- The following year, the confrontation between Russia and the West are likely to increase, as Moscow for the most part will not be ready to make concessions that are the United States and the European Union to end its sanctions and military build-up.
- Russia's ties with China had increased and would continue to be strengthened, but any sustained alignment on the Moscow - Beijing will eventually face limitations due to deep-rooted fears of the Kremlin concerning the rise of China as a major power.
- Russian President Vladimir Putin will face increasing economic and political challenges on the domestic front, but in the coming year, these challenges will be manageable for the leader.
It was October 1939. Winston Churchill, speaking on the radio "bi-Bi-si", described Russia as follows: "It is a riddle, wrapped in mystery, hidden in the incomprehensible". Of course, the Second world war had just begun, and it is of paramount importance for the United Kingdom, Europe and the world in General had a question about the intentions of the Soviet Union — especially in light of his relationship with Nazi Germany.
The book ends with Churchill the following characterization of Russia: "I can't predict the actions of Russia... But perhaps this is the key. It is the national interests of Russia." This quote has a unique attitude to the work we do in the "Stratfor". We develop forecasts, and our forecasts is the geopolitical methodology, which takes into account above all a broad national interests, not the subjective views of individual leaders, decision makers, and ordinary citizens. But this does not mean that such people and their subjective considerations are irrelevant. National interests, due to the geography and the geopolitical objectives of the state, to provide the framework in which the trajectory of the nation is determined in the long term. While in the short term, people — from politicians to business leaders and workers do have an impact on policy-making and development trajectory of their country.
Based on these principles, I recently went on a visit to Russia. Just after completing work on the annual forecast "Stratfor" in 2019, I wanted to test our prediction directly on the spot and see how it is on the point of view of Russian citizens themselves. Of course, Russia is a large and diverse state, and in such a vast and complex country it is impossible to make a complete picture. But my visit it included stops in my country, in Moscow and St.-Petersburg, Kazan and some small towns in the space between them — as well as discussions with citizens representing various sectors of society and the profession, provided an excellent opportunity to verify our forecast for compliance with the realities and looks on the ground.
Russian view of the confrontation between Russia and the West
Our Outlook on Eurasia — is the ongoing confrontation between Russia and the West. Since the revolution of Euromaidan in Ukraine in 2014 — along with the annexation of the Crimea and support separatists in Eastern Ukraine — Moscow and the West was in confrontation, which included the entire spectrum of relationships: from military construction to economic sanctions, cyber attacks, disseminate propaganda and political interference. Russia's strategic interest to retain Ukraine and the rest of the former Soviet periphery in the zone of influence, in contrast to the desire of the West to deprive Russia of this sector, provided the background for this confrontation, which has now spread from the border areas of Europe to Syria and North Korea. In 2019 this confrontation will likely only intensify, as the treaties on arms control cease to exist, and the sanctions will be expanded.
In accordance with the prevailing opinion of the Russians with whom I spoke, the tension between Moscow and the West continues. True or not, but the Russians consider their country a great power that deserves to have her voice had an important place on the world stage. Many citizens believe that the West, especially the United States, is actively trying to weaken Russia both from the point of view of its role in the world, and from the perspective of internal stability and cohesion. Several times people have described Russia as a country that reacts badly to pressure from the outside; many are also portrayed her as a "besieged fortress". The more Moscow is faced with that pressure again, especially from the United States, the more it strengthens its position and seeks to protect what it considers its legitimate strategic interests.
The Ukrainian conflict is an example. The standard line of Russia lies in the fact that the Euromaidan uprising was supported (if not arranged — approx. author) West, whose main purpose was to weaken Russia in the most strategic and sensitive location on its immediate periphery. For many Russians, Moscow just acted defensive, annexing the Crimea and supporting Pro-Russian separatists in Eastern Ukraine. For them, Ukraine was just the last step in the West's long-standing campaign to encircle and contain Russia, which had previously included actions such as NATO expansion in Central and Eastern Europe as well as US support for the color revolutions in the former Soviet periphery. After Russia withdrew from the chaos and instability of the 1990s years, she could hardly stand aside when unfolded these events, as it was not clear how far the West in its apparent campaign against Russia.
Because of this, as I said, Russia is not going to make major concessions to the West, even when faced with significant pressure in the form of increasing military power or economic sanctions. And while the West may have imposed sanctions in response to Russia's actions in Crimea and Eastern Ukraine, the enemies of Moscow has now expanded these measures to encompass many other aspects of Russian behaviour: intervention in elections in the West to North Korea and Syria. This extension of the scope of a convince Russian politicians that the West would weaken sanctions or pressure in any significant way, even if Moscow really offer concessions. As a result, the strengthening of Western sanctions, most likely, only will strengthen the resistance and retaliatory measures from Moscow.
Although now it seems a confrontation is long, its beginning, according to Moscow, was not inevitable. Indeed, Russian officials and experts on foreign policy have stressed to me that during the first presidential term of Vladimir Putin in early 2000-ies Moscow has made serious efforts to integrate with the West — up to consideration of a question on accession to the European Union and NATO, albeit on a parity basis. This, as we know, never happened. And by the end of Putin's second term — by the time the European Union and NATO expanded to Central Europe and the Baltic States, ignoring the position of Russia on Kosovo, the Kremlin has become clear that Russia needs to move forward alone, even if this will entail direct conflict with the West and its allies. Confrontation, as expected, soon followed. First Russian-Georgian war (2008), and then in the struggle for the Crimea and Eastern Ukraine (2014).
The Ukrainian conflict has strengthened the Russian perception of the impossibility of equal partnership with the West that led to the search for the Moscow partners and influential role in other parts of the world. One such role was the participation of Russia in the Syrian conflict on the side of the regime of Bashar al-Assad against the "Islamic state" (banned in Russia — approx.ed.)and Western-backed rebels. My interlocutors told me that Russia actually care about Assad per se, but Moscow felt it had to draw a red line in the question of regime change, imposed from abroad (i.e. from the US — approx. of the author). Russia had a unique opportunity to penetrate into Syria, given its historical ties with that country and its strategic location. At the same time, Moscow wanted to make it clear that it can also be a major player in the middle East and in other theatres such as Afghanistan and Africa — both militarily and diplomatically.
Russian-Chinese alignment with each other and its limits
Another key aspect of our annual Outlook on Eurasia for the above mentioned Russia's desire to spread their connections around the world to reduce the hegemony of the West and challenge the world order led by the United States. The key to this is China, which in the context of competition of great powers also interested in how to challenge the world order dominated by the USA. In recent years between Moscow and Beijing regard were increased, while the communication between Russia and the West weakened. Both countries have stepped up cooperation in trade and military exercises, and policy coordination on issues such as North Korea.
The majority of Russians with whom I spoke acknowledged that relations between Moscow and Beijing has improved, particularly in the security sphere. However, many assumed that between Moscow and Beijing is not a genuine Alliance. Feeling a deep mistrust of the growing influence and intentions of China, many Russians are afraid — rightly or not — that Beijing has plans in the Russian territory in the far East and the Arctic. I was told that China could not challenge the political model of Russia as the West does, but one day he may challenge its survival. This may be an exaggeration, but this fear gnawing at the heart of many Russians. At the same time, many people told me that Chinese investment in Russia is not everything. One businessman who frequents a major Russian investment forum in St.-Petersburg and Vladivostok, told me that to really bear fruit, only about 5-10 percent of the multibillion-dollar deals between the two countries, mainly in the energy sector.
Calls from the inside
On the domestic front, our forecast also indicates a number of economic and political challenges for Putin, including sanctions weakened the economy, public dissatisfaction with the unpopular pension reform, and pressure in connection with the need to reform the powerful security agencies in the country. In our forecast it is noted that these challenges will be a test for Putin during his fourth — and probably last — term, although the long-term leader will ultimately succeed in dealing with them this year.
Russia's views on by itself, Putin is clearly different. And those who oppose the leader, as reasons for their opposition called on everything, from corruption to unpopular plans to raise the retirement age. Putin's supporters are basing their opinion on the record of the President's efforts to strengthen stability, as well as the lack of decent alternatives to his rule. But regardless, people support Putin or not, almost all agreed that, while the President remains at the helm, no significant changes or upheavals in the political system in Russia will not. The more the Kremlin will feel pressure — external or internal — the more Moscow will strengthen control, this means that the security agencies such as the national guard, will concentrate in his hands all the more force.
From the macroeconomic point of view, the majority of experts in the field of Finance and business believe that the Kremlin has tools for dealing with economic sanctions issues, as the government increased its foreign reserves and wealth funds, and took steps to prevent volatility of the currency, untied the ruble from oil prices. However on the ground it becomes clear that sanctions are applied to your damage. Almost all complained about rising prices and stagnant wages, while foreign travel became more expensive and difficult for some and virtually impossible for others. Overall, however, I was under the impression that Russia is on the verge of a serious economic crisis.
But when it comes to long-term prospects for Russia, the reasons for concern can be more. According to one financial journalist, Moscow could cope with the economic turmoil in 2019 or in the next few years, but long-term economic Outlook, especially in relation to the continuing dependence of Russia on oil and natural gas, as well as brain drain of young professionals is poor. In addition, in Russia the demographic decline is expected (according to forecasts, by 2050 the country will lose ten percent of its population — approx. of the author). Combined with the impending social changes as the arena of the post-Soviet generation this can create a lot of pressure and start to check out the Kremlin's ability to maintain stability across the vast country.
Opinions who have given me the Russians of all strata of society largely coincide with our predictions. In some respects, they added their own nuances in our thoughts for the coming year. After almost 80 years after Churchill's speeches, Russia can still be "mysterious and unfathomable". But the combination of the study of her national interests from afar, listening to the conversations on the prospects of its people at close range, of course, gives important hints about what to expect from this country in the future.
Eugene Chausovsky (Eugene Chausovsky)
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