Russia Analytical Report, Sept. 10-17, 2018

This Week’s Highlights:

  • A Russia-China defense alliance is a far-fetched possibility, Dmitri Trenin, director of the Carnegie Moscow Center, writes, arguing that the relationship is best described as an entente—a basic agreement about the fundamentals of world order supported by a strong body of common interest. Defense analyst Michael Kofman, however, believes that Moscow and Beijing are not in an entente yet, though the Vostok-2018 wargame represents a “step along that arc.” Moscow has been careful to make the exercise scenario for Vostok-2018  based more on aerospace and naval attack—i.e., aimed at U.S. expeditionary forces and their Pacific allies, as opposed to a land-based contingency that implies fighting Chinese forces, Kofman notes.
  • Trump added 30 percent more people, companies and entities to U.S. sanctions lists during 2017 than Obama did in his last year in office, writes Peter Harrell, adjunct senior fellow at the Center for a New American Security. U.S. sanctions on Russia, according to Harrell, have contributed to a nearly 40 percent decline in U.S. goods exports to Russia since 2013. The rapid growth in U.S. sanctions is giving rise to an equally rapid rise in costs and unintended impacts, he warns.
  • Democratic capitalism is showing signs of deep, systemic sickness in the United States, Europe and Australasia, even as varieties of state or authoritarian capitalism are slowly becoming entrenched around the world, particularly in China and Russia, argues former Australian Prime Minister Kevin Rudd.  If the United States wants to remain a global beacon of democratic capitalism, it must confront its domestic challenges and re-embrace its responsibilities to the liberal international order.
  • Putin’s popularity has recently suffered most among the poor, small-town residents, people on the cusp of retirement, Muscovites and young Russians, sociologist Denis Volkov writes. The decline has been fueled by discontent with the proposed increase in retirement age, as well as by growing fatigue with Putin’s foreign policy, which people see as a significant obstacle to Russia’s development.

I. U.S. and Russian priorities for the bilateral agenda

Nuclear security:

  • No significant commentary.

North Korea’s nuclear and missile programs:

  • No significant commentary.

Iran and its nuclear program:

  • No significant commentary.

New Cold War/Sabre Rattling:

  • No significant commentary.

NATO-Russia relations:

  • No significant commentary.

Missile defense:

  • No significant commentary.

Nuclear arms control:

  • No significant commentary.


  • No significant commentary.

Conflict in Syria:

  • No significant commentary.

Cyber security:

  • No significant commentary.

Elections interference:

  • No significant commentary.

Energy exports from CIS:

  • No significant commentary.

U.S.-Russian economic ties:

  • No significant commentary.

U.S.-Russian relations in general:

“Is the US Using Sanctions Too Aggressively? The Steps Washington Can Take to Guard Against Overuse,” Peter Harrell, Foreign Affairs, 09.11.18The author, an adjunct senior fellow at the Center for a New American Security, writes: “President Donald Trump’s administration added nearly 1,000 people, companies and entities to U.S. sanctions lists during 2017, nearly 30 percent more than the number added during former President Barack Obama’s last year in office. … [T]he scope and complexity of sanctions prohibitions is growing as well. … The rapid growth … is giving rise to an equally rapid rise in costs and unintended impacts. … U.S. sanctions on Russia … have contributed to a nearly 40 percent decline in U.S. goods exports to Russia since 2013 … The political costs are at least as important. … There are growing concerns [about] … long-term, systemic costs as well. It may finally spur allies and major global companies to develop alternatives to the financial and trading channels that give U.S. sanctions enormous global weight. … The first step to containing the overuse of sanctions is to require that policymakers periodically publish an analysis of each U.S. sanctions program … A second, related step … is to provide a formal mechanism for … [those] affected by U.S. sanctions to offer comments on them, and to require sanctions policymakers to address those comments. … The third way … is to ask each new presidential administration to articulate a set of principles for when and how it will use the penalty. … Washington needs to refocus on deploying sanctions in a multilateral framework to the greatest extent possible.”

“The Rise of Authoritarian Capitalism,” Kevin Rudd, New York Times, 09.16.18The author, a former prime minister of Australia and president of the Asia Society Policy Institute, writes: “Democratic capitalism is showing signs of deep, systemic sickness … even as varieties of state or authoritarian capitalism are slowly becoming entrenched around the world, particularly in China and Russia. … [D]emocratic capitalism succeeded remarkably in Asia, Africa and Latin America after World War II, and after the Cold War in particular. … After the end of the Cold War, however, four structural challenges emerged … financial instability, technological disruption, widening social and economic inequality and structural weaknesses in democratic politics. … Russian nationalism represents a departure from Western political, economic and diplomatic norms. China has become increasingly confident in its own model, described as authoritarian or state capitalism. And its 'Beijing consensus' is held up to the non-Western world as an example of a more effective form of national, and even international, governance. If the United States wants to remain a global beacon of democratic capitalism, it must first confront its domestic challenges. … Finance should return to its historical role as the servant of the real economy, rather than its master. … The United States also needs to re-embrace its responsibilities to the liberal international order … History cautions us against any belief that democratic capitalism will somehow inevitably prevail. Unless, of course, we make it so by tending the garden while there is still time.”

II. Russia’s relations with other countries

Russia’s general foreign policy and relations with “far abroad” countries:

“How Badly Did Russia's Interview With the Skripal Poisoning Suspects Backfire? We measured the response—and it was harsh,” Precious N. Chatterje-Doody and Rhys Crilley, The Washington Post, 09.15.18The authors, a research associate at the University of Manchester and a research associate at the Open University working on Reframing Russia, write: “RT, Russia's state-backed international broadcaster, aired an exclusive interview with the two Russian men accused of poisoning Sergei and Yulia Skripal in the English town of Salisbury. The two suspects denied all involvement, claiming to be tourists interested in Salisbury Cathedral. … The tone of RT's programming [covering the Skripal poisoning] tended to vary dramatically … One consistent theme … was the network's critiques of Western political institutions and Western media. RT coverage also employed dismissive irony, humor and informality … Did this strategy work? Yes—but only initially. Our social media research suggests that, initially, English-speaking RT audiences accepted RT's skepticism about official British accounts of the poisoning. RT's YouTube ‘Skripal’ playlist of 60 videos … were upvoted a total of 32,000 times, compared with only 4,200 downvotes, which suggests viewers largely agree with their content. … But this week's interview with the suspects marked a dramatic change—the top 100 most-liked comments included many from viewers who felt the interview was ridiculous and that the suspects' stories were implausible.”

“Moscow Courts the Taliban,” Arkady Dubnov, Carnegie Moscow Center, 09.13.18The author, a political analyst and expert on Central Asia, writes: “Four individuals, referred to as the Taliban field commanders by the Russian news agencies, were scheduled to arrive in Moscow in early September. Muhammad Abbas Stanikzai, the head of the Taliban’s Qatar office, was to lead the delegation to a multilateral peace conference on Afghanistan in Moscow. The forum would feature representatives from Russia, India, Iran, China, Pakistan and Central Asian countries. The United States was also invited. … The conference was called off at the request of Afghan President Ashraf Ghani. … The government in Kabul wants to negotiate directly with the Taliban … Moreover, Kabul’s patron, the United States, made it clear that it believes that the new Moscow conference would be pointless … That is why the United States refused to participate. … Moscow can promise to remove the Taliban from its list of proscribed terrorist organizations. In exchange, the Taliban could guarantee that its military operations won’t threaten the security of Central Asian countries, and that it will renounce terrorism. If that happens, later on Moscow could promise certain political and even economic support for the Taliban. In addition, the Taliban should be even more focused and motivated to combat so-called Islamic State in Afghanistan. All this would be welcome for all the international players associated with Afghanistan, including the United States—even if prospects for peace in a country with a forty-year-long history of guerilla warfare look as dismal as ever.”


“Entente Is What Drives Sino-Russian Ties,” Dmitri Trenin, China Daily, 09.12.18The author, director of the Carnegie Moscow Center, writes: “[T]hat President Xi Jinping is also taking part—for the first time [in the Eastern Economic Forum] … indicates the growing togetherness of Beijing and Moscow … Putin and Xi are on the same page when it comes to the fundamental concept of a desirable world order: several independent power centers … protection of state sovereignty … and full equality in relations among the major powers … Chinese and Russian strategies and tactics in foreign affairs are as different as their cultures, but now that the liberal democratic order led and dominated by the U.S. has past its prime, the two neighbors’ efforts are pretty much aligned. … The Sino-Russian economic engagement has broken new ground with Moscow giving Beijing access to some of Siberia’s energy riches, and promising some infrastructure projects. Crucially, China on the whole kept has away from the U.S.-Russian confrontation, while Russia doesn’t want to be drawn into disputes between China and the U.S. … The Vladivostok forum coincides with Russia’s biggest military exercise in three decades … For the first time, the People’s Liberation Army has been invited to participate in the drills … Still, a Russia-China defense alliance is a far-fetched possibility. … Yet the Moscow-Beijing relationship … is also more than the strategic partnership it still calls itself. … [I]t is best described as an entente—a basic agreement about the fundamentals of world order supported by a strong body of common interest.”

“Vostok-2018: Russia and China Signal Growing Military Cooperation,” Michael Kofman, Russia Matters, 09.10.18The author, a senior research scientist with the CNA Corporation and a global fellow at the Kennan Institute, Woodrow Wilson International Center, writes: “Russia’s minister of defense, Sergei Shoigu, has promised that this month’s Vostok-2018 strategic maneuvers will be the country’s largest military exercise since 1981 … This year’s event has heightened geopolitical significance, with China participating directly for the first time in the exercise itself … Russia’s inclusion of China in this exercise and Beijing’s decision to increase the profile of its military-to-military engagement with Moscow sends important signals. … [S]tarting in 2014, Moscow has been careful to make the exercise scenario for Vostok based more on aerospace and naval attack—i.e., aimed at U.S. expeditionary forces and their Pacific allies, as opposed to a land-based contingency that implies fighting Chinese forces. Official Chinese involvement is yet another indicator that Russia and China are more inclined to balance the United States rather than each other. … This does not mean that they will enter an entente, but it is an important early step along that arc. … Washington is intensifying the military dimension of its competition with both states, invariably pushing them closer together … Russia has already made its choice, while China is in a deliberative mode on how to handle increased competition with the United States. … China alone is a contender for global leadership … and Russia has the resources, military technology and international position to reinforce Beijing’s ambitions. Moreover, China has the financial resources to see Russia through Western sanctions, should it choose to do so … Vostok-2018 helps to remind regional audiences and peer adversaries that, while Russia may not be an Asian power, it remains a power in Asia.”


“Conflict With Russia Hangs Over Ukraine’s Recovery,” Tony Barber, Financial Times, 09.11.18The author, Europe editor for the news outlet, writes: “At a military parade in Kiev … pride of place went to the Javelin anti-tank missiles … acquired earlier this year from the U.S. … Closing the door on Russia, and opening it to the EU via a trade deal, has been a boon to Ukraine’s domestic companies and foreign investors … But the conflict with Russia and Moscow-backed separatists … remains a major threat to the economic recovery. … [T]he government in Kiev, [is] fearful that support in … western capitals may diminish over time as the conflict drags on … Kurt Volker … says [the] U.S. will keep sanctions on Russia until it changes its behavior … Alexei Kudrin, a liberal ex-finance minister of Russia, estimates that the U.S. and EU sanctions have reduced Russian gross domestic product by half a percentage point a year … However, Alexander Valchyshen, head of research at … an investment firm specializing in central and eastern Europe, doubts the sanctions will change Russian behavior. … Russia’s intervention in the Donbass has been the single most important factor of the past quarter of a century in accelerating the process of Ukrainian nation-building, politicians say.”

“Putin Wants God (or at Least the Church) on His Side: A contest over the future of Christianity in Ukraine goes to the heart of Moscow's ambitions,” Christopher Stroop, Foreign Policy, 09.10.18The author, a freelance writer, public speaker, and commentator on religion and politics, writes: “A global struggle is playing out within the politics of Eastern Orthodoxy … That struggle pits the Russian state and the Russian Orthodox Church against Constantinople and its apparent support for an independent Ukrainian Orthodox Church. … [T]he Russian Orthodox Church is by far the largest … [and] it is the only Orthodox church backed by considerable state power today. Yet the Russian Orthodox Church and the Kremlin still resent the symbolic and moral authority of Constantinople … Ecumenical Patriarch Bartholomew is recognized by the other Orthodox churches as having the status of first among equals. … Around two-thirds of Ukrainians are Orthodox, but since 1991 believers have been split among three separate bodies. Only one of these, the Ukrainian Orthodox Church of the Moscow Patriarchate, is officially recognized by global Orthodoxy—and it falls under the jurisdiction of the Russian Orthodox Church, providing an important tool of influence for Moscow. … Ecumenical Patriarch Bartholomew appears set to deal Russia an important blow … by granting autocephaly, or self-government, to Ukrainian Orthodox Christians … To be sure, the Kremlin is likely to attempt some kind of retaliation … but at the end of the day, both Ukraine and Constantinople will have won an important moral victory.”

Russia's other post-Soviet neighbors:

“Why Russia Starts So Many Conflicts on Its Own Borders,” Anna Ohanyan, The Washington Post, 09.12.18The author, a professor of international relations, writes: “To protect its borders, Russia splinters and shatters its borderlands … In our new book, we call this a strategy of ‘regional fracture.’ … [O]ver the past two decades, Russia has exploited existing regional conflicts and cleavages, and created new ones. … The problem is that fractured regions can become global security threats. … Not all of Russia's efforts are overtly political or military moves … Moscow has cajoled or compelled post-Soviet states to join two of its regional organizations … often insisting on exclusivity. … During the Cold War, rival and externally led blocs often subsumed ordinary regional interests, and proxy wars sprung up around the world. After the collapse of the Soviet Union … the West looked to peel away individual states from the Russian orbit … And, to globalize market economies and boost geopolitical stability, the West tolerated illiberal governments, fraudulent elections and authoritarian rulers in Russia's periphery. … [F]ractured regions fuel instabilities and armed conflict by empowering authoritarian governments. This is likely to strengthen Russia's increasingly institutionalized, and often divisive, presence in the contested areas, if Western capitals neglect regional ties in Eurasia. … For the West to manage Russia's divisive policies in the shifting geopolitical sphere in Eurasia … rewiring of policies to recognize region-building as an overlooked principle of diplomatic engagement and development is long overdue.”

“Why Oligarchy Is Spreading Like Ink: Rich people are gaining power over electorates across the world,” Edward Luce, Financial Times, 09.14.18The author, a columnist and commentator for the news outlet, writes: “McCain was a flawed maverick. One of his blind spots was a tendency to romanticize countries like Georgia. … The temptation to contrast Russia’s democratic neighbors with Muscovite autocracy was strong. Each of these countries, to one degree or another, is in thrall to strongmen and oligarchs. Georgia, which is the most democratic of the lot, is dominated by a single oligarch, Bidzina Ivanishvili … I asked Georgia’s latest prime minister, Mamuka Bakhtadze about who his boss was. Was it the Georgian electorate, or Ivanishvili? His answer was fumbled and unconvincing. … To one degree or another, extremely rich people are gaining power over electorates across the world. Is the U.S. an oligarchy? … We tend to call people like Jeff Bezos and Sheldon Adelson billionaires rather than oligarchs. … Bezos’s net worth is now above $100 billion, which is the GDP of a medium-sized country … McCain famously said: ‘We are all Georgians now.’ Perhaps we should take his remark in the widest sense.”

III. Russia’s domestic policies

Domestic politics, economy and energy:

“Why Putin Is Losing Popular Support,” Denis Volkov, Carnegie Moscow Center, 09.11.18The author, a sociologist and expert at the Levada Center in Moscow, writes: “The approval ratings of Russia’s leaders and its institutions have been declining for more than three years. Proposed changes to Russia’s pension system have sharply affected the approval ratings of Russia’s leaders and its institutions. … Aside from the president’s approval rating … there exist other indicators of support for Putin: the extent to which Russians trust him, as well as the percentage of Russians willing to vote for him in an election. Both figures have fallen to 48 percent; in the spring, they stood at 60 percent. Other government institutions’ approval ratings have been steadily declining since late 2014–early 2015. … [T]he pension reform plan … has simply intensified an existing downward trend: popular support for all major government institutions, including the presidency, is waning. … The president’s popularity suffered most among the poor, small-town residents, people on the cusp of retirement, Muscovites and young Russians. … Russians are [also] tiring of the country’s foreign policy. … Increasingly, people see foreign policy as a significant obstacle to Russia’s development. The current economic situation also adversely impacts approval ratings. … As hopes for positive change fade, so will loyalty to the president, making his departure from politics in 2024 much likelier.”

“Russia’s Thugs May Be Too Much for Its Technocrats. Don’t be fooled: The slick professionals in Putin’s regime serve a thuggish state,” Leonid Bershidsky, Bloomberg, 09.14.18The author, a journalist and veteran Russia watcher, writes: “Many countries present a number of different faces to the world, but Russia goes them all one better. … One of these faces got a lot of airtime this week. First, Gen. Viktor Zolotov, head of Russia’s National Guard, published the video of his out-of-control rant against anti-corruption activist Alexey Navalny … The contrast between Zolotov’s office and the manner of a gopnik, a petty thug, was inescapable. … On Thursday, the world saw more of this side of Russia when the two men accused in the U.K. of having poisoned ex-spy Sergey Skripal were interviewed by … RT, the Kremlin’s overseas propaganda network. … These two were also gopniks, not suave intelligence officers … But how to square that with the other side of Russia? Last week, Russian Central Bank governor Elvira Nabiullina … gave a lecture at the International Monetary Fund. … The two-faced nature of the Russian state isn’t about the mysterious Russian soul or the complex national character … There is no balance between the thugs and the intellectuals: There is a clear hierarchy, an unambiguous understanding of who works for whom. The thugs are the ones who run the country by stifling dissent and providing the force behind corrupt networks. … Putin is with them in all of this … Even when Putin talks like Nabiullina … he’s only paying homage to the support crew … These economists and managers have long since made a pact with the devil … Their greatest fear is that their magic won’t be enough to keep Putin’s Russia together at some point … Zolotov’s outburst and the Salisbury fiasco are signs that things are moving that way.”

“Russia’s New Agenda: Choosing Between Two Versions of State Capitalism,” Andrei Kolesnikov, Carnegie Moscow Center, 09.12.18The author, a senior fellow at the Carnegie Moscow Center, writes: “The hunt for funding to implement the decrees on social spending that President Vladimir Putin passed in May … has offered something of a peek behind the curtains of Russian state capitalism. … Presidential aide Andrei Belousov has proposed a windfall tax on metals and mining companies … That idea was opposed by Finance Minister Anton Siluanov, but although the prevailing position at a meeting attended by the latter … seemed to be a move away from enforced ‘voluntary’ payouts, nobody has rescinded the idea of business offering episodic aid to the nation. It’s typical that Prime Minister Medvedev has removed himself from the decision of whether it’s better to just appropriate the money or give it the status of ‘investments,’ ‘taxes’ or ‘public agenda.’ It’s hard to deny that this is a Kremlin affair. … The problem is that the head of state has also removed himself from the discussion … In the case of Belousov versus the metals magnates and chemists, Putin has remained an observer who is not willing to suggest moves to either side … This is a situation that is occurring more and more frequently in the Russian political system: a competition among loyalists for the attention of the patron, who doesn’t show a preference for either side, and doesn’t even make a final decision. The competing sides make it themselves, understanding that they will have to continue to do so more frequently.”

Defense and aerospace:

  • No significant commentary.

Security, law-enforcement and justice:

  • No significant commentary.