Ruminations on International Politics and Bilateral Relations between the United States and Russia: A Window of Opportunity?
Although the United States is still very powerful, and arguably remains the most powerful state across any number of issues areas, American preponderance has diminished significantly under the watch of the previous administration. In the military sphere, the tragic war in Iraq and critical difficulties in the Afghanistan campaign are historic factors whose drain on America's resources and on American's will to exercise power should not be overlooked. Oddly, all this has suddenly taken a momentary back seat as a result of the present global financial and economic crises whose material and psychological effects are comparable to a massive tsunami. For the first time since the end of the Cold War, the United States appears to understand that with respect to almost all its strategic priorities, it critically needs the support of other states. It is this circumstance that allows us to speak very tentatively of a new period of multi-polarity in which the Russian Federation will unquestionably be an important actor.
Very broadly speaking, this is the global context that provides the backdrop for the upcoming first meeting between the new American president and President Medvedev. Thus, we may legitimately ask what the agenda might look like at the April G20 summit. However, the prism through which America sees policy action is historically inherited. More specifically, although the U.S. is interested in cooperation with Russia and wants to “reset” bilateral relations, this does not mean that it views Russia as an important partner in all issue areas. Because I believe that Washington's present worldview does not encompass meaningful cooperation with Russia to remedy the economic crisis, it is in fact necessary to ask two questions: what might we expect of the agenda at the G20 meeting and also what will be the agenda concerning Russian-American relations in general for Obama's first meeting with Medvedev? Although these two events will happen nearly at the same time and in the same place, they need to be considered separately.
The agenda of the G20 will be focused exclusively on the international economic crisis and most likely the U.S. position will not be a radical departure from the past. My sense is that the goal will be to outline framework principles to address the inadequacies of the international financial system, speak out against protectionism and promote free trade, although hopefully in a more socially embedded way, and start a process to deal with these issues. In this sense, the G20 summit can be considered something like a neo-Bretton Woods.
Ultimately, the immediate financial problems - healing lending institutions and getting credit back into productive sectors to restart growth, create employment, and generate consumption - will be addressed primarily at the national level. Current international institutions - the G7, IMF, and World Bank to name the most important – will also play a prominent, albeit secondary role. However, it should be recognized that the G7 countries do not necessarily see Russia as being able and/or willing to make a significant contribution in this area, particularly in a way that promotes their interests. If anything, Russia's granting credits or trying to shape the international financial system is considered mercantilist and threatening.
However, there is room for Russia - which has been bailing out troubled economies and very recently created a credit institution with Kazakhstan for EurAsEc - to make a productive contribution. The Obama administration's policy on Russia has not fully gelled yet. It is still too early, they have been pre-occupied by other issues, and there are likely differences of opinion within Obama's team and the Washington bureaucracies. This has all the contours of what political scientists call a "window of opportunity". A window of opportunity by definition is that which ushers in something different from the past. One area where innovation might occur is cognitive: the creation of new linkages between previously separate issues. One such linkage might be energy security and financial security.
The overlap of energy and finance is not obvious to U.S. policy makers because the United States' posture with respect to international energy markets is somewhat unique. America is a net importer of energy, yet it does not completely feel this burden financially because it has the historical advantage of participating in the international energy trade using its own currency. Moreover, the conventional thinking among most American elites is that Russian energy is dangerous. However, with original thinking, creative diplomacy, and political will, a source of friction might become an area of cooperation. Perhaps I am naively optimistic, but Ukraine might be the first of a number of ambitious candidates for an unexpected turnaround.
Ukraine is in very serious trouble financially. It is having difficulty making its hard currency gas payments to Russia, and is hoping to get bailed out by international financial institutions. Another transit crisis ("gas war") is not inconceivable. This might be an opportunity to address this issue by restarting the international pipeline consortium process in Ukraine with Russian, European, American, and Ukrainian participation.
Prime Minister Timoschenko appears to be committed to the current "market price" bargain with Gazprom, however her budget resources are very constrained. Europe and Russia both dread the possibility of another crisis. The United States stands to gain economically and also re-engage Russia over the thorny Ukraine question in a productive way. In exchange for immediate credit, donors could acquire a share in the consortium, although Ukraine would have to retain a significant stake as well. Perhaps this could be the origin of a financial institution in which Russia meaningfully cooperates with other states over the long term.
In the longer term, I think that U.S. and Russian interests overlap with respect to numerous international financial issues. One such issue is better monitoring and control of financial flows. President Medvedev spoke about this a few weeks ago in an interview about the crisis and the United States has been especially committed to this as part of its “war on terror” after September 11. Both countries also have an interest in more tightly and sensibly regulated (in terms of legal instruments but also supervision) investment practices.
Another issue is the independence of credit rating agencies. Prime Minister Putin spoke about this recently and U.S. policy makers are also concerned about the breakdown in the barriers that keep raters, businesses, and the financial media from colluding at the expense of investors. Perhaps credit agencies could be international and run on a non-commercial basis. Finally, the whole world it seems has an interest in a more “socially oriented” economic system. President Obama spoke about this when he discussed labor and environmental standards in NAFTA and in the world trade system more broadly during the democratic primaries and general election campaign last year. President Medvedev and Prime Minister Putin have also discussed this problem on numerous occasions.
When I was living in Japan during 1996-8, the United States Federal Reserve Bank and the Japanese Central Bank conducted joint foreign exchange operations to prop up the Japanese yen. Would it not be fortuitous for the U.S. and Russia to collaborate in managing their currencies as well? Unfortunately, the Japan example is not apt, because the U.S. and Japan are major trading partners and the U.S. does not want the yen to fall too much since this exacerbates the bilateral trade deficit which is always a serious concern. Russia does not have this kind of economic relationship with the United States.
However, it might be possible to create a new international mechanism for dealing with currency crises due to speculative pressures. Perhaps states could create some kind of joint public insurance institution where countries pay a premium to an organization that has a board where states work in concert to help when countries are experiencing pressure on their currency. With enough money, it might be possible to have gradual devaluations and/or punish speculators. This kind of insurance fund which could simultaneously participate in regulating financial practices could become part of a revamped international financial architecture.
As far as the agenda for the broader, long term Russian-American relationship which will be broached separately on the sidelines of the G20, this might be an opportunity for Moscow to express the wish to expand the range of issues on which it cooperates with Washington. After the economic crisis, Obama's immediate international priorities appear to be Afghanistan, Iran, Iraq, and terrorism. Russia will be an indispensable partner for dealing with all of these issues. However, although the United States and Russia definitely need to work together on these specific questions, as well as on other conventional bilateral questions such as arms limitations and non-proliferation, they should strive to work together in ways that do not simply replicate what has already been done in the past.
The United States already appears to be sending signals that it would like to link the two questions of anti-ballistic missile defense (ABM) in Europe and nuclear proliferation in Iran. Specifically, the U.S. might be willing to scrap the ABM project in Eastern Europe in exchange for serious Russian support with respect to Iran in the U.N. Security Council and also in its arms trade. This seems like a reasonable quid-pro-quo from the American perspective. However, the two states might be able to go even further: maybe this is an opportunity to bring up again the prospect of a joint ABM venture in Azerbaijan.
Regarding Afghanistan, both sides have so far limited themselves to vague declarations about mutual interest and cooperation. The U.S. is concerned about the base closure in Kyrgyzstan and believes that Russia is partly involved. This might be the moment to intensify Russia-NATO cooperation and take them to a more serious level of commitment. Perhaps it is possible for Russia and NATO to share a base in Kyrgyzstan and conduct some joint operations together.
However, this is also an opportunity to contemplate work on new issues: increasing mutual trade and investment, reducing volatility in energy markets, environmental problems, alternative energy technology, more advanced conventional energy technology, and general science/high tech cooperation. It might be possible to break the deadlock and finalize Russia's WTO entry, abrogate the Jackson-Vanik amendment concerning Russia, and promote specific economic projects in Russia, the United States, and abroad. With political will, I think both sides can realize that they have a mutual interest in closer economic cooperation both because of the immediate benefits and the longer term political dividends that close economic relations might bring.
The latest rumors and press leaks suggest that a Putin-Biden commission is in the works. Certainly the U.S. is very interested in direct, high level contacts with Russia. This is not surprising since under former President Bill Clinton there was the Gore-Chernomyrdin commission. It seems that Russia would also have such an interest, and so only the actual formula of participants seems to remain undecided. Any number of combinations would work. The key is that both figures in the dialogue would have to have direct access to high level agenda setting and decision making, and be able to sway domestic interests.
If the particular combination of Putin-Biden does not happen, on the U.S. side I think Senator John Kerry would be a great figure. He is extremely intelligent, very experienced, and an influential Democratic Senator: he was a former candidate for President and is currently the chairman of the Senate Foreign Relations Committee. The latter is a key position since it is the Senate that would have to approve a permanent waiver of the Jackson-Vanik amendment for Russia, and in general, the Senate has significant influence over American foreign policy. His/her counterpart might be an equally influential top adviser to President Medvedev. The advantage of such a commission is of course that they might be able to circumvent the traditional bureaucracies which are cumbersome and tend to be less amenable to new ideas.
Finally, a note of caution: this brief essay was written from the perspective of someone who wishes to see genuinely cooperative relations between the United States and Russia. At the same time, I acknowledge that on both sides, not everyone shares these goals. A successful breakthrough with Russia, and particularly regarding the key issues of Afghanistan and Iran would be a tremendous accomplishment for the new American administration. Domestic audiences would take note, and this would help both President Obama and influence the conventional wisdom about Russia. Failure would also raise eyebrows quickly, reinforce old stereotypes, and compel the new president to change course. “Windows of opportunity” are not open forever. They generate high hopes and wishful thinking, but should a gust of cold air blow in, they are quickly shut. They are ephemeral and once they are over, old structures tend to reassert themselves. For a Russian audience that experienced the collapse of the Soviet Union, this is probably self-evident.
The road ahead is arduous. Any progress will involve serious bargaining and the process promises to be challenging because of the urgency of the problems that we face and the general novelty and difficulty of the situation. It is my sincere wish that on both sides our politicians will find the courage, wisdom, and political skills to come to mutually satisfying arrangements.
Boris Barkanov
Fulbright Hays Doctoral Dissertation Research Scholar 2008-9
Department of Political Science
University of California, Berkeley