Moscow's Red Square covered with snow

25 Years of US-Russia Relations: What Went Wrong and Can It Go Right?

April 14, 2017
RM Staff

A quarter century has passed since the Soviet Union broke apart. In the early 1990s, it seemed like there was no place for America and Russia to wind up except on the same side. But today, tensions between the two have grown so high that talk of a new Cold War is all but constant.

Recently Georgetown University’s Center for Eurasian, Russian and Eastern European Studies1 gathered together top experts on U.S.-Russia ties to explore the lessons learned, the role of diplomatic and commercial relations and the possibilities for improving a crucial bilateral relationship.

As bad as tensions in U.S.-Russian relations have become, there are some key differences between now and the Cold War, according to Pulitzer Prize-winning author and political scientist William Taubman, who was one of the first to speak at the conference: The standoff is much less ideological, or at least the ideological contradictions are different (and perhaps less explicitly stated) than the old ones; it is not as global; and it does not seem to pose—at least not yet—the danger of nuclear Armageddon. Prof. Taubman also shared his impression that the hostility toward America is now deeper in Russian society than at the end of the Cold War, with much less admiration for America than in those heady days.

The summaries below focus primarily on the speakers’ presentations and not the question-answer sessions that followed. The latter, however, are included in the full video of each session, which can be viewed via the hyperlinks. All summaries are paraphrased, not verbatim, except where quotation marks indicate otherwise. Comments in parentheses have been added by the rapporteur.

Introduction

Full video (56:45)

Any serious discussion of U.S.-Russian relations since the fall of the Soviet Union must consider the nature of bilateral ties before that milestone event. This historical context was provided by Prof. Taubman who spoke about the different stages of the Cold War, focusing on U.S. and Soviet leaders, who may not be “the whole story, but they matter a lot.” Prof. Taubman identified four stages of the Soviet-American standoff:

  1. Stalin-Roosevelt/Truman: This was the height of the Cold War, featuring all five of the characteristics identified by Columbia University’s Robert Legvold to the utmost degree: each side sees the other as primarily at fault; there is no room for compromise; each side sees regime change as the only possible end to the standoff; any agreement is merely tactical; the conflict is actually a web of multiple, interconnected conflicts, including economic and ideological ones. Soviet leader Josef Stalin was unique in his paranoia and held an extremely harsh view of the West. While President Franklin Roosevelt tried to warm up personal relations, calling his Soviet counterpart “Uncle Joe” and writing that they “talked like men and brothers,” his successor, Harry Truman, lurched to the other extreme, thinking that Stalin was preparing for war.
  2. Khrushchev-Eisenhower/Kennedy: This was still very much the Cold War but different from the previous stage, both because of differences between Stalin and his successor, Nikita Khrushchev, and because of U.S. reactions to them. From the mid-1950s (until 1958), Khrushchev was really trying to ease tensions: Within several years he had made cuts in armed forces, opened the USSR to Western cultural influence and withdrawn Soviet troops from Austria and Finland. But the U.S. was slow in responding, never really understanding his approach—neatly summed up as “be my friend or I’ll break your neck.” U.S. Ambassador Llewellyn Thompson, later credited with helping to defuse the Cuban Missile Crisis, wrote in a cable in March 1959: “We have refused these overtures or made their acceptance subject to conditions he as a Communist considers impossible.”2 (During the Berlin Crisis and the Cuban Missile Crisis, Khrushchev changed tack and opted for deliberate escalation.)
  3. Brezhnev-Nixon/Kissinger: Soviet leader Leonid Brezhnev had a steadier approach and under President Richard Nixon, advised closely by Henry Kissinger, a kind of détente was achieved. But this would be eroded by domestic factors and followed by the first “new Cold War” after the Soviet Union invaded Afghanistan and President Ronald Reagan initially led an assault on détente together with others in Washington like Sen. Henry Jackson.
  4. Gorbachev-Reagan: In 1985 the world looked pretty grim, as if the Cold War was intensifying. But with Reagan challenging the USSR and Moscow’s deep economic problems, Gorbachev had to push for a breakthrough, especially in nuclear disarmament, and this required him to “revise” Communism.

Session 1: 25 Years of Lessons Learned and Unlearned

Full video (1:40:47)

This session focused on the 1990s and most of the presenters spoke to some extent about the surprises, mistakes and missed opportunities of those years, as well as the decade and a half since. The conversation also included some disagreement about the West’s efforts to integrate Russia into its institutions after the Cold War.

The main surprises identified by specific speakers:

  • The collapse of the Soviet Union itself (Amb. Vladimir Lukin, now a Russian senator);
  • That after 1991 Russia did not stay on the path of Euro-Atlantic integration (Prof. Legvold of Columbia and Amb. Alexander Vershbow, now with the Atlantic Council);
  • The rapidity with which President Vladimir Putin, after 1999, was able to recentralize and reassert authority, to move against the oligarchs and regional barons and to do a lot more with “the injection of a little money into the system”; also the surge in Russia’s economy under Putin (Dr. Thomas Graham of Yale University and Kissinger Associates, Inc.).

One of the most interesting disagreements during the session concerned the post-Cold War order, particularly in the realm of international security, and the ways Russia’s place in that order was determined. The bluntest negative assessment came from Dr. Sergey Rogov, former director and now academic dean of the Institute for U.S. and Canadian Studies of the Russian Academy of Science: When Russia was weak and disoriented after the Soviet collapse, America made a “crucial … blunder,” he said—it decided to build a European system without Russia. It decided to build a new security system on the basis of NATO, to which Russia did not belong, and a new economic system around the European Union, to which Russia also did not belong. Dr. Rogov felt President Bill Clinton’s administration had made a mistake by dealing with the “low-hanging fruit” and absorbing Moscow’s former clients into NATO and the EU. When Mikhail Gorbachev called in 1988 for an inclusive and pluralistic world order, he intended for Russia “to be inside the tent,” not outside, according to Dr. Rogov. Amb. Lukin added that there had “definitely” been alternatives to NATO enlargement, like the 1990 Charter of Paris and a revamped version of the OSCE. Prof. Legvold also said that East and West had “failed to create a pan-European system.” The dissenting opinion came from Amb. Vershbow, who started the first of his three NATO assignments in the summer of 1991, later served as ambassador to Russia and was most recently deputy secretary general of NATO. He believes NATO enlargement was not a mistake and that the U.S. and its allies tried hard to pull Russia into an inclusive security system, inventing “all kinds of new institutions” to do so. That said, he acknowledged that no one could be confident at the time how events in Russia would unfold and NATO enlargement seemed like “a prudent hedge” against what could happen there. Amb. Vershbow called NATO enlargement a political, not a military, project.

Dr. Graham, who served on the National Security Council from 2002 to 2007, cited two examples of policies that might have been enacted differently, saying there was a time when President Putin wanted an equal partnership, and Russia had grown strong enough to be a constructive partner, but the U.S. didn’t take the risks necessary to test how willing he was to reciprocate, though it could have afforded those risks as the stronger of the two countries. Dr. Graham’s “what if” scenarios: (1) What if Washington had allowed Moscow a greater role in restoring Afghanistan, where the two had worked very closely in the initial phases of the U.S.-led war and America even used Russian intelligence? And (2) what if talks in the NATO-Russia Council had been a genuinely open discussion of equals, instead of Washington deciding that NATO should find a unified position and present it to Russia? Earlier Amb. Vershbow, too, had said that perhaps the West had missed opportunities after 9/11, failing to understand President Putin’s “transactional side,” taking too much for granted and not appreciating the concessions Russia had made.

In discussing mistakes, all the speakers mentioned the newly independent states of the former Soviet Union and at least two spoke of Russia’s post-Soviet transition period. Prof. Legvold described the “toxic interaction” between East and West over the “ex-Soviet space” as one of the “malignant seeds” that has spoiled bilateral relations. Amb. Vershbow noted that President George W. Bush’s administration should not have pushed so hard for Georgia and Ukraine to be admitted to NATO in 2008, its last year in office. Dr. Rogov said the main responsibility for Russia’s “zig-zagging development” lies with Russia itself and credited the U.S. with doing all it could to make sure there was no divvying up of the Soviet nuclear arsenal, but added that the U.S. became part of the problem by uncritically supporting certain policies and economic reforms in Russia in which most of its people lost out. Amb. Lukin pointed out that in the early 1990s people in the U.S. understood only very superficially what had happened in the USSR. Prof. Legvold, too, spoke of the “distorted character of transition in Russia.”

In closing, all the speakers tried to touch on lessons learned and ways forward. Dr. Graham saw three lessons looking back: (1) The U.S. needed to show more respect for Russian power; (2) never underestimate Russia’s willingness to defend its national interests; (3) we always need to imagine that we might be wrong in our assumptions and our policy prescriptions and always have to be willing to go back and readjust. Prof. Legvold said neither side ever focused enough on the stakes in the bilateral relationship: In a world of nine countries with nuclear weapons (and several more with the strong potential to develop them), climate change and other major transnational problems, some form of partnership is imperative. Amb. Vershbow thinks the real divergence between Moscow and Washington lies in their values gap and came with Russia “shutting down civil society.” Now, he said, the best we can hope for is to minimize risks and work on confidence-building. Dr. Rogov called for five measures to help get out of the “new institutionalized confrontational relationship”: reining in propaganda on both sides; invigorating confidence-building, drawing on some of the forgotten Cold War-era rules for reducing the risk of accidental war; resuming normal political dialogue; resuming military-to-military contacts; and finding a political solution in Ukraine.

Keynote: Madeleine Albright and Igor Ivanov

Full video (1:01:28)

This portion of the conference featured an amiable discussion with two former top diplomats whose main message seemed to be that a crucial key to successful diplomacy is to develop personal relationships, with frank and frequent discussions behind the scenes—sometimes traveling in delegations with people from different departments—and a genuine attempt to imagine yourself in the other’s shoes.

“It’s a pity that we worked only two years together,” Mr. Ivanov said; had it been more, U.S.-Russian “relations would be better.” (He served as Russia’s foreign minister from 1998 to 2004; Ms. Albright was U.S. secretary of state from 1997 to 2001.)

The biggest challenges the two grappled with in their time as counterparts had been in the Balkans—at a time that included the 1999 U.S. bombing of Belgrade—and with the Anti-Ballistic Missile Treaty, which Washington had considered abandoning (and did in 2001). In both instances, the personal rapport between the two diplomats helped mitigate the fallout. Mr. Ivanov recalled getting an unexpected evening phone call from “Madeleine” as he was having dinner with his family; she said she wanted to personally inform him that “in a few hours we’ll start bombing Yugoslavia.” Thinking about why she bothered to do this, Mr. Ivanov said, he understood that the military operation would be short and, afterward, they would have to keep on working together on the political side. Ms. Albright added that she imagined herself in Mr. Ivanov’s place: “Why would I want a surprise like that?” Mr. Ivanov’s second example concerned the end of the Clinton era when the U.S. had started to question its need for the ABM treaty: Ms. Albright invited him to put together a delegation of his “military people” and go to the Pentagon for talks. He did and a little while later Washington decided to postpone its decision on the treaty.

Going forward both expressed some worries not just about bilateral relations, but the overall global balance. Ms. Albright was concerned that America’s posture had become unpredictable and that the country’s new leader had “no experience.” Mr. Ivanov said that the main players on the world stage speak about specific issues but not about the “global situation. … What is multi-polarity?” he asked. “Which poles?” International organizations are not solving existing problems, posing the risk of greater disorder.

Both also noted how much harder the next generation of diplomats will have it, as the field of international relations has come to require a knowledge of everything from economy and nuclear weapons to space and cyber security.

Session 2: The Role of the Private Sector and Commercial Relations

Full video (01:39:27)

This session brought together one Russian political scientist and four American businessmen who have been working in Russia for the last 20-25 years and have, between them, directed about $6 billion in investments into the country by the session chair’s estimate. These entrepreneurs have collectively helped create major businesses that are now household names in Russia, like the telecoms company Vympelcom, Yandex (known as Russia’s Google), online seller Avito, TV networks CTC and MTV-Russia and medical-services providers InVitro, European Medical Center and Mat’ i Detya. They spoke of their ties to Russia, the role foreign investment has played in its economy and the country’s economic outlook as they see it.

Session chair Daniel Russell of the U.S.-Russia Business Council kicked things off with five basic points:

  1. Russia’s economy rebounded from the twin shock of low oil prices and Western sanctions much better than expected and the flexible ruble exchange rate was a big part of that;
  2. The impact of sectoral sanctions was significant, but the collapse of oil prices was “the main thing,” plus Russia’s own counter-sanctions drove up food prices 15-20%;
  3. Russian economic woes predate the 2014 drop in world oil prices—growth had slowed considerably before then;
  4. Economic recovery is going to be slow and the government’s goal of 4% growth in the near term is unrealistic;
  5. The elephant in the room is the lack of comprehensive structural reform, which would reduce the state’s role in the economy and encourage greater competition.

Next, Feodor Voitolovsky of the Primakov Institute of World Economy and International Relations described the historical background of U.S.-Russian economic relations, giving a play by play of the entire Soviet and post-Soviet period. He made three main points: (1) Political motivations have largely trumped economic ones in U.S. economic policy toward Russia; (2) bilateral economic relations have gone through alternating periods of positive and negative; (3) but with trade ties as weak as they are, economic interdependencies have never become a buffer against political frictions between Moscow and Washington, as they did, more or less, in the U.S.-China relationship or in Russia’s pre-Ukraine ties with the EU. Dr. Voitolovsky noted that while U.S. investment in Russia circa 1987-1993 was small in absolute numbers, it was very significant in helping develop market principles—a point on which the other speakers generally agreed.

Michael Calvey of the private equity firm Baring Vostok agreed that Russia’s economic recovery will be slow, but still felt the country’s a good investment for at least three reasons: (1) Russia’s experiencing the same long-term change as economies all over the world, with online commerce and “transformative businesses” growing very fast, including the ways businesses are finding customers; (2) inflation is coming down to single digits for the first time since he’s been there; (3) industries that are well developed in other parts of the world, like insurance, are in their infancy in Russia and have huge potential there as the bank rate changes and investors look for better returns on their money. Mr. Calvey noted that when he and the other speakers started out, people in Russia didn’t believe you could make money from a company’s shares, but foreign investors have changed that: They have shown that you can make money off a company by keeping money in it, not “sucking it dry” and non-transparently making money on the side. He was pessimistic about the prospects for any objective, critical reassessment of U.S. policy on Russia in the current political climate.

Drew Guff, managing director and founding partner of Siguler Guff, pointed out that private equity money is very long-term, especially in Russia, which has less liquidity than the U.S. and capital markets that don’t work as well. Up until the Ukraine crisis in 2014, the returns on those private investments were excellent, “always top-quartile.” Today there’s a kind of pause, a break in the action. Interest in Russia is muted—partly because of the politics, partly due to lack of meaningful structural reform, which is unlikely until after Russian elections in 2018. Mr. Guff agreed with Mr. Calvey that the biggest returns in Russia, like in China, India and other emerging markets, are going to come from technology and the shift to a digital economy—how people search for things, pay for things, etc.

Peter O'Brien, a former CFO of Russian oil giant Rosneft and an independent director at pipe manufacturer TMK, expressed the half-optimistic, half-whimsical hope that low oil prices would actually force through some of the changes needed to make Russia’s economy more amenable to foreign investment, after the 2018 elections at least. He also pointed out that all strong industries have their natural life cycles, mentioning an oil executive who had always been very bullish on Russia but recently shut down his office, saying that with these oil prices he could do better economically in the U.S. Mr. O’Brien voiced concern about Russia’s human capital: In part due to Western sanctions, there’s a brain drain of people “who could have been our partners” and, more generally, Russia has troubles with education.

Charles Ryan of UFG Asset Management expanded on Mr. O’Brien comments, saying Russia still has a very large group of entrepreneurs who are willing to “jump through hoops and comply with everything” and it is sad, disappointing and frustrating to see some of the constraints placed on them, like the ones resulting from sanctions. He also shared some anecdotes from his early days in Russia, including a revealing one about a meeting with President Putin when he was deputy mayor of St. Petersburg dealing with foreign investment. Mr. Ryan was working with the EBRD and went to Mr. Putin to pitch a tax waiver for Gillette, which wanted to invest in a local plant but, under the existing tax code, would have had to pay something like 140% on its turnover. He had prepared to give a detailed presentation, but Mr. Putin was exhausted and didn’t want to hear it, saying, effectively, “I get it.” Mr. Ryan tried to clarify what exactly the deputy mayor “got.” Wearily, Mr. Putin explained: We haven’t been in power long, but we want to stay in power and staying in power means providing people with some benefits; benefits mean jobs; jobs require capital, which we don’t have right now; foreigners do have it; foreigners want tax breaks; ergo, tax breaks for foreigners mean we stay in power.

Session 3: U.S.-Russia Relations: A Way Forward?

Full video (01:36:37)

Harvard’s Paula Dobriansky stated that the U.S.-Russia relationship is at a very low point and proceeded to mention three relatively new reports, all with somewhat different positions: an Atlantic Council report that calls for “constrainment” with principled engagement; a Center for the National Interest report calling for a new direction in relations focused on particular areas vs. a broad approach; and one by the Elbe Group, also with very clearly defined areas. (Session chair Andrew Kuchins also recently produced a report on a new Russia policy for America.) From a U.S. perspective, Dr. Dobriansky said, compromise may be difficult as there’s a view that certain kinds of conduct by Russia make moving forward difficult.

Andrei Kortunov of the Russian International Affairs Council pointed to a roadmap for U.S.-Russia relations that he recently co-edited with Olga Oliker from the Center for Strategic and International Studies. In it, the authors try to identify “low-hanging fruit” for cooperation and they came up with eight or nine such items—though some are “toxic” and would require better bilateral relations, while others would require a multilateral approach. He also said that while the word “hybrid” has taken on a negative connotation of late, a “hybrid” relationship is probably the best we can expect—not because it mixes cooperation with confrontation, but because it combines two overlapping agendas, each with its own logic, stakeholders and momentum. The first, “old one” is essentially inherited from the last century, including issues we failed to resolve, or swept under the rug, and now it’s come back. The major items there are the arms race/arms control and non-proliferation; it offers an important stimulus for cooperation, but we must fix it and move ahead. The “new” agenda involves emerging problems and opportunities: climate change, migration management, international terrorism, global governance, including the reform of international institutions like the U.N., food security and the Arctic. There are entirely different groups of stakeholders on both sides. Again, there will be clashes of interests, but they’ll be different from those on the old agenda. We should try to balance the two.

Stefan Meister of the German Council on Foreign Relations gave the German perspective on Russia and U.S.-Russian relations, saying that German-Russian relations have also fallen to their lowest point in the post-Cold War period, with politics now dominant over economy in Russian-European relations—a big change. The fundamental shift came after Ukraine, which has made it impossible for Germany to cooperate with Russia as allies, although both countries are “sitting in the same boat” about President Donald Trump—neither knows what he wants. Presidents Putin and Trump both mistrust international institutions and want only deals among big powers, Dr. Meister said, adding that the Russian leadership is missing an opportunity to re-engage with Germany because Moscow believes European elections will improve its position anyway. Russia is focusing on the big picture of a new international framework, while the West is focusing on small steps. They’re needed.

Arkady Ostrovsky of The Economist magazine said that what we’re living through is not a return to the Cold War, but the result of the way it ended and how that end was perceived. We are really looking at a stand-off between liberalism and national-populism, which is not confined to any one country. Studying the end of the Cold War is relevant: Russia emerged from the Cold War with the thought that once Communism ended Russia would become a “normal country.” But 1999—the year after Russia’s financial crisis (and the year the U.S. bombed Yugoslavia without either Russia’s or the U.N.’s support)— emphasized a disillusionment with reforms and their failure to deliver on promises, which was then sublimated into anti-Americanism. The rhetoric of the elder President George Bush’s administration about “victory in the Cold War” conjured the idea of a military triumph, enhancing the idea of military power as a tool of spreading democracy, Mr. Ostrovsky said. If Russia was defeated, the logic suggests, it’s only natural that it would one day seek revenge. The end of the Cold War was a precursor to the far right we’re seeing now. Putin understood, not right away, but pretty early on, the importance of narratives and ideas. Putin and Trump are both over-the-top TV personalities who have used the media and narrative very powerfully, while liberals have given up the historic narrative, allowing the likes of nationalists to seize it. Orwell wrote about this in reviewing Hitler’s “Mein Kampf”: Pacifist tin soldiers somehow don’t cut it; there’s a need for heroic narratives.

Paul du Quenoy, a history professor with the American University of Beirut, warned the audience that his assessment would be gloomiest of all. What to do about souring U.S.-Russia ties? he asked rhetorically: “Get used to it.” That said, he reiterated what Prof. Taubman had said earlier—that relations between the two have been an awful lot worse than now in the very recent past. It is nothing new for nations to have irreconcilable interests, he added, and in a number of the post-Cold War flashpoints, America and Russia have no basis for agreement, particularly when one wants the other gone from a region, while the latter insists on maintaining a presence. Prof. du Quenoy noted that the Arab perspective on Syria is very different than in the West. The situation seems intractable and neither side has an incentive to end the problem. In his own view, Russia’s current international strategy seems “hopelessly unrealistic,” as it’s difficult to act like a great power “when your econ is smaller than Spain’s.” Bold as they were, Moscow’s moves in Ukraine were very limited. In Syria, too, air power is the primary weapon, not boots on the ground. So Russia’s exercise of power is mostly diplomatic, including cultural diplomacy, and often includes a highly “legalistic” approach to foreign policy, exemplified by the frozen conflicts in Ukraine and Georgia, which preclude them from getting NATO membership. For Moscow, a fundamental problem remains, he said: It seeks much loftier goals than it can achieve. None of this means that America and Russia can’t find some common points and “islands of cooperation.” One of these may be the fight against radical Islam, which, in Prof. du Quenoy’s estimate, poses a much bigger problem for Russia than official media lets on.

Event summary compiled by Russia Matters editor Natasha Yefimova-Trilling.

Footnotes

  1. The center, incidentally, is part of Georgetown’s Walsh School of Foreign Service, named after a Jesuit priest-cum-diplomat who witnessed firsthand the devastation across Russia immediately after the Bolshevik revolution and the civil war that followed and later wrote a book about the revolution.
  2. Thompson, who, in his years as a more junior diplomat, had stayed in Moscow during the Nazi invasion of 1941, explained Khrushchev’s decision to initiate the Berlin Crisis in November 1958 with these words: “We are in the process of rearming Germany and strengthening our bases surrounding Soviet territory. Our proposals for settling the German problem would in his opinion end in dissolution of the Communist bloc and threaten the regime in the Soviet Union itself.” (From “Berlin 1961: Kennedy, Khrushchev and the Most Dangerous Place on Earth” by Frederick Kempe.)