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Spies and Sanctions: Russia's Foreign Policy Future

21 Mar 2018
By Dr Kirill Nourzhanov

Vladimir Putin’s resounding victory in the Russian presidential elections on 18 March has been overshadowed by the recent diplomatic fracas with the UK. However, the scandal is unlikely to affect Putin’s new foreign policy objectives.

The nerve agent attack on former Russian spy Sergei Skripal in the UK has dominated the recent political and expert debate on Moscow’s approach to international relations. For Britain and many of its NATO allies the attack signified what NATO Secretary General Jens Stoltenberg called  “reckless and unlawful behaviour by the Russian state”: a gruesome culmination of the pattern of destabilising the West, which also included election meddling, warfare in Georgia and Ukraine and military involvement in Syria. Russian officials strenuously denied any involvement and called the UK’s response a “mean and cynical” provocation against their country designed perhaps to “restore London’s position as a key global player”.

However, the vitriol and sensationalism surrounding the Skripal incident may have overshadowed another event that is crucial for understanding Moscow’s evolving foreign policy objectives: the Russian presidential election on 18 March. Vladimir Putin’s convincing victory in the free but not genuinely competitive presidential election provides him with a clear mandate to set Russia’s course over the next six years. Putin’s electoral platform had a strong focus on domestic policy and it is his intention to deliver game-changing transformations by 2024 that, in turn, will determine the contours of Moscow’s foreign policy.

In a departure from the previous campaign in 2012, which had conservative statist overtones, Putin promised to lead Russians to better lives and prosperity through technological development, investment in human capital and greater entrepreneurial freedom and competition. The liberal turn in Putin’s agenda at home follows the strategic vision of his former Finance Minister, Alexei Kudrin. Some of Kudrin’s ideas about slashing military spending and increasing budgetary outlays for social and infrastructure programs are already being implemented. Even if predictions about Kudrin’s return to the cabinet after Putin’s inauguration in May this year prove incorrect, it is clear that meaningful reforms must be put in place in the immediate future. Opinion polls show that the patriotic euphoria associated with the absorption of Crimea in 2014 has run its course and Russians will once again judge the government’s performance primarily through the lens of rapid and sustainable economic growth.

Securing favourable external conditions for economic modernisation will shape the Kremlin’s foreign policy. The consensus among the Russian political elite is that the US will stick to its adversarial stance and effectively maintain its economic blockade for five or even 10 more years. Under such circumstances, preventing further escalation and open confrontation with Washington while maintaining strategic nuclear parity and safeguarding the country’s sovereignty and national interests will constitute the leitmotif of Moscow’s American policy.

On the eve of the election, Putin reassured his compatriots that he would not be drawn into a new bout of the expensive arms race with the US and that the reduction in defence spending would not be detrimental to national security as the program of rearmament had been successfully completed. He argued that Moscow was ready for constructive dialogue with Washington on issues such as “terrorism, environmental problems, weapons of mass destruction, crises around the world, including in the Middle East, the North Korean problem”. However, he added that toxic internal politicking in the US precluded any positive engagement for the time being. Russia will be looking elsewhere in the meantime.

The Kremlin views ‘old Europe’, particularly Germany, as a source of investment and know-how for building a modern economy. German-Russian trade has expanded significantly in recent months despite the EU sanctions regime. The imminent completion of the Nord Stream 2 gas pipeline between the two countries will be of particular benefit to Moscow. Despite strenuous US opposition Germany has refused to reconsider its stance on the pipeline. Furthermore, it has resisted pressure from other NATO countries to abandon Nord Stream 2  in the wake of the nerve agent attack on former Russian spy Sergei Skripal in the UK, claiming that the pipeline project is “commercial and economic” rather than geopolitical. Berlin’s commitment to the partnership, however difficult, is good news for Putin. It will undoubtedly serve as a model for building relations with France, Italy and other European nations not afflicted by Russophobia.

At his first press conference after the election, Putin referred to China as Russia’s strategic partner and praised the “extraordinarily high” level of bilateral relations. The sentiment is reciprocated by Beijing, where this strategic partnership is regarded as being “as unshakable as a mountain”. Nurturing cooperation with China in the economic, political and military spheres will be the hallmark of Moscow’s diplomacy in the next six years. China is set to replace the EU as Russia’s main trading partner in the next two years. The diminishing asymmetry of the Sino-Russian alignment will be particularly worrying for Putin’s detractors in the West.

Relations with Canberra will not register prominently on the Kremlin’s radar in the coming years. Julie Bishop’s refusal to recognise Russia as a military threat notwithstanding, the Kremlin views Australia as part of the containment line erected by the US and its allies. Australia’s acrimonious response to the Skripal affair has reinforced Moscow’s conviction that Australia is incapable of critical reflection upon and readjustment of its sanctions policy. In this sense New Zealand holds much more promise as a partner for mutually beneficial ties potentially incorporating a free trade agreement.

The current foreign policy environment is not ideal for the implementation of economic reforms in Russia but neither is it hopeless. Western sanctions have by and large failed to weaken the Putin administration or effect a behavioural change in its ranks.  Half as many Russians are concerned today than in 2014 about the attempts by the US and its allies to isolate and punish their country. The Russian governing elite is confident that time is on its side; it merely needs to survive and hold out for a few more years while the US hegemonic rage peters out. Moscow will not budge on its core security interests in the former Soviet Union and Syria but will try to avoid fresh geopolitical entanglements elsewhere. Alongside an alliance with China and selective pragmatic engagement with Germany and other countries, this may give Putin sufficient breathing space to concentrate on his promised domestic reforms during his fourth term as president.

Dr Kirill Nourzhanov is a senior lecturer at the Centre for Arab and Islamic Studies at the Australian National University (ANU). He has an MA from Moscow State University and a PhD from ANU.

This article is published under a Creative Commons Licence and may be republished with attribution.