Russia in the World


Our expert Nikolai Tagarov reacts to Russia In the World, one of the sessions presented at the World Economic Forum.


Panel Discussion

Nikolai Tagarov EXPERT

As I watched the WEF panel discussion entitled “Russia in the world” – focused as it was on immediate trends for Russia’s economy in 2017, such as expectations for relaxing sanctions and consequent opening up, I wondered about the country’s longer-term path and deeper socio-economic realities.

For a range of cultural, historical and geographical reasons Russia has often seen itself in opposition to the predominant world economic order. Russia has thus often stood beyond, or literally geographically above the world, and never fully or comfortably “in” the world. While criticizing the USA for its view of itself as “special”, Russia has also entertained a self-righteous view of itself as the Third Rome. And it has meddled in the affairs of other nations no less. One needs only review a recent joint study by CSIS and CSD (a think tank I used to work) entitled “The Kremlin Playbook” for a range of recent examples.

When I talk about “Russia” I have in mind the predominant perceptions of the general Russian public (to the extent that I can gauge those accurately) and a range of experts that have voiced those views. One thing to note is that Russian society is clearly becoming more and more left-leaning, longing for a return to a Soviet-like and Great Power status in a future Eurasian Union.

Experts such as Glazyev, Hazin or Delyagin who have recently become immensely popular have argued exactly that Russia should seek integration in a protectionist, self-sufficient Eurasian Union with a more or less planned, Stalinist type economy; there is a prevailing opinion (not unfounded) among such experts that the Russian Federation is not large enough to be self-sufficient (not so much in territory as in terms of population). Yet Gazyev also argues that competitiveness should be enhanced and there should be limited engagement with the rest of the world. Yet other experts argue that Russia can never be competitive due to inherently excessive manufacturing expenses given its harsh climate (Parshev) or that its very cultural and even religious heritage is in contradiction to the practice of competitive capitalism but instead has tended to favor cooperation and collaboration even prior to Communist times (Katasonov).

In the event that the Eurasian Union is recreated at some point and these neo-Stalinist visions eventually prevail, the lack of a culture of competitiveness is going to present major challenges. Whereas Russia does like meddling in the near abroad, within the space of its own “empire”, whether termed Russia, USSR or Eurasian Union, in all fairness, despite some notable exception its economic practice has been not to exploit the periphery but to support it via massive transfers of wealth from the center in an effort to buy the periphery’s alliance and ensure its geopolitically motivated integration.

If that happens, given the culturally and geographically based lack of competitiveness with respect to the wider world, Russia may experience a sort of cycle of recurring expansion and contraction in its efforts to rebuild its empires. Let us not forget why the Soviet Union really collapsed. No outside force caused it to disintegrate. It is only later that the Russians started blaming America for “destroying their great country”. Yet the truth is that while the West naturally sought to weaken the USSR, it never sought its annihilation. In reality, President George H. W. Bush urged the leaders of the Soviet republics to maintain unity in order not to endanger global stability. Instead, it was the Russian center itself – or Russian people – who, given the lack of overall efficiency of the Soviet economy, bitterly resented the transfers of resources from the Russian Federation to the rest of the Soviet Republics. It was the Russian people themselves who elected Yeltsin on the promise that Russia would become prosperous by ceasing to support the rest of the USSR.

One might counter that these are hypothetical scenarios, while the hard reality on the ground is that Russia is ruled by an alliance of liberals on the one hand, and “siloviki” on the other. Yet another common theme in Russian history has been that the ruling class has often been kept in check by another "coalition" – namely, the alliance of Emperor and the common people. And while Mr Putin’s attitudes are often carefully concealed, public perceptions are easier to detect and describe. The latter may indeed influence and embolden Russia's President to act in unexpectedly radical ways. Given the recent global wave of populism and protectionism, one wonders whether Russia might join the bandwagon.