© REUTERS/Thomas Peter

In 1989, the global economy changed even more profoundly than global politics. While political rivalry actually never disappeared entirely, and nations like Russia never became liberal democracies, the “End of Economic History” could indeed be recorded, quite in the sense of Francis Fukuyama’s famous article.

1989 was not only the year that saw the Central European nations revolt against Communism, it was also the year that Japan suffered its biggest ever financial debacle, and the Soviet Union started its economic decline. Both developments deprived the world of two economic powerhouses. Scenarios of Japan becoming the world’s number one economy were quickly forgotten and gave way to the idea that the US would enter the era of “unlimited wealth,” as US economist Paul Pilzer wrote.

The major difference between the “post-historical” global economy that emerged in the 1990s and the traditional industrial economy of the 19th and 20th centuries was a new type of cooperation between major economic areas. Previously nations that tried to “catch up” actually used the same technologies as the others, but in a more effective way; this very fact explains why their economic rivalry only reinforced the political one. The fight for markets excluded compromises simply because it was a pure “zero-sum” game.

The post-industrial revolution of the 1970s and the 1980s changed all this. In the new globalized world, the US became the front runner in producing computers and semiconductors, in creating the operational systems these computers used, and in making the most effective economic use of new technologies. When selling software, the US and other Western powers didn’t sell the knowledge embodied in the original programs; they just sold copies, which could be reproduced in any quantity at zero cost. At the same time, the newly emerged economies in Asia used US technologies to create sophisticated hardware, producing these goods in increasing amounts.

This new configuration was perfectly “post-historical” in Francis Fukuyama’s sense. Both parts of the world’s economy became dependent on each other, and in this new order, there were no reasons for economic wars and quarrels. The United States was an absolute economic superpower. By 1992 it produced 26 percent of world’s gross product, according to IMF data, and controlled around half of the patents in force. But the economic policy it pursued vis-à-vis all potential rivals was super-friendly and extremely decent.

Benevolent Superpower

The US supported the economic reforms in Russia in the early 1990s; it bailed out Mexico from its debt crisis in 1994; it refrained from introducing any restrictions on cheap Asian imports after the 1997-98 financial crisis; and it advocated the accession of China to the WTO on conditions designed for a mid-sized developing economy rather than for a rising industrial powerhouse. During these decades, the peripheral economies grew fast, increasing the demand for US technologies and software, and supplying Western nations with affordable industrial goods, thus improving the quality of life in the global North. To my mind, this perfect interdependence was the essence of globalization. The globalized world was indeed a “post-historical” one.

The consequences of globalization are well known. Between 1991 and 2015, more than 1 billion people were brought out of extreme poverty, with “emerging Asia” accounting for roughly 75 percent of this number. China became the world’s largest exporter of goods in 2009, the largest industrial producer in 2010, and the world’s largest economy in 2016 (by GDP based on purchasing power parity). The “Asian century,” observers claimed, was set to begin.

The US share in the global GDP as measured by purchasing parity ratio decreased to 15.1 percent by 2018, and its trade deficit grew from $31 billion in 1991 to $622 billion in 2015. Asian nations turned into the largest holders of foreign currency reserves (China, Hong Kong, South Korea, Taiwan, Malaysia, and Thailand account for more than $4.65 trillion in combined international currency reserves), while the US is now the largest debtor nation in the world. It seemed that the newly industrialized world was successively challenging the post-industrial one, and the final outcome of this epic battle was far from predetermined. But while these numbers indeed appear to show that the gap between the leader and the follow-ups has narrowed dramatically, they do not reflect the whole situation. Look at the United States’ technological dominance instead―here, nothing much has changed.

Chips and Systems

As of early 2019, it’s true that more than a half of all desktop or notebook computers in the world were produced in China. But the country is able to furnish less than one-third of them with locally-produced microchips and remains highly dependent on imports. Meanwhile, up to 60 percent of all global makes rely on Intel microchips. In server processors, Intel’s domination is even greater―98 percent. Both Intel and AMD lead the development of new generations of chips, while mass manufacturing of the devices has been relocated to Asia. Companies like SK Hynix of South Korea or TSMC and UMC of Taiwan position themselves as American firms’ competitors, but continue to depend on them for the most vital technologies.

In 2018, more than 65 percent of all smartphones produced in the world were manufactured in China―and 78 percent of them were built by “genuine” Chinese brands, from Huawei and Xiaomi to OPPO and Vivo. But at the same time 97.98 percent of all the smartphones in the world run on either Windows, Android, or iOS operating systems. If all computers and computer-like devices are counted, the share of Microsoft, Google, and Apple software comes to an impressive 95.93 percent. As for the market for online searches, Google has a market share of 92.82 percent compared to 1.02 percent held by Baidu, the Chinese search engine, and 0.54 percent held by Yandex, which pretends to be the undisputed leader of the Russian high-tech sector. Among the 10 most popular social networks, US-based Facebook, YouTube, WhatsApp, and Instagram account for 8.12 billion users, while the Chinese or Chinese-oriented QQ, Douyin, and Sina Weibo only have 1.67 billion users. Of close to 300 billion e-mails exchanged in the world daily, up to 92 percent are received by inboxes registered with US-based companies. Apple and Google-built services are clearly in the lead with a 75 percent market share.

All the Big Players Are American

In 2007, PetroChina became the first trillion-dollar company by market value, and in 2008 Russia’s Gazprom advanced to the fourth position on the list of world’s most valuable companies. But as of March 2017, all the top 10 companies by market capitalization were once again American―for the first time since the 1970s! Therefore, the idea of a “US retreat from the world” looks a bit questionable. The same is true when looking at the financial side of things. As of April 2019, mainland China and Hong Kong together held around $1.33 trillion in US Treasury bonds. But even if they tried to sell them off, a “financial tsunami” would remain unlikely, since US banks can easily buy them out and get loans from the Federal Reserve using Treasury bonds as a perfect collateral. Just remember that between 2008 and 2011 the Federal Reserve’s balance sheet grew by $2.1 trillion. This could well be repeated if China engaged in full-scale financial confrontation.

In short, two decades into the 21st century, the US still appears the undisputed global leader in terms of technological domination and enjoys clear superiority in each and every domain of the information economy. If any other nation tried to wage “economic war” against the United States, it would be certainly defeated―and not so much by financial sanctions, asset freezes, or trade embargoes, but by denial of access to US-made or US-controlled technological and/or communication capabilities.

If all this is true, why do the other powers do nothing to counter this dominance? My answer is simple: because the American political leadership never used this component of US strategic power to subjugate any foreign government or foreign company―at least not until now. Since 1990, the US has waged many wars and boldly made use of its military power in Iraq (twice), Bosnia, Serbia, Kosovo, Afghanistan, Somalia, Libya, Syria, and many other corners of the globe. But it never relied on its technological superiority for promoting its political goals. As far as the information technology domain is concerned, the history of war and conflict seemed firmly over in all the years that have passed since Francis Fukuyama outlined his famous hypothesis.

Crossing the Red Line

But much of this has changed in recent years as President Donald Trump decided to “get tough” with China and launched a full-scale trade war against Beijing. Without any doubt, the US has good reasons, since China has for years imposed protective tariffs on US goods (in 2017, the US took $13.5 billion in custom duties from $506 billion Chinese imports, while the Chinese authorities levied $14.1 billion in duties on $127 billion worth of US imports). Chinese companies have also violated many US laws protecting intellectual property and forced foreign investors to share their technologies when outsourcing production facilities to China. More examples could be added.

The fundamental difference to all the previous economic tensions is that the US authorities have recently invoked sanctions against several Chinese high-tech companies―most notably Huawei and ZTE―actually accusing them of industrial espionage in the United States. And even this wouldn’t change the situation much if the restrictions imposed were aimed at curbing the companies’ imports from the US or their purchases of US-manufactured components. But as of June 1, 2019, several US companies, following the authorities’ orders, effectively banned Huawei from their services: Microsoft discontinued the supply of its Windows operating systems for Huawei laptops and other content-related services, and Google announced that it was blocking some elements of its Android operating system (GoogleMaps, YouTube, GooglePlay, Gmail) on Huawei smartphones.

Here, it seems to me, the US government crossed an important red line. It undermined the trust foreign hi-tech companies had in the technological platforms that for decades secured America’s dominance in the globalized world. Microsoft or Google don’t just produce American software―for a long time, they have been producing American soft power. It now appears that this soft power can easily be turned into a hard variety. The long-term consequences of such a change may be profound.

Chinese Retaliation

What will happen next? Of course, the affected Chinese corporations will suffer a major blow; Huawei and ZTE may well be stopped from their expected expansion―but I would be surprised if the Chinese government did not retaliate. Unlike the oil-producing countries or other commodity economies, China already produces billions of units of hi-tech products and will definitely continue its industrial expansion. Therefore it is crucial for Chinese companies to develop their own operating system (Huawei already announced it will have one available by the end of 2019)―and the Chinese government will do its best to help them achieve this end. At the same time, Chinese producers will want to devise their own microchips (today not a single Chinese company is listed among the top 25 semiconductor producers in the world), which will not be a huge problem since they have already acquired or stolen all the major technology from Western companies. So sooner or later, technological platforms will emerge that will be able to compete with the dominant American companies.

It should be noted that Chinese software and social networks are predominantly used either in China itself or by overseas Chinese. This hasn’t changed for years―while goods manufactured in China conquered the world, Chinese software has so far remained limited to the Chinese community. Now, however, the US would appear to be facilitating the internationalization of the Chinese hi-tech sector. This is helped by China’s incredible sway over the most important consumer markets in the world. In the case of Russia, for instance, consumer products account for less than 3.1 percent of overall exports; in the case of China, the figure exceeds 59 percent. The users of China-made computers and mobile devices abroad―serving around 2 billion people around the globe―are China’s main economic asset, which it will use with all possible ardor. As a result, a real alternative to the US technological platforms will emerge for the first time.

Of course, the US will not simply roll over. In recent years, it initiated at least two major economic shifts of global importance. First, the so-called Fourth Industrial Revolution introduced fully automated production techniques, thereby endangering the position of labor in the production chain. This undermines China’s and other rapidly developing countries’ main competitive advantage: the relatively low labor costs that propelled them toward global industrial leadership. In the future, US companies may be able to discard their overseas production capacities and bring not only their capital but also their industrial facilities back to the US, increasing their independence from China. Second, the US and Europe have embarked on a journey toward energy independence―focusing either on nonconventional extraction techniques (the US) or on developing renewable energy sources (Europe). Both trends will make the West far less dependent on commodity economies like OPEC or Russia.

The End of “Chimerica”

All this will definitely produce a kind of division in the current “post-historical” economic system. Both parts of what analysts had prematurely started to call “Chimerica” will increasingly rely on their strongholds. In the case of China, it’s the hardware produced on the mainland and supplied all over the world. In quite a short time, these devices will be furnished with Chinese operational systems and Chinese microchips―and the Chinese will do their best to make sure that their software cannot be uninstalled. I would also expect all Chinese smartphone manufacturers to replicate Apple’s system of free iMessages and FaceTime calls etc., which will lift overall demand for their products.

On the US side, there are many competitive advantages as well: first of all, the US will make full use of its total domination of the microchip market, which can hurt Chinese manufacturers dramatically; second, it may increase its pressure on Chinese consumers as an increasing number of software applications will not work on Chinese smartphones, and, last but not least, the West can use the global internet projects it is currently developing to increase its dominance. It can, for example, announce that China-produced devices will be barred from space-based internet providers. As the result, the global economic and informational realm that exists today will split apart, and countries and companies will lean to the one or the other dominant technological “core.” It’s difficult to say how far this division will go, but the general trend is easy to see.

Undoubtedly, the ongoing economic and technological split will be followed by the reinforcement of political contradictions between different blocs and alliances. Today, the US has by far the largest number of loyal supporters: in Europe, Latin America, and Japan, most will side with the Americans. The United States’ financial capabilities, its economic reach, and its long-term strategic alliances will contribute to creating a Western economic and technological space that cautiously opposes the one created by China. But the Chinese have made remarkable progress over the past two decades.

Between 2005 and 2018, China’s investments in Africa went from $23 to $352.7 billion; Chinese companies invested around $170 billion in Latin America; the government started the Belt and Road Initiative; and, of course, Beijing worked hard to turn Moscow into its economic vassal (all the leading Russian mobile communication companies opted for Huawei’s hardware to comply with a new law that obliges them to collect and keep all the customers records for at least a year). Both economic superpowers are likely to press their allies and economically dependent nations to adopt their technological and software standards.

How high is the probability of “Chimerica” being destroyed for good in the current economic showdown? It’s entirely possible. Even though China exported more than $539.5 billion worth of goods to the US in 2018, this accounted for only 4 percent of its nominal GDP. During the same year, Beijing increased the bank loans provided to local companies and households by more than 16.2 trillion renminbi ($2.4 trillion or 17.9 percent of country’s nominal GDP). The Chinese authorities seem oblivious to the danger of creating the greatest credit bubble in history as they seek to increase economic growth by boosting local demand.

Do Not Fear

So the preparations for a “decoupling” from the US are in full swing. Of course, if things take a turn for the worse, the world may face a full-scale economic recession. But it could well be the last recession of the globalized world. The political rhetoric that goes along with it―praise for protectionism, export substitution, and reliance on different nations’ own competitive advantages―may contribute to the creation of “multiple globalizations” centered around either the US or China.

Back in 2008, a young American strategist called Parag Khanna first described the model for this new era of economic and political competition. Khanna argued that the coming world will be led by three “empires”: the United States, China, and the European Union, which are capable of projecting their economic and societal models across the globe. All the other nations, Khanna argued, will be downgraded to either “second” or “third world countries;” the first group will at least be able to influence “imperial” competition, while the latter will no longer play any role in world affairs at all. This scenario looks more realistic as the technological showdown advances.

Should we fear the advance of this “post-globalized” world? I don’t think so. Economic progress is often uneven, fluctuating between cooperation and fierce competition between major rivals. As potential adversaries mature, the contradictions between them increase. But the most crucial point here is that since World War II, economic competition has played out increasingly peacefully. The 1989 economic revolution that left the US at the top of the economic hierarchy didn’t provoke any political quarrels―on the contrary, it caused a short “post-historical” era in world politics. In the economic and technological sphere, this “post-historical” age lasted even longer―and even now it seems that while economic tensions rise, the risk of political confrontation isn’t increasing. Francis Fukuyama, it would seem, had a point after all.

The post The (Temporary) End of Economic History appeared first on Berlin Policy Journal - Blog.

© Sputnik/Mikhail Klimentyev/Sputnik via REUTERS

The most common complaint about Russia’s foreign policy theses days is that it is becoming more aggressive and expansionist. Both US and European policymakers believe that Russia is now a serious challenge to global peace and stability. However, while this description might be accurate—Russia has already proven how dangerous it can be, especially to its neighbors—there is another phenomenon that has come to characterize Russia’s foreign policy: its absence. In its place, Russia has amassed a patchwork of interests, alliances of convenience, and grudges.

Contemporary Russian foreign policy was born in 1999, as Russian leadership—and more importantly the Russian public—began to grow deeply disillusioned with the West. At the time, the survival of Russia’s political elite depended upon both the suppression of separatism within Russia and the restoration of Russia’s global role. When Putin was elevated to the position of president, he tried to restore the country’s political relationships—not only with post-Soviet states, but also with the former USSR’s most corrupt allies. He paid visits to North Korea and Cuba during his first year in office and wrote off more than $40 billion of Soviet-era debts owed by Mongolia, Vietnam, Ethiopia, Syria, Nicaragua, and other nations between 2000 and 2004. This did little to establish beneficial relationships, but these steps were quite popular inside Russia and contributed to the ascent of Putin’s approval ratings in the early 2000s.

When Putin began to consolidate his position, he used the 9/11 terrorist attacks in the US to dramatically shift the country’s foreign policy. In exchange for its support for the Western mission in Afghanistan, Russia was able to improve its economic relations with both the US and Europe. Moscow founded the Russia-NATO council in 2002, with Putin calling European integration a “hope” for Russia. It seemed that Russia was briefly able to accept Washington’s special role in the world and maintain a steady rapprochement with the West.

A Short-Lived Honeymoon

The honeymoon ended in 2003 with the Bush administration’s occupation of Iraq. Russia sided with Germany and France against the invasion, and for a brief time, it was possible to imagine the beginnings of a new Moscow-Berlin-Paris alliance. But it was short-lived: Moscow turned its back on Europe after the major European powers denounced its behavior towards Ukraine during the Orange Revolution of 2004/05. With the exception of brief overtures to the West, like the ”Partnership for Modernization” with the EU and a ”reset” with the US, Russia had returned to its skepticism of the West.

This culminated in Russia’s ”pivot to the East,” as the Kremlin called its decision to rely more on a rising China to buttress Russia’s geopolitical ambitions, and ”Eurasian integration,” another response to the hardening of Russia-Western relations. The deep alienation from the West after the Ukraine crisis also led Russian leadership to develop relations with the most authoritarian regimes in the world, from Iran to Venezuela and Syria to Sudan. These connections cost money, and for a dubious rate of return: Over the last five years, Russians lent to and invested in Venezuela and Syria without achieving any foreign policy effects at all. Russia’s involvement in Syria in 2015 was meant to force the West to recognize Russia’s claims in the post-Soviet space, but neither the Americans nor the Europeans expressed any willingness to fight terror alongside a nation that was itself perceived as a terrorist power.

Thus, Russian foreign policy has come a remarkable full circle: it started with pure anti-Americanism, entered situational alliances with the United States and major European powers, then pivoted to the East, and ended by building ineffective partner-client relationships with disreputable political regimes. With Putin seeking another presidential term, extending his time as Russia’s leader to a quarter of a century, it is obvious he lacks any agenda for engaging with the world in the future.

A Domestic Imperative

President Putin might be not a very good strategic planner, but his actions are at least well thought out. Experts have been predicting his fall since 2002, but his regime remains reasonably healthy, and no organized opposition exists in the country. Putin’s foreign policy has been one of the foundations of his hold on power, and it reflects the shifting roles of Russia’s elites and its public in domestic policies.

When Putin assumed presidential power in the early 2000s, he sought popular support rather than that of the elites. This changed in 2002/03: With all the major state-owned corporations under the control of his allies and Russian businesses subdued, Putin’s major focus shifted to the interests of the elites. This is when the era of constructive foreign policy began. Until at least 2007, Russia’s foreign policy was largely underpinned by a desire to connect with the West, driven by Russian businessmen who wanted to join the global financial elite. Moscow opposed NATO and EU enlargement in the post-Soviet zone, but until the end of former President Dmitry Medvedev’s tenure, Russia cooperated productively with the US and Europe.

The decisive change came in 2011. Putin was disturbed by the implications of the Arab Spring revolutions, which had deposed a number of local strongmen, and felt his suspicions confirmed by massive street rallies held throughout Russia in response to the rigged 2011 Duma elections. In 2012, Putin won re-election with only 63.3 percent of the popular vote, a much lower margin than his 71.3 percent in 2004 and Medvedev’s 70.3 percent in 2008. He refocused his attention on the public and tried to galvanize support, especially since economic growth was faltering.

Without any vision for the future, the Kremlin decided to bet on a set of ideas for a post-Soviet reconstruction, a plan outlined in an article Putin published in the Izvestia newspaper in late 2011. These ideas failed: By the end of 2013, it was clear that Ukraine was moving westwards, and the benefits of closer ties with Kazakhstan and Belarus were negligible. In November 2013, the Levada Center recorded the lowest ever popular support for Mr. Putin—60.7 percent, compared with 85.9 percent when he allowed Medvedev to take over in April 2008. The occupation of Crimea in February and March 2014 and the subsequent war in Ukraine had far more to do with domestic concerns than global considerations. It was one of Putin’s boldest moves and it resonated strongly with the public. From this time on, Russia’s foreign policy began to vanish, replaced by an imaginary discourse meant to serve domestic political needs.

A Besieged Fortress

The Russian government has no actual need to improve the country’s relationships with the West because it derives its legitimacy predominantly from the current showdown. It also has little need to be active on other foreign policy vectors, since it simply has nothing to offer except the sale of energy resources and weapons. Welcoming international pariahs like Venezuela’s Nicolás Maduro or Sudan’s Omar al-Bashir should not be considered an element of foreign policy. The Kremlin simply wishes for Russia to look like a besieged fortress, under attack by the West.

And it has worked well: Putin’s approval ratings haven’t dipped below 80 percent since the annexation of Crimea, even though the economy has stagnated and personal disposable incomes have declined for the fourth year in a row. As it becomes more obvious that Putin is unable to provide Russians with improved conditions or Russia with expanding international influence, his only realistic option is to claim that only because of him, Russia is successfully withstanding growing external pressure. No one in the Kremlin wants relations with the West to improve. This would not make much of a difference to Russia’s economic landscape, and without an ”enemy” it would become much more difficult to explain why the country’s economy is performing so poorly, why military spending is so high, and why corruption is rampant.

The dismantling of Russia’s foreign policy also allows the government to change the entire worldview of the Russian people. As the country’s self-image as a besieged fortress has become more deeply ingrained, the Kremlin has tried to extend it, turning the whole history of the country into a story of defensive wars and praising the wisdom of ”strong rulers” who led the country to victory. Ivan the Terrible and Josef Stalin, the rulers who were responsible for the most brutal repressions of the Russian people in history, are nowadays the most glorified leaders in the nation’s history. For facilitating Putin’s political victories, some politicians have in fact suggested extending voting rights to 27 million people killed during World War II. More absurd initiatives are certain to follow. Books published with the support of foreign NGOs are confiscated, Russian non-profits that receive foreign grants or produce research for foreign customers are pressured; the country is being brainwashed, and its self-made isolation is a contributing factor.

To see that the Kremlin will not change its course now, one need only look at how its foreign policy actors have changed their language. Any trace of diplomatic politeness has completely disappeared. Putin described US sanction policy as ”clownery that cannot be tolerated;” Aleksey Pushkov, the chairman of the State Duma’s foreign policy committee, described the United States as a power ”approaching the point of a mental breakdown.” All of this underlines the fact that Russia’s foreign policy statements are used not to manage relations with other countries, but rather to impress a domestic audience.

A Vicious Cycle

This development could in fact be rather good for the Western powers. Many see Russia as a revisionist power that wants to change the borders of Europe and rewrite the rules that took hold after the end of the Cold War. But it has not been successful in this pursuit. Putin wanted to consolidate the post-Soviet space and keep Ukraine inside Russia’s sphere of influence, but instead of regaining Ukraine, he had to settle for Crimea; the Eurasian Union looks dysfunctional, with even Armenia disgruntled with its rules; China has not been a valuable investment partner; and the West is tightening its sanctions. In 2008 and 2014 Putin had targets he could invade and occupy without having to directly confront the West militarily, but now he does not. The country’s shift to domestic rhetoric in its foreign policy reflects the clear fact that the Kremlin realizes it has no chance of military expansion, and no means with which to respond to Western sanctions.

Under these conditions, Moscow’s only rational course is what it has already chosen: Abandoning any hope for positive change and nurturing a domestic climate of fear and hatred. This approach allows Russian authorities to both mobilize their subjects’ political and electoral support and channel hundreds of billions of rubles from the budget to fund the military and military equipment manufacturers (who represent, along with their family members, up to 11 percent of the Russian population). This strategy precludes any full-scale military conflict with the NATO countries for two obvious reasons: First, the Russian people do not want to go to war. No one was killed in Crimea, and during the subsequent conflict in Donbass the highest estimates of casualties among Russian servicemen are around two to three thousand people. In Syria, the combined losses of the regular army and the mercenaries Russia employed totaled less than 300. A single day of direct engagement with NATO forces would claim many more lives.

The second is that the Russian army isn’t fit for a full-scale war. It possesses only about a tenth of the tanks, armored vehicles, and guns that the eastern flank of NATO forces in Europe (not counting Greek and Turkish armies) can command. Even with 4.3 percent of its GDP spent on defense, Russia will need 30 to 40 years to catch up with its main opponents in just one theater. At the same time, the country possesses no means to respond to Western sanctions and nothing to offer in exchange for these sanctions being lifted. Thus, Putin is now able only to interfere with foreign elections and influence public opinion abroad by either waging disinformation campaigns or secretly funding fringe political parties. The Kremlin is stuck in its current foreign policy stance. Like a caged dog, it can only bark louder and louder.

The main challenge Putin’s regime now faces is the need to preserve its popularity within Russia while maintaining the international status quo—avoiding becoming a rogue state or attracting further sanctions. The West’s response to such a tactic should be based on a deep understanding of its own strategic superiority and the recognition that Putin’s Russia will run out of steam much more quickly than Brezhnev’s Soviet Union did. The gap between Putin’s non-existing foreign policy and his desperate rhetoric may broaden, but it will produce neither substantial benefits for Russia nor existential threats for the West.

The post A Disappearing Trick appeared first on Berlin Policy Journal - Blog.

© REUTERS/Alexsey Druginyn/RIA Novosti/Pool

The Russian parliamentary elections of September 18, 2016, despite wide-spread signs of fraud, clearly showed that the protests that threatened President Vladimir Putin in 2011-12 have completely run out of steam. Once again, the same four parties that secured the Duma back in 2007 and 2011 retained control of the parliament, while Putin’s United Russia party won a constitutional majority of 343 deputies out of 450. Today’s Russian party system resembles that of the former East Germany, which Putin watched collapse as the KGB resident in Dresden.

How did Putin hijack Russian politics so completely, and why are there so few signs of any appetite for change in the country he has governed for 15 years? For one thing, the opposition is not trusted – the very people who are now trying to take on Putin prepared Russia’s political system for his rise. In fact, even though Putin likes to contrast Russia today with the country’s experience in the 1990s and early 2000s, there is  much more continuity between these two periods than change.

Putin was deeply rooted in the political elite that emerged in Russia in the “reformist” years: He began his political career alongside Anatoly Sobchak, a democratically elected St. Petersburg mayor. It was Boris Yeltsin who appointed Putin to serve as the director of the FSB, the KGB’s main successor. There were oligarchs, most importantly Boris Berezovsky, who supported his candidacy as Yeltsin’s successor. His enormous presidential powers today are grounded in the super-presidential constitution drafted in 1993 by Sergey Shakhray and Viktor Sheinis, two outspoken pro-democracy politicians.

But beyond that, there were important economic, political, and social reasons for Putin’s ascent as a “natural” leader of the country, and all of them were laid in the 1990s – and those who occupied senior positions in the bureaucratic hierarchy at the time have no reason to complain about the country’s adoption of Putinism as its basic political and economic doctrine today.

Economic Foundations

Those who connect Putin’s success with the economic history of modern Russia emphasize the importance of the devastation wrought by the early market reforms. The main argument is that by the end of the 1990s Russians had become exhausted with the decline in living standards, rapid inflation, constant devaluation of the ruble, growing unemployment, and surging income inequality. Andrey Illarionov, a respected economist who served for several years as Putin’s economic advisor, blames the reformers of the 1990s for neglecting the people’s needs and conducting the reforms in a way that caused a 35 percent economic contraction, pushed close to half of all citizens below the poverty line, and created an oligarchic economic structure. All this produced a desire for a more “organized” economic environment.

This might be true – but there is another trend that stood at the core of the market reforms of the 1990s, and was much more connected to Putin’s takeover: the country’s privatization program.

The privatization of state-owned assets in the 1990s was often called “piratization,” with investors paying extremely low prices for Soviet-built enterprises. Whether or not this process was just, new owners secured enormous competitive advantages vis-à-vis any greenfield investors that might be interested in developing new businesses in Russia. Growth since then has generally come from sectors barely touched by the privatization movement: telecoms and internet providers, financial services and banking, retail trade and logistics, personnel services, etc. – but not from the industrial core of the Russian economy. In the 2000s, the privatized companies were not even able to match Soviet-era levels of natural gas and oil production.

All of this completely distorted the Russian economy: the main initiatives undertaken by the new owners of Russia’s core assets were not aimed at their development, but rather at “restructuring” them into different holdings and selling them off at the heights of stock market fluctuations, only to buy them back during crises. Redistribution rather than development became an obsession of post-privatization Russia and a foundation for the power of the state, which was heavily engaged in buying and selling assets or enforcing their redistribution through nominal legal moves. During the 2000s less than 12 percent of all criminal investigations against entrepreneurs were brought to the courts since the companies either agreed to bribe officials or were overtaken by those who had orchestrated their prosecution. This “redistributive economy” paved the way for the “redistributive state” that came into being in the 2000s when market reforms in general were designed less to overcome the grip of the bureaucracy and more to improve its flexibility and effectiveness.

Therefore, Russia’s economy was and is the ultimate breeding ground for Putin’s authoritarianism: all the major Russian companies are either operating as agents of the state or are entwined in the state-led economy; the population is highly dependent on the state budget, which is turn depends heavily on the primary industries; in a redistributive economy the power of the state apparatus tends to expand; and this structure, first invented on the federal level, has been replicated in the regions. Such a system became the first pillar of Putinism in the 1990s.

Tactics and Ideology

Many Russian democrats (so-called and real ones) and their sympathizers in Western countries attest that a liberal democratic order was nearly complete in Russia in the early 2000s and was later dismantled by Putin and his ex-KGB aides. This is incorrect for several reasons.

The most democratic Russian elections of the past quarter century actually occurred not in Russia, but rather in the Soviet Union. Democracy implies a peaceful transition of power from one person or party to another through a fair election process. Such a transition occurred in Russia only once, in 1990-91, when the Communist elite was defeated in first parliamentary and later presidential elections; since 1992, the ruling party or leader has not been defeated. The parliament has been effectively controlled by a pro-Kremlin party or coalition since 1993, and the presidents have changed only through succession appointments camouflaged by electoral processes.

It was not the autocratic Putin who launched an attack against the elected legislature, but democratic Boris Yeltsin. Likewise, it was not the intelligence services that drafted the 1993 constitution, but liberal-minded lawyers. All of these efforts resulted in a profound neglect of popular representation and legislative power, and – more importantly – a solidification of a sort of “no alternative” principle. Democratic leaders who backed Yeltsin’s bid in 1996 called on people to “vote your heart,” degrading the role of thoughtful choice in politics. There can be no doubt that this election shaped the political culture of Russia well into the 2000s.

Moreover, the ideas actively criticized by Russian liberals today have their roots in the 1990s. Putin’s pursuit of a traditional “national concept” comes from Yeltsin’s efforts to draft a Russian “national ideology” in 1994. The 1990s also saw the revival of the Russian Orthodox church, which the state actively supported. By the mid-1990s cooperation between state and church bureaucracies had become so strong that special permissions were issued by local authorities allowing businesses to funnel money into religious charities in lieu of local tax payments. This kind of policy was designed not only to make people less critical of the divinely rooted state, but also to solidify a sense of historical continuity between a new democratic Russia and its old imperial incarnation.

This sense of continuity became a powerful means of transforming Russian society in the 2000s and was used for at least two different objectives. On the one hand, the very idea of praising the past has turned into a deep negligence for the future – the very idea of stability grows from an assumption that the basic features of Russian society are sound, so there is no need to look for something more contemporary. At the same time, as Russia never was a democratic nation, praise for its history places Putin in a pantheon of similar autocrats. In the 1990s, Peter the Great and Stolypin were honored; in the 2010s it was Ivan the Terrible and Stalin.

Imperial Policies

Putin is often accused of both undermining the Russia’s fragile federalism and expanding its sphere of influence further into the post-Soviet space, using not only economic pressure but also hard military power. But even here, the origins of these developments stretch back to trends that began in the 1990s.

Russia continues to resist local self-determination and aggressively implemented imperial policies in the post-Soviet space. In 1992, a bloody conflict erupted in Moldova, where the Russian military had a strong presence. The conflict resulted in a breakaway puppet state, the Transnistrian Moldovan Republic, that Russia never formally recognized but has supported ever since. In 1992-93, an even more violent conflict plagued the Georgian provinces of Abkhazia and South Ossetia, where Russia once again acted formally as a mediator but actually played an active part in the struggle; the result was Tbilisi’s effective loss of control over both territories. The Russian policy vis-à-vis the post-Soviet states was called a “doctrine of managed instability” long before Putin took over.

As early as the 1990s, Russia experimented with cutting natural gas transit from Turkmenistan to Ukraine in an attempt to prevent new oil and gas pipelines from being built in the South Caucasus. And Moscow has been laying the groundwork for a pro-Russian upheaval in Crimea and the Donbass for some time, supporting pro-Russian Crimean activists since 1994. Contrary to its own rules, the Russian government dispersed hundreds of thousands if not millions of Russian passports to the residents of Transnistria, Abkhazia, South Ossetia, Crimea, and some other parts of Ukraine, building a foundation for hostile action against its neighbors decades before these actions turned into real conflict.

Further afield, two new distinctive features of current Russian foreign policy emerged in the 1990s: the country’s support for various rogue – but presumably friendly – regimes, even at the expense of Russia’s relationships with major partners; and its “pivot to the East,” paying special attention to China as a new strategic ally. Russia openly supported Slobodan Milosevic’s Yugoslavia from 1993 onward even as it undertook a bloody war in the Balkans. Russian Prime Minister Yevgeny Primakov famously turned his plane back to Moscow while en route to Washington when he learned of the impending NATO strikes on Belgrade in March 1999. Russia later ordered its troops to move into the northern regions of Kosovo, coming quite close to open engagement with Western forces in the former Yugoslavia. The same Primakov, also serving as Russia’s foreign minister in the mid-1990s, produced a new strategic doctrine based on supposedly strong historical connections between China, Russia, and India, declaring the “Beijing-Delhi-Moscow axis” to be the principal foundation for a “non-Western dominated world of the 21st century.” In the late 1990s, Beijing became the premier non-European destination for official Russian state visits.

There is thus nothing new in Putin’s unwavering support for autocrats of various stripes, whether old friends of the USSR like the late Fidel Castro of Cuba and Muammar al-Gaddafi of Libya or newer friends like Bashar al-Assad of Syria. The Russian leaders of the 2000s were hardly original in their search for allies outside the Western world – they long ago reached the conclusion that democratic nations are bad partners when it comes to strengthening the government’s grip over Russian society.

Historical Deadend

Looking at today’s Russia, it is too easy to believe that the government is shaped by a single personality – that is, that the situation will change when Putin is no longer in charge. This is mistaken; the end of the Putin era may not be the end of Putin’s Russia. What the world faces today is not Putin’s creation, but rather the only kind of Russia that could have arisen from the former Soviet Union and the Russian Empire before that. The rise of an economy based on the absence of competition and innovation was as natural as the imperial revival and “power vertical.” Even the strong pro-democracy movement of the 1980s and 1990s lacked the power to change the nature of Russian society and Russian social attitudes – and Russian elites were able to restore patterns and structures that they had used for decades and centuries.

The dramatic social revolution that ended the Soviet Union in the early 1990s, however unfinished it may seem, was the result of a huge wave of mass protests, which included a majority of the educated and self-made urban class. Since then, the greatest success of economic and social change is that is has become easy for people to join the free world one by one, or, in the words of Zygmunt Bauman, to find an “individual solution to systemic contradictions.” The freedom of movement that was thought of as a guarantee of change actually prevented it – more than six million self-made Russians emigrated, leaving the oligarchs and the bureaucrats to manage each other as well as the unorganized masses. By giving money to the former and power to the latter, Russian reformers led their country into a historical deadend without any recipe for escape.

Today’s Russia is not Putin alone. It is a system that evolved in a single direction since the fall of the Soviet Union and one that will be extremely difficult to transform – especially for Western politicians, who have failed to recognize the path Russia has been on for decades.

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The EU should maintain sanctions on Russia – and it would be well advised to strengthen them. Economic arguments for easing do not add up, and harsher sanctions would represent the right moral choice.

© REUTERS/Sergei Karpukhin

For two years, the EU-Russia agenda has been dominated by the issue of sanctions – those imposed by the European Union on Russia after Moscow’s annexation of Crimea and its backing of the separatist forces in eastern Ukraine, and those imposed by Russia in retaliation. European sanctions (as well as those introduced by the United States and other countries) had a clear aim: to protest Russian aggression while avoiding any direct military confrontation with the Russian Federation.

The question up for debate since 2014 is whether the san­ctions changed Russia’s policies vis-à-vis Ukraine – if not leading it to return Crimea, at least pushing it to withdraw from the Donbass – and whether they are worth continuing, or even strengthening.

I would argue that they have and they are, and for at least three reasons. First, as became clear later, Western sanctions were extremely timely: it was in early September 2014 that oil prices fell below $100 per barrel and began their impressive downward slide. The situation in the Russian economy, not good since at least 2012, has deteriorated sharply, and sanctions definitely have contributed: for many years Russia’s economic growth was fueled by easy access to foreign capital and loans, so Russia was already under pressure.

Secondly, taking into account that Russia possessed huge reserves, enough to cover prospected budget deficits for more than four years, no one should have expected a change in the Kremlin’s course to come quickly – rendering evaluations of the sanctions’ efficacy premature.

But the most striking thing for me is a third aspect – what sanctions have achieved despite being inexcusably soft. If one looks at the sanctions levied by the US, EU, and UN against, for example, Iran or North Korea (which, it is worth pointing out, never annexed the territory of their neighbors nor incited civil war), one sees asset freezes, bans on oil and commodities exports, full-scale tra­de bans, disconnections from SWIFT and international bank clearing centers, and even prohibitions on servicing airplanes used by Iranian or North Korean airlines. Is there any doubt Russia would struggle under such a broad set of sanctions? President Putin would not be able to counter them for a single year – and I would argue such a set of rules was warranted after Russia attempted to undermine the founda­tions of the post-World War II political order in Europe.

Economic Interests at Play

Why did the Western nations decide not to impose all-embracing sanctions on Russia? I think that at the time the Europeans conside­red EU-Russian economic connections much more important than European ties with either Iran or North Korea. In 2013 the EU exported goods and services worth €119.5 billion to Russia, and its imports amounted to €206.9 billion, making up 9.6 percent of extra-EU trade turnover. Europe depended on Russian oil and natural gas. Some big European companies were highly exposed to Russia, and several EU policymakers have solid connections with President Putin or people in his inner circle. No one actually respected Putin much at that time, but economic interests played a decisive role. Russia’s counter sanctions were also economically driven, but in another fashion: in introducing a ban on agri­cultural products, Moscow attempted to sway European farmers and strengthen its pressure on EU governments. But even if the sanctions have not reshaped Russian foreign policy, it is important to understand how they have affected the Russian and EU economies before a decision is made regarding their extension at the June 23 EU summit.

First, the Russian economy is now in very poor sha­pe. Russia’s GDP for the first quarter of 2016 in current dollar terms will be only $242 billion, roughly 55 percent less than in the first quarter of 2014. Russia repaid more than $216 billion in net external debt between July 1, 2014 and January 1, 2016, while domestic investment fell by 8.4 percent in real terms in 2015 alone. Russia’s monthly imports were down from $27.4 billion in June 2014 to roughly $9.0 billion in January 2016. Real disposable incomes are falling for the third consecutive year, while the ruble has lost up to fifty percent of its value.

“Putinomics” Are Exhausted

No one should expect the economy to crum­ble anytime soon, but the trend looks clear: “Putinomics”, based on plundering oil wealth while putting the economy firmly under state control, has been exhausted. The era of 6-9 percent annual growth is over. The country will not undergo complete collapse, but it is just beginning what will be a prolonged recession.

Of course, the sanctions only played a small role in all this. If one tried to estimate the effects of Russian agricultural counter-sanctions, they would arrive at a figure of not more than 0.7 percent of GDP, and $1-1.2 billion in lost wages and depreciation of existing investments. Moreover, growth in the Russian agricultural and food proces­sing industries might well offset these losses. Some other branches of the Russian economy were da­maged as well, including military production.

The financial sector experienced the greatest losses: in 2015 the overall profits of the Russian banking industry contracted by 67.5 percent year-over-year, to 192 billion rubles ($3.15 billion), but the go­vernment did all it could to support financial institutions affected by the sanction regime. The different estimates of the combined damage caused by sanctions on Russia vary from a conservative €25 billion to an overstated $1 trillion. In any case, direct losses did not exceed 3 percent of Russia’s GDP.

Today, however, Europeans are less interested in the Russian economy than in their own – and here we see two consequences of the sanctions. While overall EU agricultural exports increased in 2015, they declined significantly in Central European nations, whose economies were often oriented toward Russian markets; and several nations (including Italy, France, Austria, and Greece) argue that the sanctions have hurt their manufacturing industries.

A Major Challenge

This is the major challenge Europeans will face when making their decision this coming June. In her statement on sanctions, Chancellor Angela Merkel said on February 1 that “sanctions against Russia must stay in place until Russia fully implements the Minsk agreement” and Ukrainian sovereig­nty over the Donbass (Crimea was not men­tioned) is restored; the Russians, meanwhile, have made little movement in that direction, and are apparently waiting for the damage caused by the sanctions to change Europeans’ minds.

But why do EU leaders assume that lifting sanctions would return business with Russia to conditions that existed two years ago?

Take trade flows as an example. In 2015 Russian imports from the EU were down by 40.8 percent, while imports from Korea fell by 49.4 percent, imports from then-friendly Turkey fell 39.4 percent, imports from Kaza­khstan fell 35.5 percent, and imports from China fell 31.3 percent. Why should one expect trade to explode if sanctions are lifted? I would argue that the Europeans underestimate at least three factors: oil prices have plummeted since 2014, so the ban on exporting oil and gas exploration equipment is hardly a relevant factor; the ruble lost close to a half of its value while inflation was limited, meaning imported food would now be twice as expensive in Russian shops (and the same applies to many other industries); and Russian entrepreneurs have much less ability these days to attract foreign loans, especially with many other markets that look now much more promising. Moreover, even if EU leaders decide to terminate financial sanctions against Russia, US authorities will not follow suit, making the European move senseless: taking into account EU banks’ exposure to the US market, none of them will try to violate the American sanctions if they are still in place.

In other words, the main argument of European politicians in favor of abolishing the sanction regime looks totally misleading, and the promise of a strong recovery in EU-Russia trade is pure illusion. Of course, some companies and countries may profit from economic normalization (including the Baltic states, Finland, or Poland) – but their governments are the strongest supporters of sanc­tions, their willingness to punish the neighborhood aggressor still greater than the desire to profit from trading with it. To put it more bluntly, Europeans now face a choice that is much more moral than economic.

No Economic Benefit

But that doesn’t make this choice easier. On the one hand, the very fact that the Russian economy has already been derailed (although not ruined) by the current situation in the energy markets, as well as by the irres­ponsible policies of the country’s political elite, may lead one to conclude that sanctions are no longer needed. In other words, sanctions were quite useful and they came at the right time; they delivered a blow to the Russian economy that provoked the slowdown, and now we may simply feel that Russia has been punished more than enough.

On the other hand, the same arguments may be interpreted the opposite way. If the Russian economy is doing badly, termination of sanctions would not give Europeans access to a market as strong as it was in the early 2010s. They will be unable to sell roughly half a million vehicles, as EU-based companies did in 2008, or provide financial services to a giant market – and that ignores agricultural sales. Russia has already become a much more autarkic and much less market-oriented country than it was even several years ago, and business with it will not be the same as it was before. It is now clear that the main Russian export for some time now has been not oil and natural gas, but corruption. So if there are no visible benefits from resuming economic cooperation with Moscow, why not leave the sanctions in place for another year – or even longer?

A Value-Based Choice

This makes the choice both easier and more difficult. I suggest that Europeans abandon the rhetoric of benefits and convenience when it comes to the sanctions regime and instead make a value- and interest-based choice, taking into consideration only political arguments. If the sanctions are lifted, after all, there might be an increase of EU exports to Russia of 5-10 percent, predominantly due to increased shipping of food. It would add €4-7 billion (or 0.3-0.5 percent) to overall ext­ra-EU exports – which would hardly change the economic situation in Europe. In some countries it might increase exports by up to 3 percent, but this too would not be a critical change – and all this would happen not when the Europeans ter­minate their sanctions against Russia, but only when Russia lifts its own counter-sanctions, which might take some time.

At the same time, ending sanctions would become a sign of reconciliation between Europe and Russia at a time when anti-EU propaganda inside Russia is at its peak and a policy of undermining the European unity is a top priority. The decision to lift the sanctions would be regarded in Moscow as a clear sign of European weakness and a signal for continuing Russia’s aggression against Ukraine. The EU would lose its moral standing while gaining nearly nothing, since the Russian market will not show any additional demand for European goods and services and Russian tourists will not flock to European destinations as they once did.

But this new economic reality creates an opportunity for the opposite option. With Russia dropping from the third to the fourth position in the EU’s ranking of most im­portant trade partners and presumably drifting further down in coming years, Eu­ropeans may increase their pressure on Moscow without fear of ex­cessive economic damage to themselves. The reason this option is attractive should be clear: Russia has not stopped supporting Donbass separatists and is doing its best to undermine the government in Kiev and destabilize Ukraine. If this happens, Europe will encounter an even greater problem than it faces in Syria and will suffer a major defeat in its foreign policy.

A More Confrontational Course

Thus I would suggest opting for a more confrontational course vis-à-vis Russia, dramatically increasing pressure on its current leadership. Where vital geopolitical interests are at stake, there is no need to take dubious economic considerations into account.

The main problem with EU sanctions was that they affected only a small group of Russians and were difficult to distinguish from the effects of the general economic slowdown. At the same time, they allowed President Putin to rally the Russian public, which is very sensitive to external pressure. If we want sanctions to be effective, we should change our tactics.

First of all, it should be made clear that the sanctions will not be lifted before Ukraine regains complete sovereignty over rebel-controlled regi­ons. There is no need for European leaders to convene every six month and debate an issue that is not progressing at all. Second, the sanctions regime could be reinforced with a demand that all European banks sell off all portfolio investments in Russia, whether these belong to the banks or are held by their clients. Even today, around 60 percent of all transactions in the RTS market involve a Western financial company. This divestment would lead to an un­precedented sell-off in Russian equities, and would send the RTS dollar-denominat­ed index well below 500 points. Since there is no significant internal demand for Russian equ­ities, this move will be felt by a majority of investors. Dec­lining valuations will produce margin calls for many Russian companies and cause a new wave of debt repayment, leading to a further decrease in investment.

Next steps might include a European memorandum stating that EU nations will buy 10-20 percent less Russian gas every consecutive year. If this mo­ve were to be made now, it would be especially effective – Russia will be unable to diversify its gas deliveries until at least 2020, and significant problems experienced by Gaz­prom would resonate across the Russian economy.

Moreover, there are a lot of me­asures that could be taken against the Russian ruling elite – today the Russian autho­rities themselves ban military, security, and police officers from traveling abroad, but the EU could announce a ban on issuing visas to all Russian government and municipal employees. Another option would be to change the policy to­w­ard Russian-controlled assets in Europe, announcing that holdings would have to be sold by, say, January 1, 2018. Russian citizens could be banned from establishing companies in the EU, participating in those that already exist, or holding banking accounts with €10,000 or more – and the list of measures may be extended.

Appeasement Isn’t Working

Why do I propose such complex measures? First, because a strategy of appeasement rarely brings good results. The West tried to reach a deal with Russia after its conflict with Georgia, and got Crimea and Donbass. If Europe and the US forgive Russia for its formal and informal occupation of vast areas of Ukrai­nian territory, Moscow will treat this as a carte blanche for further geopolitical adventures. Therefore, I believe, the pressure being exerted on Russia now is in many ways much more important than any current economic consi­de­rations.

Furthermore, sanctions should be desig­ned in a way that will affect millions of Russian citizens, not just Putin’s friends. Only then can there be hope that the Russians themselves will increase pressure on their government. If huge swaths of the Russian middle-class link their tro­ubles in Europe with President Putin’s policies aimed at redrawing European borders, a great deal may change in Russia, creating the space and impetus for a protest move­m­ent. This is how sanctions used to work and is how they worked in Iran, where the population began to back greater openness in the country, even at the price of its nuclear program.

Make no mistake: What we have seen from Russia since 2008 is an attempt to dismantle the postwar political or­der in Europe. What’s going on today is not only about Ukraine – it’s about the entire continent. The task of European policymakers consists not only in defending Ukraine – it includes protecting Europe, both from explicit Russian aggression and from its policy of undermining European institutions. We need to explore whether the price of san­ctions is as high for Europeans as depicted by Kremlin propaganda; to distinguish the losses caused by sanctions from those caused by a slowdown in the Russian economy; and reconsider a new sanctions package – one that would be able to bring Moscow’s leadership in line with reality. Any attempt to ignore what is said and done in the Kremlin would be an inexcusable mistake.

NB. A longer version of this article will be published by the Atlantic Council.

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They appeared late in February 2014, hundreds of heavily armed and well-equipped Russian speakers who suddenly popped up in Crimea. They wore no insignia, nothing to say who they were. And they seemed to have no commander – apart from common decency.

They were all extremely polite to locals, and hardly ever drew their fancy weapons. Their method of taking over Ukrainian military installations was not to storm in; instead, they kindly advised the soldiers to stay inside, and blocked their way out. There were only two “incidents” in which two Ukrainian officers were killed and another wounded.

President Vladimir Putin denied these polite people existed for more than a year. But other Russians had little doubt that the gentlemen soldiers who were busy being so polite in Crimea were their guys. NATO was equally convinced, although less impressed by their good manners. Later Putin admitted that, yes, the well-behaved soldiers were his.

Russian journalists and bloggers were already miles ahead. Boris Rozhin, who blogs as Colonel Cassad on LifeJournal, coined the term “polite people” back in February 2014. The name fit the soldiers’ role in the new hybrid war scenario, sprinkled with a touch of blogger irony.

Either Voentorg JSC missed this irony or doubled down on it. The firm, a leading supplier of nonlethal ammunition to the Russian armed forces, adopted the name “polite people” – even adding a photo of a soldier with a cat to create an all-Russia trademark.

The polite people are a sign of the continuing militarization of Russia’s foreign policy, and the Kremlin’s lack of respect for rules and norms. Political writers are increasingly – politely – accepting the idea that a hybrid war can be waged anywhere without formal announcement. If the troops say “please” and “thank you,” what’s the problem?

The other thing that the polite people demonstrate is how far the Russian armed forces have evolved over the past couple of decades. In the 1990s and early 2000s, nearly every Russian soldier was a conscript. Yet from 2005, the number of professionals in the armed forces increased from around 30,000 to more than 240,000, and the plan is to push this to half a million by 2022. That would be more than half of all men serving in the Russian uniform – that is, assuming they wear it.

All those sent to Crimea a year ago were contracted servicemen: well equipped, well trained, and psychologi-cally prepared to act even in controversial circumstances. Their politeness may have had less to do with their mothers teaching them manners and more to do with the fact they were far better prepared and armed than the Ukrainian soldiers they faced. In a way, they enacted an updated version of Theodore Roosevelt’s maxim of speaking softly and carrying a big stick.

Could Putin be a polite person? Moscow is as calm as a judo black belt – it can afford to disrespect the rules and ignore the norms of international behavior because it outguns those it faces. And it can avoid a Western military response as long as it remains polite.

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(c) REUTERS/Maxim Shemetov

Russia will soon celebrate a major milestone – the 70th anniversary of the Soviet victory over German fascism. There will be a parade, numerous speeches and hearty congratulations for the few remaining veterans. In short, the proceedings will follow a tradition that Moscow has long observed during these beautiful spring days. However, I think the time has come to gradually phase out that tradition.

Seventy years is a very long time, if not by historical measure, then at least by human standards. After all, 70 years is the average Russian lifespan, meaning that soon not even people who were children during that time of hardship, much less veterans of the Great Patriotic War, will remain. Whether Russians like it or not, that dramatic page of history has turned.

Interestingly, the Soviet authorities only began celebrating Victory Day in the mid-1960s. They had several reasons for doing so – to show respect for the war’s veterans, many of whom were reaching retirement age, to remind specific countries and the world at large of the growing power of the Soviet state as it became a leader in the arms race and space race with the West, and to hold up Soviet society as an example to the world.

Today, half a century later, the original reasons for the holiday are no longer relevant: all but a few of the veterans are gone, and the small number that do remain receive only perfunctory attention from the country on May 9; Russia long ago lost its global standing as a military giant; and the Soviet Union collapsed. Not only the soldiers themselves, but almost the entire wartime Soviet population has passed from the scene.

Now Russia fights not against real fascists in Germany, but against imaginary ones in Ukraine. Given this, it might make sense to radically shift the focus of the holiday.

The Great Patriotic War was a huge and unforgettable tragedy for the Soviet people. No other country paid such a high price in human life for that war. Estimates of Soviet losses range from the conservative figure of 20 million all the way up to 38 million. But even that does not begin to approximate the deaths indirectly resulting from the conflict, the countless Soviet citizens killed as “enemies” of the state or the entire populations forcibly relocated to other regions of the country. Now, when the Germany of World War II no longer even exists in its former configuration, when the soldiers of that day and all their contemporaries have largely passed on and the tactical and strategic lessons of that war have long ago lost relevance, the most appropriate way to characterize that conflict is as an enormous human tragedy.

I emphasize the human side of the tragedy. I am no advocate of “rewriting history” and consider it immoral to belittle the contribution that the Soviet people made toward victory, but I see nothing improper in drawing a clear distinction between the sacrifices made by patriotic citizens and the “contribution” made by leaders who were both inept and indifferent to the suffering of their countrymen. The errors that Soviet military commanders made, their uninspired bungling of military operations and their egregious contempt toward the lives of their own soldiers — as epitomized by their planning to conclude their “Race to Berlin” by May 1, no matter the casualties involved — all of this means that Victory Day is best celebrated not by glorifying the state, but by paying tribute to the soldiers and those who labored on the home front, and by grieving for the innocent civilians and patriots who suffered.

Nobody who grew up or lived even briefly in the Soviet Union will ever forget May 9, no matter which former Soviet territory they now live in or which path those respective countries have taken since. Now that Russia has essentially co-opted the holiday, it not so much unifies the peoples of that former superpower as it serves as a bone of contention between the leaders of those various states — none of whom, by the way, had even the slightest personal involvement in that war.

And if Russian leaders really wanted to achieve reconciliation between peoples, witness outpourings of genuine patriotism, and foster renewed interest in that war and its participants, it would take steps to “personalize” the holiday.

Instead of parading military equipment through Red Square before bleachers filled with officials and heads of state from a motley collection of minor countries, Kremlin leaders should, first, quickly create a serious state agency — transparent, and accountable to the public — along the lines of the US Department of Veterans Affairs. That agency had a budget of $152.7 billion in 2014, and its director is part of the US government.

Second, they should begin working not so much on perpetuating a nostalgic but vague memory of that conflict, as on the detailed retelling of the actual events of the war. That could serve as a source of reflection and pride for current and future generations of people that live in countries that took part in that war and that experienced its hardships and deprivations.

Such a retelling of history is a complex and potentially contentious process, but it is the best way to understand what happened to all those people so many years ago. Russia should not glorify that war as its own history, exclusive of others, but collaborate with the governments and civil society organizations of all the former Soviet entities to create an Institute of Soviet Civilization devoted to the historical study of that long period of mutual co-existence and supported by historical artifacts and documents from that increasingly remote era.

The main principle guiding the work of that institution would be the universal participation by specialists and representatives from each of the former Soviet republics or states. Only in that way could it reflect the multifaceted nature of that bygone superpower, underscore the uniqueness of its heroic and tragic history, and clarify not only the past, but also what lessons we can learn from our fathers and grandfathers, as well as what mistakes we should take pains to avoid.

As long as Russia maintains an exclusive claim over Soviet history, that legacy cannot serve as a source of true patriotism. For it to do so, it must become a history of peoples, and not governments.

If Russia had earlier made attempts to adopt this attitude, if it had gradually shifted its focus to the tragic nature of the war and “reformatted” its collective memory accordingly, if it had given less emphasis to specifically Russian aspects of that conflict and more to the post-Soviet context as a whole, it would not be facing the current wave of “de-communization” that is sweeping former Soviet republics and states.

War is always a tragedy, and history, by definition, is past. If we remember that lesson during this anniversary of that glorious victory, it can improve life for the children and grandchildren of those soldiers who died decades ago so that their progeny might have a better future. We should remember them, but not make their feats into bargaining chips to achieve short-term political ambitions.

NB. A version of this article first appeared in The Moscow Times.

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