Russia’s President Vladimir Putin has given lengthy assessments of the situation in global policy and economy when speaking at the plenary session of the 25th St. Petersburg International Economic Forum (SPIEF), and further offered a number of recommendations for building a multipolar system.
He also talked about the various tasks Russia faces at present and the future – tasks of supporting economic development of the country, stimulating domestic business activity, creating conditions for comfortable doing business and, opportunities and prospects opening this process for players of the entire global market and strengthening external trade and investment ties.
President Putin participated in a plenary meeting held on June 17, alongside with Kazakh President Kassym-Jomart Tokayev and Egyptian President Abdel Fattah el-Sisi, the latter by video link. Chinese President Xi Jinping delivered a video address to the participants.
While emphasizing the problems currently faced by the world’s economy at large, unfair competition among states, trade and financial wars, sanctions, restrictions, and so on, he asserted that the era of the unipolar world order has ended.
The United States, having declared victory in the Cold War, develops its own political systems and public institutions, implements its own models of economic growth and, of course, has the right to protect them, to ensure national sovereignty, he said, and added “but our partners in the West, for the sake of ambitions, in the name of preserving outdated geopolitical illusions really don’t understand that the world based on such dogmas is definitely unsustainable.”
The current global changes are fundamental, pivotal and inexorable. However, it seems that the ruling elites of some Western states are just in such illusions. They do not want to notice obvious things, but stubbornly cling to the shadows of the past. For example, they believe that the dominance of the West in global politics and economics is an unchanging, eternal value. Nothing is eternal, according to Putin.
Moreover, they rudely and shamelessly impose their own ethics, views on culture and ideas about history, and sometimes question the sovereignty and integrity of states, create a threat to their existence. Suffice it to recall the fate of Yugoslavia and Syria, Libya and Iraq. This is the nature of the current attack of Russophobia in the West and insane sanctions against Russia.
Putin also spoke about the Russian economy. The gloomy forecasts regarding the prospects for the Russian economy, which sounded at the beginning of spring, did not come true. People, businesses and various sectors are receiving respective assistance and support. Such support has helped mitigate the fallout from sanctions. The economy is smoothly adjusting to new challenges, macro-economic stability is being maintained, all social programs planned earlier are being fulfilled, the administrative burden is being consistently reduced, and conditions for projects are being improved.
Economic dynamics are stabilizing, public finances are stable. Literally three months after the massive package of sanctions. According to the results of the first five months of this year, the federal budget was executed with a surplus of 1.5 trillion rubles, and the consolidated budget with a surplus of 3.3 trillion rubles. At the same time, the federal budget surplus in May alone amounted to almost half a trillion rubles, exceeding last year’s May figure by more than four times.
In the future, deferred payments on insurance premiums will not need to be paid, as they say, at once. This can be done in equal installments within 12 months starting from June next year. Further. Since May, the rate on preferential mortgages has been reduced.
After a sharp rise in the spring, interest rates in the Russian economy are gradually declining, the Central Bank lowers the key rate. In this regard, it possible to once again reduce the rate on preferential mortgages, now to seven percent. In the near future, the emphasis in supporting business activity should shift from fiscal stimulus measures to market bank lending mechanisms.
This process should definitely be supported. Thus, to increase the capacity of the VEB Project Finance Factory, we will allocate 120 billion rubles from the National Welfare Fund. Such a measure will provide additional lending for in-demand initiatives and projects in the amount of about half a trillion rubles.
And it’s not just about the current obvious consequences. The leaders of European countries, at the level of informal conversations, as they say, very disturbing prospects are being furtively discussed, that sanctions can be applied not only against Russia, but also against any objectionable state, sooner or later they can affect everyone, including the EU members themselves and European companies.
“So far, things have not come to this, but European politicians have already dealt a serious blow to their economy – they themselves did it with their own hands. We see how social and economic problems have become aggravated in Europe, and in the United States too, how the cost of goods, food, electricity and automobile fuel is growing, how the quality of life of Europeans is declining, and the competitiveness of enterprises is being lost.” Putin said.
What else is of fundamental importance here? The worsening of the situation in the global economy is not a matter of recent months. What is happening is not the result of recent months, of course not. Moreover, it is not the result of a special military operation carried out by Russia in the Donbass. Such statements are frank and deliberate distortion of facts, he explained.
The world has been consistently driven into such a situation by many years of irresponsible macroeconomic policies of the so-called G7 countries, including uncontrolled emission and accumulation of unsecured debts. Moreover, these processes only accelerated and intensified with the onset of the coronavirus pandemic back in 2020, when both supply and demand for goods and services drastically decreased on a global scale.
So, if at the end of 2019 imports, imports of goods to the United States amounted to about $250 billion a month, by now it has grown to $350 billion. It is noteworthy that the growth amounted to 40 percent – in proportion, this corresponds exactly to the unsecured pumping of the dollar money supply in recent years. They printed, distributed money, and for this money they raked out all the goods from the markets of third countries.
According to the UN, back in February of this year, the global food cost index was 50 percent higher than in May 2020, and the composite commodity index doubled over the same period. In the context of an inflationary storm, many developing countries have a reasonable question: why exchange goods for dollars and euros, which are losing weight before our eyes? The conclusion suggests itself: the economy of imaginary entities is inevitably replaced by the economy of real values and assets.
According to the IMF, there are now $7.1 trillion and €2.5 trillion in global foreign exchange reserves, and this money is depreciating at a rate of about eight percent per year. But besides, at any moment they can also be confiscated, stolen, if the United States does not like something in the policy of certain states. Well, this, in my opinion, has become absolutely real for very many countries that keep their gold and foreign exchange reserves in these currencies.
According to experts, in the coming years, this is an objective analysis, the process of converting global reserves will be launched – they simply have nowhere to go with such deficits – from currencies losing their value into real resources – other countries, of course, will do this, – such as food, energy, and other raw materials. Obviously, this process will further spur global dollar inflation.
Putin also talked about the principle of developing social justice. The growth of the economy and business initiative, industrial opportunities and scientific and technological potential of the country must have a powerful social embodiment. Such development should lead to a reduction in inequality, and not to its exacerbation, as is happening in some other countries.
The reduction of poverty and inequality is the demand for domestic products, and throughout the country, and hence the reduction of the gap in the potential of the regions, the creation of new jobs exactly where they are most needed, in general, a determining condition for further economic development.
He emphasized that the positive dynamics of real incomes of citizens, the reduction of poverty is the main indicator of the effectiveness of the work of government bodies and the state as a whole. Moreover, tangible results here, despite all the objective difficulties, must be achieved already this year, and such a task has been set for the government.
In recent years, Russia has built a coherent system of support for needy families with children. Assistance from the state can be received by a woman from the early stages of pregnancy until the child reaches 17 years of age. The well-being of people, their prosperity is the most important factor in demographic development, and here, taking into account the overlapping negative demographic waves, the situation is extremely difficult. In April, less than 100,000 children were born in Russia, which is almost 13 percent less than in April 2020.
Regarding the fifth principle on which Russia builds its economic policy is the advanced development of infrastructure. Next year, a large-scale plan for the construction and repair of the backbone network of federal and regional highways will start. Within five years, at least 85 percent of its length must be brought to a standard state. Such a new tool as infrastructural budget loans is actively used. They are issued for 15 years at a rate of three percent.
Putin, in addition, proposed consolidating resources and launching a comprehensive program for the modernization of housing and communal services, synchronizing it with other infrastructure development plans, as well as capital repairs of the housing stock. The task is to radically change the situation, to consistently reduce the share of obsolete networks, resettling emergency housing and repairing roads.
In addition, he proposes to increase the amount of resources for projects to create a comfortable urban environment in small towns and historical settlements. Then, allocate additional funds for the renewal of cities in the Far East. This will be within the framework of the programs of infrastructure budget loans and the modernization of housing and communal services, as well as other development programs.
Next year, a large-scale plan for the construction and repair of the backbone network of federal and regional highways will start. Within five years, at least 85 percent of its length must be brought to a standard state. Such a new tool as infrastructural budget loans is actively used. An absolute priority for is the comprehensive arrangement and development of rural areas. People who work in the countryside, feed the country, and, as it is now clear, a significant part of the world, must live in comfortable, decent conditions.
Putin discussed internal tourism. Every year more and more tourists seek to visit the most beautiful natural places of our country: national parks, wildlife sanctuaries, nature reserves. It is estimated that this year the tourist flow will exceed 12 million people. It is important that government agencies, business, and tourists know what is permissible and what cannot be done in these territories, where it is possible to build tourist facilities, and where it is strictly prohibited, where it creates risks for unique and vulnerable ecosystems.
In general, he said it is necesary to develop clean technologies in order to achieve the goals set for the environmental modernization of enterprises, reduce harmful emissions into the atmosphere, especially in large industrial centers.
In this regard, the sixth, in my opinion, cross-cutting principle of development that unites our work is the achievement of true technological sovereignty, the creation of an integral system of economic development, which, in terms of critically important components, does not depend on foreign institutions. We need to build all spheres of life at a qualitatively new technological level and, at the same time, be not just users of other people’s solutions, but have the technological keys to creating goods and services for the next generations.
In recent years, much attention has been paid to import substitution, and has achieved success in a number of areas: in the agro-industrial complex, in the production of medicines, medical equipment, in the military-industrial complex, and in a number of other areas.
Russia has the personnel, scientific and technological reserves to develop products that are now in high demand, including household and construction equipment, industrial and service equipment. Today’s task is to increase capacities, to establish the necessary lines in a short time. And one of the key issues is comfortable conditions for the work of enterprises, as well as the availability of prepared production sites.
What is important here? The first is funding. The second is taxation. In clusters, it is necessary to ensure a low level of conditionally constant taxes, including insurance premiums. The third is support for production at the starting, early stage, the formation of a package of orders, including the provision of subsidies for the purchase of finished products of such enterprises.
Fourth, simplified administration, including a minimum or complete absence of inspections, as well as the operation of enterprises in a comfortable and easy tax and customs monitoring mode. Fifth, and perhaps most important, it is necessary to create mechanisms for guaranteed long-term demand for new innovative products that are just entering the market. Putin concluded that the priority is to make stronger Russia.
There were about 2,700 business representatives from 90 countries in attendance – far below the 13,500 participants from 140 countries reported during the pre-Covid pandemic, according to SPIEF’s website. Under the chosen theme ‘New Opportunities in a New World’ that reflects the changing global situations, the conference runs from June 15 to June 18 and it is the 25th St. Petersburg International Economic Forum (SPIEF) since its establishment.
Democracies failed attempt in Russia
The Soviet Union was already on the edge of disintegration in the late 1980s. The country’s economy was strained by a costly military intervention in Afghanistan, which began in December 1979. Domestic issues, such as the Chernobyl nuclear disaster, sparked fury among Soviet residents, who felt empowered to express their discontent thanks to Soviet Premier Mikhail Gorbachev’s democratic changes. These circumstances contributed to the fall of the Berlin Wall in 1989 and the disintegration of the Soviet Union in 1991. More than a dozen new democracies erupted from the ashes of the Soviet Union. True democracy has a few fundamental qualities, such as free and fair elections, the role of the media, education, the judiciary, political parties, and religious tolerance, amongst many others. This research paper will look at how democracy hyped in the Soviet Union and the commonly used tools for democracy’s timely success and giving the theoretical perspective and also looking at the factors that proved to be hurdles in the way of liberal democracy for Russia.
Soviet Union was one of the world’s largest countries in the late 1800s. It stretches from Europe’s Black Sea to Asia’s Bering Straits in the Far East. It was difficult to govern due of its enormous size. It almost had a population of over 125 million people. Ethnic Russians made up half of the group. The rest consisted of a vast number of; Germans, Poles, Slavs, Asians. Within the Empire, there were roughly twenty different nationalities. Each had their own dialect and traditions. Many people were unable to communicate in Russian. Within this diversified community, almost every major religion was represented. The Russian Empire was politically, economically, and socially backwards in comparison to Western Europe. There was minimal industry, and peasant farmers made up the vast majority of the population. In this research paper we will try to understand the factors involved in the fall of Soviet Union and the major events leading to the rise of democracy.
The Constructivist theory can be applied on the situation of Russia and the reason why democracy failed there. As according to the constructivist everything is socially constructed and generally accepted phenomena this makes anything widely right or wrong, acceptable or not acceptable. For example ruling or governing a country is more acceptable and proper when a democratic path is chosen and wrong when any other or slightly differing way is used. The western nations try to democratise the whole globe but it’s not possible, every nation should have a form of government that is suitable for its public not something that is induced by the west. Only considering the democratised nations modern and up to date is also because of the constructivist nature of the phenomena.
The Tsarist state system, which was well established in the Soviet Union, had taken a long time to build. The Tsar’s authority was bolstered by a number of factors. The ‘Pillars of Autocracy’ are what they’re called. Army, civil service, Orthodox, and Church were all mentioned. There was no elected parliament in the Empire until 1905, and there were no elections for government seats. Tsarist power could not be challenged through legal or constitutional means.
A succession of Tsars presided over this large and diverse Empire. As autocrats, they ruled the country. This meant that only the Tsar could rule over Russia: Tsars felt that they had a divine right to rule Russia, and that God had bestowed their position and power upon them. Ministers were chosen by the Tsar, he could also remove them whenever he wanted. They were usually selected from the Royal family or the nobility. The civil service assisted the Tsar in running the empire by carrying out his orders and preserving his power. Their privilege was owed to the Tsar and was based on their services. This instilled loyalty since opposing him would result in the loss of power and status. The Russian civil service was considered as backward and greedy around the turn of the century: many civil officials were underpaid, resulting in widespread bribery. Years of service, rather than competence, were used to determine promotion. A massive police system enforced the Tsar’s order, reporting suspicious behaviour and destroying dissident groups: The secret police played a crucial role in tracking down and spying on adversaries. They had the authority to detain possible threats as needed. Okhrana agents worked undercover, infiltrating groups that could pose a threat to the Tsar. They acted on behalf of the Tsar and treated citizens as they thought would be proper. Torture and murder were among their tactics. Exile to a remote part of Siberia was a common punishment for opponents of the Tsar. Thousands of people who were considered enemies of the state were deported to Siberia. They were so far away that they had no prospect of posing a serious threat to Tsarist control.
Tsar Nicholas II controlled Russia in 1894. He and his German-born wife Alexandra were staunch supporters of autocracy. He was, however, a weak individual who considered the mundane task of a king to be tedious. He was more interested in his personal matters than running the state affairs. Tsar Nicholas II, who was unsure of himself and indecisive, was readily swayed by persuasive government workers. He was not a reformist like his grandfather neither an oppressor like his father, knowing no where to begin he invited everyone to his coronation including the peasants. Seeing free food and drinks the poor people which lead to a stampede and 1500 died and got injured, the Khodyna Tragedy happened in May, 30th 1896. Soon after the tragedy Nicholas went to a party with the French due to which he was referred to as Nicholas, The Bloody. The rule of Tsars was quickly becoming outdated and the people were in search of new form of government and. for many the solution was simple looking at the west republics, democracies and constitutional monarchies. But a small group of people rejected the idea of following the west and were more interested in giving birth to a new idea called Communism. Bolsheviks’
The Russian Social Democratic Labour Party gathered for their Second Party Congress on August 11, 1903, and the members voted. As a result, the Mensheviks (‘minority’) and the Bolsheviks (‘majority’) divided the party into two sections. In reality, the Bolsheviks, led by Vladimir Lenin, were a minority party that did not gain power until 1922. Differing opinions on party membership and ideology caused the party to split. Lenin envisioned the party as a forerunner of people devoted to a proletarian revolution. This helped the Bolsheviks gain popularity, and their tough stance against the bourgeoisie appealed to the younger generation.
Bloody Sunday On Sunday, January 22, 1905, everything was up in the air. Unarmed people were fired upon by the Tsar’s army during a peaceful protest led by a preacher in St Petersburg. There were 200 people dead and 800 injured. The Tsar’s subjects would never trust him again.
The Social Revolutionary Party became the major political party, establishing the October Manifesto later that year, riding on the subsequent surge of popular outrage. The Bolsheviks were pushed by Lenin to adopt violent action, but the Mensheviks opposed these demands as compromising Marxist values. The Bolsheviks had 13,000 members in 1906, while the Mensheviks had 18,000. The Bolsheviks remained a minority group in the party in the early 1910s. Because Lenin was exiled in Europe and the Duma elections were boycotted, there was no political platform from which to campaign or gather support. Furthermore, revolutionary politics were not in high demand. The years 1906-1914 were mostly peaceful, and the Tsar’s moderate reforms deterred extremist backing. Rallying cries for national unity put the Bolsheviks’ demands for reform on the back foot when the First World War broke out in 1914.
World wars and its impact on the Socio-Politics of USSR
The Russian empire of Czar Nicholas II was one of the empires that fell apart during World War I. Nicholas was the undisputed monarch of a realm of nearly 150 million people stretching from Central Europe to the Pacific from the edge of Afghanistan to the Arctic when he declared war on Germany and Austria-Hungary in July 1914. Nicholas was forced to abdicate less than three years later, in March 1917, after soldiers in Petrograd joined striking workers in protest of his authority. The Romanov dynasty’s three centuries of power came to an end in July when he and his family were dragged into a cellar by Bolshevik revolutionaries and shot and stabbed to death. The Soviet Union rose quickly from the ruins of the Russian empire to become a global force. Czar Nicholas II’s Russian empire was one of the empires that came apart during World War I. When Nicholas declared war on Germany and Austria-Hungary in July 1914, he was the unchallenged ruler of a realm spanning about 150 million people from Central Europe to the Pacific, from the edge of Afghanistan to the Arctic. Nicholas was forced to abdicate less than three years later, in March 1917, when soldiers in Petrograd joined strikers in defiance of his authority. In July, Nicholas and his family were carried into a cellar by Bolshevik revolutionaries and shot and stabbed to death, bringing the Romanov dynasty’s three centuries of dominance to an end. From the ruins of the Russian empire, the Soviet Union rose quickly to become a global force. Historians continue to dispute whether World War I was a game-changer that triggered the Russian Revolution or merely hastened the inevitable collapse of an outmoded monarchy unfit to compete in the contemporary world. Russia was at a critical juncture prior to the conflict. “Some believe that before 1914, Russia was progressively adopting more modern political and social structures, that it had a lively culture, a highly educated elite, that it had survived the turmoil of the 1905 revolution, and that it had the world’s fastest-growing economy,” Miner adds. However, as he points out, the Czarist administration faced numerous dangers to its stability, ranging from deplorable urban working conditions to labour unrest, which the Czar’s army attempted to quell in 1912 by massacring gold miners in Siberia. To make matters worse, Nicholas II began to reverse the meagre democratic reforms to which he had consented in 1905. As a result of the archaic czarist regime’s drive to maintain power, “the Russian Empire trailed behind the rest of Europe in terms of economic and industrial strength,” according to Lynne Hartnett, a historian. As the consequences of its manufacturers couldn’t produce enough weaponry and ammunition to equip the Czar’s 1.4 million-man army, Russia became vulnerable in a conflict. The Russians had 800,000 men in uniform at the outset of the war who didn’t even have rifles to train with, and those who did had to make do with antiquated weaponry that were nearly 40 years old. Some soldiers were forced to fight unarmed until they were able to obtain a weapon from a soldier who had been killed or injured. Because Russia’s initial bullet output was only 13,000 rounds per day, they had to make every shot count.
The war swiftly devolved into a fiasco, with Russia suffering a humiliating defeat in the Battle of Tannenberg only a few weeks in. Approximately 30,000 Russian soldiers were killed or injured, and the Germans captured approximately 100,000. As the months went on, things didn’t get any better. The Russian empire had lost over one million troops by the end of the year. Russia’s ammunition supplies were nearly depleted, and the country’s infrastructure was ill-equipped to replace troops efficiently. Despite the fact that peasant soldiers suffered the most casualties, the most serious losses for regime stability were within the officer corps, when push came to shove in 1917, the army was not a reliable supporter of the monarchy. Despite the fact that Russia produced enough food to sustain its population during the war, Russians went hungry. The issue was not manufacturing but distribution and transportation, which resulted in frequent shortages. The czarist state’s inefficiencies began to erode political support. Russia had won World War I, the struggle that had brought an end to the Czarist monarchy, but there would be no peace. Later that year, civil war broke out between the Bolsheviks and regime opponents. The Bolsheviks eventually won, and a treaty establishing the Union of Soviet Socialist Republics was signed in 1922.
The tale of the Soviet Union in World War II is one of many wars. When World War II began, the Soviet Union was virtually allied with Nazi Germany in a rather standard European interstate conflict. Despite the fact that the Germans did the most of the combat in Poland, the Soviet Union took control of the eastern half. The Soviet Union supplied Nazi Germany with huge supplies of crucial raw resources until June 22, 1941, when Germany began Operation Barbarossa. In addition, the Soviet Union provided Germany with access to the Far East, particularly rubber, which was transported across Siberia. It also battled Finland in the 1939–1940 “Winter War” and invaded Estonia, Latvia, Lithuania, and what is now Moldova in 1940. The Soviet Union, on the other hand, wanted Germany to provide greater technological assistance than it was willing to provide. Part of Hitler’s motivation for conquering the country was to acquire its natural resources. The second war was fought over control of the Mediterranean and did not involve the Soviet Union. On June 22, 1941, the Germans launched an attack on the Soviet Union, possibly the largest single component of World War II. The Soviet Union became an ally of the United Kingdom and a beneficiary of US Lend-Lease aid almost overnight. In the Soviet Union and Russia, the “War on the Eastern Front” is known as the “Great Patriotic War.” It lasted 1,418 days, and between 26 and 27 million Soviet citizens, largely civilians, died as a result. The Soviet Union continued to engage the majority of German forces even after the Western Allies landed in Europe. The total number of Soviet soldiers killed on the battlefield was 8.7 million. Following Germany’s defeat, the Soviet Union entered the Pacific War, which had begun on December 7, 1941, with the Japanese attack on Pearl Harbour. The Soviet Union attacked the Japanese Army in Manchuria on August 9, 1945, and it surrendered eight days later. The Soviet endeavour, particularly the sudden turn of events in 1942 and 1943, transformed a “pariah state” experimenting with a new economic and political system into a successful proponent of the same, as well as a space-bound superpower with resurrected imperial trappings. For example, the Soviet nuclear programme began in 1942. During the Cold War, the importance of its armed forces to the overall Allied victory was overlooked in the West. However, the reconciliation effort that began in the 1980s and the disintegration of the Soviet Union at the end of 1991 changed this.
End to the Mighty Soviet Union
During the Russian Revolution of 1917, revolutionary Bolsheviks deposed the Russian tsar and formed four socialist republics. The Union of Soviet Socialist Republics was formed in 1922 when Russia and her far-flung republics merged. Vladimir Lenin, a Marxist revolutionary, was the first leader of the Soviet Union. The Soviet Union was billed as “a pure democracy,” but it was just as restrictive as the czarist monarchy that preceded it in many ways. It was dominated by a single party, the Communist Party, which insisted that every Russian citizen pledge loyalty to it. Following the Dictator Joseph Stalin’s rise to power in 1924, the state took entire control of the economy, overseeing all industrial activities and constructing collective farms. It was also in charge of all aspects of political and social life. Those who spoke out against Stalin’s policies were either jailed and transported to gulags or executed. Stalin’s ruthless actions were criticised by Soviet authorities after his death in 1953, but the Communist Party remained in power. They concentrated on the Cold War with Western countries, in which they engaged in an expensive and deadly “arms race” with the US while using military force to suppress anticommunism and establish their hegemony in Eastern Europe.
Mikhail Gorbachev, a long-serving Communist Party official, was elected President of the Soviet Union in March 1985. He came into office with a stagnating economy and a political system that made reform nearly impossible. Gorbachev enacted two sets of policies in the hopes of making the USSR a more rich and productive country. Glasnost, or political openness, was the first of them. Glasnost removed remnants of Stalinist repression, such as book bans and the ever-present secret police, and granted Soviet citizens unprecedented freedoms. Political detainees have been released. Newspapers might publish government criticism. For the first time, elections were open to parties other than the Communist Party.
Perestroika, or economic restructuring, was the name given to the second series of reforms. Gorbachev believed that loosening the government’s control on the Soviet economy was the best way to resuscitate it. Individuals and cooperatives were allowed to own enterprises for the first time since the 1920s because he believed that private initiative would lead to innovation. Workers were given the freedom to strike in order to demand better pay and working conditions. Gorbachev was also a proponent of foreign investment in Soviet businesses.
These reforms, however, took a long time to produce fruit. The “command economy” that had kept the Soviet state afloat had been destroyed by Perestroika, but the market economy took time to evolve. Gorbachev’s initiatives seemed to have only one result: rationing, shortages, and long lines for scarce products. As a result, people became more dissatisfied with his government. Gorbachev believed that improving the Soviet economy necessitated improved relations with the rest of the world, particularly with the United States. Even as President Ronald Reagan dubbed the Soviet Union the “Evil Empire” and began a massive military build-up, Gorbachev declared that he would not participate in the weapons race. He declared that Soviet forces would be withdrawn from Afghanistan, where they had been fighting since 1979, and that the Soviet military presence in the Warsaw Pact countries of Eastern Europe would be decreased. This noninterventionist policy had significant consequences for the Soviet Union–for starters, it caused the Eastern European alliances to “crumble like a dry saltine cracker in just a few months,” as Gorbachev put it. The first revolution of 1989 occurred in Poland, where non-Communist trade unionists in the Solidarity movement negotiated with the Communist government for more liberal elections, which they won handily. As a result, nonviolent revolutions erupted across Eastern Europe. In November, the Berlin Wall came down, and in the same month, Czechoslovakia’s Communist government was overthrown by the “velvet revolution.”
This sense of possibilities rapidly spread throughout the Soviet Union. Frustration with the dismal economy, along with Gorbachev’s laissez-faire attitude toward Soviet satellites, sparked independence movements in republics on the periphery of the Soviet Union. The Baltic republics (Estonia, Lithuania, and Latvia) declared their independence from Moscow one by one. Concerned members of the Communist Party in the military and government placed Gorbachev under house arrest on August 18, 1991. The official explanation for his detention was that he was “unable to lead due to health issues,” but the public knew otherwise. The coup leaders announced a state of emergency. The military advanced on Moscow, but human chains and residents erected barricades to protect the Russian Parliament. Boris Yeltin, the then-chairman of parliament, rallied the masses by standing on top of one of the tanks. After three days, the coup failed. On December 8, a newly liberated Gorbachev proceeded to Minsk to meet with the presidents of the Republic of Belarus and Ukraine, signing a deal that separated the two republics from the Soviet Union and established the Commonwealth of Independent States. “The Soviet Union as a topic of international and geopolitical reality no longer exists,” the accord stated. After a summit in Alma-Ata, Kazakhstan, eight of the nine remaining republics declared their independence from the USSR a few weeks later. (Georgia became a member two years later.) Back in Moscow, Gorbachev’s star was fading, while Boris Yelstin, the man who had stood atop that tank in front of parliament, now controlled both parliament and the KGB. Gorbachev’s departure as president was unavoidable, and he stepped down on Christmas Day, 1991, declaring, “We’re now living in a new world.” The Cold War, the weapons race, and the country’s insane militarization, which have wrecked our economy, public attitudes, and morality, have all, come to an end.” The once-mighty Soviet Union had been demolished.
Democracies Failed attempt in Russia
Each of the liberal democratic canon’s features has been adopted in Russia, although in a strangely warped form. Its democracy reflected in a samovar, to quote Trotsky. Economic disintegration, rampant crime, the collapse of public morals, growing death rates, loss of international influence, and the continuation in power of most of the old communist-era elite have all accompanied its stumbling steps down the road to democracy. Western liberals generally blame these problems on Russia’s political culture or the personal traits of its leaders, rather than questioning the applicability and appropriateness of their own democratic model. Russia has failed democracy, not democracy that has failed Russia. In fact, limiting democracy to a collection of ideals and institutions using a checklist method is extremely foolish. Any consideration of politics is missing, including the struggle for resources and clashes of ideas among various social and political groupings. The premise is that once democratic norms and institutions are in place, political parties will arise to compete for votes, and sensible policies and effective governance would follow. Rather than a forum for policy resolution, democracy is considered as a source of political legitimacy. After all, according to the market democracy paradigm, the new Russian government had no choice but to liberalise the market. When you think about it, it’s a strange kind of democracy that starts by telling people they don’t have any other options.
The western nations need to learn the lesson that any political ideology is not forcibly induced upon a nation especially a country like Russia with a strong history of authoritarian regimes. Every nation has its own set of ways and rules to modernize its society and economy. For the most part, democracy in the USSR or Russia is not defined by what is contained in decent Western constitutions or university textbooks. It’s what happened once Communism fell apart in the country. Before 1991, democracy was regarded to be the best form of government. However, in Russia, elections were rigged, elderly people died hungry, tanks blew up the parliament, and colonial wars were launched. The Russians were all perplexed as to whether or not this was democracy. They looked to the West for guidance because western democratic governments were the ultimate source of guidance for them. However, due to differences in society’s upbringing and cultural norms, democracy could not flourish as much as it could in the West, and a more authoritarian regime was established.
The Fate of Ukraine: Can the West Stop Russia?
The options of financial containment are exhausting as Russia bristled through the last obstacle to its domination in the Luhansk province of Donbas. With the anticlimactic fall of the city of Lysychansk, Russian troops have turned to Kramatorsk and Slovyansk – the forefront cities in the neighboring Donetsk region. A heavy shower of artillery rocks both the cities as Russian forces (alongside the separatist fractions) are tilting toward drawn-out ground warfare to triumph over Ukraine’s southeast – cementing a formation extending down to Crimea, the former southern-Ukrainian territory annexed by Russia in 2014. The strategic victory over Donbas would compensate for the initial failure in central Ukraine and allow Russia to regroup to eventually pressure Kyiv into surrender. Despite visible attrition in Russian forces, intense missile strikes have resumed in Kyiv and Kharkiv while Ukrainian defensive forces are preparing to launch a counteroffensive to reclaim Kherson. The Western coalition is privy to this subtle shift in momentum – albeit reacting a little too late!
The G7 summit was a mockery of the supposed resolve the West wished to portray. Banning gold imports from Russia and debating on an oil price cap was the highlight of the meeting (looking past the crude retorts by soon to be the ex-prime minister of the UK). Admittedly, the embargo on gold exports would hurt the Russian economy. Russia holds approximately $100-140 billion in gold reserves – about 20% of the total holdings of its central bank. Budgetary estimates reveal that gold is Russia’s second-most profitable export commodity – secondary only to energy exports. The ban would significantly dent trade as almost 90% of the gold export revenue comes from the G7 economies. And while Russia would still be able to streamline gold to alternative economies in Asia, the embargo would effectively “[deny] access to about $19 billion of revenues a year,” said US Secretary of State Antony Blinken in his interview with CNN. Thus, the US is seemingly determined to tumble the Russian economy to cripple the Kremlin’s ambitions in Ukraine. The mantra is the same – cutoff maximum revenues to the point that Russia struggles to finance its war of attrition. Unfortunately, such strategies are not enough.
Placing an oil price cap on Russian supplies is trickier than banning gold imports. For starters, gold is not essential for economic and social survival and, frankly, not the basis of upheaval in many developed economies struggling with skyrocketing inflation. While gold exports cannot flow easily to alternate markets, Russia has been sufficiently successful in replacing Europe as the prime market for its crude supplies.
Six months since the invasion and revenues earned by Russia from oil exports are already up by more than 50%, according to a market report by the International Energy Agency (IEA). Since the invasion, Europe has relatively reduced its reliance on Russian oil while the US has absolutely banned crude imports from Russia. Still, India has procured roughly one-fifth of total Russian exports since the invasion – up from less than 1% pre-war quota. According to an exclusive Reuters report, Indian customs documents reveal that companies are rapidly replacing the US dollar to evade sanctions and purchase Russian energy supplies. In June alone, India imported roughly 44% of its 1.7 million tonnes of Russian coal via non-dollar settlements – either in yuan or the Hong Kong dollar. In July, that number increased over a fifth to a record high of 2.06 million tonnes.
Alternatively, China has been the core defiant force against Western pressure – despite not outright supporting Putin – terming sanctions against Russia as “illegal” and “Immoral”. China has also been a crucial economic lever for Russia – both symbolically and practically. According to the General Administration of Customs China, bilateral trade with Russia increased by 29% YoY during the first seven months this year. The most notably traded commodity is the Russian crude. Beijing imported roughly 55% more Russian oil in May compared to the same period last year, prodding Russia to replace Saudi Arabia as its biggest oil supplier. In combination, China and India have counterbalanced the revenue shortfall by $24 billion in energy imports from Russia – more than $13 billion in revenue compared to 2021. The US should now question: how exactly can a price cap work in this scenario?
According to official sources, the G7 coalition is considering placing a cap at $40-60 per barrel of Russian oil. However, the mechanism of implementation is still hazy. As of now, the ambitious plan to cap Russian oil revenues is still very much an ambition, without any concrete structure or broader consensus. On one hand, the G7 is considering to cap the oil revenues of Russia. On the other hand, the EU is easing payment restrictions for oil supply from Russian monopolies like Gazprom Neft and Rosneft. Many experts have questioned the viability of such a theoretical (and contradictory) policy. “The price cap policy would not put Russia under the immediate fiscal stress many expect,” said Mark Mozur, a market analyst at S&P Global Commodity Insights.
Failure to bring India and China on board would automatically tune the futility of the plan before it even gets launched. European insurance services provided to Russian oil cargoes could be replaced by Asian counterparts, assuming that the European companies would comply instead of overriding the cap to avoid a retaliatory cut back on oil supply from Russia. The recent slash in gas supplies through Nord Stream 1 (NS1) pipeline hints that Russia could potentially choke oil supply to Europe if a price cap is enacted. “As far as I understand, we won’t be supplying oil to those countries which would impose such price limits. And our oil (and oil products) will be redirected to the countries which are ready to cooperate with us,” said Elvira Nabiullina – Governor Russian Central Bank. According to the Russian Ministry of Finance, fossil fuel revenues have already surpassed last year’s budget projections. Thus, Russia is not short on finance for the remainder of this year. Yet a winter without Russian oil or gas would be a nightmare for a Europe already grappling with hyperinflation. Citing recent estimates by JP Morgan, if Russia resorts to retaliatory output cuts, the global oil prices could soar to around $380 per barrel. Hence, despite cutting export volumes, profits from oil sales would still flourish the Russian coffers. Ultimately, the superficial policy of a price cap could only spell doom – not just for Europe but for the entire global economy teetering on the cusp of a recession.
Mr. Richard Connolly – Director of the Eastern Advisory Group – perfectly sums my position: “For as long as the political will is there in the Kremlin and for as long as export prices remain high, I don’t see any immediate financial constraints confronting the Kremlin.” Thus, the desperate cartel-like strategies by the G7 economies only highlight the West’s constrained toolkit. Russia has successfully projected force in eastern Ukraine while simultaneously pressing intensely for Kyiv. The West, on the other hand, has focused on fortifying its own security instead of resolving the conflict in Ukraine. Ukrainian President Volodymyr Zelensky has repeatedly exuded optimism – refusing to cede the captured territory to Russia and hoping to negotiate from a position of strength. However, that position would almost certainly falter by 2023 when Western aid starts to dry up. “No one expects another $54 billion [in aid to Ukraine],” said Peter Baker, the Chief White House correspondent for The New York Times.
The truth is, while the NATO expansion might detain Putin from launching another invasion in Europe; it would not impede Russia from further dismantling Ukraine. Perhaps the Western bloc should pause and consider a few harsh realities. Firstly, the prospective expansion of NATO was the very catalyst that sparked the invasion in the first place. And secondly, an embargo on Russian commodities would not substantially damage the Kremlin unless Asia (predominantly India and China) supports the western consensus. And that support would certainly not be gained by pressuring India or evoking tensions over Taiwan with China.
The skewed western logic evades common sense sometimes. The West is cautious not to supply advanced weaponry to Kyiv; avoid tilting the war against Russia to the point of risking a nuclear retaliation from Putin. However, advancing Ukraine to retrieve captured territory in the south is somehow a safer strategy. It is unbelievably naive! And I believe the US already realizes this paradoxical reality yet continues to push forward – to save face and prolong the defeat of its pseudo-democratic rhetoric. Understandably, a push for diplomacy with Russia – though the ethical path to prevent further bloodshed – would be a swift political death to President Biden, as he prepares his bid for re-election in 2024. Therefore, we should be ready for two outcomes: a segregated Ukraine or mass destruction in Europe.
Ultimately, these sanctions and strategies, the NATO induction of Finland and Sweden, and the supposed candidacy of Ukraine to the EU have done nothing to derail Russia. Putin shows no sign of distress while political and economic attrition is gradually gaining a foothold in the US-led coalition. And expecting Putin to hang his gloves just because the West is exhibiting its renewed post-cold war cohesion is as fantastical as expecting a Ukrainian victory against Russia without detrimental consequences. Wishful at best!
The Moscow–Tehran Axis: Alliance without Rigid Obligations
Russia and Iran are finding ever more points of convergence in their foreign policies and across the domain of economic cooperation. It is no coincidence that a record number of high-level visits between the two countries have taken place this year, the most recent being Vladimir Putin’s visit to Tehran to take part in the Syria summit of the leaders of Russia, Turkey and Iran.
Fostering relations with Iran, along with the continued functioning of the Astana Process, demonstrate Moscow’s increasing use of pragmatism in its foreign policy: any non-Western power is a welcomed partner, even if there are contradictions and inconsistencies in its relations with Russia.
Biden in the Background
The Astana summit and Putin’s visit to Tehran came immediately after U.S. President Joe Biden’s tour of the Middle East. Despite numerous commentators suggesting that the Russian leader’s visit to Iran was a “response” to the initiative of the American president, there is no real substance to this argument. What Biden’s trip does do is place the trilateral meeting in the Iranian capital into a wider context.
The Middle East is one of those regions where the presence of the United States and Russia matters, although the dynamics of their engagement are diametrically opposed to one another. While Washington is gradually pulling out of the region that holds less and less allure for the White House, Moscow is doing exact the opposite, being increasingly pulled into the processes unfolding in the Middle East.
The basic approaches of the two sides differ as well. The United States has become accustomed to finding allies in the region so that they can become conductors of its policy, while at the same time looking for key troublemakers that it can try to contain and isolate. Russia, on the other hand, does not have friends or enemies in the region. Over the past decade, Moscow has been trying to act as a universal mediator, maintaining relations with all the key forces in the Middle East.
Against the backdrop of the events in Ukraine, the United States has set about trying to turn Russia into an international pariah. Moscow sees the Middle East as a possible route to circumventing the sanctions, even if partially, so it is only logical that Washington would seek to isolate Russia in the region. This is proving somewhat difficult, however, even with its impressive list of allied states and the lukewarm reaction of Middle Eastern countries to Russia’s special military operation in Ukraine. For one thing, no one in the Middle East wants to be faced with a choice between Moscow and Washington. In the Middle East, Russia remains a player to be reckoned with, and its interests coincide with those of almost all the countries in the region—including Washington’s partners—on a whole range of issues.
Take Turkey, for example, a NATO member who has serious disagreements with Russia over Syria, Libya and the South Caucasus. Worse still, Ankara has openly criticized Moscow’s actions in Ukraine, lending active support to Kiev by supplying hi-tech weapons. At the same time, Turkey, much as Russia, does not hide its annoyance at the U.S.-established order in the regions adjacent to its territory, notably the Middle East and the Eastern Mediterranean. Let’s not forget Russia–Iran trade relations as trade turnover between the two amounted to some $33 billion in 2021 and the bilateral trade is expected to reach even greater heights by year-end 2022. Given this, Ankara will clearly want to continue dialogue with Moscow, both with regard to Syria and on other issues.
A somewhat similar situation has been the case for the Arab countries in the Persian Gulf. Not a single one of these has joined the Western sanctions against Russia, and the United Arab Emirates is turning into something of a hub for Russian capital. Saudi Crown Prince Mohammed bin Salman has made it clear that his country places its agreements with OPEC+, where Russia is a key player, above U.S. interests, and Joe Biden’s visit did nothing to change this.
Outside the Persian Gulf, President of Egypt Abdel Fattah El-Sisi has also refused to pursue a policy to isolate Moscow. Cairo has been one of the biggest importers of Russian weapons in recent years. And, like the United Arab Emirates, the country is also cooperating with Russia on Libya. Finally, there is another important U.S. partner, namely, Israel. Despite some friction with Moscow, Tel Aviv is still willing to cooperate with Russia to sustain its policy of containing the Iranian threat in Syria. In other words, all these players have more than enough reason to turn their backs on the binary approach that Washington imposes on them, where they are forced to choose between the United States and Russia.
The Astana Model
It would be quite a mistake to dub Joe Biden’s tour of the Middle East a complete failure. He got some wins here and there, such as the Saudi decision to open flights to and from Israel. Besides, it is unlikely that the U.S. was harboring any real hopes to reverse the regional alignment, including the attitudes towards Russia, all in a single trip. What is telling here is the situation as such. The events in Ukraine were indeed a turning point in relations between Moscow and the West—however, the Middle East did not undergo any major changes until February 24, 2022, and later.
Today, the situation in the region is much different to the Cold War-style polarization that analysts bring up so frequently. The Middle East of 2022 is a complex combination of multi-vector approaches of various countries. All this is not so much a reflection of Washington’s weakness as it is an illustration of the fact that Russia continues to be an important and legitimate player for Egypt, Turkey, Saudi Arabia, Israel and the United Arab Emirates, and this is unlikely to change any time soon.
It is this difficult political climate that gave rise to the Astana format, a platform where the parties with different approaches—and even waging a proxy war against each other—can come to the negotiating table as partners who resolve issues. True, this format may only have worked in relation to the Syrian dossier in years gone by, but the most recent summit took the paradoxical relations between the countries to a new level. Turkish drones carry out targeted attacks on the Russian Army, which in turn shoots them down. But this did not prevent Vladimir Putin and Recep Tayyip Erdogan from sitting at the same table and having a constructive conversation at the meeting in Tehran. Moreover, one of the main topics on the summit’s side-lines did not even have anything to do with the region, and that was finding a solution to the issue of exporting grain through the Black Sea.
This has nothing to do with banal hypocrisy on the part of sides with opposing interests. The participants in the Astana summit were not hiding behind smiles, sticking their middle finger up at each other from inside their pockets… no, they held a constructive dialogue. The grain issue was eventually resolved thanks to the negotiations between Turkey and Russia, and the summit in Tehran was largely responsible for getting the two together in the first place.
The Astana summit is swiftly turning into a model that reflects the basic principles of Russia’s foreign policy. What this model essentially boils down to is political realism in its purest form, where everyone is invited to cooperate, regardless of accumulated problems and disagreements, assuming the sides have overlapping interests.
And the invitation has effectively been extended to the West: despite the proxy conflict waged between Europe and Russia on the Ukrainian soil and despite the economic war in the form of sanctions, Moscow is nevertheless prepared to sell oil and gas to Europe. “Gazprom has always fulfilled and will continue to fulfil its obligations in full. If that’s what European countries want, of course, as they are the ones closing the pipes,” Vladimir Putin noted calmly at a press conference following the Tehran summit.
At the same time, the Astana format stands at odds with the traditional integration models of the West, which believes similar values to be a prerequisite for alliances. Certainly, the Americans do not always follow this approach. Still, even those relationships where common values typically play little if any role—such as that between the United States and Saudi Arabia—become bogged down by human rights issues (in this case, Biden’s condemnation of the murder of journalist Jamal Khashoggi). In the present situation, we see that the Astana model of radical realism allows Russia, in such a difficult situation, to pursue dialogue with all players in the Middle East, while the United States is facing problems talking to its traditional allies.
With the relations with the West collapsed owing to the Ukraine crisis, Russia’s policy towards Iran is increasingly perceived as a policy case that could be heading in a promising direction. Putin’s trip to Iran did not bring any significant breakthroughs, although news reports about the summit and events surrounding it were overwhelmingly positive. One newsworthy item, for example, was the launch of the rial/rouble pair on the Tehran Currency exchange on the day of the summit, while another was a memorandum signed between National Iranian Oil Company (NIOC) and Gazprom to involve investments of approximately $40 billion into Iran’s oil sector.
Some important news came out shortly after the Russian President’s visit, such as the decision to increase the number of flights between Russia and Iran up to 35 per week, or the announcement that an agreement on the supply of aircraft parts and maintenance work was being drawn up, or plans to earmark $1.5 billion for the development of railway projects in Iran.
It must be noted here that there is no guarantee that all these initiatives will be successful in the end. For one, timelines have not been set out for most of the projects, and not all of them will even reach the stage of implementation. And those that do—for example, the supply of aircraft parts—will concern a limited set of products. The Iranian aviation industry has been in a rut for a number of years now, thanks to the sanctions. They have learned to make certain things on their own, sure, but most parts are either imported through third countries or stripped from old planes that no longer fly.
Despite all this, some projects might turn out to be rather successful. The number of areas where cooperation between the two countries is possible is clearly expanding, and this is thanks to the sudden spike in interest on the Russian side in Iran. In addition to this, traditional pockets of cooperation are getting a new push. For example, the export of Russian agricultural products against the backdrop of the global food problem is fast becoming a key element of Iran’s food security. And the North–South Transport Corridor, which has been operating in test mode for the past few years, could very well become the main export route for Russian products.
A certain rapport can also be witnessed in the domain of foreign policy. Iran’s reaction to the events in Ukraine was more positive than that of the other Middle Eastern states. During his meeting with Vladimir Putin in Tehran, the Supreme Leader of Iran, Ali Khamenei, stressed that NATO would have started a war with Russia on the pretext of Crimea if it had not been stopped in Ukraine. Certain changes can also be seen in Syria, where Russia’s responses to the actions of Israel are becoming increasingly harsh. Finally, the hallmark of the trilateral summit in the Iranian capital was the attempt of Tehran and Moscow to convince Ankara to abandon its military operations in Syria.
Be that as it may, there is no way the alignment between Russia and Iran would turn into a full-fledged alliance. The main reason why this will never happen is because of Russia’s image in Iran, which is riddled with negative historical connotations. Distrust of Tehran and a poor understanding of its policies can be found among the Russian elite as well. Besides, the sides disagree quite strongly on a number of issues, including their respective policies in the Middle East and how to resolve the territorial disputes over the Caspian Sea.
Also keep in mind that Russia and Iran are competitors in the energy market. The agreement with Gazprom largely stems from Russian efforts to gain leverage over the Iranian oil and gas industry. Exactly how much leeway the Iranian side will give to Russian companies remains to be seen.
However, paradoxical as it may sound, the bunch of contradictions that has accumulated in Russia–Iran relations does not stand in the way of rapprochement between the two countries. Russia is realistic in its approach, and this makes it possible to focus on areas of common interest, even when there are far more problems in bilateral relations, for example in Moscow’s relations with Ankara. At the same time, both Moscow and Tehran are extremely interested in an alternative to the West-dominated economic order. Neither country can do this alone, but these two “political outcasts” countries are better suited to the task than anyone else.
Here, positive developments were reflected in the conclusion of a long-term strategic agreement between Russia and Iran similar to the documents that Tehran signed with China and Venezuela. Judging by what Russian officials said, the project will be finalized quite soon. Importantly, the agreement will take the form of a memorandum—a formal confirmation that the intentions do not impose any direct obligations on the two countries. The “Russia–Iran axis” will continue to move in more or less the same direction. Relations between the two countries may well expand and deepen with each passing year to never-before-seen levels, but the sides harbor no intention of taking any unwanted obligations, including becoming allies.
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