Russia. Here today, where tomorrow?

Mr Putin keeps everyone guessing

ST PETERSBURG, May 2003. Historic buildings shone with freshly gilded domes and new coats of paint. Mr Putin, having contrived to assemble 47 world leaders for a series of international summits to coincide with the city's 300th anniversary, was showing the world the former imperial capital in its full glory.

It was the high summer of Mr Putin's relations with the West. Over three years, he had gradually sidelined Russia's foreign-policy hawks who pined for Soviet supremacy and mistrusted any rapprochement with the former enemy. Thanks to his immediate declaration of solidarity with George Bush after the September 11th attacks, America had turned a blind eye to the uglier sides of his own regime, including his characterisation of the war in Chechnya as part of the war on terror.

For months, the world's most powerful men had been wooing Mr Putin to use Russia's permanent seat on the UN Security Council either to support or to oppose an attack on Iraq. This presented him with a dilemma: if he supported it, he would look like an American puppet, but if he opposed it, America might bypass the UN, invalidating Russia's biggest remaining claim to being a global power. It never came to a vote; the UN was sidelined anyway; but Mr Putin somehow managed to stay on fairly good terms with everyone all the same.

However, since then a chill has set in. The Yukos affair, the Duma election and the blatantly fraudulent presidential election in Chechnya last October got foreign leaders to take fears about Russian authoritarianism more seriously. The assassination earlier this month of Chechnya's president, Akhmad Kadyrov, made a mockery of Russia's claims that the situation there was “normalising”. The expansion of NATO and the European Union right up to Russia's borders revived old disputes about visa rules, security and trade barriers. The roar of NATO jets patrolling just outside Russian airspace is almost drowned out by the grinding of teeth in the defence and foreign ministries.

Russia has been squeezed into a narrower space. Countries such as the Baltics, which used to be under its thumb, are now members of the EU. Countries such as Ukraine and Belarus, which Russia still considers part of its backyard, are now Europe's neighbours, and therefore its concern. That has brought nasty surprises. When Russia last November brokered a peace deal in Moldova that would have involved Russian “peacekeeping” troops staying there until 2020, it expected no resistance. But Moldova's president, under pressure from European leaders as well as from his own people (who had watched Edward Shevardnadze being swept from power in Georgia only a couple of days earlier), scrapped the deal at the last minute, infuriating the Russian leadership.

Old assumptions have changed. The Partnership and Co-operation Agreement that Russia first signed with the EU a decade ago had “an integrationist goal”, says Fyodor Lukyanov, editor of Russia in Global Affairs. “It meant that Russia should gradually adopt EU standards. But under Putin, Russia doesn't want to become just like Europe. It won't have human rights as a priority. It doesn't want to be endlessly coming to agreements on things.”

In February the European Commission admitted that its strategy of gradually integrating Russia, the fruit of one of the St Petersburg summits, was getting bogged down. “Russian convergence with universal and European values will to a large extent determine the nature and quality of our partnership,” it observed pointedly.

Bursting with energy

Yet as it looks around its new, smaller Lebensraum, Russia sees that the place has something cosily familiar about it: it is a lot like the old Soviet Union. It may now be called the Commonwealth of Independent States (CIS), but their independence goes only so far. The Kremlin sends advisers to help its preferred candidates with election campaigns. It vies with the growing American presence there, using Russia's remaining military bases and, in Georgia, loyal statelets as levers.

Last September Anatoly Chubais, the head of the state electricity firm, UES, said Russia should become a “liberal empire”, extending its reach on the economic side. Though he was then campaigning for his opposition party, SPS, his words have resonance in the Kremlin, says Mr Lukyanov. As big Russian firms outgrow opportunities at home they are increasingly venturing abroad, especially to countries where Russian is still spoken.

The government is doing much the same. A preliminary agreement on a single economic space for the CIS pushes Russia further from Europe's economic embrace (though it will take ages and may never happen at all). Russia is unlikely to replace the Middle East as the West's main source of oil, but when Russia eventually builds a Far East pipeline, it will forge closer ties with Asia. UES has bought electricity companies in Georgia and Armenia, and Gazprom owns stakes in firms all across the CIS and in much of Europe.

Yet strengthening its hold in the CIS does not mean that Russia is withdrawing from the West. Mr Putin may not care what foreigners think of the way he runs his country, but he cares a great deal about its status in the world, and thinks these two things can be kept separate (after all, they are for China). Now that Russia's Security-Council veto has lost its shine, he will concentrate on his country's prospective chairmanship of the G8 in 2006. He is expected to try hard to get preliminary approval for WTO membership by then.

For that, Russia will have to negotiate with many countries, above all with the EU over the price of the gas it exports there. There are plenty of other shared problems, from drug-trafficking to terrorism to migration, so the West will continue to have plenty of dealings with Russia, as well as considerable leverage.

One way of using this wisely will be to show Mr Putin that his approach to many of his domestic problems makes them the world's problems too. He believes that Russia needs a strong leader to contain threats such as economic and political refugees, a decaying army, terrorist breeding-grounds and epidemics spiralling out of control. But the strength that enables the country to cope with all this is also a weakness: at the moment too much depends on the man at the top. A sudden jolt (a sharp economic downturn, a new outburst of terrorist attacks, or any mishap that might befall Mr Putin himself) could tip the country over the edge again. A more democratic Russia would be a more stable one, and less worrying for the world in general.

The riddle of the sphinx

It does not help that people have trouble understanding what Mr Putin himself wants for Russia. As examples such as the Yukos affair or his dealings with the media show, he has an uncanny ability to keep everyone guessing. Mikhail Fradkov, his new prime minister, was about the only candidate that not a single political pundit had thought of; and also the only one bland enough to leave a large question mark over why he was chosen.

But now that Mr Putin is as much in control as he ever will be, the next few months should provide a clearer indication of where he is heading. Telltale signs will be whether he lets his reformist ministers get involved in issues that have so far been the province of the siloviki, such as military spending; how he brings the Yukos affair to a close; whether he encourages the oligarchs to invest in ways that help develop the economy rather than merely plug holes in state welfare spending; and how he responds to his officials' more retrograde ideas (he recently softened a law restricting public gatherings after an outcry against it).

In broad terms, though, Mr Putin's agenda for Russia is clear: he wants it to be a global power and an economic tiger, but also a controllable, monolithic state where suggestions are welcome but opposition is not. “Russia was not a democracy in the 1990s and it's not an autocracy now,” says Nina Khrushcheva, a professor at the New School in New York. “Russia is a process, but we always insist on labelling it as a finished product, as this or that, and then scold it immediately if it doesn't fit.”

Yet the 20th century had many such countries in transition, and many of them stayed that way for decades before the system cracked and democracy started to seep in: think of Mexico, South Korea, Malaysia, Chile, Singapore. Russia is not what it was 13 years ago; it is not what, 13 years ago, everyone hoped it would be today; nor is it better or worse; it is simply what it is. And given how fast things change there, tomorrow it might well be something completely different.

Article forms part of a survey on Russia in this issue of The Economist. Article looks at Russia in the world and what Russia President Putin want his country to become. Writer says he wants it to become a global power and an economic tiger, but also a controllable, monolithic state where suggestions are welcome, but opposition is not.

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