Korea’s $11 billion debt despite the latter’s weak position. Russia has been eager to develop a trans-Korean gas pipeline that would transport fuel to South Korea. While the likelihood of this being realised remains slim, in the context of Pyongyang’s inability to repay the debt in any case, it is a reasonable gamble to make on the part of the Russian government.
This is somewhat similar to China’s efforts over the past few years, albeit in an inverse form. With Beijing less cash-strapped than Moscow, it is able to invest directly whereas Russia is using debt forgiveness to redirect cash payments away from servicing old debts and instead towards domestic reinvestments. Free projects, such as the Chinese-funded and constructed headquarters of the African Union, have been followed by ever-growing economic and political relations.
Russia’s debt policy has been used to strengthen existing alliances and partnerships. While not all Soviet-era allies have retained close ties to Moscow, many have done so continuously since the Cold War. One of the biggest beneficiaries of Russian debt forgiveness has been Cuba. In July 2014, ahead of a visit to the island nation by Putin, the Russian government wrote off 90% of Cuban debt. Though Russia was not only the country that showed willingness to restructure Cuba’s debt obligations at the time, it was by far the most generous. China restructured approximately $6 billion while Japan and Mexico forgave $1.4 billion and $478 million, respectively; Russia forgave $32 billion.
The decision did reaffirm the close relations between Moscow and Havana. Cuba has repeatedly voted in support of the Russian Federation at the United Nations on sensitive topics, such as Crimea, and Russian firms have received multiple drilling and mining contracts from the Caribbean country.
However, this strategy has its limitations. The overwhelming majority of these debts date back to the Soviet era and are therefore limited in scope. Some countries, such as Angola and Ethiopia (which saw most of their debts forgiven in the 1990’s), were primarily recipients of military support during civil wars so their debts were not as vast as other heavily indebted countries with other creditors. Since then, despite respite from Moscow, such countries have continued to become increasingly burdened by growing debts. While Ethiopia is often heralded as an example of rapid economic growth, its debt, both in total but also has a percentage of GDP, has grown considerably during the post-Soviet era.
While debt relief is undeniably beneficial to the third world, the fact that Russian-owned debts constitute a mere fraction of all foreign-owned debts in most cases means that the act of writing debts off cannot achieve much in of themselves. Consequently, in several countries, the gesture is mostly a PR move. In the case of Afghanistan, where Russia was the largest creditor due to loans handed out during the 1980’s, Kabul had for decades refused to recognise the debt. The decision to forgive the debt was therefore more of a signal of a desire to improve relations than any hope to achieve instantaneously tangible rewards.
The largest stumbling block for the Kremlin’s efforts remain structural issues afflicting the indebted nations, the nature of which vary considerably from country to country. For example, while Russia has forgiven a majority of Iraq’s debt to the country, which in turn helped revive talks over potential oil contracts, the continued instability in the Middle Eastern nation makes it difficult to reap many benefits. Though it is true that Baghdad has continued to purchase Russian T-90 tanks and attack helicopters, this is more of a sign that Russia has partially managed to pivot Iraq away from the United States’ sphere of influence as opposed to gaining economically.
With the onset of coronavirus, however, Russia might not be the leading debt forgiver for very long. In places such as sub-Saharan Africa, where economies are expected to continue shrinking while deficits are set to grow, other creditors could potentially step in and likewise forgive debts. In April of this year, G20 leaders agreed to extend debt relief in the form of a moratorium on debt repayment yet this can only serve as a short term solution. With many governments already increasing their borrowing, creditor nations are well positioned to leverage their position in order to improve geopolitical relationships as well as set the stage for favourable contracts for their firms. If more countries follow Moscow’s path, then the significance of what the Kremlin has done will only recede and lose much of its relevance.
Debt forgiveness can win friends but can only go so far. For Russia’s diplomatic maneuvers to stick, they will need to continue complementing it with other efforts, such as improving trade and boosting security partnerships, in order to truly make the most of its financial generosity.
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