Caught up in its worst economic crisis since the break-up of the Soviet Union, Russia has emerged as a key player in world geopolitics.
Just when France has invited Vladimir Putin to Paris in October to inaugurate the Orthodox cathedral on quai Branly, thus breaking the freeze in diplomatic relations between democracies and Moscow that dates from the annexation of Crimea, the new Russia is appearing more than ever to be a double-headed eagle. On the one side is a wrecked economy and society; on the other is a spectacular strategic and diplomatic renaissance, confounding the forecasts of those who claimed to be able to reduce Russia to the level of a regional power.
Putin has built up his power base on three pillars: restoring state authority; contesting the order of the post-Cold War world dominated by the United States; and putting the economy back on its feet, carried along by the raw materials super-cycle, which has meant higher purchasing power and the emergence of a middle class of some 90 million people. The first pillar is crumbling from the pressure of corruption and the third from the shock of recession.
Russia is undergoing its most violent crisis since the break-up of the Soviet Union. Economic activity regressed by 3.7% in 2015 and will decrease by at least 3.5% in 2016. Capital is leaving the country faster and faster, as the rouble makes a spiral descent. Salaries are being cut by 10% a year. Unemployment has shot up. The people are being badly affected by the consequences. Life expectancy, which had progressed from 59 to 66 years since 2000, is going down again. The middle class has been reduced to 20% of the population. More than 19 million Russians are living on the poverty line. There is far more inequality.
The bankruptcy of the Russian economy is being accelerated by the oil aftershock and international sanctions. The failure of the Doha summit on 17th April – because the Saudi Arabians refused to accept a freeze on production if Iran was not similarly bound – has been a major reversal for Moscow. It confirms that the rebalancing of the hydrocarbon market will take time. But the deep-rooted causes of the decline of the Russian economy are internal. Development is dependent on raw materials alone. Talent and brains are going into exile, just like capital. The banks have been bled dry. Investment and innovation continue to be blocked, causing high-value-added exports to drop off, with the exception of armaments. Turning towards Asia is still a dead end, blocked by China and its economy that is 12 times greater than the Russian one.
But in Russia the state gains nourishment and strength from the hardships of the Russian people. Alongside the economic nightmare, a diplomatic and strategic revival is taking place. In two years, the new Russia has wrecked the order of post-Cold War Europe, has made an impressive show of force by intervening in Syria then in Nagorno-Karabakh, and has taken its seat once again in the front row of the diplomatic scene by wiping out its banishment from the international community following the annexation of Crimea and the dismembering of Ukraine.
On the military side, Russia has given proof of its capabilities, notably in conducting hybrid wars, after modernizing its forces following the pitiful expedition into Georgia. Rearmament has meant that the defense budget has increased from 70 to 92 billion since 2011, reaching 4% of GDP. Modernization includes downsizing, professionalization, renovation of equipment (the Soukhoï T50 stealth fighter, the T14 heavy tank, a fleet of 45 attack submarines), and giving priority to reactivity and forecasting. On the strategic side, Russian intervention has shown itself to be more effective that that of the Western coalition – a reminder that taking good aim is fine but hitting hard is better. This has brought about a new Cold War climate, highly unsettling for Europeans with the increasing number of air and sea operations on the borders of the continent. On the political side, Putin has saved Bashar al-Assad’s regime by placing it under Russian control. On the diplomatic side, Russia has established itself as a key player in Europe and in the Middle East.
Putin’s breakthrough since 2014 must not be underestimated. It remains fragile because a State that cannibalizes the economy, society and its citizens will meet its downfall in the long run. However, it is a reminder that power politics and hard power are still effective in the 21st century. And it is no good concealing the strategic risk that comes from the awakening of imperialism in the name of prioritizing the eradication of Islamic State. Even more so as it is accompanied by the promotion of an alternative regime to that of free nations, démocrature [a combination of democracy and dictatorship], and plans to radically revise the post-Cold War world order.
(Published in Le Figaro, 25th April 2016)