Russia

Capital Moscow
Population 142.1 million (2018) CIA
President Vladimir Putin

Introduction

Russia’s expansive but perilous geography is key to understanding the country. Spanning from North Korea to Norway, and Azerbaijan to the Arctic, its landmass is larger than the surface area of Pluto. But its vast, cold, and treacherous terrain has always been difficult to manage and defend which, paradoxically, often creates the impetus for further territorial expansion. Drawing on a rich cultural memory of empire that spans Mongol, Tsarist, and Soviet periods, Russian elites and citizens alike believe their country should play an outsized role in both regional and global politics.

Russia’s history is one of hardship as well as geographic and cultural isolation. Up until the late nineteenth century, slavery was effectively legal, and Russia was exceptional in that it enslaved its own people as serfs, tied to their masters and land, without rights. Most, with the exception of the nobility and the merchant class, were either living in poverty or on the edge of it. Centuries of cultural isolation, best characterized Russia's missing out on the Enlightenment movement (the only of the great European powers), meant that for a long time, the country was intellectually antediluvian compared to its western neighbors. While Peter the Great attempted to revolutionize Russia and open a “window onto Europe” in the early eighteenth century, his heirs to the monarchy reversed his achievements in many ways, stymying Russia’s path to modernity.

1917 proved to be a decisive year in Russian history, with a democratic revolution exploding in February and a socialist one in October. The first was a popular revolt against Tsar Nicholas II over the Russian army’s humiliation the First World War, as well as increasingly dire economic conditions and growing corruption. The October Revolution, led by Vladimir Lenin of the Bolshevik party, was an uprising to secure complete power for the Communists.

In the Soviet Union, private property was nationalized and higher wages guaranteed. The first two decades of the Communist experiment saw the elimination of the class structure through political repression. Soviet leaders declared the end of inequality, and that society was fairer than it ever had been. These proclamations often worked to garner public support until Soviet citizens began to compare their lives to others living outside the USSR.

This was especially true during World War II, or the Great Patriotic War, as it is called in Russia. Soviet troops fighting in Germany and other countries were able to see that, even in wartime, people were better off than the Soviets. After the war, and the closing of the border, Western culture was a forbidden fruit. Even though very few people were actually allowed to leave the USSR, many had heard accounts of the abundance and variety of Western shops, and craved Western music, literature, and fashion. Even the other countries of the Eastern Bloc, namely the German Democratic Republic and Poland, had higher standards of living than Russia or Ukraine, for example. While there were no longer class interests, the entire Soviet population began to judge their own living standards as poor, with families struggling to afford clothing or find necessary goods.

However, at the same time, to claim the Soviet system was a complete failure would be untrue. Given Russia’s long history of inequality (serfdom, for example) and its tumultuous 20th century, the way it emerged as a world power in the latter half of the Communist period is remarkable. Only an effective political system and viable economy could have launched the USSR into the position of global superpower it enjoyed for much of the second half of the 20th century. Until at least the late 1960s, most Russian citizens enjoyed a newly developed infrastructure as well as rapidly rising standards of living. As Marshall Poe asserted: “the Bolshevik program achieved its main goals and won the allegiance of most of the subject population.” Although it was not exemplary in terms of human rights or citizen participation, within 40 years of its establishment, the Communist system in Russia did deliver in many of the ways that Lenin had promised it would.

Even after the fall of the Soviet Union and the transition to a market economy, many Russians found themselves facing the same everlasting, Russian troubles. The class struggle returned: businessmen who made their fortunes illegally or by exploiting the chaos of the 90s, rose to become the new elite, and are now commonly known as oligarchs.

Putin’s accession to power - initially as prime minister in August 1999 - came about fortuitously. Yeltsin, whose health was failing, needed to find a successor who would not prosecute him for his abuses of presidential power. When Yeltsin unexpectedly resigned on New Year’s Eve 1999, Putin became acting President, and received the financial and political support of most leading oligarchs in the 2000 presidential election campaign, enabling him to win with 53% of the vote. In 2004, he was reelected with an even greater mandate, due to runaway economic growth buoyed by higher oil prices, and a sharp rise in the country’s living standards. His increasing control over national media, a weak opposition and almost unanimous support from oligarchs also helped Putin win his second term. By then, he was seen as a key power-broker among Russia’s business elites, and someone who could maintain order over Russia’s clan-like power system.

Russia’s two-term limit on presidential mandates therefore presented a severe dilemma for elites, since Putin had a constitutional obligation to step down in 2008. An agreement was engineered by which Putin could continue to wield unofficial political power after 2008 by becoming Prime Minister, while his loyal aide, Dmitry Medvedev, would become President. In 2012, the pair swapped roles again. It is still unknown why Medvedev stayed for only one term, and some have speculated that it was because of Putin’s dissatisfaction with Medvedev’s policies and worsening personal relations with Putin’s close aides. In the 2012 election, Putin won with almost 64% of the vote. He was elected to serve a fourth term in 2018 with over 76% of the vote, despite widespread voting irregularities and leading opposition figures being barred from running.

Russia’s great-power attitude is demonstrated through its relations with its post-Soviet neighbors. Russia plays nice with more pliable neighbors like Kazakhstan, but demands loyalty. In the case of its more pro-European or volatile members, notably Georgia and Ukraine, it has dispensed more aggressive policies, with the Russo-Georgian war (2008) and the annexation of Crimea (2014) being clear examples. In a post-Communist world, other countries are allowed to shape their futures, but only if Russia can act as a regional primus inter pares.

As most Western countries (besides a few far-right parties) continue to champion the values of liberal democracy, Russia seeks to protect itself from both foreign and domestic criticism by stressing its cultural otherness. Since his conservative turn in 2012, Putin has tried to reshape the world’s perception of Russia. In this conception, Russia sees itself as the third Rome, the cultural heir to the fall of christianity in Constantinople and the true standard-bearer of Judeo-Christian values. The degree with which Russians truly see themselves in this way is a matter of debate. Nonetheless, these values are usually defined in negative rather than positive terms, for example in its rejection of LGBTQ+ rights or what it sees as the ‘ahistorical’ liberalism of modern Western culture. Indeed, modern Russian identity consists of simultaneously rejecting Western European culture and values while staking a parallel claim to being the sole representative of (traditional) European civilization, which is embodied in its embrace of Orthodoxy, patriarchal gender norms, and cultural nationalism.

While relations between Russia and the West are tense, Russia enjoys strong and enduring relationships with several other post-Soviet states, including Belarus, Armenia, Kazakhstan, and Kyrgyzstan. The Eurasian Economic Union, founded in 2015, binds these countries in a rival trading bloc to the EU, cementing Russia’s status as the economic lynchpin of Eurasia, nudged between Europe and the Asia-Pacific.

Arms, agriculture, energy, and mining are the country’s four major sources of income. Russia’s heavy reliance on oil and gas, as well as grain, render its economy exposed to fluctuations in global commodity markets. OPEC has recently become an important partner for Russia in the face of an expanding American role in the oil market and the global supply glut, which have negatively affected oil prices. Cooperation between OPEC and Russia also signals closer political and diplomatic ties. BRICS, or the organization for economic organization between Brazil, Russia, India, China, and South Africa, has been a leitmotif of sorts for Russia’s political and economic orientation in the twenty-first century. While Russia is forced to engage with the West because of its location, as well as its economic and military power, Putin finds it easier to build fruitful political relationships with large, semi-developed and not-quite-democratic economies like his own that favor realpolitik over the liberal language of rights.

In 2012, President Barack Obama called Russia a regional power, a move that understandably angered President Putin. While in 2012 that may have been an accurate, albeit insensitive, reading of the geopolitical situation, since then, Putin has made every effort to cement his country’s place on the world stage, regardless of Western responses to his tactics. His relentless push for great power status sees no end in the short-term, and the more pushback Russia receives from the West, the more determined Putin becomes to shake up the world political order, even if only to benefit his domestic image. Russia continues to be an essential player, if only because it wills itself to be one.

Quick Facts

Basics
Capital City Moscow
Country Population 144.5 million
Largest City (Population) Moscow (12 million)
2nd Largest City (Population) St. Petersburg (5 million)
3rd Largest City (Population) Novosibirsk (1.6 million)
4th Largest City (Population) Yekaterinburg (1.5 million)
5th Largest City (Population) Nizhny Novgorod (1.2 million)
President (Dates) Vladimir Putin (2000-2008, 2012-Present)
Prime Minister (Dates) Dmitry Medvedev (2012-Present)
Currency Ruble
Politics
President Vladimir Putin
Prime Minister Dmitry Medvedev
Freedom House Score (1=Free, 7=Not Free) 6.5
Ruling Party United Russia
Past Presidents (Dates) Dmitry Medvedev (2008-2012)
Past Prime Ministers (Dates) Boris Yeltsin (1991-1999)
Vladimir Putin (1999, 2008-2012)
Viktor Zubkov (2007-2008)
Mikhail Fradkov (2004-2007)
Mikhail Kasyanov (2000-2004)
Sergei Stepashin (1999)
Yevgeny Primakov (1998-1999)
Sergey Kirienko (1998)
Viktor Chernomyrdin (1996-1998)
How Central Banker is Appointed Appointed by President (4 year term)
Average Voter Turnout in Last 5 Elections
(% of Total Population)
67.08
Trade and Commerce/Economics
10 Major Import Partners
(% of Total Imports)
Exports Major
Partners (10)
Major Industries
by GDP
Top Exports Sanctioned by
(and Start Date)
Sanctioning
(and Start Date)
1. China (20%)
2. Germany (13%)
3. Belarus (5.9%)
4. Italy (4.1%)
5. United States (3.8%)
6. Japan (3.4%)
7. France (3.4%)
8. Poland (2.9%)
9. South Korea (2.9%)
10. Ukraine (2.1%)
1. China (11%)
2. Netherlands (8.5%)
3. Germany (5.9%)
4. Belarus (5.2%)
5. US (4.6%)
6. Italy (4.2%)
7. Turkey (3.9%)
8. Japan (3.8%)
9. Poland (3.3%)
10. Belgium-Luxembourgh (2.9%)
Mining (coal, oil, gas, etc.,)
Machine Building
Defense
Shipbuilding
Road/ Rail Transportation Equipment
Petroleum/Petroleum Products
Natural Gas
Metals
March 2014: USA; Canada; EU; Japan; Australia/
April 2014: Ukraine, Albania, Iceland, Montenegro/
August 2014: Norway, Switzerland/
April 2016: Lithuania
March 2014: USA, Canada/
August 2014: EU, Norway, Australia (US, Canada)
Finance
Largest Sources of FDI by Country 1. Cyprus
2. Luxembourg
3. Netherlands
4. Ireland
5. Bahamas
Demographics
Largest Ethnic Groups
(% of Total Population)
Largest Religions
(% of Total of Population)
Population Living
Abroad
Russian (77%)
Tatar (3.9%)
Ukrainian (1.4%)
Russian Orthodox (71%)
Sunni Islam (15%)
Other Christian (2%)
20-30 million
Major International Organizations (and date of accession)
1 UN/UN Security Council–1945
2 Council of Europe–1996
3 OSCE–1973
4 Asia-Pacific Economic Cooperation (APEC)–1998
5 ASEAN Regional Forum (ARF)
6 East Asia Summit (EAS)–2011
7 Commonwealth of Independent States (CIS)–1991
8 Collective Security Treaty Organization (CSTO)–1992
9 Shanghai Cooperation Organization (SCO)–2001
10 Eurasian Economic Union (EEU)–2015
11 World Trade Organization (WTO)–2012
12 BRICS–2009
13 Black Sea Economic Cooperation–1992
14 Council of the Baltic Sea States–1992
15 European Bank for Reconstruction and Devepolment (EBRD)–1992
16 International Monetary Fund (IMF)–1992
17 Euro-Atlantic Partnership Council (EAPC)–1997
18 World Bank–1992

Politics

After the Soviet experiment, a new government arose in 1991. Many thought that Russia would rapidly transition from its old authoritarian, communist regime toward a Western-style free-market democracy, but these hopes proved to be illusory. With little history of democratic institutions or experience with a free-market economy, the new Russian system proved deeply problematic. The period just after Communism’s collapse is often characterized as a free-for-all, with some people adeptly taking advantage of the chaotic situation. This is not necessarily a fair portrayal: connections mattered, and the most connected (men like Khodorkovsky or Potanin) were playing on an uneven playing field slanted their way. The transition to a free-market economy wound up being hugely detrimental to most of Russian society, and resulted in a depression of massive proportions.

Vladimir Putin has dominated politics for the past 20 years, and has painted himself as the leader who brought Russia stability and renewed global prestige after the humiliating and hell-like 1990s. During the last decade of the 20th century, Russian male-life expectancy fell below 60 and mortality rates soared. The three primary external causes of death for males in order of magnitude were suicide, alcohol poisoning, and murder, all of which were brought about by political and economic uncertainty. The Communist system that guaranteed basic rights for all was now scrapped, and the economy spiraled out of control. But by the time Putin entered the political stage, stability was on the horizon.

As the guarantor of a complex web of Russian patron-client networks, Putin’s primary objective is to stay in power and protect their interests. This has been achieved by neutralizing Russia’s political opposition, creating significant economic growth and, more recently, boosting domestic support through confrontation with the West. In the early to mid 2000s, Putin succeeded in his economic goals, helped significantly by the rapid rise of oil prices. He also established a clear vertical of power through which he alone appoints governors and ministers and they are liable to him. This political structure has enabled Putin to act decisively on issues such as annexing Crimea, sending troops into Eastern Ukraine or deploying military units to Syria. He and his political allies, many of whom are oligarchs, control major Russian industries and have also monopolized the country’s media, painting a distorted view of Russian domestic and foreign affairs.

Over the last two decades, Putin’s foreign policy has gone through different phases. While at first cautiously friendly and cooperative with the West, by February 2007 - when Putin gave his infamous Munich speech - it had become hostile. This shift in relations was confirmed by the Russo-Georgian war in 2008.

Executive

Russia’s government has privileged the executive branch over the other two branches since the earliest days of post-communism. The 1993 constitution, written solely by President Yeltsin, did not establish sufficient checks on presidential power. While at the time this was a politically expedient move so that Yeltsin had more power to legislate reforms, over the longer term, it paved the way for Putin to revive Russia’s ancient autocratic tradition.

Russia’s 1993 constitution nominally outlines a semi-democratic system with a separation of powers, but many of the mechanisms through which Putin rules are not formally outlined in the document. Each ministry (foreign affairs, defense, etc) has its own corresponding department in the presidential administration, and it is often the latter that is more important than the former. Putin also derives informal power through his personal networks, including senior government officials and business figures. His weakening of institutions like the judiciary and parliament have allowed for the perpetuation of this informal system.

Legislative

Russia’s legislative branch is made up of two houses. The Duma is Russia’s lower house, and has 450 members. The Federation Council has 166 members, and is Russia’s upper house. The Duma wields more power than the Federation Council, and can move legislation to the president without its approval. Although nominally a check on the president, the legislative branch has little genuine power.

Russian parties—both the ruling party, United Russia, and opposition parties—are institutionally weak, even if some of their members wield significant informal power. This is in part due to Moscow’s failed transition to democracy. Yeltsin, the first leader of post-Communist Russia, never actively built a political party. To govern, he cultivated informal relationships with regional governors, at the expense of effective party development in Russia. This dynamic began a precedent of personalized rule. Yeltsin’s inability to form a strong party meant that the system that took root in Russia was reliant on personal connections and payoffs, a remnant of Soviet style politics.

The informal and personal style of Russian politics have also caused UR to be weak. Since every mechanism for achieving objectives is based on connections, no ideology has been fostered. Currently, UR is a parking lot for ambitious people working only to advance their own careers. Politicians do not join because of ideological alignment, but in expectation of future benefits, financial or otherwise. Because of this lack of ideology and of clear policy stances, informal politics have persisted as the only clear way to achieve personal advancement, a reality that has served to keep UR relatively weak, but Putin strong.

Political opposition has been unsuccessful in dislodging Putin because of his central position in the nexus of Russian informal networks, and because of his carefully cultivated, messianic image among those hurt most by the transition from communism to capitalism.

Systemic opposition parties - meaning those which Putin allows to compete in elections - are also weak in Russia. These include parties like the Communist Party, LDPR and A Just Russia. These entities are unable and unwilling to check the power of the regime in any substantive way. They offer broad support for the ruling government but criticize individual policies. In this way, they serve as a pressure valve for opposition sentiment - providing an outlet for people’s dissatisfaction at unpopular policies without ever seriously challenging the regime.

Since coming to power, Putin has made an effort to weaken any non-systemic opposition to himself or his political allies - that is to say, opposition parties that are not tolerated by his own regime. This makes it difficult for the opposition to run candidates, often by instituting last minute rule changes. In addition, the regime controls the media, so the opposition receives little coverage. The Kremlin’s financial resources prop up approved candidates, while the opposition has no obvious funding channels. Its lack of cohesion and lack of clear agenda have also undermined its own credibility. While there are citizens who hold more liberal and democratic values than United Russia advocates, the opposition has failed to create a cohesive front and is unable to offer a clear set of policies that appeal to the masses. For now stability is more important than vague ideas of change.

Nonetheless, Alexei Navalny has had the most success as an non-systemic opposition candidate. He has managed to garner a strong following, particularly among younger Russians, thanks to his anti-corruption message. Seen as a threat to the regime, Navalny has been arrested dozens of times, is regularly jailed, and was barred from running for president in 2018.

Weaknesses of other institutions such the courts, along with the inability of any opposition to gain power, has made it nearly impossible to check to Putin’s power.

Judicial

In many ways, the court system in Russia today is a reconstituted image of its Soviet counterpart. In the Soviet Union, if laws proved inconvenient for party apparatchiks, they could be bent to serve specific interests. Laws became a tool of the state and were therefore highly unpredictable (which is the exact opposite of what a functioning legal system should look like). Today, those working within the judicial system develop close personal relationships with senior government officials and businessmen, who provide them with benefits and career opportunities in exchange for patronage. This cronyism destroys the integrity of the legal process. Privileging career advancement over a fair judicial process negatively impacts the rectitude of the court. Hastening the judicial procedures makes it more difficult for principled defense lawyers to properly prepare for their clients. This diminishes the reputation of the court in the eyes of the population, further weakening the courts themselves.

The judicial system in Russia is also highly political. In order for a judge to be secure in his or her job or to advance through the ranks, his/her relationship with political higher-ups must be positive. Thus, Russia’s judges are no longer independent interpreters of the law so much as instruments of higher-ranking officials.

Furthermore, the law itself is often contradictory which opens the door for the country’s inconsistent jurisprudence. Unlawful detainments are common, appeals that should be at least considered by courts are swiftly rejected, and state-provided lawyers rarely have their client’s best interest at heart. The now-notorious story of Sergei Magnitsky encapsulates these blatant flaws of Russia’s judicial system.

Putin’s seemingly boundless power also weakens the courts, as they are not immune from his influence. At the high levels of the judiciary this manifests itself in Constitutional Court and the Supreme Court, members of which are nominated by the President. Unlike other systems, where the courts often are an important check on presidential power, Russia’s are subservient to the regime, in large part because of the weaknesses of other institutions that are incapable of keeping Putin in check.

Civil Society

Civil society in Russia faces significant restrictions. Many of the country’s media are either owned by the state or controlled by Putin’s allies in the business community. A small number of print media are allowed to offer relatively objective coverage of the government, although certain topics - such as corruption - are strictly off-limits. Investigative journalists and bloggers face regular repression by the authorities and ersatz groups.

Foreign NGOS also face adversity from Russia’s political landscape. Since 2015, they have been required to register as ‘foreign agents’, which limits their ability to accept tax-exempt donations.

Major Issues

Problems such as corruption, an aging population, and poor health across the country are substantial and cannot be solved by one party alone. Corruption continues to serve as the foundation for many business dealings, particularly large deals, and permeates through much of society. While Putin has publicly stated that corruption is a problem that needs to be eradicated, scant efforts have been made to achieve this goal. In fact many contend that his very presence guarantees its prolonged existence. Russia’s aging population and poor health are arguably even bigger problems for Moscow than corruption. Retirement policy changes, enacted early in 2018, have impacted Putin and his associates’ popularity -the government’s recent decision to increase the retirement age by five years for men and eight for women by 2028 and 2034, has caused nationwide protests. Poor health as a result of alcoholism and diseases like AIDS also affect the political situation. The demographic picture is already working against Putin, and as health and longevity issues continue to worsen, the Kremlin will be forced to allocate more resources to fighting these problems.

In his time in power, President Putin has managed to improve the economy, facilitate foreign investment into Russia and generally improve Russians’ living standards. Even when the rest of the world was experiencing a financial crisis in 2008, Russia emerged largely unscathed. However, with Western sanctions and lower oil prices, these standards have been slipping. Russia’s sovereign wealth fund has been heavily depleted in order to balance recent budgets. Only 60% of pensions are currently paid out, owing to a lack of state funds and money. Now as before, living standards are at the forefront of everyday Russians’ problems.

A central problem for Russia is the future of its non-functioning, semi-welfare state. Life expectancy for men is 67.51 years and 77.64 for women. The birth rate has also been declining across Russia, but has begun to even out as of late. The proportion of pensioners is growing, but the working-age population is declining. Eventually, Moscow will be unable to effectively fund welfare programs, and may even have to turn to the oligarchs, a move that may anger Russia’s elites. It is likely that Putin will run the risk of upsetting Russia’s elderly population, traditionally part of his voter base, over undermining his elites that help bolster his rule and his wealth.

Despite having over 100 ethnic groups, most of Russia is inhabited by Russians, who constitute around 80% of the population. Tatars are the second largest ethnic group at 3.9%. The ethnic diversity in Russia means that it has been easy for the government to use Russian’s inexperience with and wariness of foreigners to instill patriotism and even nationalism into the official rhetoric. Immigrants and foreigners, or people who don’t comply with the average Russian way of life and its values become outsiders, making it easier to establish an “us versus them” narrative, which the Russian government has been disseminating heavily since the annexation of Crimea. This rhetoric not only applies to minorities within Russia, but also to other ethnicities such as Ukrainians, Americans, and some Europeans.

Immigration from Central Asian countries has also been in the line of fire in Russia, with many citizens expressing concern over foreigners taking over the country and hurting national cohesion, as well as increasing the rate of crime and violence. However, the government continues to tolerate such migration because it supports economic growth.

The process of “othering” in contemporary Russia is not limited to ethnicity, but also applies to sexual orientation. Russia passed a gay propaganda law in 2013, which forbids people from spreading information about LGBT+ issues to children. Additionally, feminist activists have been arrested as well. These new laws and arrests are dog-whistles to socially-conservative attitudes and widespread public disapproval of sexual minorities.

President Putin faces a challenge in leading a nation where many are struggling to make ends meet. Living standards may yet prove to be a pivotal factor in ensuring the long-term survival of Russia’s new tsar.

Vladimir Putin

Vladimir Putin

Conclusion

The institutional weaknesses in Russia today can in large part be attributed to Putin and his substantial consolidation of political power. To Putin, it is always better to control everything preemptively than delegate and risk instability in the ranks. For this reason, he has actively tried to prevent institutions such as parties, parliaments, and the courts from having any genuine authority. Keeping them weak helps him maintain his grip on power.

President Putin has carefully crafted Russia’s mission as maintaining traditionalism and “great power status” with the hope that citizens will focus more on questions of identity than stagnating living standards and public services.Without beginning to address these issues, post-Putinist Russia will have a difficult time placating the population and sustaining the two-decade old system any further.

Geopolitics

Russian foreign policy has been defined by two pillars for much of its history: its role as a global player and as a regional hegemon. Its objectives in its neighborhood (namely Eastern Europe, the Caucasus, and later, Central Asia) have served to strengthen its great-power status on the global stage. In the 19th century, Saint Petersburg competed with London and Paris for the title of Europe’s dominant power. Controlling the Caucasus and Eastern Europe was never an end goal in itself for the Romanovs, but rather part of the bigger picture of great power competition. This still holds true in the 21st Century. The 2008 South Ossetian war and the 2014 annexation of Crimea were not solely about Georgia or Ukraine, but about the wider goal of competing with the West.

Russia has three constituent components that secure its great powerdom in the modern era: geography, nuclear weapons, and its permanent seat on the UN security council. Barring massive civil war and state break up, all three are likely to remain intact regardless of its economic power.

Russia’s territory, stretching from Poland to the Pacific, as well as its highly-diverse geography, including mountains, deserts, forests, and plateaus have, historically, made the country difficult to govern. Russia exists without many natural borders. The Turkic steppe and the Caucasus mountains protect its underbelly, but flatlands define its western and eastern flanks, making the country vulnerable to outside attack. In light of this, Russia’s historical foreign policy has often been offensive: either conquer, or be conquered.

Today, Russia is surrounded by 14 countries—eight of which are former Soviet states. Russia has strong relationships with many of these nations, but its most significant relationship with them is in in the realm of security. Russia’s simultaneous strategic upheaval and reinforcement of the post-Soviet order has dominated Eastern European and Central Asian politics, and has recently permeated Middle Eastern, European, and even North American systems.

The Kremlin is fortunate that Russia is the only country in the world with a nuclear capability to destroy the United States. As long as it has a large nuclear arsenal, Russia will behave in ways that don’t match its economic or military might. It is Russia’s ace in the hole that everyone else is aware of and covers up for many of Russia’s weaknesses.

Russia’s permanent seat on the UN Security Council might not seem like much, but it is something that Moscow hangs its hat on. It is among the most important bodies in global governance. Russia is keen to preserve the council’s importance and is reluctant to reform—it does not want to give away any of its prestige to rising powers like India.

Despite Russia’s geography as a Eurasian power, its orientation over the centuries has been overwhelmingly European. Europe is its significant other, the yardstick against which it measures all of its success. Over the centuries, Russia has been an insider and outsider of Europe depending on the prevailing international climate, but it has always still been more part of the European state system than the Asian one. The key events of Russian history, including the Napoleonic Wars, WWI, WWII, the Cold War are all tied to European history. Most of its population is in Europe, and cultural influences, despite heavy resistance from within Russia, have flowed from European capitals.

Even in Soviet and post-Soviet foreign policy, Moscow’s key strategic goals have been oriented toward the West, including forming a common European space (which would have included free visa travel from Lisbon to Vladivostok) and expelling American influence from Western Europe. Russia’s expansion eastward has served these goals. Like other European powers that established oversea colonies to get resources to advance their global position in the global balance of power, Russia has done the same with its cookie dough-like expansion. Except there was one difference—during the 19th and 20th centuries, the great European powers had to give up their overseas territory. Russia’s empire was contiguous, so it was able to hold on to it. This spawned Russia’s modern condition: a giant state with over a hundred ethnicities, a fragmented civil society, and tough to govern territories in the far East, North Caucasus, and Siberia.

Local

Eastern Europe

Russia’s most complex relationships are with its bordering states and former communist neighbors. While the more pliable nations such as Kazakhstan and Belarus serve as close Russian allies, states like Ukraine and Georgia have a fraught relationship with Russia on account of their regular attempts to spurn its sphere of influence.

Belarus

Belarus enjoys a close relationship with Russia, on account of its commitment to a pro-Moscow foreign policy and an authoritarian system of governance. Belarus has tremendous economic ties with Russia and a high degree of military cooperation, with the two countries often conducting joint exercises. In Belarus, Moscow sees a loyal partner and a buffer between itself and the West. They are tied together by a Union State treaty but despite the depth of economic and institutional links, the relationship often hinges on the uneasy personal relationship between Vladimir Putin and the Belarusian president Aleksandr Lukashenko, who is keen on receiving Russia’s economic subsidies but also on limiting Russia’s political dominance.

Ukraine

Perhaps no two countries on earth are as historically-intertwined as Russia and Ukraine. Modern Russian culture began in Kiev in the 10th century, and Russian hegemony in Ukraine was re-established in the 18th century. Since then, the two nations have had their share of ups and downs. Ukraine was the breadbasket of the Soviet Union, feeding millions of Soviet citizens and fueling the early Soviet war effort against the Wehrmacht. But at the same time, as James Mace points out, “Enemy number one for Stalin and his circle was not the Ukrainian peasant, nor the Ukrainian intelligentsia. The enemy was Ukraine itself.” Ukraine has oscillated been being Russia’s lifeblood and enemy, since the days of Catherine the Great. This paradox, along with its mythical place in Slavic consciousness, is what makes Russian-Ukrainian relations so difficult to put into words.

Since the collapse of the Soviet Union, Ukraine has remained intertwined with Russia. Its politicians claim that Russia holds it hostage, which is true in many ways, but Ukraine has relied and continues to rely on Russia for many things: without Russia, Ukraine cannot address its daily tasks, like paying its bills and providing energy to its economy. A prosperous Ukraine will need to at least re-establish a working relationship with Russia, given the latter’s ability to frustrate life in many ways.

For Russia, invading Ukraine was a way to signal its strength to a global audience. Reacting against the renewed threat of NATO and EU expansion into Ukraine and the prospect of the country’s revolutionary fervor seeping into Russia itself, the Kremlin annexed Crimea and invaded the eastern parts of Ukraine—Luhansk and Donetsk.

Ukraine is the most important country in Russia’s sphere of influence. Its membership of NATO would create another physical border between the security alliance and Russia (Norway, Estonia, Latvia, and Lithuania all are also part of NATO and border Russia). Ukraine’s ethno-linguistic and cultural background is also much closer to Russia’s than any other country besides Belarus, meaning that any move away from Russia would shake the Kremlin to its core, as the birthplace of russkiy mir would no longer be around.

Moldova

Moldova has strategic value for Russia for two reasons: it can help to destabilize Ukraine, as the two share a sizeable border, and it provides another buffer from EU and NATO expansion in Eastern Europe. Because those two issues are critically important to Russia, Moscow has worked hard to infiltrate and influence Moldova’s political system. It has done so by strongly supporting one political party—the Moldovan Party of Socialists - that takes its cues from a pro-Kremlin playbook. Additionally, Russia has supported Transnistria since the break-up of the USSR, as a point of leverage over Moldovan politicians. Moldova provides an opportunity for Russia to assert itself in the region and uphold its re-emerging, great power status.

Central Asia and the Caucasus

Kazakhstan

Kazakhstan is one of Russia’s most reliable partners. Astana has actively pursued integration and partnership with Russia since the dissolution of the USSR, because its large ethnic Russian minority leaves it vulnerable to ethnically-motivated separatism.

As well as having close political and economic ties with Russia, Kazakh President Nursultan Nazarbayev and President Putin have a close personal relationship. However tensions between the two flare from time to time, most recently on issues such as the status of the Russian language in Kazakhstan.

Georgia

Georgia has been the quiet recipient of some of the most aggressive geopolitical tactics Russia has employed to date, in a dramatic bid to derail the country’s Western ambitions. The threat of a pro-Western, democratic state on its doorstep scares Russia, and has pushed it to take parts of Georgia—Abkhazia and South Ossetia—by force during the Russo-Georgian War of 2008. This notwithstanding, the war did not come from nowhere. Separatism in South Ossetia and Abkhazia had been brewing since the civil wars of the 1990s. Russia simply exploited these local sentiments to its own advantage. This conflict came soon after the Rose Revolution - a pro-democratic popular revolution throughout Georgia in 2003 - was successful in Georgia. The Rose Revolution placed Mikheil Saakashvili in power, a pro-western democrat who wanted Georgia to join NATO and the EU. Russia became involved when it was becoming increasingly possible that NATO and the EU could expand to its Southern flank. Just months before the first Russian tanks were spotted, NATO had declared that Georgia and Ukraine would eventually become members of the organization. Russia has many geopolitical fears, but the idea that Western forces could build military bases on Georgian territory was near the top of the list.

Although the Russo-Georgian War occurred over a decade ago, relations between the two countries have entered a new phase characterized by pragmatism. However, under the surface, relations remains somewhat tense as Russia covertly moves the South Ossetian border deeper into Georgian territory. The pragmatism is also subverted by the fact that Georgia remains the only neighbor of Russia’s with which it has no diplomatic relations. Russian intervention in Ukraine has distracted most of the West from Georgia, but Russian troops continue to occupy parts of the country, and its sovereignty remains partially unprotected.

Azerbaijan

Russia and Azerbaijan have neutral relations. Despite both having poor human rights records and authoritarian leaders, Baku has made sure to keep Russia at arms length. The key factor in the Azeri-Russian relationship is oil and gas. Azerbaijan’s gas is seen in Europe as an alternative to Russian gas: it is in Baku’s interest to build its own pipelines to the West and in Russia’s interest to sabotage them. This dynamic has underscored the Baku-Moscow relationship alongside tensions around Nagorno Karabakh conflict: Russia has historically supported Armenia (though occasionally it has sold arms to Azerbaijan as well).

Additionally, Moscow is eager to ensure that neither Turkey nor Iran gain too much influence in Azerbaijan. Both powers could threaten Russia’s position further north in the Caucasus.

Armenia

Russia is Armenia’s only reliable security guarantor in the Nagorno-Karabakh conflict and on its border with Turkey. Because of its vulnerability in the security sphere, Armenia has had to swallow bitter pills in the economic sphere, joining the EEU even when its trade has mostly been with European markets. As result, Armenia is one Russia’s most consistent allies, along with Kazakhstan and Belarus. Russia feels comfortable knowing that Armenia never makes a foreign policy decision without considering how the Kremlin would react. If policy-makers in Yerevan are unsure how Moscow may respond, they usually tread carefully.

Other Central Asia

Russia has decent relations with the other Central Asian countries. It is currently in a gas dispute with Turkmenistan but has historically imported large amounts of gas from the country. Uzbekistan has traditionally preferred to deal with outside powers bilaterally and not join regional organizations like the EEU. This is likely to change under Mirziyoyev: Uzbekistan’s new leadership is now looking like it could foster a much stronger partner with Russia. Tajikistan is a weak state and has (and will continue to rely on) Russia to guarantee its security interests. The same can be said of Kyrgyzstan, but it is also a member of the EEU (Tajikistan is not).

Global

The European Union

Europe remains Russia’s most important economic partner by far. It is the major source of investment and the largest export market for its energy.

Its invasion of Ukraine was a watershed moment in EU-Russia relations: it has led to a more systemic kind of confrontation. Before 2014, Russia’s relationship with the EU was not the same zero-sum game it is today.

Despite Brussels’ distaste for Moscow, Russia has managed to cultivate pockets of friendship throughout the EU. Its most notably strong relationships are with Italy, Greece, Hungary, Cyprus, and Austria. All of these countries have strong illiberal movements within them, that run counter to the ideals of the EU.

Russia is also actively seeking to limit Europe’s influence in the Balkans. It does not want Serbia to ever join, and bitterly regrets that Montenegro is a member of NATO. The Balkans have traditionally been a Russian sphere of influence because of cultural ties, but that has withered away over the last 75 years. Moscow does not wish it for it deteriorate further.

Germany

Germany has been the closest thing to a friend Russia has had in the West—German economic interests in Russia remain important (e.g. Nord Stream); and Germany before the Ukraine crisis showed some sympathy to Russian geopolitical concerns: Germany was the main player watering down the Bush administration’s efforts to bring Georgia and Ukraine quickly into NATO (the wordings of the Bucharest declarations are much spoken of but they were actually a compromise: promise membership without any concrete plan of how to get there because Germany didn't want to bring them into NATO). Even during the Cold War, the Ostpolitik of West Germany was about forging more cooperative relations with the communist bloc, largely to the distaste of the US.

The United Kingdom

The UK has followed more closely the US line and taken a more hawkish approach to Russia. A good example of the dynamic was in the run-up to the Iraq war: Moscow, Berlin and Paris lining up against London and Washington. Plus, Russia did not hold an openly hostile view towards EU enlargement until quite recently—its hope was that it could build closer relationship with European countries through the EU and put a wedge in the Transatlantic relationship between Western Europe and Washington.

The Baltics

Russia has had a strained relationship with the Baltics ever since the collapse of the Soviet Union, when Estonia, Latvia, and Lithuania pivoted westward. Since then, there have been three major issues that have publicly concerned Russia, all of which revolve around the Baltic States’ Russian diasporas. Russia accuses the Baltics, especially Estonia, of discriminating against Russians by withholding citizenship, discriminating against Jews, and fomenting fascist sentiments. Russia has also acted in non-normative ways—kidnapping Estonian internal security personnel, for example. Lithuanian relations had been stable until the invasion of Ukraine. Latvian relations are also fraught, with issues such as Latvia’s disregard for protecting the status of Russian as a second language being regularly criticized by Russia.

Overall, Russia aims to destabilize Baltic leaderships to bring the countries back into its own sphere of influence, or at the very least, remove them from Brussels’ orbit. The Baltics occupy a particularly important geopolitical location as they border Kaliningrad, a Russian exclave endowed with substantial military capabilities.

China

Relations with China are among Moscow’s most complex. History matters a lot to both parties, despite the smiling photos we see today. Russia and China share the world’s sixth longest international border, at over 2,600 miles (~4200 km) in length. Chinese military maps have shown the Vladivostok and Primorskiy Krai regions as Chinese (which they were until the 19th century). Russia’s far east is not necessarily threatened by China, but Moscow’s grip on the region is very loose. China and Chinese companies rent a lot of land in the Russian far east, and naturally, many Russians there fear potential colonization. While unlikely in the foreseeable future, this prospect could come to fruition in the event of state collapse, as the far east is very vulnerable.

Economically, Russia has become increasingly dependent on China, especially in light of new sanctions. Moscow relies on China as a major consumer of its oil and gas exports. It is also imperative for Russia to continue to import Chinese exports, namely consumer goods.

China sees Russia as a tactical instrument rather than a long-term strategic partner. Before Crimea, Syria, and the interference in foreign elections, China was the main target for Western politicians, but now Washington is preoccupied in Russia, shifting some focus there away from Beijing (although Trump has kept China squarely in his target). Russia is also a reservoir of raw materials, which they have harnessed well in the last several years. Meanwhile, Russia would like to see more Chinese involvement in some of its traditional zones of influence, like Afghanistan and Central Asia. Anything to prevent the flow of narcotics into Russia is worth it from Moscow’s perspective, since drugs have wreaked havoc upon its Siberian and far eastern populations.

India

Russian-Indian relations have historically been solid, and remain so in the present day. Cold War solidarity between semi-socialist India and Russia was bolstered by US support for India’s sworn enemy, Pakistan.

Russia’s main market for its arms exports, a cornerstone of its economy, are China and India, which continue to purchase large amounts of second-grade Russian weapons. Russia also sells a lot of nuclear reactors to India, and sees the country as a future high-growth market for its agricultural exports.

Narendra Modi, the President of India, and Putin are simpatico, cut from the same cloth. However, this ideological similarity will not lead to a considerable strengthening of ties, as Modi still needs to work closely with US allies like Australia and Thailand to prevent Chinese expansion in the Indian Ocean. Protecting India’s vulnerable flank is more important to Modi than becoming closer with Putin on the basis of strongman affinity.

The relationship is likely to remain highly transactional. The two countries see eye to eye on a lot of smaller issues, but have few major projects that they can work together on. One potential area to look out for is Pakistan. India is always looking to contain the Pakistani threat, and Russia fears extremism emanating from Pakistan. The chaos, disorder, and extremism that Pakistan could bring to Russia does not sit well with Moscow. If things become heated in Pakistan, expect Russia to make overtures to India for help.

Japan

The Russo-Japanese relationship should be seen through two lenses: geopolitical and historical. Japan, and Abe especially, sees Russia as a useful counterweight to China in Asia. Tokyo has long sought access to Russian gas imports, but is now vacillating on this as energy becomes a political hot-button issue in Japan. Abe also personally admires Putin’s strongman image (much like Trump).

Japan very reluctantly applied sanctions on Russia after Crimea, not wanting to alienate its Slavic neighbor. Tokyo especially needs a good relationship with Moscow to deal effectively with Pyongyang. The two countries have a shared interest in this through their shared border with North Korea.

Russia wants Japanese investment, technology, and energy business, especially in the far east, where Mitsui and Mitsubishi have cooperated with Gazprom and Sakhalin. It also would prefer that Japan to be less of a base for the U.S. military in the Pacific.

The entire relationship between the two countries is undermined by the strong US-Japanese alliance, Russia’s ever-increasing ties and dependence on China, and most importantly the Russo-Japanese territorial dispute, which prevents further political cooperation. For Moscow, control of the Kuril islands is key to having access to the Sea of Okhotsk, and thus Russia’s vulnerable Far East. They are unlikely to ever give them up, but both parties have domestic reasons to claim that they “are working on it.”

Russo-Japanese relations would be significantly better without historical constraints and the US factor. Ultimately, the relationship is expendable for both parties, and could fall through completely in extenuating circumstances, owing to both countries having much stronger ties to other partners.That said, Japan exports a lot of cars to Russia, and Russians have an overall positive view of Japan. Ideally, Japan would like more economic leverage with Russia so that it could exert more influence on Russian policy-making in East Asia.

The United States

US-Russia relations are so poor in part because of some deeply held beliefs that Moscow holds about American behavior following 1989. Many Russian elites and citizens feel that they were treated the same way the Germans were after WWI with reparations, except Russia in this case fought no war to deserve it. Since the collapse, the West has continued to push deeper into Russia’s traditional sphere of influence, with NATO member states now directly bordering Russia. NATO being a defensive organization means little to many Russians. It feels like a threat so it is treated as such. From Russia’s perspective, the 25 years after Soviet collapse saw Moscow’s interests being almost completely ignored. After 300 plus years of asserting its position as a global player, Russia was now patronizingly told its influence could no longer been felt globally, and perhaps not even regionally. The perceived undercutting of Russian dignity is at the root of the currently fraught US-Russian relations.

The United States is Russia’s primary strategic competitor and its main great power status threat. Because of this, the Kremlin forms large swathes of its foreign policy in direct opposition to Washington’s. Cooperation between the two countries is limited. Russia’s distaste for US actions in Kosovo, Iraq, and Libya, as well its perceived support for the color revolutions right on Russia’s doorstep have made shared foreign policy hard to come by. Russia seeks to maintain its own status quo while the US has tried to spread liberal democracy continuously: the two are simply antithetical. The one place where the two countries do share an acknowledged mutual interest is with regard to terrorism, but even on this there is limited cooperation. As the fight against ISIS has showed, Russia has managed to turn the conflict into a proxy battle, with the US supporting the ousting of Assad in addition to the removal of ISIS, and Russia supporting the Assad regime at any cost.

Many contend that Russian relations have improved under Trump. Rhetorically that appears to be true, but policy wise it is not yet the case. The future of the relationship hangs in the balance, dependent on the outcome of Robert Mueller’s investigation. For now, power is in America’s hands, Russia is only free to behave how they want in Central Asia and the non-NATO parts former Soviet Union.

The Middle East

Although no part of the Middle East has been part of Moscow’s empire, Russia has spent a lot of time on its periphery. Russia waged 12 wars against the Ottoman Empire (modern day Turkey), conquered the Caucasus and Central Asia, and invaded Afghanistan. 2015 marked the first time that Russia had ever directly entered Arab lands.

The Middle East is important to Russia for three reasons. First, Russia needs it to cooperate on oil and gas supply—with Iran and the Gulf states at its side, Russia can influence oil prices to suit its economic needs. Second, the region is a hotbed of Islamic extremism in reasonable proximity to Russia. Putin intends to prevent extremism from seeping into Russia’s Muslim republics, especially Chechnya, by any means necessary. With a growing Muslim population that is now larger than that of Saudi Arabia, Putin fears a religious uprising. Cultivating strong relations can help with cooperation against Jihadi terrorism. Third, and finally, almost every single Middle Eastern country buys a significant amount of arms from Russia, one of the cornerstones of its export market. If relations sour, Moscow’s Arab, Persian, Turkish and Israeli clientele could turn elsewhere for arms.

Russia is worried about Western influence, either through direct government channels or through soft power, spreading to the Middle East and North Africa. The Soviet Union had a history of exploring the region and supporting communist movements to reinforce its own credibility and create a united front against the West. After the fall of the Soviet Union, these relationships were put on the back burner due to domestic issues and the transition to a market economy. However, MENA has become one of the most serious and vital areas of contention between the West and Russia. Russia is promoting closer and mutually beneficial ties between Iran and Saudi Arabia, two states with diametrically opposed goals. Israel was, and remains a stable partner for Russia, and the two states see eye-to-eye on many issues. One of these issues is the Israeli-Palestine conflict, in which Russia may be able to play a substantial role in negotiations. It should be noted that Russia also enjoys good relations with Palestine, and has not sided openly with one party. Another vital aspect is the question of natural resources. Russia sees immense opportunities for the exploration and trade of oil and gas in states like Egypt, and has crafted agreements with countries like Saudi Arabia to limit oil production and raise market prices. Garnering support from partners with similar interests and access to energy is a key concern for Russia.

Latin America

Russia has historically had close relationships with several Latin American states, such as Venezuela and Cuba. Cuba was, and continues to be, a bastion of communism in Latin America. Its history of close ties to the Soviet Union was demonstrated most famously in the Cuban Missile Crisis. Cuba maintains friendly relations with Russia to this day; Russia enjoys being friendly with a country so close in proximity to the US. Venezuela is important due to its oil trade, in which Russia is heavily invested. It is also another state which Russia sees as an outpost for its values and anti-American attitudes.

Sub Saharan Africa

Russia’s growing presence and increasingly warm bilateral ties with African nations is perhaps unexpected, yet completely understandable, as it attempts to find new allies and sources for investment. As mentioned earlier, Russia is also looking to forge ties with nations that are less democratically inclined, and which it can influence politically and economically without the democratic conditionality that Europe and the United States insist upon. Sub-Saharan Africa remains an area that is overlooked by many states, and Russia is looking to exert its influence there.

Conclusion

Russia has had the same two major foreign policy goals for the last 350 years, and it is unlikely those will change soon: defend the state and defend the regime. Defending the state means protecting borders, establishing Russia as a regional - if not global - hegemon, and projecting power on the international stage. Defending the regime means minimizing external influences that destabilize the regime (like popular mobilization or elite defection) and maximizing external support for the regime (like other governments or the people of Russia.) There are many policy implications that stem from these two objectives. For one thing, Russia will continue to modernize its military. It will also continue to intervene in the former Soviet space when it feels threatened, in both overt and covert ways. Although isolationism has been a part of its foreign policy, in order to achieve its goals, it will need to also build alliances through hard and soft power. Its potential for future alliance-building in the post-Soviet space is relatively limited, so Russia will likely look toward the Middle East, the Pacific, sub-Saharan Africa, and Latin America to expand its influence. It will also continue to criticize any and all interventions by the West that do not have Russia’s explicit consent as iterations of imperialist foreign policy. Kosovo, the Color Revolutions, Afghanistan, Iraq, and Libya are all clear examples of this. There is no reason to believe it won’t continue.

Additionally, Russia will continue to try and divide Europe. Its criticism of the West’s liberal leanings and support for illiberal politicians are means to an end, but not an end in themselves. Russia seeks power and prestige, and right now, dividing Europe by attacking its political establishments is the clearest path to that end. Moscow is just as happy to support Orban in Hungary as it is Corbyn in the UK. As long as the figure is polarizing, Moscow wins. The wider the political gaps become across the EU, the more Russia - through its zero-sum vision of global politics - sees its interest being maximized. Building off this, it will also continue to counter liberalizing movements such as Color Revolutions, democracy promotion, and human rights in its sphere of influence, while fanning the flames of nationalism at home. Finally, it will intervene in crises abroad to showcase its great power status, as it has in Syria.

Economics

Since the sovereign debt crisis of 1998, when the ruble lost two thirds of its value against the dollar and the government defaulted on its foreign loans, the Russian economy has maintained a broad measure of stability, and at times, been at the center of rapid growth. Russia has the world’s sixth largest GDP (PPP). Despite high headline domestic output however, it also has stark levels of inequality. One-fifth of Russia’s wealth is owned by roughly 100 high net-worth individuals, commonly referred to as oligarchs, many of whom have made their fortunes investing in the country’s natural resources sectors. Although recent sanctions and lower than usual oil prices tipped the country into recession in 2015, it has been able to stave off a collapse.

Structure of the Economy and Key Markets

Economic success depends almost exclusively upon high oil prices—Russia is the second largest exporter of the commodity on the planet. While high prices are undoubtedly beneficial for Russia, supply and demand hold the economy hostage. Russia would do well to diversify its exports away from over dependence on oil and gas. Russia’s hydrocarbons sector currently powers Europe, but Moscow is still much more dependent on the European markets than the other way around.

While the country is relatively wealthy and has been making strides in diversifying its economy, it continues to be plagued by high levels of corruption, with some estimates appraising Russia’s bribery transactions at $300 billion. Some studies suggest that the amount of offshore wealth, hidden in Switzerland, the UK, and Cyprus, for example, equals that of Russians’ total wealth domestically.

Although Russia no longer has a command economy, vestiges of it remain, perhaps most evidently in the state’s ownership of companies across various sectors, particularly oil and gas.

To understand Russia’s economic position today, it is important to understand how it got here. Russia’s economy has arguably faced more turbulence than any other in the last 120 years. As a part of the Soviet Union, its economy was centrally planned around output quotas, leading to highly inefficient allocations of capital and labor and large government debts. The Soviet command economy was much more diversified than the Russian economy today, and grain and other crops were a major export in addition to natural resources such as oil, gas, petroleum, and minerals. From the late 1960s, the Soviet Union struggled economically as was especially evident during the stagnation of the 1970s and subsequent economic collapse in the late 1980s. It is during this time that a famous saying emerged among the Soviet people: “The government pretends to pay us, and we pretend to work.” Politically and economically the system was not working, which only hurt output more.

After the fall of the communist system, Russia, as the primary Soviet successor state, was responsible for paying off the USSR’s external debt. This, in addition to a crumbling economy and “shock therapy,” which was implemented to bring the Russian economy into a free-market system, caused real GDP to fall dramatically and hyperinflation to spiral.Many Russians lost their entire life savings in the early 90s. This period would become the worst economic crisis Russia has ever faced and one of the worst in world history.

While poor economic conditions of the post-Soviet period thrust many Russians into worse poverty than they had experienced in the Soviet Union, a handful of hard-nosed businessmen profited handsomely off the country’s transition to a market economy. By buying lucrative state-owned assets at heavy discounts, they were able to then turn them around and profit.

Much of the foreign monetary aid to Russia through the International Monetary Fund (IMF) and other organizations was also laundered and sent to offshore accounts, and the economy remained devastated through the late 90s and only worsened by the 1998 financial crisis, when inflation reached 84%, the ruble depreciated heavily against all currencies, and Russia defaulted on its debt. The crisis was the result of high fixed exchange rates, declining productivity, and a chronic fiscal deficit. Lax tax collection, the dependency on borrowing money, and the staggering costs of the first war in Chechnya—$5.5 billion— exacerbated the problem. It was only in 2000, with the arrival of Vladimir Putin as president, that Russia was able to bounce back and grow. Helped enormously by rising oil prices, Russia was able to sustain growth until 2009, when the effects of the global financial crisis reached local markets. Even then, Russia’s experience was short and not as painful as other countries’.

When oil prices once again began to rise in 2010, the economy was able to recover strongly. There is a close correlation between oil prices and the health of the economy due to Russia’s overdependence on natural resources. In 2012, oil, gas, and petroleum accounted for 70% of total Russian exports. High prices for these resources, as well as for rare minerals, are essential for balancing the federal budget. The break-even price for oil was high in 2014, but has dropped to around $50 a barrel thanks to significant cost-cutting by producers.

After Russia’s annexation of Crimea, the combination of falling oil prices and sanctions on key industries devastated Russia’s economy. Sanctions were placed on Russian companies using Western oil and gas technologies for exploration and production, and they were barred from medium and long-term debt markets in the United States and the EU. The 2014 sanctions were renewed in 2016 for the supposed Russian meddling in the United States elections, and expanded to target members of the Putin elite —close to 700 people— and key companies and banks through asset freezes and travel limits.

Trade Snapshot

Due to Russia’s status as a leading global producer of of natural resources, it enjoys close trading relationships with both European and Asian countries. The European Union, in particular Germany and the Netherlands, remains Russia’s largest trading partner. Russia also has an expanding relationship with the Asian market, particularly China. The United States continues to be a stable trade partner for Russia as well. Ukraine was formerly a top trading partner due to geographic proximity and the horizontal integration of their goods markets, , but due to the ongoing diplomatic tensions and military activity that relationship has soured. Exports from Ukraine to Russia have fallen to $3.85 billion, while Russian exports to Ukraine fell to $6.27 billion. The Russian-German trade relationship is based primarily on gas. Germany is the biggest European importer of Russian gas. This relationship will be consolidated if the Nord Stream 2 pipeline is completed, providing Germany with direct, cheap access to Russian gas. Russia currently exports $15.9 billion worth of goods, including $8 billion of crude petroleum, $2.6 billion of refined petroleum, approximately $900 million of coal briquettes, and $715 million in refined copper. Russia imports $22.7 billion of goods, primarily in German tech products, totalling approximately $7 billion, and transportation, cars, and parts to Russia, totalling approximately $5 billion. Medicaments also make a substantial portion of Russian imports, at $1.4 billion.

China is another country that exports more diversified goods than it imports from Russia. Russian imports from China total $35.5 billion, with the most substantial being around $10 billion of technology such as computers and broadcasting equipment, approximately $2 billion of clothing, and almost $2 billion in transportation and parts. Russia exports mainly natural resources to China, with a total of $30.3 billion, including $15 billion in crude petroleum, approximately $2 billion in raw nickel, $1.7 billion in refined petroleum and $1.5 billion in sawn wood. As a fast-growing market with which it enjoys relatively good foreign relations, Russia sees China as an increasingly valuable trade partner.

The Netherlands is also one of Russia’s leading trading partners. In 2017, Amsterdam imported over $30 billion worth of various petroleum products, and nearly $2 billion in metals. Conversely, Moscow imported nearly $4 billion worth of goods from the Netherlands, mainly in the technology, healthcare, and agricultural sectors.

Russia also enjoys a significant trade relationship with the United States, with total imports from the U.S. in 2017 standing at $7 billion, a massive 20% increase from 2016. Russia exports more than that to the U.S., totalling $12 billion, mostly in petroleum, metals, and chemicals.

Belarus is another significant trading partner, due to its close proximity and economic integration with Russia, with total exports at $10.6 billion. Dairy as well as other food products amount to 70% of Belarusian exports to Russia. This is evident when looking at the numbers, where Russia imports approximately $2 billion of dairy and animal products. Belarus also provides Russia with $1 billion in cars and other machinery and parts. Other industries such as technology, plastic and metal products, as well as fruits and vegetables and other foods all amount to less than $1 billion each. Russian exports to Belarus amount to $14 billion, with the majority of that sum stemming from crude petroleum at $4 billion, petroleum gas at $2.5 billion, and refined petroleum at $500 million, as Belarus is almost 100% reliant on Russian gas. Other substantial sectors include metals and natural resources, technology, chemicals, health and beauty products, and food products, each under $1 billion. Additionally, Belarus is a part of the Eurasian Economic Union, which reinforces close economic ties between the two countries.

Foreign Money Flows

Russia has also been hurt by low rates of Foreign Direct Investment (FDI) due to political uncertainty and sanctions. In 2015, FDI flows fell by 92 percent from the previous year. While they had been falling since 2014, they rose again in 2016, reaching close to $38 billion, primarily due to the partial privatization of Rosneft. In 2017 that number fell back down to just over $25 billion. Most investment has been in the oil and gas and manufacturing sectors, and to a lesser extent in agriculture and technology. Currently there is $450 billion invested in Russia in the form of FDI stock, accumulated over many years.

Tax Law

Taxes have played a substantial role in supporting the economy since President Putin’s introduction of the flat rate tax and his strengthening of mechanisms for effective tax collection. Citizens are taxed at the federal, regional, and local levels in property, corporate (at 20%), excise, capital gains, land, and value added taxes (VAT), set by the Russian Tax Code. The largest portion of tax revenue comes from VAT. In 2017 the Russian Finance Ministry proposed an increase on personal income tax and VAT, and the potential liberalization of tax policy to benefit the poorer sections of society and boost economic growth, with President Putin setting 2019 as the implementation date. The second largest portion of the federal budget comes from the oil and gas industry, which has a tax of over 45% of its net income. Revising the taxation system and rates would greatly benefit today’s economy, as sanctions are the new norm, and the 13% flat rate tax has been the standard since 2000, and has seen Russia through mostly positive economic conditions. At present it is not the most efficient way to support the federal budget and the poorest strata in society.

Conclusion

Russia’s economic history has made it both fatigued, yet used to trying economic conditions. While the transition to a market-economy as well as low oil prices prevented the economy from building a solid foundation in the 90s, Russia has been able to bounce back and enjoy relative stability. This stability is heavily dependent on natural resource exports, meaning that Russia will continue to trade heavily with European and Asian markets. To grow further, Russia should continue expanding into the Liquefied Natural Gas (LNG) market and seek new customers for the delivery of its gas products. Russian import substitution as a result of sanctions on Western foodstuffs has been successful in the agricultural sector, with Russia becoming the world’s largest lead exporter of grain in 2017. However, Russia continues to produce few high-quality goods outside of the oil and gas sector, despite various government efforts to stimulate production. It remains substantially dependent on foreign imports in other sectors.

Culture & Society

In Russian history, there are three, so-called “accursed” questions. What is to be done, who is to blame, and who is happy in Russia? These questions have tormented Russian thinkers for centuries, and serve as a window into popular conceptions of the Russian soul.

Countless authors (Pushkin, Dostoevsky, Tolstoy, Turgenev, Chekov, Bulgakov, Nabokov, Solzhenitsyn, and Akhmatova to name a few), composers (Stravinsky, Tchaikovsky, Rachmaninoff, Shostakovich), artists (Mayakovsky, Repin, and Perov), and filmmakers (Eisenstein, Tarkovsky, and Sokurov) have grappled with these questions, and in doing so, helped to create one of the richest cultures of world history. While the storylines vary, their ideas are remarkably self-perpetuating. Melancholic brooding over the country’s eternal problems is widespread: economic misery, state abuses of power, and the agony and ecstasy of Russian cultural existence are time-honored themes.

However, there is more to Russia than ‘the Russian soul’ It is a complex nation with unique principles, traditions, and beliefs about themselves and the world around them. Indeed a self-awareness and an “us versus them” narrative has been a key driving point of culture and politics throughout Russian history.

It is paradoxical, then, that notwithstanding a high degree of national self-awareness, Russians have failed to determine what exactly it means to be Russian, and what exactly Russia’s place in the world should be. Russians have, and continue to be, pulled towards both Europe and Asia, experiencing tremendous cultural influence from both regions throughout their long history. Relativity is perhaps the most important term to keep in mind when talking about Russia.

Religion and Values: to turn West or not?

Kievan Rus, the birthplace of the East Slavic peoples, was founded in 882 AD. Although located in modern-day Ukraine, it holds a special place in the Russian spirit, as it is regarded as the precursor to the modern Russian state. Prince Vladimir, perhaps the most notable prince of Kievan Rus, was the driving force behind the Christianization of empire. Today, he is one of the many sources of contention between Ukraine and Russia: which country has the right to claim Vladimir as its founder? By claiming that Vladimir is of Russian origin, Russia aims to cement itself as the cradle of Slavic civilization, and as such, the most important state.

After more than seventy years of religion having been outlawed in the Soviet Union, it is now experiencing a dramatic resurgence in Russian society. The Russian Orthodox Church has a powerful influence on national politics and culture, insisting on imposing socially-conservative values in Russia to distinguish it from the ‘decadent’ and liberal West.

It cannot be ignored that while Orthodox Christianity dominates, the country’s Muslim population is growing quietly, but steadily. Moscow already has the largest Muslim community in Europe. Currently, over 70% of the Russian population is Christian, while Muslims make up around 15%. But some scholars predict that by 2065, Russia will be a majority-Muslim country. This is a reality that would drastically alter Russia’s self-perception as a Christian state and its raison d’etre.

The Russian devotion to religion and family values is a key driver of social policy. Russians tend to support traditional gender roles and relationships, and overwhelmingly oppose movements advocating equal rights for LGBTQ+ individuals. A general leitmotif for society is preventing the spread of Western liberal values, which Russians and the Russian government regard as threatening to the traditional family unit. Russians are have a complex relationship with Western culture; even though they enjoy the vacationing there and appreciate the high standard of living abroad, many also see the West as unmoored from Christian morality, religion, and tradition. Some also see increasing diversity in Europe as a degradation of society. At home, they also prefer to maintain a typically Russian ethnic identity, where Central Asian ethnicities in particular, and consequently, religions and customs, are not completely welcome. Therefore, many Russians favor limiting migration from Central Asian countries.

Russia has historically been torn between either a European (Westernizer) or Eurasian (Slavophile) path. Great debates between members of the Russian intelligentsia are full of ad-hominem attacks against those who disagreed. The Westernizers have promoted classically liberal ideas, such as the rights of the individual, limiting the power of the state, and devotion to empirical reasoning. On the other side, Slavophiles (whose most famous proponent was none other than Fyodor Dostoevsky himself) contended that Russia should not seek to be like its European neighbors because Russia was not like them. To them, Russia had protected Europe against the Mongol conquests and now were permanently changed (hence the Russian proverb: “Scratch a Russian, find a Tatar”). Russia should become completely absorbed with its own culture rather trying to change itself to accommodate others. Slavophiles wanted Russia to be a haven for Orthodoxy. At present, the Kremlin has embraced its uniqueness, thereby opting for the Slavophile argument, cultivating a “true” Russia, so to speak, not dominantly influenced or bowing to any other culture.

Russian culture is such that the key players may change, the technology may change, and the political system itself may be completely different, but the same timeless debates will endure. The Westernizer versus Slavophile debate is not one that has just recently resurfaced. How to lead Russia and how Russians perceive themselves (as either European or distinctly Eurasian) fluctuates decade by decade. For example, although society is now firmly Slavophile, Russians were keen to be considered European in the early 1990s. Anti-Western or anti-American attitudes have prevailed among elites and the public since at least the late 1990s, and continue to be influential in politics. Americans are not trusted, partly as a vestige of Cold War mentality and, consequently, anti-Americanism has played well into the hands of Russian leadership, and has been axiomatically used to foster more domestic pride, patriotism, and even nationalism. While the West is presented as hostile to Russia, Moscow advocates a stronger and omnipotent position in its own backyard. Russians believe they are the dominant power in the post-Soviet region and serve as a “big brother” to smaller Slavic and Central Asian states. By crafting this status on the international stage, the Russian government, as a reflection of society, shows that they are indeed worthy of great power that spans continents. However, as history has shown, this narrative may shift back to a Westernizing one swiftly--being fiercely nationalistic and anti-Western is not a staple of Russian culture, just a recurring trend.

Russian Pride

Victory and pride are the two themes that are most widespread in national discourses. Sports are used to bolster these feelings, and are one of the main vehicles through which patriotism is evoked. Hockey and football are most important and are Russia’s main sources of national unity and pride. The recent World Cup has shown that success on the world’s largest sporting stage can unite Russia: it ignited a bit of a patriotic frenzy among Russians— even among those who don’t watch sports. The Cup has not only been a useful tool through which to boost tourism and improve foreigners’ perceptions of Russia; it has had a dramatic domestic effect in which Russian pride has been boosted to unprecedented levels through a peaceful, non war-related event.

Sentimentalism and nostalgia also play a large role in Russian pride. Many still lament the fall of the Soviet Union, and many of Russia’s present achievements are compared to those of the USSR. Even holidays are still greatly founded on a sense of Soviet nostalgia. New Year’s celebrations are rife with Soviet movies, songs, foods, and other traditions. Victory Day, celebrating the defeat of Nazi Germany on May 9, continues to be the greatest patriotic holiday with military parades, children dressed in Soviet costumes, and a sense of pride in the Soviet army’s role in liberating Europe. Past success is the most successful tool that the Russian government uses to bolster the idea of a presently great Russia, and one in which people truly believe.

Alcohol

Russians are legendarily big drinkers, and with good reason. Vodka has been many Russians’ refuge from the difficulties of life in the Taiga, but also one the country’s everlasting problems. Solving the vodka problem has riddled many Russian leaders. Gorbachev banned it and got good results: life expectancy and productivity both increased. Yeltsin embraced it, and as result male life expectancy in Russia fell beneath 58 years, while murder and crime rates soared. Yeltsin himself could not stave off the bottle, getting drunk at State visits to Washington and during pressing times in the Russian White House. Yeltsin’s alcoholism tarnished his memory: he is remembered as a drunk instead of as a man who peacefully facilitated the collapse of the Soviet Union.

Perhaps the alcohol problem can never be solved, only treated. It was a problem in Tsarist times as well. A speaker discussing the struggle against alcoholism at the all-Russian Congress in 1914 declared:

“When the Russian is born, when he marries or dies, when he goes to court or is reconciled, when he makes a new acquaintance or parts from an old friend, when he negotiates a purchase or a sale, realizes, a profit or suffers a loss - every activity is copiously baptized with vodka...the Russian spends his entire life, from cradle to grave, bathing and swimming in this drunken sea.”

The communists, too, shared this view. Zinoviev, one of the leaders of the Bolshevik revolution, went so far as to say that hard drinking is a kind of national religion, much like confucianism is to the Chinese.

Massive vodka consumption has been part of Russian culture for centuries. It was a way to deal with the weather and make use of the potatoes, but has become something much more. Russian toasts, parties, and famous nightlife all revolve around that hallowed drink.

Conclusion

Russia’s culture has been more greatly affected by ideas than most other societies. It is a country where revolutionaries first tried to implement a Marxist utopia, where 19th century debates about the Russian soul rage on 150 years later, and where writers like Dostoevsky and Tolstoy are seen as demigods. Other cultures discuss ideas but it is easy enough to separate the person from the person’s ideas. In Russia, there is no such thing: people have been and continue to be the embodiment of ideas. There are few neutral Russians: people believe in what they believe, and they do so with all their heart. Dostoevsky pinpoints this uniquely Russian quality in his esteemed novel, The Idiot:

“It is easier for a Russian to become an Atheist, than for any other nationality in the world. And not only does a Russian ‘become an Atheist,’ but he actually BELIEVES IN Atheism, just as though he had found a new faith, not perceiving that he has pinned his faith to a negation. Such is our anguish of thirst!”

Centuries of vulnerability at the nexus between East and West have caused Russia to foreign identity that is neither European nor Asian. An awareness of Russia’s specific place in geography and history has naturally influenced foreign relations and culture. Russia’s leaders have also used this “otherness” to their political advantage. Decades of Soviet rule followed by a brief but disastrous experiment with democracy in the 1990s have cultivated a society that is desperate for stability, yet also yearns for a renewed sense of international respect. This is undoubtedly a reality the Russian government will take full advantage of.

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