Putin’s year of triumphs

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Russian President Vladimir Putin’s decision not to reciprocate the new American sanctions has been called a tactical triumph by Foreign Policy. The decision marks the appropriate end to the year of triumphs by Moscow. Both foreign and domestic policies were proactive and effectively nullified the effects of isolation inflicted by the West.

In spite of biting western sanctions imposed in the wake of Russia’s annexation of Crimea in 2014 and renewed in response to the continued crisis in eastern Ukraine, where Russia-backed separatists defied an “antiterrorist operation” waged by Ukraine’s armed forces, the Russian economy did not fold. The ruble is now substantially stronger than in the midst of the crisis. After losing more than one third of its value by the end of 2014, it has now returned to its pre-sanctions’ self and trades at slightly more than 60 rubles per one US dollar. The gross domestic product is projected to grow by 1.5-2 percent in 2017. For that, the IMF says, the “authorities’ economic package” of a flexible exchange rate, banking sector capital supports, liquidity injections, fiscal stimulus, and regulatory forbearance is to be thanked.

Russia took a proactive stance in the global economy by securing a global agreement to cut oil production – the first deal to unite the OPEC and non-OPEC producers since 2001. If successful, the deal will go a long way to stabilize the world oil market and boost the falling price of crude.

Throughout the year, Russia sought to diversify its foreign relations away from the West and toward the fast-growing East Asian economies. It reached an agreement with China on integrating activities of the Russia-sponsored Eurasian Economic Union (EAEU) with China’s project of the Silk Road Economic Belt. As a key member of the Shanghai Cooperation Organization (SCO), Russia pushed for the start of consultations with the Association of Southeast Asian Nations on the possibility of establishing a broad economic partnership that would unite the SCO, EAEU and ASEAN countries.

Practical achievements followed. At the ASEAN-Russia summit in May, participants agreed to launch a joint feasibility study of a comprehensive free trade area between ASEAN and EAEU.

One month later, during Vladimir Putin’s visit to Beijing, 30 new economic cooperation agreements were signed. At the Tashkent summit in June 2016 India and Pakistan joined the SCO, making it an even more powerful organization. More than a dozen military, nuclear and energy deals were singed during the bilateral Indo-Russian summit in October. Russia’s warm welcome at the BRICS summit in Goa clearly demonstrated that western efforts to isolate Moscow internationally had failed.

Finally, trade and investment agreements worth more than US$2.5 billion in total in sectors such as energy, transportation, and pharmaceuticals have been reached between Russia and Japan in December. Among other things, Japan has agreed to participate in the US$40 billion gas field development project in Siberia near the Arctic Ocean, while Russia’s natural Arctic partners in the West – Canada, Norway and the USA – looked away.

 

In international politics, Russia’s concerted military campaign against Syrian rebels has helped the embattled President Assad to regain control on the ground, culminating with the re-taking of Aleppo by the Syrian government forces. Russia’s troops played stabilizing role in Libya as well as Syria, prompting Israel’s Prime Minister Benjamin Netanyahu to visit Moscow twice for security-related talks. Russian diplomacy achieved important results normalizing relations with Turkey, twice under the threat of termination after the deadly shooting of the Russian plane in November 2015 and the assassination of the Russian Ambassador Karlov in December 2016. Finally, perceptions of Russia in the West have also changed, with both political actors and population at large increasingly embracing the post-liberal, regionalist and neo-traditionalist  vision of the world order that largely resonates with the views of the Russian public.

Against such a background, all attempts to demonize Russia by the outgoing Obama administration are bound to fail. The “Russian hacking” scandal, apparently unsubstantiated with anything but circumstantial evidence has underscored the loss of a high ground by the USA: as one Twitter user put it, the Russian security service, whether implicit or not, “did not write those emails.” As for the Obama accusations of Moscow’s stealing the U.S. elections, it is indeed strange to believe that Russia could sway the vote of sixty three million American voters – as strange as to believe that it was Russia that caused the migrant crisis in Europe.

Mikhail Molchanov
Mikhail Molchanov is a policy analyst and international relations observer based in Canada. He has worked as senior policy analyst for the federal government, and as Professor of Political Science at several Canadian universities. He has authored and co-authored 7 books and nearly 120 articles and book chapters.
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