The National Interest

As the U.S. election draws near and Dmitry Medvedev prepares to take office, is there an opportunity to revitalize and redirect the floundering U.S.-Russia relationship? This was the subject of an all-day conference held on April 28, at the Nixon Center (co-sponsored by The National Interest). U.S. and Russian experts gave a comprehensive examination of the future of U.S.-Russian relations, particularly in the context of new leadership in both countries. Keynote speakers addressed the condition of the overall political and economic relationship, and also outlined key policies and specific conduct to keep in mind. In the opening remarks Dimitri Simes, publisher of The National Interest and president of The Nixon Center, thanked those who traveled from Moscow to attended and stressed the importance of organizing an unofficial dialogue of people who are not tied too closely with their respective governments, yet are well-versed with the pertinent issues. The three keynote speakers from Moscow went on to meet with officials at the State Department and on Capitol Hill, including Deputy Secretary of State John Negroponte and Senator Ted Stevens (R-AK).

Foreign Policy in Flux

The first session, moderated by Blair Ruble, director of the Kennan Institute, began with general outlines of the political transitions in each country. Jim Hoagland of the Washington Post, started by observing that President George W. Bush’s public approval ratings have fallen to an historic low, meaning that he has little political capital to try and undertake any dramatic new initiatives in his remaining months in office. With the clock running out, the administration must settle on passing the torch on many original goals.

However, all three of the presidential candidates who would succeed Bush are “engaged internationalists” who will reject unilateralism and seek to repair and strengthen America’s relationship with its allies. The candidates will also refrain from “the panacea of fortress America.” The veteran journalist pointed out that there is a universal fragmentation of state power and a rebalancing of power that requires a sustainable international system. This rebalancing will cause the United States to play a “vital,” but “less dominant” international role. Hoagland predicted that the next administration will not treat Russian as a secondary power and will work at reforming international institutions. He saw three areas where U.S. and Russian interests converged: trade, climate change and global terrorism. “There is a real possibility of seizing the moment in the time of transition,” Hoagland asserted.

Following Mr. Hoagland, Gleb Pavlovsky, the president of the Foundation for Effective Politics and a key advisor to both Putin and Medvedev, described key elements of Russia’s transition, particularly the Medvedev-Putin dynamic. Mr. Pavlovsky began by explaining the keen interest and involvement of Russia’s ruling class in ensuring a peaceful transition of power, prompting three proposed power-sharing models. The chosen model comprised of retaining the dual leadership of the president and prime minister with the appropriate checks and balances. The alternative models gave Putin considerably more power. A change of particular note is the restoration of the full scope of authority of the cabinet of ministers. There is also a possibility of shifting the responsibilities of the minister of foreign affairs to the prime minister. In response to questions about Medvedev’s “debt” to Putin for his position, Pavlovsky was careful to note that “the foreign policy of the Russian Federation is determined by the president of the Russia Federation.” Overall, the speaker was optimistic about the model stating, “All of these changes will strengthen the mutual restraint and multipolarity of the government.”

Pavlovsky explained that avoiding conflict between the two pillars of leadership is a priority. In this context, Pavlovsky noted that Putin endorsed Medvedev as his successor in large part because he agreed with his vision. In some cases, other candidates visions’ may have actually been detrimental to Russia. Pavlovsky indicated that Putin wanted to avoid “the risk of stagnation” in Russia and saw Medvedev as the most promising candidate in this regard. The speaker also said that disagreements between the two leaders would most likely be settled amicably. This is particularly true because Russian foreign policy is currently well defined and will likely stay that way. Putin laid the framework for future Russian policy during his 2007 speech in Munich and Medvedev does not appear to have any drastic new ideas or reforms. Although Pavlovsky does not foresee any sweeping changes in substance, he noted that stylistic changes may be forthcoming.

On this note, the speaker outlined avoiding confrontation as Medvedev’s fundamental foreign-policy objective; Medvedev views non-confrontation as central to his larger goal of Russian modernization. Pavlovsky expanded, “Russia is not interested in a military confrontation in the Caucasus.” Knowing this, Pavlovsky explained that the U.S.-Russia relationship is much like a high-stake poker game where “some players plant false impressions of Russian intentions.” The Russian advisor saw a need to expand the agenda for nuclear strategic cooperation on non-proliferation issues, but noted that additional information channels would need to be opened. Pavlovsky also predicted a closer EU-Russia relationship and that in many ways Medvedev’s “modernization” is “Europeanization.”

Aims & Action

The second session gave a rather dismal outlook on the future of U.S.-Russia relations. Ambassador Stephen Sestanovich, a former ambassador-at-large, who is now the Council on Foreign Relations’ top Russia expert and a foreign-policy advisor to Hillary Clinton, moderated the session. Speakers analyzed converging and diverging national interests, while also suggesting future measures to ease tensions and aide collaboration. Mark Medish, the vice president of Russia, China and Eurasia Studies at the Carneigie Endowment for International Peace, described the U.S.-Russia relationship as “unproductive on its good days and dangerous on its bad days.” Alexei Pushkov, a prominent Russian television journalist, described a largely negative public perception of the United States in Russia. David Merkel, the deputy secretary of state on European and Eurasian affairs, gave a more optimistic view of U.S.-Russian relations, citing the Sochi summit between Bush and Putin,earlier this month as a step in the right direction. “We need a framework to put more meat on the bones,” Merkel explained.

The most pessimistic of the three, Mr. Medish saw the U.S.-Russia relationship as one of “mutual disappointment and disenchantment” and “something of a dead-end since the fall of the Berlin wall.” Calling the relationship “dysfunctional” with “schizophrenic policies” he compared the Bush record on Russia to “Wagnerian opera.” Medish also held little hope for the future. “There is no dynamic partnership around the corner,” he declared. Medish saw the Sochi framework as a catalog of missed opportunities rather than an agenda for the future. Although he stated that the right issues were named at Sochi, there is no draft for how to “positively move forward.” Medish saw McCain as the candidate most likely to further strain the U.S.-Russia relationship, citing his recommendation to cast Russia our of the G-8. Although he, a self-professed Democrat, saw Clinton or Obama as positive choices, he also saw foreign-policy differences not between one party and another, but across party lines. No matter who takes power, the relationship will continue to be one of reactive “damage control” rather than a constructive partnership. For the U.S.-Russian relationship to positively evolve, Medish saw the need for someone to make a grand gesture along the lines of “Nixon goes to China.” When asked about the significance of “Russian resurgence,” he replied that it is a “great and fundamental” theme that need not be an obstacle as long as Russia has “vision rather than retribution” in mind.

Alexei Pushkov explained that Russians see the United States as the automatic friend of Russian adversaries, which creates a certain impression regarding America’s true intentions. There is also a perception that the United States wants Russia to be a follower, not a partner. Although Russia and the United States have mutual interests where they could more constructively cooperate—terrorism, global stability, non-proliferation—the geopolitical maneuvering of the United States curtails Russian motivation and hinders trust. Mr. Pushkov also disputed the notion that Russians are anti-Western, citing U.S. approval ratings in Russia as higher than in France, Germany and Spain. “Criticizing the U.S. is [now] very European,” the speaker observed.

Although Pushkov noted that neither Putin nor Medvedev desire a confrontation with the United States, the speaker does not foresee the relationship moving forward without America recognizing that it must give in order to receive. When asked about what a “Nixon in China” moment might be, Pushkov replied that a neutral Ukraine would cause Moscow to see a turn in U.S.-Russian relations. [The American panelists, however, were skeptical of such an approach.] And even then, there will be limits. For Russia to support stronger sanctions against Iran, for instance, there would have to be something on offer for Russia; but even then, Pushkov said that there would be nothing that would convince Russia to support any sort of military action against Iran.

Later on, during the question and answer session, former Reagan Administration national security advisor, Robert McFarlane, questioned also whether Russia was interested in helping to advance key U.S. interests, noting that the failure to move forward with projects that could have supplied the United States with natural gas calls into question its “real interest” in cooperation.

When asked which of the U.S. presidential candidates Russia prefers, Pushkov declared McCain to be the worst choice and Obama to be the best. Medvedev prefers Obama because he seems “less tied” to the cold war and the two men are of the same generation. Pushkov noted that “even Russian liberal papers” see McCain as a dangerous choice. The speaker described the perception of Clinton as a redux of the past, though she may be more prone to push a meddlesome human-rights agenda. He described her as “the Bush administration without the personal touch.”

Mr. Merkel gave a more positive assessment of the relationship and reminded the audience to focus on actions, not rhetoric. Identifying the areas for improvement and the areas of tension is necessary for developing cooperation. Merkel also noted that in some cases where the United States and Russia strongly disagreed, in regard to Georgia for example, the European powers were in accordance with the U.S. position. Thus, it is a bit overly simplistic to view the formation of U.S. policy as a direct reaction to Russian interests.

Economics, Energy & Environment

The final session of the day addressed the Russian economy, the energy sector and potential for foreign investment in the context of U.S. involvement and cooperation. Igor Yurgens, the chairman of Renaissance Capital and the leader of a new think tank established as an advisory group to Dmitry Medvedev, summarized the current economic situation in Russia, the U.S.-Russia trade relationship and the economic challenges the country will face in the future. Robin West, a former assistant secretary of the Department of the Interior and the chairman of PFC Energy, described Russia’s role in the global energy crunch and addressed the conditions for improving bilateral relations. Paul Saunders, the executive director of the Nixon Center and the associate publisher of The National Interest, moderated the discussion.

Mr. Yurgens began the session by saying, “We’ve never had it so good.” The Russian economist then cited 8 percent economic growth in the past year, following 7 percent growth in the previous year. He noted that the Russian economy is now the seventh largest in the world and a Goldman Sachs model estimates it will be fifth by 2020. The economist then outlined the two main challenges to the Russian economy as the need for improved infrastructure (estimated in the trillions of dollars) and the demographic situation that is causing a shortage of labor. He explained that the labor problem stems from overall population decline, limited immigration and an erosion of the education system. To address the infrastructure problems, Moscow has implemented a four-year plan, but it needs more funding. He welcomed foreign investment and improved bilateral trade, particularly in the technology sector. “Whoever bring technology to Russia will have a ‘green corridor’ from the very top,” Yurgens declared. The speaker also highlighted a new foreign-investment advisory council to the president and drew a distinction between the animosity in the political arena and dealings in the business sector. Addressing U.S.-Russia energy collaboration, Yurgens explained the need for an institutional framework and a commercial dialogue. “There is a vested interest on both sides of the ocean,” he asserted. Yurgens also noted that some “noises” have been made after Sochi, but much more needs to be done.

“The global economy is headed down a dark path,” Mr. West declared. The global commodity and energy crunch foreshadow substantially higher prices ahead. Because of this, there is incredible pressure on meeting supply and efficient consumption. Russia has the potential to play a great role in energy supply, but international investors will not fund a capital intensive risky investment—quite simply the Russian energy sector needs reform. Russian production has stagnated and is heading for decline. This scenario is neither in Russian interests nor global interests. Improvements in transparency and contractual security as well as strengthening infrastructure and institutions would go a long way to reverse the trend. West also noted that Russian gas flares are an “environmental disaster” that must be addressed, along with its highly inefficient consumption. Yurgens responded to criticisms by explaining that improvement is a process. One of the essential reforms is the need for an independent judicial branch. Medvedev agrees that this reform is necessary and some progress has already been made, such as lifetime appointments for judges. “Give us ten years and we’ll [Gazprom] be on the same ground as Exxon Mobil [or] Shell,” Yurgens asserted.

The opening remarks of Nikolas Gvosdev, editor of The National Interest, best summarize the conclusions of the conference: “We may expect a bumpy road ahead—Russian priorities may conflict with U.S. priorities. But policy makers must be aware of the differences in order to be constructive in forming policy.”