Stratfor has been chronicling what we call the end of the Post-Cold War world, a world with three pillars: the United States, Europe and China. Two of these three have been shifting their behavior over the past few years. We've discussed the end of China's high-growth, low-wage expansion. We've also discussed the deep institutional crisis in Europe resulting from its economic problems. We have discussed some of China's potential successors. What needs to be discussed now is the system that will emerge from the Post-Cold War world, and to do that, we need to discuss shifts in Russia's behavior.
Chaos in Russia
Russia went through two phases in the Post-Cold War world. The first was the chaos that inevitably followed the collapse of the Soviet Union. Chaos sometimes can be confused with liberalism and many think of Russia in the decade after the Soviet Union as being liberal. But Russia under Boris Yeltsin was less liberal than chaotic, with a privatization program that enriched those who rapidly organized to take advantage of the poorly defined process, a public life that had little shape or form and a West that was both pleased with the fall of Soviet power and deluded into thinking that Russia was reshaping itself into a Western constitutional democracy.
The second phase was a reaction to the first. The havoc of Yeltsin could not continue. To a great extent Russia was not working. The only structure that had survived the Soviet Union and that was still working was the security services -- and even those were being seriously degraded by Yeltsin's efforts. The security services had both held the country together to the extent possible and had participated in the accumulation of wealth through the privatization process. In the course of that they not only retained the power they had in the Soviet Union but also dramatically increased their power. At the same time, a class of oligarchs emerged and the two groups oscillated between competition and cooperation.
Russia could not continue as it was. It was sinking into extraordinary poverty, worse than the Soviet Union; there were regions that were seeking to break away from the Russian Federation; and it had little to no international standing.
The United States and NATO waged a war in Kosovo, completely indifferent to Russian opposition. Russia opposed the war both because Serbia was an ally and because one of the principles of Europe since World War II was that there would be no shifts in borders. This was regarded as sacred inasmuch as redrawing borders was one of the origins of the war. Russia's wishes were disregarded.
When Serbia did not collapse immediately under air attack and the war dragged out, the Russians were asked to negotiate its end. In return they were promised a significant role in managing post-war Kosovo. That didn't happen; the future of Kosovo became a matter for European and American decision-making.
Influence is not something given to a country. It has that influence because of its power, because the consequences of ignoring its wishes would have unacceptable consequences. By 1999, Russia had reached the low point of its influence.
Putin Brings Russia Back
It was logical that a man like Vladimir Putin would emerge from the chaos of the 1990s. Putin was deeply embedded in the KGB and the old security apparatus. During his time in St. Petersburg, he was integrated with the emerging oligarchs as well as the new generation of economic reformists. Putin understood that in order to revive Russia, two things had to happen. First, the oligarchs had to be intimidated into aligning their activities with the Russian government. He owed too much to them to try to break them -- though he made an example or two -- but he did not owe them so much as to allow them to continue to loot Russia.
He also understood that he had to bring some order to the economy both for domestic and foreign policy reasons. Russia had massive energy reserves, but it was incapable of competing on the world markets in industry and services. Putin focused on the single advantage Russia had: energy and other primary commodities. To do this he had to take a degree of control of the economy -- not enough to return Russia to a Soviet model, but enough to leave behind the liberal model Russia thought it had. Or put differently, to leave behind the chaos. His instrument was Gazprom, a government-dominated company whose mission was to exploit Russian energy in order to stabilize the country and create a framework for development. At the same time, while reversing economic liberalism, Putin imposed controls on political liberalism, limiting political rights.
This process did not happen overnight. It was something that evolved over a decade, but its final result was a Russia that not only was stabilized economically but also had influence in the world. For Putin, the consequences for political and personal freedom were not a high price to pay. From his point of view, the freedoms of the 1990s had damaged Russia tremendously. Putin wanted to create a stable platform for Russia to protect itself in the world. The dread of disintegration, supported by Western powers in his mind, had to be reversed. And Russia could not simply be ignored in the international system unless Russia was prepared to continue its position as victim.
Energy production created an economic base that the government could use to end the erosion of economic life throughout the country. It also gave Russia a lever that assured it would not be ignored. Energy sales to Europe became an essential part of European economic life. Germany, for example, needed energy to maintain its economy. There was always a chance that Russia might cut off sales. On several occasions, the flow of energy was severed when disagreements arose between Moscow and the transit states, Belarus and Ukraine. As the Russians developed greater reserves it became easier for them to endure the cost of a monthlong disruption than it was for Germany.