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18 May 2015

Russian Foreign Policy Under Dimitry Medvedev’s Presidency (2008-2012) – Analysis


Putin’s Russia (2000-2008) not only established internal stability, following the difficult and painful transition of the 1990’s onwards, but recovered economically, bolstered by a rapid increase in revenues from oil exports. Vladimir Putin knew how to take advantage of Russia’s position as the main supplier of energy to Europe. He also used it as a bargaining chip in achieving political ends. Russia is now trying to regain its former position as a major power, grounded on a strong and independent foreign policy. However, regardless of how well-intentioned this policy initially was, it ultimately created tensions with the West – especially with the United States (U.S.) and the European Union (EU).

The inherent limitations of this policy were brought to the forefront during the economic crisis of 2008-2009, which demonstrated that Russia was still plagued with serious economic, social and institutional deficiencies. President Dmitry Medvedev, Putin’s successor in the Kremlin in May 2008, quickly realized that a new course of structural reform was needed, not only to provide immediate solutions but to allow Russia to continue to be counted among the ranks of the world’s major powers. After setting these reforms, referred to as “modernization,” into motion Medvedev did not hesitate to approach the West for the required investment and technology transfer so desperately needed in many spheres of the Russian economy. These initiatives coincided with the election of Barack Obama as president of the United States. Obama first came across as less inclined towards unilateralism than his predecessor, George W. Bush, and responded positively to the Russian shift in attitude. This was demonstrated when former U.S. Secretary of State Hillary Clinton and Russian Foreign Minister Lavrov symbolically pressed the “reset button,” a highly-publicized event designed to turn a new page in the ledger of relations between Washington and Moscow.

Medvedev’s Russia also recognized that the EU should be another major partner in its drive towards modernization, as reflected by the Modernization Partnership launched at the Stockholm Summit in November 2009. But the limits of the new approach to the relations between Russia and the West were palpable in a series of crucial issues: The lack of progress in negotiating a new Partnership and Cooperation Agreement between the EU and Russia (as a replacement of the the 1997 agreement)1; Russia’s accession to the World Trade Organization (WTO), achieved only at the end of 2011; Russia’s continued pursuance of establishing a new European security architecture focused only on military issues (or hard power), which reflects Russia’s desire to maintain an exclusive sphere of influence in the post-Soviet space

The war between Russia and Georgia in August 2008 over the breakaway Georgian regions of South Ossetia and Abkhazia, and the stated intentions of the Georgian and Ukrainian governments to join the North Atlantic Treaty Organization (NATO), raised the bar in the already heightened tensions between Russia and Western countries to its highest point since the Cold War.

Russia under Medvedev actively sought to establish a special relationship with China, its historical Asian rival. Russia is aware of the substantial benefits that could be derived from closer economic cooperation with this rapidly developing neighbour. At the same time, Russia is also confronted by the strategic challenge of dealing with a country that has become a major world power. Relations – both political and economic – between Moscow and Beijing during Medvedev’s presidential term can be best described as good and business-like. However, Medvedev was unsuccessful in establishing a public dialogue with China on major global issues.

Relations between Moscow and Tokyo were tense due to Russia’s ongoing claim to the disputed Sakhalin Islands, captured from Japan at the end of World War II. Nevertheless, Japan remains a major investor in Russia.

Between 2008 and 2012, Russia paid more attention to other emerging powers like Brazil and India (and BRICS members),2 seeking better ways to coordinate shared policies on global economic governance. Russian-Indian relations have historically been robust, and India is today a major consumer of one of Russia’s chief exports – cheap, yet competitively priced arms and weapons systems. Moscow also began to refocus on Latin America, both for geopolitical (as it is located in the “U.S.’s backyard”) and economic reasons, especially those connected with energy. Although only modest results have been achieved in respect to Russia’s relations with Brazil and India, two regional and economic powerhouses, it is possible that these countries may effectively coordinate their positions at some point, especially in dealing with some of most important and pressing aspects of international economic relations.
INTRODUCTION

Following the inauguration of Russian President Dmitry Medvedev in May 2008, the Russian political scene was characterized by a new structure: the country was governed by a bicephalous system (which reflected the two-headed eagle of the national flag).Medvedev became President and Vladimir Putin assumed the position of Prime Minister. In this ostensibly tandem structure, the Chief Executive was subordinated to the President as was the case even before Russia first emerged as an independent country in the wake of the collapse of the Soviet Union.

Such a dual power sharing worked quite well during Medvedev’s term and with no serious fissures that could bring about competing circles of power around each of the heads of state. This was true even though the personalities of the two leaders were very different. Their priorities, however, seemed different, at least formally.

During his presidency (2000-2008), Putin made every effort to recover Russia’s super power status and international respect. He did not hesitate to use the privileged position of Russia – main energy supplier to Europe, a permanent member of the Security Council of the United Nations, a continuing influence over the post-Soviet space – to achieve his ambitious goal. For his part, Medvedev preferred to use foreign policy as an instrument to advance the process of economic modernization, while keeping Russian national interests in mind. When compared to Russia’s main partners and competitors, Medvedev was very much aware of the systemic disadvantages his country faced. These disadvantages, according to him, were factors that considerably weakened Russia as a major world power and economic player.

The foundation of Putin’s domestic and foreign policy was the concept of “sovereign democracy,” which argues that Russia must follow its own democratization process. There was no need to emulate and copy Western models. In this view, if Russia’s political system had serious flaws, the same could be said of the political systems of Western countries. The West was no longer seen as being in a position to give lessons to Russia. Consequently, Russian foreign policy at the time gradually abandoned or even opposed some of the positions taken by Western countries. Such a tendency began with Putin’s speech at the annual Wehrkunde conference held in Munich in January 2007.

Within a year serious tensions arose between Russia and their Western allies, for instance with the August 2008 armed conflict between Georgia and Russia. The origin of this conflict was the longstanding secession attempts by South Ossetia and Abkhazia, two territories recognized as being part of Georgia.

Especially glaring were Russia’s disagreements and confrontations with the U.S. over such issues as NATO expansion, European-based missile defense systems and U.S. attempts to expand its influence into what Russia considers its “near abroad”, the post-Soviet space. Under Putin, Russia once again seemed to be a rival of the West, not merely on an ideological basis as during the Cold War, but because of its own strong nationalistic tendencies.

Medvedev, however, decided to take a different track. The great economic crisis of 2008-2009 somberly exposed Russia’s serious limitations, especially in the economic sphere. The young President, although trying to maintain an independent foreign policy, recognized that for Russia to become a great power again matching not only the “big” U.S. and Western powers but also major emerging economies such as China, Brazil and India, it has to “modernize” in broader terms. Not only does it have to upgrade its infrastructure, diversify the economy and expand its base of technology, but it needs to make progress at the institutional level. This means that Russia needs to make greater efforts at democratization and reduce endemic problems such as corruption and excessive bureaucracy.3

This new approach is graphically reflected in the doctrine of the “four I’s”: Institutions, Infrastructure, Innovation and Investment. Medvedev sought to rouse Russian society from its slumber, bring the country into the 21st century more definitely and use its enormous capabilities with far more efficiency. Medvedev believed that to overcome its technological backwardness Russia needed to collaborate politically with other nations and to open the country up to foreign capital and technology transfer, thus bringing about a clear improvement in relations with Western partners was an essential step.

The underlying purpose of the Russian President’s visit to Silicon Valley in June 2010 and the “Partnership for Modernization” launched at the EU summit in Stockholm in November 2009 was in keeping with this approach. Medvedev was not afraid to admit that the U.S. and the EU can be key partners in Russia’s modernization project, which he was bent on pursuing.

While Putin and Medvedev maintained excellent personal relations, there were some differences in their approach. These led to some confusing and somewhat embarrassing situations. In June 2009, Medvedev, for instance, wanted to consolidate his efforts, proverbially, “putting all his eggs in one basket,” by concluding negotiations on Russia’s accession into the World Trade Organization (WTO). Accession talks had been dragging on for over 17 years.4 At the St. Petersburg Economic Forum in June 2008 a series of fruitful meetings were held between the Russian Minister of Economic Development, Elvira Nabiulina, her American counterpart, Ron Kirk, and Catherine Ashton, then European Commissioner responsible for trade relations. Two hours after this meeting Prime Minister Putin announced that before joining the WTO, Russia would first focus on forming a Customs Union with Belarus and Kazakhstan. Putin’s announcement appeared at first impression to imply (though not openly stated) that these three countries would, through establishing a common trade organization, join WTO simultaneously. Such a surprising revelation at the time only resulted in Russia’s efforts to join WTO being delayed even more. It was even described as a step backwards.

Unlike his predecessor, Medvedev managed to reduce tensions with the U.S., the EU and even NATO. He supported the adoption of new sanctions on Iran by the UN Security Council and halted the expected delivery of Russian S-300 surface-to-air missiles to Iran, effectively cancelling past agreements signed during Putin’s reign.

It could be argued that Medvedev’s apparent outreach towards moderation amounted to anything more than participating in cordial summits and meetings. Certainly the results of his policy were modest. The wider Russian public remained skeptical about any possibility for effecting real change. On the other hand, the mistrust of the West loomed large – remembering the failure of the policy of concessions followed by Mikhail Gorbachev – despite the positive momentum of Russia’s new relations with the U.S. and EU.
Russia’s Great Power Status

Although Russia had ceased to be a major global ideological force and had lost much of its former empire, between 2008 and 2012 both Putin and Medvedev believed that it still remained a major global power. Objectively, there is no doubt about this reality in light of its world standing:

(1) Occupying an area of over 17 million square kilometers, Russia is the largest country in the world, covering more than half – 170 – of the 360 degrees of longitude of the earth.

(2) Russia is the second largest exporter of oil after Saudi Arabia and the largest producer and exporter of natural gas in the world. It owns 20% of the world’s known coal reserves and 14% of its uranium. It is a leading producer of titanium, copper, zinc, aluminium, gold and diamonds. Russia has the largest temperate rain forests in the world and is a major producer of wood products. It also has the largest freshwater reserves on the planet.

(3) After suffering an approximately 50% drop in Gross Domestic Product (GDP) in the 1990s, the Russian economy recovered dramatically between 2000 and 2008, with an average growth rate exceeding 6% per annum. In 2007, in terms of Purchasing Power Parity (PPP), it was ranked sixth in the world (in terms of absolute purchasing power, it is currently ranked No. 12). In the 2010s, Russia accumulated the third largest foreign currency reserves in the world (more than 450 billion),5 after those of China and Japan. The Russian state paid off its foreign debt inherited from the Soviet Union almost entirely. Understanding the “ups and downs” of the global economy, Russia proceeded to create a Stabilization Fund which absorbed much of the shock when achieved growth reversed, as a result of the 2007-2008 international economic crisis.

(4) Russia continues to be a key actor on the international scene with the largest arsenal of nuclear weapons after that of the United States. It maintains a powerful standing army, although it is undergoing a difficult process of reduction in terms of manpower, restructuring (from 4 million to 1 million soldiers) and modernization. It is a permanent member of UN Security Council and belongs to the G-8, the G-20 and BRICS (Brazil, Russia, India, China and South Africa). It is also a member of the Quartet on the Middle East Peace Process (the United Nations, the United States, the European Union and Russia), the P5+1 (the five permanent members of the UN Security Council plus Germany) on Iran’s nuclear program and the Six-Party Talks on North Korea’s nuclear program. In addition to its enormous capacity as a producer of oil (it is not a member of the OPEC cartel but is a member of the Forum of Gas Exporting Countries), it controls much of the network of pipelines connecting the energy producing fields of Russia itself, the littoral states of the Caspian Sea and Central Asia with Europe.

(5) Russia continues to have great advantages in the sphere of science, but still fails to connect much of its basic research and development with applied technology for industrial uses, which further hinders technology transfer and commercial development.

(6) Russia’s enormous potential continues to be restrained by a series of internal structural problems which are holding back its development as a major economic and political power. Russia is also suffering a serious demographic problem, due to its low birth rate (10.4/1,000) and high mortality rate (16/1.000), which translates into low population densities, (8.6 inhabitants/km² throughout the country). This is especially noteworthy in the case in the far eastern part of the country. Social problems are acute, with a high rate of alcohol and drug use, economic inequality and the deterioration of education and health services. Corruption and the shadow economy hinder the development of SMEs (small and medium-sized enterprises) and the fledgling middle class is very slow to integrate new cohorts into its ranks. The economy is overly dependent on export revenues from oil and other mineral products, making it vulnerable to the fluctuation of prices in international markets. The vast majority of public infrastructures have not been renovated since the Soviet era and have badly deteriorated. This is not only a hindrance to development but also a threatening strategic risk, as these facilities form the backbone of the country. Finally, after two devastating wars in Chechnya in 1994 and 1999, Russia is again facing increasing instability the North Caucasus region. Terrorist attacks began again in Moscow, with a bombing at its international airport on January 24, 2011.

From the military standpoint, restructuring efforts and downsizing have aroused serious discontent amongst the officer corp. Despite claims of modernization, only a small part of the plan to turn the army into a professional one has been actually carried out. Problems affecting the supply of military components and parts for conventional warfare and nuclear arms (including Iskander tactical missiles and the strategic-ICBMs) continue. Recent tests of new types of weapons, such as the Bulava missile, have proved unsatisfactory. The shipbuilding industry has become nearly obsolete, to the point that, for the first time, the Russian Navy has decided to purchase foreign-made vessels, for instance, the French Mistral.6 After two years of negotiations, Russia and France signed a treaty of military cooperation on June 17, 2011, under which Russia agreed to buy two French Mistral-class amphibious assault ships, together with a full technological complement package as part of the total deal. This transaction marked the largest transfer of sensitive military equipment from one country to another in history. Russia plans to renew its outdated military and technological base in order to restore the effectiveness of its military deterrence at the regional level. Meanwhile, France will take advantage of this commercial windfall to expand exports into evolving new arms markets and to further boost its foreign policy initiatives.7

From a broader perspective, Russia continues to suffer from an identity crisis: although, since the fall of Constantinople to the Ottomans in 1453, Russia has considered itself the just heir of the Byzantine Empire and “the Third Rome,” – Russians and their European neighbors both have been doubtful and an identity crisis as to whether this country is really part of Europe and has the proclaimed Western values it claims to. There are several reasons for this isolation, and much is historically based. Russia has been isolated for many centuries (attributed to invasions of the Tatars/Mongols, the Orthodox Church, the Communist regime, etc). The ideas of the Renaissance of the 14th and 15th centuries and of the Enlightenment in the 18th century did not penetrate the country as much as it did in Europe and authoritarian regimes have prevailed, from the autocracy of the Tsars to the totalitarianism of the Soviet Union, such regimes have preventing the principles of liberal democracy from taking deep root among the masses.

Efforts to integrate Russia into the West in the last decade of the 20th century failed due to a lack of vision and willingness from the Western countries. The problem was compounded because the Russian elite preferred to follow a nineteenth-century capitalist model of development, one mixed with corporatism and state-orientated policy it was this model that forced it away from the West. The model forced it away from the West. Following a short flirt with Western capitalism and political values during the first presidential term of Vladimir Putin (2000-2004), Russia moved away from the West (2004-2008) and proceeded to redefine its own objectives. Russian foreign policy since then has focused on maintaining a dominant position within the “near abroad”, achieving equality with the main centers of global power (mainly the U.S., the EU and China) and promoting the formation of a multipolar world order.8
THE POST-SOVIET SPACE

The post-Soviet space is made up of countries linked historically to the Tsarist and Soviet Empires, and where tens of millions of ethnic Russians or Russian speakers live, serves as a crossroad between Europe, Asia and the Middle East. For Russia, it is an area of vital importance, not least because of its vast energy resources. Russia’s efforts since the dissolution of the Soviet Union have been designed to recover the dominant role it once played in such an expansive area. He wanted to ensure forth all efforts to prevent or to reverse attempts by other powers (the U.S. and China, Turkey, Iran and the EU) to increase their degree of presence and influence.

At the end of the last decade, Dmitri Trenin, a Russian analyst, launched what has been called the “CIS Project,” i.e., the conversion of the Commonwealth of Independent States (CIS) into a pivotal point of Russian power. However, never sought seek to formally put back together the Soviet Union. It wanted to ensure the loyalty of the new member states to Russia and in turn for Russian to gain a privileged position in terms of economic and cultural interests. President Medvedev himself called the post-Soviet space a “zone of privileged interests” for Russia. Moscow has used different instruments, such as political and economic integration, intervention in internal or regional conflicts and the restoration of close relations with its largest Western neighbor, Ukraine to develop this strategy.
Integration

Russia is the driving force behind regional integration structures, such as the Commonwealth of Independent States (CIS), the Eurasian Economic Community (EAEC), the Collective Security Treaty Organization (CSTO) and the Shanghai Cooperation Organization (SCO). However, none of these structures has yielded the expected results.
The CIS was created in December 1991; it comprises all the republics of the former USSR, with the exception of the Baltic States, Ukraine and Georgia. It is an institutional structure that serves as the mechanism of political integration of former Soviet republics. However, it cannot be compared with the EU or a formal federation or confederation. The CIS’s relatively low standing is mainly because it does not present an integration model, and one which is attractive to member countries. For instance, unlike the EU, it has no collective funds which can be redistributed and targeted for the development of the weakest member states). Its activities are further confounded by fears that Moscow’s leadership has become too powerful, and other partners are not willing to be involved with the re-creation of a re-branded post-Soviet political structure.
The Eurasian Economic Community (EAEC or EurAsEc) was created on December 10, 2000 by Russia, Belarus, Kazakhstan, Kyrgyzstan and Tajikistan, with Uzbekistan, Moldova, Armenia and Ukraine having observer status. Member states allowed Uzbekistan to join on October 7, 2005, and it became one of the most independent minded countries of the former Soviet Central Asian republics. The organization wants to bring about greater economic integration between its members.
In June 2009 Prime Minister Vladimir Putin announced that before entering the WTO, Russia would establish a Customs Union (CU) with Belarus and Kazakhstan, which would then be expanded to include other nations. On November 27, 2009, the agreement establishing a Common Economic Space was signed in Minsk; it entered into force on January 1, 2010. The Unified Customs Code (which is actually a copy of the Russian code) of this union came into being on July 1, 2010, along with the new Common External Tariff (CET). The creation of this Customs Union had been a serious obstacle to Russia’s accession to the WTO (it finally entered the WTO in December 2011).There is no guarantee that the project will succeed in the long term, when the limited development of the economies of its members is considered. On January 1, 2012 the leaders of Russia, Kazakhstan, and Belarusian approved documents establishing a “common economic space”– a single market for the provision of goods, investments and the flow of labor.
The Collective Security Treaty Organization (also known as the Tashkent Treaty) was signed on May 15, 1992 in Tashkent Uzbekistan. It established a regional security structure which assured for the collective defense needs of signatory states. Article 4 crucially states that “an aggression by a state or group of states against one signatory would be perceived as an aggression against all.”9 Initially only Russia, Armenia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan signed the Treaty. Soon thereafter Azerbaijan followed in their footsteps, as of September 1993, and in December 1993, Belarus and Georgia also joined up. Military co-operation had continued without interruption since the USSR was dissolved; it was the single most effective area of co-operation amongst CIS countries, surpassing any other economic integration arrangements. Security had been a priority in Russia’s policy. For many who have signed the Treaty, especially Central Asian states and Armenia, Russia was seen as the sole security guarantor. This is why, from its inception, the CIS Treaty was one of the few structures established within the region which provided for practical co-operation; it actually took place in the form of regular joint military exercises and co-ordination and synchronization of security policies of the member states.

Uzbekistan, Georgia and Azerbaijan refused to extend their membership during the summit of the CSTO members in May 1999’ and this decision proved to be a major failure for Russia. Although the Treaty had fewer members, co-operation amongst the remaining ones intensified. In May 2001, the Rapid Reaction Force of the Central Asian Region was established,10 and during a meeting in Moscow on May 14, 2002, it was decided that the Treaty would be transformed into a political and military bloc, namely the Collective Security Treaty Organization (CSTO).

CSTO was finally institutionalized, as of April 27, 2003 in Dushanbe Tajikistan, and this occasion is considered by many as the beginning of a new stage in the organizations’ activities. All successes which originated from Moscow’s deliberate decision to make co-operation more dynamic and genuine resulted in a transformation of the CSTO into a more effective instrument of Russian foreign policy.

Some of the CSTO’s initiatives included a proposal to create an Anti-Terrorism Centre to respond to threats in member states, and in 2003, a Russian military base was established in Kant, Kyrgyzstan (which is officially a CSTO base, although only Russian troops are deployed there). After renewing its membership in June 2006, Uzbekistan withdrew from the alliance in late June 2012.

One of the informal objectives behind strengthening the CSTO is to counter American and NATO activities in the CIS area. They believe that only a strong and effective CSTO would be able to prevent NATO’s continued “expansion.” However, the organization is primarily an instrument allowing Russia to retain and further consolidate its position in various regions of the former USSR, especially in Central Asia. Its stated objectives are to combat terrorism and drug trafficking and to assist in civil emergencies. It seems, however, that of all the international organizations operating in the post-Soviet area – apart from the EurAsEC – the CSTO offers the best prospects for continuity. This is mainly because its members are genuinely interested in Russia’s military presence in the region, especially because of the security guarantees Moscow offers. Meanwhile Russia views its remaining influence and control in the territory that the CIS encompasses as being crucial for its own security. But still it has not fully achieved the purpose with this security organization; this is partly due to the lack of trust that governments of the Central Asian states have. Uzbekistan especially fears that Russia would abrogate the right to intervene in their sovereign territories.
The Shanghai Cooperation Organization (SCO) was established in 2001 by China, Kazakhstan, Tajikistan, Kyrgyzstan, Russia and Uzbekistan. The group also includes India, Pakistan, Iran and Mongolia as observers. It was created as a political and security alliance with a main focus on anti-terrorism. Even a regional centre on terrorism has been established in Bishkek; however, the organization as a whole does not appear to be able to effectively play the role of an integrating body. This is largely because of the greatly increased economic influence of China in recent years in the region. China does not want to make serious commitments on security and sees the SCO as more of a vehicle for achieving economic cooperation than military integration (although since the summer of 2007 some important manoeuvres have been held involving Chinese military units).
Intervention in Regional Conflicts

Rivalries between the countries of the former Soviet Union were revealed the day after its dissolution. Soon they were transformed into armed conflicts in Moldova and the Caucasus region, as well as in Central Asia mainly over issues pertaining to water rights and allocation. The dissolution of the Soviet Union provoked three conflicts which 20 years later still remain unresolved (hence the term “protracted conflicts”) .

Map 1: Transnistria Conflict

The Transnistria conflict affects Moldova, a landlocked country culturally and politically linked to Romania. The eastern part (known in Romanian as “Transnistria”) rebelled against Moldova in March 1992, declaring it wanted to continue to remain in Russia’s orbit. The conflict has led to the de facto independence of the territory, whose population is 25% of Russian origin and 28% being of Ukrainian origin. Russia maintains a 1,200-strong military contingent on that territory, the remnant of the “Peacekeeping Force” deployed there by the CIS in 1992, although at the OSCE Summit in Istanbul in 1999 it pledged to withdraw. The Moldovan government has made repeated requests but Russia did not follow through on its promises. An international mechanism to facilitate a settlement of the conflict has been established: the Group of 5 (Russia, Moldova, Transnistria, Ukraine and the OSCE) + 2 (the EU and U.S. observers, since 2005). In an effort to exert influence on this body, Moscow prevents this mechanism from acting effectively and promotes, under its auspices, three way conversations: between itself; internally with the Moldovan government; and with the de facto authorities of Transnistria.11

Nagorno-Karabakh is an enclave with a mostly Armenian population located on the territory of Azerbaijan. This conflict erupted in 1992 when the Armenian population declared it independent as the Nagorno-Karabakh Republic (NKR) and Armenia intervened with Russian assistance. Armenia won the subsequent war and has since retained control of Nagorno-Karabakh and seven adjacent districts, which represent approximately 18% of the territory of Azerbaijan.

Map 2: The Nagorno-Karabakh Conflict

Negotiations over this conflict took place within the framework of the OSCE. They were held by the so-called Minsk Group, co-chaired since 1995 by Russia, the U.S. and France. Armenia and Azerbaijan also participated. The specific terms of negotiation were defined in the “Madrid Principles” (accepted by the parties during the OSCE ministerial meeting in Madrid, December 2007), which included the renunciation of the use of force to resolve the conflict, respect for territorial integrity and the right of self-determination.

President Medvedev has been actively involved in the mediation efforts. In November 2008 Presidents Heydar Aliyev of Azerbaijan and Serzh Sarkisian of Armenia signed in Moscow a joint statement asserting that there can be no solution to the conflict other than a negotiated agreement, and based on the principles of the Madrid document. The compromise reached was threefold: (a) postponing determination of the final status of Nagorno-Karabakh, (b) Armenia returning to Azerbaijan the seven Azerbaijani districts it controls (with the exception of the “Lachin Corridor” which links Armenia with Nagorno-Karabakh, and (c) wider autonomy granted to Nagorno-Karabakh (NK) by Azerbaijan for an undetermined period of time. However, a key point was the renunciation by both sides of force and finding a final solution to the problem of Nagorno-Karabakh. This objective was replaced by a commitment from both sides of the conflict to develop cooperation between Armenian and Azerbaijani proper, to resolve the ultimate status of the disputed NK territory. Talks between the parties continue but progress has yet to been realized. Quite the opposite, fatal cross-border shootings and violence were reported in June 2012; increased tensions remains high and; no progress has been made to bring a final resolution.

Map of Georgia highlighting Abkhazia (green) and South Ossetia (purple).

The conflict between Georgia proper and the breakaway regions of South Ossetia and Abkhazia has been ongoing since the early 1990s. These two Georgian regions are conflicts zones that Moscow has been more interested in and has taken a more proactive approach. It directly intervened in this conflict to a far greater degree than it did with others in the former Soviet Union. Regardless of motivations or a double standard, it is clear that Moscow was not pleased with Georgia becoming more “pro-Western” orientated following the 2003 Rose Revolution, and the events that brought the current President, Mikhail Saakashvili to power in January 2004.

Matters were more complicated by that fact that Georgia is at the crossroads of energy pipelines, most notably the Baku-Tbilisi-Ceyhan (BTC) oil pipeline project. This massive project was constructed by British Petroleum (BP), and links hydrocarbons of the Caspian Sea to Turkey, and seen as an invasion of Russia’s zone of influence (totally bypassing Russian territory).

The August 2008 the Georgia-Russia war created a serious crisis in relations between Russia and the West. There was fear among Russia’s neighbors that Moscow was willing to use force to compel them to respect its interests. The short but deadly war was brought to a halt through the intervention of then-EU President – and President of France – Nicolas Sarkozy. The ceasefire agreement was brokered with the help of French diplomacy. It stipulated the withdrawal of the Russian armed forces to where they were located at the outbreak of hostilities and for the deployment of an observation mission (the EU Monitoring Mission, EUMM) to monitor the brokered ceasefire agreement. The EUMM mission continues to function and it attributes to being the main instrument for the prevention of renewed armed hostilities.

It is clear why Russia found so few allies during and following the Five-Day War in August 2008. Not one of the countries of the former Soviet Union was willing to provide military or political support during the armed conflict. None went as far as recognizing the two breakaway territories as independent states, despite the enormous pressure Moscow exerted on them (especially in the cases of Belarus and Kazakhstan). Russia has so far been effective in persuading only five countries – Nicaragua, Venezuela, Vanuatu, Tuvalu and tiny Nauru – to officially recognize these breakaways. Moreover, the sustainability of such recognition among these island nations is a constant source of media speculation and political discourse.

Meanwhile the Russians required Georgia to sign an agreement on the non use of force with the governments of the two breakaway territories (which would, in fact, be a tacit recognition of their independence, and thus rejected by Tbilisi). It has also tried to give the same negotiation status to the representatives of the two entities, giving them the same standing as the Georgians in conflict negotiations held in Geneva (Geneva Talks). The outcomes from these negotiations have so far been modest at best.
The “Recovery” of Ukraine

Zbigniew Brzezinski, in his book The Grand Chessboard, pointed out that without Ukraine, Russia would cease to be an empire with one foot in Europe.12

On April 21, 2010 Medvedev made his first official visit to Ukraine (making a second on May 17 of the same year). Some important agreements were concluded in the city of Kharkiv (East Ukraine) with the new the “pro-Russian” Viktor Yanukovych, President of Ukraine. Russia had agreed to reduce the price of the gas it supplies to its neighbour with 30% and in return Ukraine would extend until 2042 the lease and authorization for the Russian Black Sea Fleet to use the Sevastopol naval base in the Crimea (the previous lease agreement was to expire in 2017).

These agreements are an example of how Russia effectively uses its energy resources as a weapon to gain political leverage. However, during the Viktor Yushchenko presidency, after the “Orange Revolution” of 2004, relations between Russia and Ukraine deteriorated. There were severe disagreements over the gas price and Moscow subsequently cut off supplies to that country twice, in January 2006 and January 2009, resulting in serious damage for European customers who use Ukraine as a transit point for obtaining Russian gas. In addition, Yushchenko’s commitment to taking Ukraine into NATO was a major cause of irritation in Moscow, although the official reason was arrears for previous supplied gas.

Relations between Russia and Ukraine are mutually beneficial as their joint trade turnover is valued at $30-35 billion a year, and covers many areas (industry, energy, agriculture). Eighty percent of Russian gas that transits to Europe (at least until the South Stream pipeline become operational), passes through Ukraine. Ukraine is almost totally dependent on Russian for the supply of oil and electricity; the two countries have largely similar aircraft, space and weapons industries. An estimated eight million Russians live in Ukraine and about three million Ukrainians in Russia. Millions of Russian and Ukrainian citizens travel between the two countries, and not only tourists. The two countries have a generally shared language, and with many ethnic Russian living in Ukraine. There are many cultural, religious and historical links. Kiev is considered as the cradle of the East Slavic civilization and there are strong and lasting bonds between Russians and Ukrainians.

The efforts of President Victor Yushchenko after the Orange Revolution to distance Ukraine from Russia flew in the face of the efforts to build dense networks of shared interests and ties between them, although his successor Yanukovich restored “normality” by regulating economic relations and removing various “irritants,” such as official attempts to investigate the Golodomor (famine-genocide in Ukrainian), an organized famine that starved between three and five million people in less than two years during the 1930s as a part of a forced collectivization of peasants. For contemporary Ukrainians, this is nothing less than a diabolically planned genocide carried out by Stalin and his subordinates to quell the nationalism of Ukrainian peasants and keep them from rebelling against Soviet rule.

However, the new Ukrainian President has also sought to keep a safe distance from Moscow. He declined an invitation from Putin to integrate Ukraine with the Belarus-Russia-Kazakhstan Customs Union. At the same time, he has continued negotiations in concluding a free trade agreement with the EU. Moreover, in line with manoeuvres, Yanukovych also failed to respond positively to the Russian Prime Minister’s offer in late April 2010 to merge Gazprom with the much smaller Naftogaz Ukrainy, a move that would have given Russia control of Ukraine’s entire gas transit and storage system.13
Problems with Belarus

Although on April 2, 1997 Belarus and Russia signed the Treaty on the Belarus-Russia Union – an attempt to establish a confederation between the two countries – that Union has not been translated into reality. Belarus is controlled by the authoritarian regime of President Alexander Lukashenko, whose reluctance to be subordinated to Russia has been a source of friction. Minsk has been reluctant to agree to the creation of a Presidency of this Union (whose incumbent was Vladimir Putin) and is resisting Russian economic domination (for example, giving Gazprom control of Beltransgaz, the company that owns the network of pipelines in Belarus). Disputes over the price of the gas Russia supplies to Belarus, the level of transit charges for transporting Russian oil to Europe and the Beltransgaz debt to Gazprom have caused a serious crisis in bilateral relations. In addition, the ban on the import of Belarus milk and dairy products to Russia, for health reasons, and Mink’s refusal to recognize the breakaway republics of Abkhazia and South Ossetia have further soured relations. Some of the major Russian television channels launched a campaign against President Lukashenko a few months before he stood for a fourth presidential term in December 2010.

The Belarusian government’s position is weak because its economic dependence on Russia is almost complete [6] and its relations with the West are not good. Having initially excluded this country in its Eastern Partnership initiative due to violations of fundamental rights and freedoms by the Lukashenko regime, the EU decided to offer the partnership with a view to help put Belarus on the democratic path. For its part, the Russian armed forces consider Belarusian territory its “first line” of defense against NATO. It lies between Russia proper and the Russian region of Kaliningrad. Furthermore, armament cooperation between Russia and Belarus is important (there were 32 joint projects in progress under Medvedev’s presidency). Belarus’ withdrawal of the CSTO would be a blow to this organization and Russia. Nevertheless, the rift between Lukashenko and Moscow seems difficult to repair.
The End of the “Tulip Revolution” in Kyrgyzstan

The revolutionary events of April 7, 2010 ended five disastrous years for the citizens of Kyrgyzstan. They had suffered under the corrupt and authoritarian regime of Kurmanbek Bakiyev, victor of the 2005 “Tulip Revolution”. Bakiyev eventually fled the country on April 15, after a brief attempt to retain power by retreating to his stronghold in the south of the country.14 Russia was the first country to recognize the new government led by Roza Otunbayeva, a former foreign minister of Kyrgyzstan and Soviet diplomat who had undergone training in Russia. At the same time, Russian Prime Minister Vladimir Putin announced that 50 million in urgent financial aid would be given to Kyrgyzstan. In another form of direct assistance, Deputy Prime Minister Igor Sechin conveyed Russia’s readiness to supply the necessary fuel to Kyrgyzstan so its farmers could sow the winter wheat crop.

Moscow’s dissatisfaction with Bakiyev’s regime had increased ever since it became apparent that he had reneged on a commitment to expel the U.S. military from the Manas Air Base (the main U.S. logistics hub in Central Asia for operations in Afghanistan) after receiving the promise of a loan of $2.1 billion from Moscow. [8] Kyrgyz became extremely irritated by the sharp rise in commodity prices and electricity – this was fuelled by harsh criticism of Bakiyev’s regime by Russian TV channels, which did not shy away from exposing just how bad things were for the average Kurgyz people. On April 2, Moscow decided to pre-empt the collapse of the regime by ceasing to to supply oil to Kyrgyzstan at “discounted prices.” Kyrgyzstan’s fragile economy could not withstand the impact of this punitive measure.

This action, combined with the growing public discontent, created further political instability and the situation soon reached crisis level. However, the Russians agreed to the request of the acting president, Otunbayeva, and sent troops to the southern city of Osh to quell increasing riots. The Russian government opposed constitutional changes which would have moved Kygyzstan away from a presidential system towards a parliamentary one. Moscow believed such a structure would create further instability. In the end the Russians opted to allow parliamentary elections which would clearly favor Roza Otunbayeva. She was considered the person most likely able to garner support from a variety of different political groups, thus ensuring stability.15
ENERGY POWER

The energy sector is an important one for all the various countries of the world, but especially for Russia as it is the very foundation on which rest the Kremlin’s power and leverages. The petroleum industry in Russia is among the three largest in the world. Up until the end of 2013, Russia was the world’s largest producer of oil and gas combined. It seems, however, that the U.S. is on track to pass Russia soon. This is made possible by a comeback fueled by shale-rock formations of oil and natural gas.16

The hydrocarbons sector is also essential for the Russian domestic economy, generating year in and year out more than 20% of its GDP, 40% of its export earnings and approximately 50% of the state’s total revenues. Consequently the Russian economy is pinned to the price of oil. It reached over $134 a barrel in July 2008 and dropped to less than $30 seven months later. Energy price fluctuations also impact economic indicators. For instance, Russia’s GDP contracted by 7.9% in 2009, whereas it had grown by 5.6% in 2008.17 These figures reveal the overly huge dependence of the Russian economy on the petroleum industry. During Boris Yeltsin’s presidency (1991-1999) the average price of a barrel of oil was $16.70. The recovery in oil prices in the second half of the 2000s has greatly contributed to destabilization in some OPEC countries; the low price of oil may have influenced the decision to go to war in Iraq. The Russian economy rebounded in tandem with a rise in oil prices, with a recorded growth of 4.3% in 2011,18 and this trend has positively impacted the value of the Russian ruble against other major currencies.

There is no monopoly on the production and export of oil in Russia, although six large companies, Rosneft, Lukoil, TNK-BP, Surgutneftegaz, Gazprom Neft and Tatneft, are clearly dominant in this market.19 By contrast, the energy transport system (pipelines) is operated as a monopoly by Transneft, a publically owned company. As for natural gas, Gazprom’s dominance of the production and export sectors is almost total (production equals 1.8/2.0 bcm/day). Its retention of these effective monopolies on the sale and transport of gas is the main reason why Russia has rejected the EU’s Energy Charter Treaty and the Energy Charter Protocol on energy efficiency.

Russia is the leading energy supplier to the EU. In 2007, it provided 36% of the gas, 33% of the oil and 25% of the coal consumed by EU member states.20 Such a dependency is mutually beneficial, as Europe is virtually the only large market for Russian gas.21 However, China is understood to be a potential alternative market for Russian gas exports (oil as well), but the Chinese are hesitant about paying such high prices as do European countries.22

There are three main facets to the gas export trade: (a) domestic production; (b) the marketing of gas produced by other CIS countries; and (c) transportation.
(A) Production.

Russia is faced with a problem of production capacity due to a lack of investment in new projects and ever-increasing domestic demand. In the period 1999-2007, it invested only 17% of its GDP in the development and maintenance of its energy sector, compared with 20-24% on average in other major energy producing countries. According to some experts, if it had not been for the economic crisis that started in September of 2008, Russia would have experienced a production deficit of 27 billion cubic meters of gas in 2010 and 46 billion in 2015, thus making it impossible to meet domestic demand or export commitments to foreign customers. The large gas deposits discovered during the Soviet era have already been heavily exploited and opening new ones, especially those on the Arctic Yamal Peninsula and the Shtokman field in the Barents Sea, involves considerable technical difficulties; transportation costs can also be very high.23
(B) Marketing of the gas produced by other CIS countries.

In order to compensate for this shortfall in production, Russia worked to monopolize the purchase and transport of gas from other CIS countries, particularly from Kazakhstan, Uzbekistan and Turkmenistan. These exporting countries have no direct outputs to European markets. In May 12, 2007 Vladimir Putin signed an agreement with Kazakhstan and Turkmenistan to build a new pipeline, called the Prikaspiiski natural gas pipeline to carry Turkmen and Kazakhstani gas to Russia, alongside the Eastern shore of the Caspian Sea. The pipeline would carry Turkmen and Kazakhstani gas to Russia, enabling the Kremlin to tap into Central Asia’s oil and gas reserves in the long term. The agreement was interpreted by analysts as being a major blow to U.S., and especially, EU hopes of becoming less dependent on Russian gas imports because U.S. and EU energy projects in the Caspian basins looked futile in light of this agreement. However, during a visit to Ashkhabad by Russian President Dmitry Medvedev on December 25, 2010, the two sides concurred to formally suspend the Prikaspiiski natural gas pipeline project. Turkmen President Gurbanguly Berdymukhamedov indicated that he looked forward to a revival of Turkmen natural gas exports to Russia which had drastically fallen sharply after a mysterious pipeline explosion in April 2009. An agreement was also reached to increase existing pipeline capacity (through the Central Asian Gas Pipeline). Moreover, Gazprom signed an agreement with Turkmenistan to buy gas at similar prices to those found in European markets.24
(C) The transport of gas.

After the pro-Western government of Viktor Yushchenko was elected in December 2004, Moscow rapidly increased the price of the gas it sold to Ukraine. Failure to reach an agreement on prices and the consequent lack of payment by Ukraine led to Gazprom proceeding to cut the supply in both January 2006 and January 2009.

Almost all Russian natural gas is exported through pipelines. The key country is Ukraine, as most of the gas that is sold by Russia to Europe passes through Ukrainian pipelines. Russia has tried, albeit unsuccessfully, to gain control of this pipeline network. Moscow rapidly increased the price of the gas it sold to Ukraine following the election of the pro-Western government of Viktor Yushchenko in December 2004. The failure to reach an agreement on prices and the lack of payment by Ukraine compelled Gazprom to cut off the supply in both January 2006 and January 2009. Supplies to European customers were severely interrupted, and this seriously disrupted the economies of Eastern European countries highly dependent on Russian gas. Gazprom’s decision brought about a sharp decline in Russia’s image of a stable and trustworthy supplier.

In order to reduce its dependence on gas transit through Ukraine, Moscow decided to launch two major pipeline projects: Nord Stream and South Stream. Nord Stream is a joint venture between Gazprom and Germany’s E.on and Wintershall (a subsidiary of BASF).25 The pipeline is 1,224 km long and links the Russian port of Vyborg, near St. Petersburg, with the German port of Greifswald, crossing the Baltic Sea. It cost at least 12 billion euros to build both Line 1 and Line 2. Construction of Line 1 of the twin pipeline system began in April 2010, and was completed in June 2011. Transportation of gas through Line 1 began in mid-November 2011. Construction of Line 2, which runs parallel to Line 1, began in May 2011 and was completed in April 2012. Gas transport through the second line began in October 2012. Each line has a transport capacity of roughly 27.5 bcm of natural gas per annum. South Stream, a project launched in 2007, is being led by Gazprom and Italy’s ENI, which in December 2009 agreed to give France’s EDF a stake in it.26 It focuses on building a 900 km pipeline linking the Russian coast of the Black Sea (the port of Novorossiysk) with the European continent through Bulgaria. Its capacity will be 63 bcm/year and it is expected to start operating in 2015. On December 28, 2011, Turkey gave its approval for allowing the pipeline to pass through its territorial waters.27

South Stream is primarily a political project as reflected in its enormous cost of more than 24 billion euros. Such a sum of money cannot be justified from a purely economic perspective. Its purpose is twofold: first, to reduce dependence on transit through Ukraine (although the modernization of the Ukrainian gas transport system would be far less expensive); second, to counter Nabucco, the rival European project.

The Nabucco project, promoted by the EU as an alternative to Russian supplies, is a venture project involving Botas (Turkey), Bulgargaz (Bulgaria), Transgaz (Romania), MOL (Hungary) and OMV (Austria). On July 13, 2009 the five countries (Austria, Hungary, Romania, Bulgaria and Turkey) through which the pipeline will pass signed an intergovernmental agreement about the project in Ankara. Before being put on hold by the EU in 2013, the project’s cost was estimated at 15 billion Euros (the final price tag is underestimated and continues to rise). Once completed, it was expected to have a flow capacity of 31 bcm.28 The European Commission-backed project was originally set to come online in 2015, but this date has been delayed until 2017 with no certainty that the project will actually be put back on track again at that year. Construction was expected to start in 2013, or “as soon as there are firm indications that gas-supply commitments are in place,” according to Reinhard Mitschek, managing director of Nabucco Gas Pipeline International. However, many aspects are still in question, as the price adjustment threatens to dampen some energy companies’ interest in continued cooperation with the project consortium, and this delay could provide conditions where competing gas lines would beat it out, both in terms of gas supplies and access to customers.29
RUSSIAN-U.S. RELATIONS

Undoubtedly, Russia’s relationship with the United States remained a top priority under Medvedev’s presidency. Reminiscent of its former superpower status, the Kremlin wants Washington to fully recognize Russia as an equal player on the international scene. The Moscow-Washington relationship deteriorated significantly during the second term (2004-2008) of President George W. Bush, but with Barack Obama taking over the White House considerable improvements have been realized. Soon Washington decided to adopt a policy more sensitive to Russia’s interests, and perhaps more pragmatic, aiming to gain Russia’s cooperation on major issues such as Iran’s uranium enrichment, Afghanistan and nuclear proliferation. Russia saw the hand extended by the Obama administration as an opportunity to promote its interests in several ways: security in Europe, economic modernization and, finally, its entry into the WTO. The term “reset” (or “reconfiguration”) used by Vice-President Joseph Biden in his speech in Munich in February 2009 best characterized this new approach. This speech made a big impression and it appeared that under Medvedev’s presidency a willingness on both sides to open a new chapter in their relations came into being.

In July 6, 2009 President Obama made an important visit to Moscow, during which he signed several key documents, including an agreement on providing air traffic equipment and military material as part of the operation in Afghanistan. The establishment of a the Obama-Medvedev Commission, officially known as the U.S.-Russia Bilateral Presidential Commission, was also set up in order to improve communication and cooperation between the two countries. The two Presidents announced that the work of the Commission would be coordinated by Secretary of State Hillary Clinton and Russian Foreign Minister Sergei Lavrov. The work of this Committee developed with great intensity and produced some useful results.

The most important achievement was the signing in Prague on April 8, 2010 of a the New START Treaty (Strategic Arms Reduction Treaty, to replace the 1991 START treaty (whose terms expired on December 5, 2009) and the Strategic Offensive Reduction Treaty (SORT) of 2002. The New START had great political importance as it was a symbol of the new era in relations between the two former superpowers, though it is relatively modest in scope, as it reduces by only 30% the number of strategic nuclear weapons deployed by each party and does not resolve the problem of the linkage between offensive and defensive weapons, such as missile defense systems. The Russians, who fear that these systems may hinder their strategic offensive capability, wished to see this linkage incorporated in the provisions of the treaty and legally binding. However, the Obama administration refused, arguing that the Senate would not ratify the treaty if such a provision was included. Some reference is made in the Preamble to New START Treaty, but no more.30

Following the signing of the Treaty, Obama and Medvedev discussed efforts to synchronize the respective parliamentary approvals of the bilateral agreement. The Americans needed to obtain 67 favorable votes in the Senate, but it proved difficult to gain Congressional approval for the Treaty before the elections of November 2010. The Republican opposition accused Obama of having made too many concessions to the Russians (including the cancellation of the proposed deployment of missile defense systems in Poland and the Czech Republic) without obtaining enough in return. In fact, the Republican obsession with depriving Obama of this success proved the main threat to the ratification of this important treaty.

The climate of relations between Washington and Moscow improved markedly between 2009 and 2011. This is exemplified by how both parties behaved when Washington expelled a network of 10 people allegedly involved in intelligence work for Russia in July 2010. However, there still was a real partnership on issues like Iran and Afghanistan. On September 22, 2010 President Medvedev signed a decree vetoing the delivery of S-300 missiles to Iran. Washington and Moscow even held talks about collaborating on such a sensitive topic as missile defense.31 For her part, Secretary of State Hillary Clinton declared on September 22, 2010, during a meeting in New York between Russian Foreign Minister Lavrov and his counterparts in NATO, that “in the longer term, NATO and Russia should work together to develop models for a combined NATO-Russia missile defense architecture”.32 It was also leaked that Secretary of Defense Robert Gates suggested to his Russian counterpart Anatoly Serdyukov, during the latter’s visit to Washington on September 17, 2010, that Russia cooperate militarily in the fight against the Taliban in Afghanistan and provide the U.S. armed forces strategic transport aircraft such as the An-124 and Mi-17 helicopters.33

There was “good chemistry” between Presidents Medvedev and Obama. Medvedev did not only visit the Silicon Valley to study the development of high-tech industries, but also praised the American model of technology partnerships between the government and the private sector through The Defense Advanced Research Projects Agency (DARPA), which reports to the Pentagon. Russia wanted to tap American experience of modernizing and organizing the armed forces and police.

The case of Russia’s position during the March 2011 vote on resolution 1973, on the situation in Libya, is particularly interesting. President Medvedev’s decision not to exercise Russia’s veto to block the resolution took everyone by surprise and the motives behind it were not apparent to most observers. This episode suggested a shift in Russia’s foreign policy under Medvedev, and provided a glimpse of the future relations between Russia, the U.S. and the West more generally.

From the Korean War to Iraq, Russia had always opposed military intervention in foreign countries because of its strict observance of the principle of non-interference in the internal affairs of sovereign states. This cautious policy persisted even after the end of the Cold War in the early 1990s.

Russia could not prevent nor NATO from bombing Serbia in 1999 nor could it impede the invasion of Iraq by a U.S.-led coalition of states in 2003. The use of its veto in both cases cast a clear message to the West, namely that it is opposed to military aggression against sovereign states without the authorization of international organizations. As a result, in 1999 and 2003, relations between Russia, NATO and the United States reached their lowest point in the post-Cold War period. During the crisis in Libya, Russia, for the first time, did not attempt to obstruct the way chosen by the West. What had changed since 2003? Was there a link between Russia’s new foreign policy of Russia under Medvedev and his abstention in the UN vote on resolution 1973? We must answer yes to the last question. By endorsing military intervention in Libya, Moscow avoided compromising its ties with the United States and Western Europe. Two underlying crucial factors contributed to Russia’s courageous stance: the urgent need for Russia to accelerate its economic “modernization” with the support of the West and the relative success of the “reset” of relations with the United States.

Medvedev redefined his country’s foreign policy by focusing mainly on economic modernization. Russia cannot aspire to become a major player on the international stage without more investment in technological development and the upgrading of its infrastructure. Therefore, it sought to forge closer relations with countries able to assist in its modernization project. The United States were on top of the list because of its technological prowess and the quality of its most prestigious universities. Medvedev and Russian “modernists?” thought that the Organization for Economic Cooperation and Development (OECD) could become a strong ally in this quest.

In July 2009, during the Moscow summit, Obama and Medvedev signed an agreement to create establishment the Obama-Medvedev Commission (officially known as the Russian-American Presidential Bilateral Commission). The Commission significantly contributed to improve relations between Russia, the U.S. It aimed to strengthen cooperation between the two countries on a wide range of issues. After reaching a low point in the wake of the armed conflict between Russia and Georgia in August 2008, the U.S.-Russian cooperation was again on the rise thanks to the Commission, which was coordinated by Hilary Clinton, U.S. Secretary of State and Sergey Lavrov, Russian Minister of Foreign Affairs.

The Obama-Medvedev Commission produced significant results: Agreement on arms control and nuclear non-proliferation (New START), joint efforts to fight the terrorist threat and drug trafficking, Russia’s contribution to NATO’s mission in Afghanistan, to name a few. The Kremlin’s abandonment of its former policy of systematically exercising its veto in the United Nations Security Council could also be interpreted as a success of the “reset” in U.S.-Russian relations.

Although the decision to abstain on Resolution 1973 was extremely controversial within the Russian political elite, President Medvedev, with this option, clearly indicated the new direction he intended to give to his country.34

But all this should not obscure the fact that discrepancies still remain between Washington and Moscow on a range of topics, especially in regard to the post-Soviet space35 and European security. As Dmitri Trenin wrote, the idea of a “grand bargain” in which Washington will allow Moscow to dominate the countries of the former Soviet Union and recognize a Russian “exclusive interest” in its “near abroad” in exchange for support on issues such as Afghanistan or the Middle East is a chimera. The notion of a new European security treaty which would block the further enlargement of NATO does not seem acceptable to Western allies, even if such enlargement is, for the moment, frozen.

In the economic sphere, relations are not what one might expect from fellow members of the G8. In 2008, the year in which mutual trade was at its peak, the U.S. accounted for only 4% of Russia’s foreign trade and was only its eighth largest trading partner. The relationship is even less significant for the U.S. because Russia accounted for less than 1% of its foreign trade in 2008. In addition, Russia had been trying to enter the WTO, without success, since 1993, and Moscow accused Washington of being responsible for the delay in its accession to that international organization.36 Following a telephone conversation between Obama and Medvedev, both sides declared that bilateral negotiations between the two countries on Russia’s entry into the WTO had concluded.37
NATO AND EUROPEAN SECURITY

Relations between Russia and NATO continued to be strained. The Russians believe that the West took advantage of its good faith and temporary weakness after the break-up of the Soviet Union. The West took decisions that were against Russia’s interests. Moscow believes that NATO has sought to become the key security organization in Europe, eviscerating the work of other relevant organizations in the field, such as the Organization for Security and Cooperation in Europe (OSCE). This organization has in fact been transformed, in the Russian perception, into an organization whose central purpose is to monitor respect for human rights and democratic freedoms in the countries of the former USSR (“East of Vienna”), albeit neglecting other key security roles.

NATO has also acted “aggressively” in the eyes of Moscow by conducting a military intervention, without the authorization of the UN Security Council, against the former Yugoslavia in 1999 under the guise of the Kosovo crisis. Furthermore, in 1997 NATO began expanding to the very borders of Russia, raising the possibility that it could continue and enter such countries as Ukraine and Georgia, despite their historical links to Russia.

Although it signed the Founding Act between Russia and NATO in May 1997 and the NATO-Russia Council (NRC), a body for consultation, cooperation and decision-making on the basis of equality, Russia claimed it was not consulted about the NATO’S eastward expansion and its opinion was not taken into account. Furthermore, the Alliance failed to fulfill very important political commitments implicit in the ratification of the Adapted Conventional Armed Forces in Europe Treaty (Adapted CFE treaty) signed at the OSCE summit in Istanbul in 1999.

Russia’s intervention in Georgia in August 2008 was an action clearly aimed, among other goals, at “freezing” the gradual incorporation of that country (and indirectly Ukraine) into NATO.38 As a result of that conflict, cooperation between Russia and NATO was suspended for almost a year.39 In December 2007, Russia also suspended the CFE Treaty, citing the Western breach of the commitment to ratify the Adapted CFE Treaty signed in 1999 and NATO’s incorporation of new members from the Baltic region. For its part, NATO explicitly stated that the new Russian military doctrine, published in February 2010, was a possible threat to international security.

NATO insisted that its extension is not a threat to Russia and that it has global ambitions but seeks to address “unconventional” threats (terrorism, Illicit trafficking in nuclear and other radioactive material, etc.) which concern Russia as well. In this context, it offered to work with Moscow in developing a missile defense system as a symbol of the new spirit of cooperation in the Euro-Atlantic space. But the Russians insisted that the U.S. should first give up its missile defense program, as it could affect strategic stability (i.e., reduce the credibility of Russia’s strategic deterrent), or at least sign an agreement with Russia to limit the program. They also wanted to promote the non-weaponization of outer space. Moscow followed with great interest the work undertaken within NATO on the new Strategic Concept adopted at the Summit in Lisbon on November 19 and 20, 2010.

Given the unsatisfactory security situation in Europe (Medvedev gave as an example of this the failure of OSCE institutions to perform adequately during the August 2008 war in Georgia, it was logical that Moscow should try to change the situation. In speeches delivered in Berlin and Evian in June and September 2008 President Medvedev raised the idea of establishing a new security architecture in Europe, putting forward the ideas of negotiating a new treaty for all countries and existing security organizations in the Euro-Atlantic area (“from Vancouver to Vladivostok”). Medvedev proposed to convene a European summit (of the 56 states belonging to the OSCE) to start the process of drafting this treaty.

The aim of this project was to establish a new collective security system in Europe, which would eliminate what were from the Russian perspective new dividing lines created on the continent as a result of NATO enlargement and the advancement of enemies’ infrastructure to Russia’s borders. The new treaty proposed to incorporate the “legally binding” principles and political commitments enshrined in the Founding Act of 1997 and the Rome document of 2002.

On November 29, 2009 Russia made public a draft treaty on European Security which proposed the establishment of consultation mechanisms that every state would be entitled to use when they consider their security interests might be affected. The signatories would pledge not to use force without consulting the other states and organizations party to it.

The Western allies agreed to discuss the development of a new security structure for Europe. However, they saw no need to translate the existing commitments into a new treaty or to create new institutions or mechanisms for this purpose. They sought to focus the debate purely within the framework of the OSCE and to include the military aspects of security (‘hard security’), as preferred by Russia, but also to extend the debate to economic (e.g. energy supply security) and human (respect for individual rights and fundamental freedoms) aspects.40 The OSCE Ministerial Council held in Corfu, Greece in June 2009 launched the so-called Corfu Process, which debated these three aspects of security. The provisional results of these debates were presented at an OSCE summit held in Astana (Kazakhstan) on December 1-2, 2010.

Moscow was quite realistic and knew that its proposals on European security had no chance of being accepted. Regardless, it considered that it achieved partial success by being able to stimulate a wider debate on security in Europe. It realized that the recognition of the situation is far more complex than being merely a question of whether Russia should belong to NATO or the EU, or not. The major Western countries wanted to strengthen relations with Russia in the field of security and, for that matter, they invited President Medvedev to participate in the NATO Summit in Lisbon (November 19-20, 2010). In July 2010, prior to the summit, German Chancellor Angela Merkel told Medvedev that the EU would support some of the Russian proposals in exchange for Moscow clearly committing to furthering the solution of the ex-Soviet space’s “protracted conflicts,” starting with the withdrawal of Russian forces from Transnistria. For his part, French President Nicholas Sarkozy invited Medvedev to hold a joint session with him and German Chancellor Angela Merkel in Deauville on October 18-19, 2010 to discuss these issues. The U.S. Ambassador to NATO, Ivo Daalder, recalled during the meeting that Russia, as a European state, is entitled to join the Atlantic Alliance, in accordance with Article 10 of the Washington Treaty. The Institute for Modern Development (INSOR) in Moscow also launched a debate on this issue, although such incorporation, realistically, was unthinkable in the foreseeable future.
RUSSIA-CHINA RELATIONS

Russia’s relations with China gained ground under Medvedev, especially in the economic and energy sectors. However, this has not always been the case.

Since the Sino-Soviet split (1960–1989) that saw the worsening of political and ideological relations between the People’s Republic of China (PRC) and the Soviet Union during the Cold War, China poses the most important strategic challenge to Russian security. The influx of Chinese in Russia’s unpopulated and underdeveloped East Siberia region, adjacent to China’s northern border, may be an unstoppable flow. Also, ever-increasing numbers of Chinese citizens can be even found in Moscow. Russia is trying to accommodate China’s rapid emergence as a world power. It has enjoyed a position of prominence in relation to China for over 300 years. In 1990, the GDP of both countries was approximately equal in absolute terms, but by 2011 China’s GDP was four times larger than Russia’s. This great imbalance emerged in just over a decade. It is evident that the enormous strength of China will continue to have a very deep impact on Russia itself.

After its foundation in 1949, the People’s Republic of China (PRP) partly followed the Stalinist model of party rule, but a divide emerged between the two ruling communist parties in the 1960s. In 1968 and 1969 territorial disputes led to armed clashes between the two countries, in the Xinjiang region, located in the north east of China, and on the Damanski island (Zhenbao Island in Chinese). A significant example of the recent degree of rapprochement between the two countries was the signing on July 21, 2008 of a border demarcation agreement under which Russia restored to China two islands in the Amur River near Khabarovsk. These were first occupied by the Soviets in 1929. Undoubtedly, this agreement was another indication of the rise of China’s ascent in that region and on the world stage.

Russia worked to bring about an improved approach towards China, particularly after Putin rebuilt the ‘power’ of the Russian state in the aftermath of the failure of Gorbachev’s perestroika and the subsequent chaotic dismantling of the communist economy under President Yeltsin.

Trade between the two countries has grown dramatically in recent years, and China is now Russia’s second largest trading partner after Germany (this trade turnover is valued at between $54 and $56 million annually). Russia has been the largest supplier of weapons to China in the post-Soviet era, although Chinese technological advancement will make it less dependent on Russian arms imports in the future.41

In the energy sector opportunities for cooperation between the two countries are immense. In February 2009, the China Development Bank (CDB) and the Russian energy companies Rosneft and Transneft agreed to grant the first tranche of a loan of $25 million to develop new oil fields in Siberia and build a “branch” of the East Siberian oil pipeline to the Pacific Ocean linking the two countries.42 From 2011 to 2030 Russia agreed to supply China 20 million tons of crude through this pipeline.43

The importance Moscow attaches to relations with China is shown by the fact that the first foreign trip of Dmitry Medvedev as Russian head of state (except for one to Kazakhstan) was to Beijing in May 2008. Prime Minister Putin visited the Chinese capital several times between 2009 and 2011. In October 2009, the Russian PM signed cooperation agreements with his Chinese counterpart amounting to $3.5 billion. Moreover, Presidents Hu Jintao and Medvedev met five times in 2010.

From September 26 to 29, 2010 Medvedev made an important visit to Beijing, during which he signed 15 bilateral agreements, including 12 on energy cooperation. In addition to opening the aforementioned pipeline between eastern Siberia and China, the following important agreements were signed:

1. Gazprom and China National Petroleum Corporation (CNPC) signed an agreement establishing the basic principles for future cooperation in the field of natural gas. Although a final agreement between Gazprom and CNPC was stalled over Russian price demands, which Beijing viewed as unaffordable for domestic consumers, the parties still decided to continue a dialogue for elaborating mutually beneficial decisions on different routes of supply, gas supply volumes and the setting of prices.44

2. The Russian Energy Minister signed a memorandum with his Chinese counterpart on cooperation in the field of coal mining. Beijing granted Moscow loans amounting to $6 billion in exchange for supplies of coal from Eastern Siberia. During the next 25 years China is expected to import at least 15 million tons of coal from Russia.45

3. In the field of nuclear energy, the State Atomic Energy Corporation (Rosatom) and its Chinese counterpart signed a deal to build two new reactors (Unit 3 and Unit 4, anticipated capacity – 1,060 MWe) at China’s Tianwan nuclear power plant, located in Lianyungang City, Jiangsu Province, about 250 km north of Shanghai. Construction began in late 2012.46

4. In the electricity sector, the Chinese corporation Huadin signed with the Russian TGK-2 a contract worth $5 billion for the construction of a high-power electric steam generator with a capacity of 490 MW in the Russian city of Yaroslavl.

5. In the aluminium sector, the Russian company Rusal and China’s Norinco signed an agreement under which the former undertook to export about 2 million tons of aluminum worth about $4 billion, while the second will invest in production plants in Russia.

6. In the automotive sector, the Russian Avtomobilny Zavod (VAZ) and Chinese FAW Group Corporation, a state-owned automotive manufacturing company, agreed to establish a joint venture (JV) in Russia’s Ural region for the production and distribution of trucks.

These agreements have, without a doubt, a strategic dimension. Russia is taking important steps to diversify its export markets for energy products, reducing its dependence on Europe, while China is strengthening its energy security by ensuring supplies from Russia rather than relying on sea transport routes, where risks are increasing. Both have pledged to work on ensuring that mutual trade reaches $70 billion annually. In the political sphere China has underlined its support for territorial integrity in the North Caucasus and Russia has recognized Chinese sovereignty over Taiwan, Tibet and Xinjiang Uyghur Autonomous Region. For the first time China expressed clear support for the Russian initiative to establish a new security architecture in the Euro-Atlantic area and agreed to begin work to develop a “Security Architecture for the Asia-Pacific,” a matter of great interest for Beijing. This security architecture would prevent participants from taking actions towards the build-up of “offensive military infrastructure.”

Sino-Russian cooperation projects are not only undertaken on issues relevant to the two states but also with regard to major issues on the international agenda: Iran, Afghanistan, North Korea and the international financial system. Both powers are trying to decide their positions within the UN Security Council, the G20, the BRICS and regional organizations, such as the SCO. But Beijing has so far prevented the latter organization from acquiring the military dimension desired by Russia. It mainly focuses on economic rather than military issues. China uses it as a tool to increase its influence in Central Asia, as it is emerging as a competitor for Russia in that region (it has offered loans worth $10 billion to countries in the region during Medvedev’s presidency), both from a geostrategic point of view and as a supplier of energy resources. Beijing has also refused to recognize the Georgian breakaway regions of Abkhazia and South Ossetia as independent states, taking a line which has been followed by the other Central Asian members of the SCO.
RUSSIA-EU RELATIONS

Since the enlargement of the EU to 25 members on May 1, 2004 (part of the same wave of enlargement included the accession of Bulgaria and Romania on January 1, 2007 and the accession of Croatia on July 1, 2013), Russia shares a long common border with the EU space, running from the Barents Sea to the Black Sea.47 Three EU Member states share a land border with Russia, which the leading supplier of energy to the EU. In 2010 it provided 34% of the gas, 33% of the oil and 30% of the coal consumed by the EU. Approximately two-thirds of Russia’s gas and oil exports go to Europe. Over 50% of Russia’s foreign trade is conducted with the Union and Russia is now the third largest trading partner of the EU, after the U.S. and China. The total Russia-EU trade volume exceeded $390 billion in 2011. It is estimated that up to 75% of Foreign Direct Investment stocks in Russia come from EU member states.48

Relations between the EU and Russia are governed by the Partnership and Cooperation Agreement (PCA), a10-year agreement signed in 1994 and entered into force in 1997 with the possibility of being extended. Since December 2007 it has been extended on an annual basis. As a result of the delay in Russia’s accession to the WTO, at the St. Petersburg Summit in May 2003 both sides agreed to boost cooperation in four areas known as “The Four Common Spaces”: (1) economic, (2) freedom, security and justice, (3) external security, and (4) research, education and culture. In May 2005, “road maps” to spur action on the four Common Spaces were approved.

The objective of the Space of Economic is the creation of an open market between the EU and Russia and the closer integration of their economies. At the Stockholm Summit in November 2009 the “Partnership for Modernization” program was launched to help Russia modernize its production structure and diversify its economy. The program’s aim was to reduce Russia’s dependency on the production and export of hydrocarbons and minerals. The Europeans places special emphasis on “institution building” as they considered that the modernization of the Russian economy should be based on foreign investment and technology transfer. However, such a direction would require the strengthening of legal guarantees for investors and the elimination of protectionist barriers. The latter prevent the creation of internationally competitive industries. Even before Russia entered into the WTO in 2012, the EU believed that it was highly desirable for Russia to adopt internationally recognized standards (preferably incorporating much of the “acquis communautaire”). Although this initiative is now in deadlock as a result of the armed conflict in Eastern Ukraine, the Medvedev administration thought in 2009 that be of great importance in the relationship between Russia and the EU, particularly if approached as a broad partnership in reforming and modernizing production and institutional structures rather than being limited by Russia to being a mere attempt to promote technology transfer.

In January 2006 and January 2009, as a result of disputes over gas price levels between Russia and Ukraine, Gazprom supplies to European countries were temporarily halted causing severe economic damage to the industrial sector and human suffering to many European consumers. Russia’s reputation as a supplier suffered and European countries sought to diversify their supplies away from Russia in order to assure continuity. Moreover, much uncertainty over potential investment followed Russia’s refusal to implement the proposed Energy Charter.

In the Space of Freedom, Security and Justice, perhaps the most important and sensitive issue concerned the movement of people. Russia considered it humiliating that its citizens have to obtain a visa to travel to EU member countries (the Schengen Area) and it urgently sought the elimination of this barrier, without avail. Various EU Member states stand divided on this issue. Even some of the friendliest countries to Russia, like Germany and France, which host a large number of Russian tourists each year, favored signing a simple and comprehensive agreement on visa-free short-term trips that would cover citizens of Russia and the Schengen Area. The EU’s top priority was an agreement on the repatriation of Russian illegal immigrants in Europe and the eventual elimination of administrative obstacles for the EU citizens to live and work in Russia (registration requirements, difficulties in obtaining work permits and residence documents, etc.).49

In terms of human rights, there was an uneasy dialogue between Russia and the EU during Medvedev’s four-year term as president. Russia is a member of the Council of Europe (COE) and by the same token a member of the European Court of Human Rights (ECHR) which was established by the European Convention on Human Rights. The ECHR hears applications alleging that a contracting state has breached one or more of the human rights provisions concerning civil and political rights set out in the Convention and its protocols. Interestingly, Russia has more human rights pending cases than any other member. The vast bulk of these cases deals with the behaviour of law enforcement bodies in the North Caucasus. On June 1, 2010, six years after it was opened for ratifications, Protocol 14 was added to the ECHR and entered into force. Basically, this protocol streamlines the procedures of the court. However, while it quickly ratified Protocol 14, Russia was the only European Commission (EC) member state which refused to ratified Protocol 6 to the on the abolition of the death penalty. In fact, fifteen years ago it imposed a moratorium on its application.

At the Saint Petersburg Summit in 2003, the EU and Russia established the Common Space on Freedom, Security and Justice, a new non-legally binding institution which reinforced their cooperation on justice, liberty and security ever since. In the Common Space of Security, a wider dialogue was held on key international issues, although their positions did not always coincide with one another.

However, more problematic in Russia-EU relations was what is described as the European Neighborhood Policy (ENP), which was first developed in 2004 as a way to integrate the EU’s 6 closest neighbors on its eastern border. Later, on May 7, 2009, in Prague, the EU inaugurated the Eastern Partnership (EaP), regarded with high suspicion by Moscow. Comprising Armenia, Azerbaijan, Belarus, Georgia, Republic of Moldova and Ukraine, the EaP “enables partner countries interested in moving towards the EU and increasing political, economic and cultural links to do so. It is underpinned by a shared commitment to international law and fundamental values – democracy, the rule of law and respect for human rights and fundamental freedoms – and to the market economy, sustainable development and good governance.”50 With this “partnership”, the Russians believe that the EU is interfering in its own “backyard” and is trying to prevent Russia from exercising its influence on these ex-Soviet republics (the EU is now negotiating free trade agreements with some of these countries).51 Another area of cooperation covers the field of crisis management. The EU-Russia collaboration in that field so far has been positive, but Russia wants to participate in crisis management operations on a basis of equality and co-decision with its European partners. Hence, Medvedev proposed the conclusion of a framework agreement that would outline a set of cooperation principles during crises.52 The EU was not keen on such a proposition as it wants to preserve its autonomy in the conduct of crisis management operations.

Russia and the EU have an intense cooperation in the Space Research and Education. Even though it was not an official member, Russia very actively participated in the 6th (2002-2006) and 7th (2007-2013) Framework Programmes for Research and Technological Development (abbreviated FP1 through FP6), which are coordinated by the Joint S&T Cooperation Committee. Created by European Union/European Commission, FPs aim to support and foster research in the European Research Area (ERA). In the field of education, the EU’s objectives in its cooperation with Russia are to facilitate academic mobility through the support of academics, the modernization of educational programs and the progressive alignment of Russia with the Bologna Process.
Negotiations on a New EU-Russia Agreement

In July of 2008, negotiations began to conclude a new agreement to replace the 1997 PCA. The EU wanted to reach a global agreement covering all areas of cooperation under the four Common Spaces. In the economic field, the goal was to establish an expanded free trade area covering almost all forms of trade (goods, services and capital) and important components of regulatory convergence and economic cooperation. The EU sought to improve the regulatory environment by building upon WTO rules and strengthening bilateral trade relations. Included in these talks was a further cooperation in the energy sector in line with the principles of the Energy Charter and Transit Protocol.

For its part, Russia adopted a much less ambitious approach. It advocated the negotiation of a framework agreement supplemented by sectorial arrangements in areas which were considered priorities for the Kremlin: the movement of people, combating crime, technological collaboration within the Partnership for Modernization, and cooperation in the field of security and crisis management.

Ten rounds of negotiations were held and, although progress was achieved in some areas, negotiations on economic issues did not advance as quickly as expected. This apparent lack of headway stemmed from the uncertainty at the time surrounding Russia’s accession to the WTO and the establishment of the Customs Union between Russia, Belarus and Kazakhstan.
OTHER ISSUES IN RUSSIA’S FOREIGN POLICY
The Iranian Nuclear Dossier

Russia’s position regarding the Iranian government’s efforts to control the complete fuel cycle, which could lead to nuclear weapons production, is a crucial aspect of the development of relations between Moscow and Washington, especially following President Obama’s arrival in the White House and the “reset” of the two countries’ relations. In support of this reset, President Medvedev seemed willing to sacrifice some of Russia’s economic interests in Iran (focused primarily on arms supplies and the construction of nuclear power plants) and political relations with Tehran.53

However, Iran’s seemingly continuous attempts to deceive the international community and international nuclear energy watchdogs did not cause Moscow to change its policy of opposition to excessive UN Security Council sanctions against Iran. Since 2006, when the debate on Iran’s nuclear program first appeared on the agenda of the UN Security Council, Moscow has tried to position itself as a key intermediary in the process of resolving the crisis. Admittedly, on three occasions Russia did vote in favor of sanctions against Iran in the period from 2006 to 2008, but each time it managed to delay and water them down. The sanctions imposed a limitation of export of technology which Iran could use for the development of its nuclear programme, the freezing of the Iranian financial assets, whether those of the government, banks or key individuals, and a ban on selected Iranians from international travel. At the same time, in view of a lack of progress in resolving crisis, Moscow has repeatedly expressed its presumption in favor of imposing further sanctions. Many speeches by President Medvedev in the second half of 2009 demonstrated Russia’s concern on the Iranian issue. In practice, however, every pretext was exploited by the Russian government to postpone sanctions.

Russia’s ambivalence in the Iranian nuclear crisis stemmed from the fact that for the development of its nuclear program Iran benefited from the supply of dual-use technologies by Russian and Chinese companies. With this support Iran created the technical infrastructure necessary for the enrichment of uranium and plutonium. The main factories of the Iranian nuclear infrastructure are: the complex of Saghand (activities related to extracting uranium), Ardekan (for the mineral’s treatment and the production of uranium oxide), Isfahan (where uranium oxide is converted into uranium hexafluoride) and the Natane plant. Depending on the level of enrichment, refined uranium can fuel power plants or nuclear bombs. In the Arak complex – built with the assistance of the Chinese Government which supplied technology and trained Iranian scientists – Iranians conduct activities related to the treatment of enriched uranium and the separation of plutonium. The last element is the Bushehr 1,000 MW capacity power plant. The Russian-Iranian cooperation under Medvedev was part of a wider program of reorganizing the nuclear sector promoted by Moscow’s leaders in order to build a sort of “nuclear super-holding.”

The construction of Iran’s Bushehr nuclear power station by Russia, which dates back to 1992, was another reason for Moscow to play for time. In 1995, Russia and Iran signed another agreement to continue the construction. The plant should have entered into service in 2007 but, because of a series of delays, was only officially opened in September 12, 2011. Russian Energy Minister Sergei Shmatko and head of the Rosatom Sergei Kiriyenko attended the opening ceremony.54

The Russians were upset with Tehran over its rejection of the offer, submitted in Geneva in October 2009 by the EU 3+3 (an abbreviation for the EU 3 [France, Germany, United Kingdom] and China, Russia, and the United States), according to which Iran would have sent its uranium to Russia and France for enrichment.55 This refusal was contemporaneous with the order by Iran’s President Mahmud Ahmadinejad to produce uranium enriched to 20% for the Bushehr reactor and the Natanz plant, located between Isfahan and Kashan in central Iran.

Consequently, on June 9, 2010, Russia supported the adoption by the UN Security Council of a resolution imposing a fourth round of sanctions against Iran’s nuclear program. On September 23, 2010 President Medvedev signed a decree which put in place the sanctions adopted by the United Nations (the main thrust of the sanctions was against “military purchases, trade and financial transactions carried out by the Islamic Revolutionary Guards Corps”56). In tandem with this new round of sanctions, Moscow also suspended the delivery of S-300 surface-to-air missiles, other air defense systems, combat aircraft, armored vehicles, helicopters and warships to Iran. Medvedev’s action contradicted statements made by his own Foreign Minister, Sergei Lavrov, and senior military commanders who claimed that the S-300 system, due to its purely defensive character, was not subject to the sanctions adopted by the Security Council. Hence the act appeared to show that the Russian President was willing to go beyond what was required by the Security Council resolution.57

The Iranian government did not take Moscow’s decision lightly. Tehran accused the Russians of breaching their contract and even threatened to take the case to an arbitration tribunal. Moscow feared that the vacuum left by its refusal to supply arms to Iran would be filled by China, though the same S-300 systems that China purchased from Russia did not have the same level of sophistication. In these circumstances, Iran vowed to create a more advanced domestic anti-aircraft defensive system – something it claims it has since accomplished. On the other hand, the Russians expressed deep unease at the fact that the U.S. and the EU decided to take actions against Iran without the approval of the Security Council.
The Peace Process in the Middle East

Medvedev was very active in that region, eager to move the Israeli-Palestinian negotiation process forward and regain lost influence in the region as a whole. On March 19, 2010, at Russia’s initiative, a meeting of the Quartet on the Middle East (United Nations, the United States, the European Union, and Russia) was held in Moscow in which Russia urged the parties to resume negotiations as soon as possible in order to address all the issues affecting the process. In the months following this meeting, the Russians made very strong statements against Israeli settlement expansion in the occupied territories. Moscow also attempted to maintain contacts with all parties to the conflict and was the only member of the Quartet to actually meet with representatives of Hamas, as the Kremlin considered it necessary to involve all parties in the negotiation process.

Medvedev kept open its offer to hold an international conference on the Middle East in Moscow, with the participation of all parties involved, but he did make it clear that that the timing was not appropriate yet for such a conference. The Russians were pessimistic about whether a meeting could be organized in the medium term, at least until direct talks had been held significant progress achieved. But it did not appear likely after the Israeli government refused to extend the moratorium on settlement construction in November 2010, which resulted in the indefinite interruption of the negotiations.58
Afghanistan

Russia paid much heed to the situation in Afghanistan, a country which it considers to be within its sphere of interest. It is above all concerned about the spread of Islamic extremism, terrorism, drug trafficking and the proximity of the country to oil-producing regions such as Iran, the Persian Gulf, Central Asia and the Caspian Sea.

Moscow’s position regarding NATO operation (International Security Assistance Force or ISAF) in Afghanistan and the U.S.-led coalition was ambivalent: on the one hand, it supported the mission and wished it success in controlling the Taliban, but on the other, it was distrustful of the U.S. hegemon intervening outside the European stage and remained wary of the possibility that the U.S. would keep long-term bases in the country after its planned pull out in 2014. It was also hostile to the presence of large U.S. military bases in Central Asia that are used to support the war effort, as it considers that this U.S. policy leads to an increased penetration by the West into a region it has always considered its exclusive sphere of influence. They rented two military bases in Central Asia: the Manas air base in Kyrgyzstan between December 2001 and June 2014 and the Karshi-Khanabad air base between 2001 and 2005 in Uzbekistan).

Moscow also believed that the Western military operation would have a negative impact on regional stability, especially in Pakistan, and was sceptical about the survivability of the regime headed by the Afghan Hamid Karzai.

Moscow expected that the U.S. and NATO would fail in Afghanistan (as Great Britain and the Soviet Union had previously) and that this failure would lead to the discrediting of the Western security organization and divisions among the allies, something that would greatly benefit Russia’s geopolitical position in the region and in the world more broadly. Russia knew that NATO was suffering increasing losses in Afghanistan and that a number of its troops were experiencing combat fatigue. As a result, pressure kept mounting on the Obama administration to withdraw the American troops before the already announced departure date of 2014.

Consequently, Russia sought to cash in and offered its support to the alliance by allowing transit of military equipment and personnel and non-lethal equipment to some allied countries: Germany, France, Spain and the U.S. Such an act of cooperation severed Moscow’s interests in other strategic areas of negotiation, such as missile defense in Eastern Europe. Meanwhile, the logistical support was in line with Russia’s strategic prerogatives of stabilizing Afghanistan so as to prevent a spill-over of violence into Central Asia.

The Kremlin was particularly concerned about the growing traffic of heroin from Afghanistan and was dismayed by what it considers to be NATO’s lack of attention and willingness to address this problem more effectively. Moscow argued that Russia is the main market for such traffic, which caused over 3,000 deaths per year during Medvedev’s presidency. Moscow tried to involve regional organizations (SCO, CSTO) in this issue and promote international cooperation against drug trafficking. The Kremlin also repeatedly advocated NATO-CSTO cooperation on the issue, though unsuccessfully.
Latin America

During the period of the Cold War, Latin America was a strategic region for Soviet foreign policy, as the USSR sought to counterbalance the U.S. sphere of influence in the South American hemisphere by supporting countries which promoted, or adhered to, the communist ideology. The Soviets also encouraged freedom of movements and backed pro-socialist political parties on the continent. After the collapse of the Soviet system, the Russian presence in the region was reduced very significantly due to political and economic problems in the new Russian Federation. Russia’s financial support to countries like Cuba, Guatemala and Nicaragua all but ended, resulting in a significant deterioration of bilateral relations with these countries and a near collapse of their economies.

The re-emergence of Russia as a great power with global aspirations, already observable during Putin’s second term (2004-2008) was mainly due to its huge revenues derived from hydrocarbon exports. It rekindled Moscow’s interests in Latin America. This led to intensified exchange visits at the highest level. For instance, President Medvedev, Prime Minister Putin, Foreign Minister Lavrov and Deputy Prime Minister Igor Sechin visited most countries of the region, while the Presidents of Venezuela (Hugo Chavez, nine times), Cuba, Argentina, Nicaragua, Bolivia, Brazil, Guatemala and Ecuador paid official visits to Russia between 2006 and 2011. In 2006, Russia sold Venezuela weapons worth U.S. $4.4 billionl59 and provided a loan of $2.2 billion to be used for the purchases of new Russian military equipment.60 Chavez became a major customer for the Russian arms industry, as well as some other countries in the region in dire need of military weapons.

In July 27, 2009, Igor Sechin, Russian Deputy Prime Minister, arrived in Venezuela’s capital to discuss plans to boost economic relations between the two countries and expand the exploration and production of oil and gas. Caracas announced an agreement with a consortium of five Russian companies (Rosneft, Lukoil, TNK-BP, Gazprom and Surgutneftegaz), which pledged to make a $20 billion investment in Venezuela over the next three years and gained the right to prospect in the Orinoco Delta.

In April 2010, Russia sold $4.4 billion worth of weapons to Venezuela when Prime Minister Putin met Chavez in Caracas to discuss oil, defense and nuclear energy cooperation. The agreement included $2.2 billion in credit lines for Russian arms received by Chavez during his eighth visit to Moscow in September 2009. It stipulated also the delivery of T-72 tanks and the S-300 advanced anti-aircraft missile system. Chavez said that this new arsenal is aimed at countering a planned increase of the U.S. military forces in neighboring Colombia, Washington’s closest ally in Latin America.

Chavez recognized the independence of Abkhazia and South Ossetia, the two pro-Russian breakaway Georgian regions, during his Moscow visit in September 2009. President Medvedev said at the time that that Russia would supply Venezuela with all the arms it had requested. The U. S. has frequently expressed concern about Russian weapons sales to Venezuela, one of its most noted foes in the region.61

In addition, during Sechin’s trip to South America Gazprom signed an agreement for gas exploration with Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), the state-owned petrol company of Bolivia. The Bolivian government acquired five military transport helicopters from Russia, along with a $150 million loan. Trade between Russia and Latin America has increased fivefold in the last 15 years, from $3 billion in 1995 to $15 billion in 2008, although the region represented only 3% of Russia’s foreign trade. Within the Gas Exporting Countries Forum (GECF), an intergovernmental organization made up of 11 of the world’s leading natural gas producers (Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, Venezuela), Russia tried to find support from the countries of the region (particularly Bolivia and Venezuela) in its efforts to form a “Gas OPEC,” but to no avail. As the heir to the Soviet Union, and thus rival to the U.S., Russia aimed to exploit the sympathy found in some countries of the region, especially members (Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Nicaragua, Saint Vincent and the Grenadines and Venezuela) of the Bolivarian Alliance for the Americas (ALBA).

With these manoeuvres Moscow is sending the message that Washington’s own actions in the Russian “zone of influence” (Eastern Europe, the South Caucasus and Central Asia) should not go beyond certain limits.
The BRICS

As a member of BRICS, which brings together five major emerging economies of the world, Russia plays an increasingly important role in the international arena. In 2011, BRICS’s member countries accounted for “26% of the world’s land area, 42% of the world’s population, and 14.6% of the world’s GDP”62, on course to reach 40% in 2050. By all accounts, BRICS is trying to establish itself as an alternative to the G-8.

The importance of this group, as noted by Zhang Youwen, Director of the Institute of World Economy under the Academy of Social Sciences of Shanghai, is evident when one takes into account the average growth of the BRICs countries’ economies between 1999 and 2011: Brazil grew by 3.3%, Russia by 6.99%, India by 7.22%, China by 9.75% and South Africa by 4%. Compared with the 2.8% average growth of the U.S. and the 3% of the World economy for the same period, these figures are quite impressive.63

This group of countries is primarily concerned with seeing that reforms are carried out in the Breton Woods institutions (IMF and World Bank), particularly the vote allocation system, which gives to the BRICS countries about the same number of votes as to low-developed countries. They are also calling for more influence in these institutions and for the appointment of the managing director of the IMF and the president of the World Bank Group (WB) on the basis of professional competence rather than nationality (traditionally, the IMF director has been a European and the WB president an American).

Although it was only partly able to move forward with this demand, the BRICS group continued to promote a new international payment mechanism and the diminution of the role of the dollar in international financial transactions. This group of countries was also unsuccessful in creating a payment mechanism in local currencies to facilitate trade between the five countries. That mechanism would of course enable them to avoid using the dollar in their bilateral and multilateral trade. In commercial terms, the BRICS, theoretically, promote liberalism, defend the multilateral trade system and condemn protectionism. However, words are not matched by deeds, as all five countries pursue protectionist policies in a significant number of trade sectors. Moreover, they share few similarities in the political arena. They take clearly divergent positions on various issues, such as, among others, the reform of the UNSC, sanctions against Iran or global warming.

It appears likely that the BRICS will become increasingly more important in global economic forums and institutions in the coming years. It could also display an increased role within the global political arena. For its part, Russia has played an important role in the establishment and promotion of this new “club.”
India

Russian-Indian relations have an historical dimension. They date back to the close cooperation developed between the two countries following India’s independence in 1947 and the interest of Jawaharlal Nehru’s interest in the Soviet planning system. During the Cold War, New Delhi relied on the Soviet veto in the UN Security Council in its territorial disputes with neighboring Pakistan. Russia has also traditionally been the main supplier of arms and nuclear technology to India, whose geostrategic importance for Russia stems from its rivalry with Pakistan and China.

In March 2010, Prime Minister Putin paid a visit to New Delhi and signed a series of far-reaching agreements. One of these specified that the Rosatom will build two new nuclear power plants of 1,000 Mega Watts, each in central Kudankulam in the Tirunelveli district of the southern Indian state of Tamil Nadu, with an option for another two blocks, and possibly up to 12 plant reactors and nuclear fuel production facilities.64 Moscow and New Delhi also resumed arms trade agreements, according to which Russia will modernize the aircraft carrier Admiral Gorshakov, deliver 29 MiG-29 (naval version) fighter jets and possibly sell its then new Mig-35 fighter to India. These agreements also promoted technological cooperation: The Russian Federal Space Agency (Roskosmos) promised to build and deliver in 2013 two spacecraft and a Global Navigation Satellite System (GLONASS).
Japan

Russian-Japanese relations are stormy at times. A geopolitical rivalry in East Asia, combined with both countries claiming sovereignty over the Kuril Islands (or “Northern Territories,” as the Japanese call them), a territorial dispute that dates back to the First World War and that Russia considers resolved, and frequent friction over fishing, have marked the last one hundred years in Russia-Japan affairs.65 These disagreements, and the absence of a peace treaty between the two countries, prevent substantial Japanese economic and technological investment in Russia.

The disputes came back into focus following President Medvedev’s visit to Beijing on September 28, 2010. Three weeks after the Russian President’s visit, a a Chinese fishing trawler collided with two Japanese Coast Guard patrol boats in the waters around the Senkaku islands (called the Diaoyu by the Chinese) in the South China Sea. Russia’s apparent backing of China’s position on this incident and the Russian President’s commemoration of the 65th anniversary of the end of World War II upset the Japanese government greatly, as did the proposal (which was eventually rejected) that President Medvedev visit the Kuril Islands on his return from Beijing.

Despite all these contentious issues, the level of economic trade between the two countries remains high. In 2008, the Sakhalin II project, on the island of the same name, began exporting liquefied natural gas to Japan and South Korea. The project involves two Japanese companies: Mitsubishi and Mitsui Sakhalin Holdings B.V. (a subsidiary of Mitsui and Co., Ltd. and Diamond Gas Sakhalin B.V. (a subsidiary of Mitsubishi Corporation). They initially held a combined 45% stake in the project’s operating company, but were later pressured by the Kremlin to halve their share to 12.5% and 10% respectively.66

Japanese carmakers, Toyota and Mazda, two brands that overtook the lower-end Ladas in the 1990s, have established assembly plants in Russia in 2005 and 2012 respectively. But in October 2009 Prime Minister Putin ordered a sharp increase in the tariffs on imported used cars, causing serious damage to Japanese exporters who sell many vehicles in the eastern part of Siberia.67
Multilateral policy

The scope of this paper has limitations in providing a broader overview of Russia’s position on various multilateral issues. As already noted, Moscow seeks – with varying degrees of success – to achieve greater political and economic integration in the post-Soviet space. On the basis of Chapter VIII of the Charter of the United Nations and to avoid duplication of efforts, Moscow believes that the full potential of regional organizations should be utilized in solving inter-state and intra-state conflicts. The United Nations Regional Centre for Preventive Diplomacy for Central Asia (UNRCCA) is a case in point. Based in Ashgabat, it was eestablished in 2007 at the initiative of the governments of the five Central Asian countries and it seeks to promote dialogue between the region’s governments in finding solutions for emerging problems and eliminating potential threats.68 In this sense, Medvedev was willing to strengthen cooperation between the UN, CSTO and SCO and he stated on a few occasions that one of the main aims of the reform of the United Nations should be to strengthen the regional dimension of global governance.

He also favored revitalizing and enhancing the capacities of the Military Staff Committee (MSC) of the United Nations Security Council, a subsidiary body whose role is to plan UN military operations and assist in the regulation of armaments, and combining peacekeeping with peace building operations.69 Between 2008 and 2012 Russia contributed forces to peace operations in the Middle East and various parts of Africa, Kosovo, East Timor and Haiti.

Russia moderately backed UN Security Council reform in order to enable it to meet new regional and global challenges, increase its representativeness and strengthen its central role. While not rejecting the possibility of expanding the membership of the Security Council, Russia opposes any change which would diminish the Council’s primary authority in international peace and security matters and the role of the permanent members of the Council, an aspect that Moscow considers as untouchable.

As stated by Russian Foreign Minister Sergei Lavrov at the 65th Session of the UN General Assembly in September 2010, Russia’s priorities at the multilateral level focused on the following points: (a) to address threats to international peace and security in the areas of disarmament and non-proliferation, (b) to combat terrorism, drug trafficking and organized crime, (c) to resolve regional conflicts, and (d) to overcome the effects of the international 2007-2008 economic and financial crisis, ensure sustainable growth, and fight climate change.

With regards to Iran, Moscow insisted that the imposed sanctions were punitive in nature but not affecting the Iranian population as a whole. Sanctions should instead be aimed at convincing the Iranian government of the need to return to the negotiating table and cooperate with the International Atomic Energy Agency (IAEA). Concerning the struggle against piracy in the Indian Ocean, Russia was party to establishing an ad hoc international tribunal to prosecute such crimes.

Russia also supported the Millennium Development Goals (MDGs) which “which range from halving extreme poverty rates to halting the spread of HIV/AIDS and providing universal primary education, all by the target date of 2015”.70 Medvedev noted that in recent years Russia has increased its development assistance, which is partly true. The country’s aid spending, according to a report by the Russian Ministry of Finance released in advance of the May 2011 G8 summit in Deauville, France, dropped from $785 million in 2009 to $472.32 million in 2010 – a decrease of 40%. However, Russia had only temporarily increased its aid budget in 2009 to soften the blow of the global financial and economic crises, particularly in the neighboring former Soviet republics, the report says. A government strategy paper, released in 2007, about foreign aid policy set an annual spending target of $400-500 million and talked about setting up a specialized government aid agency. It also supported actions relating to humanitarian aid, food security and natural disasters.71

In the field of disarmament, Russia actively participated in the Review Conference for the Treaty on the Non-Proliferation of Nuclear Weapons (NPT), held at United Nations Headquarters in New York in May 2010, which adopted an Action Plan detailing 64 specific actions to be taken on the three pillars of the NPT (disarmament, non-proliferation and peaceful uses of nuclear energy).72

Moscow wanted to strengthen cooperation in the field of nuclear energy, an area in which it has good technological capabilities and competitive advantage, and sought to become one of the main exporters of nuclear technology. Russia promoted the creation of an international centre for uranium enrichment, under IAEA supervision, located on Russian territory. In July 2006 it was one of the initiators of the Global Initiative to Combat Nuclear Terrorism (GICNT), an international partnership of 83 nations and 4 official observers working to improve capacity on a national and international level for prevention, detection, and response to a nuclear terrorist attack. In 2009, it also has strongly supported the commencement of negotiations for the conclusion of a Fissile Material Cutoff Treaty (FMCT), which aimed to prohibit the further production of fissile material for nuclear weapons or other explosive devices. The treaty has not yet been seriously negotiated and its terms remain to be defined.73

In July 2010 Moscow supported the creation of the new gender entity called United Nations Entity for Gender Equality and the Empowerment of Women (UN Women), headed by Chilean President Michelle Bachelet (2006-2010), which reinforces the mandates of the various existing entities within the organization.74 Finally, Russia is one of the most vigorous members of the so-called Dialogue among Civilizations and the United Nations Alliance of Civilizations (UNAOC).75

On October 5, 2010 Russia participated in its first Asia–Europe Meeting (ASEM), officially established in 1996 at the first summit in Bangkok, Thailand. Seeking to deepen the relations between Asia and Europe at all levels, ASEM is an interregional forum which consists of the European Commission, the 28 members of the European Union (EU), the 10 members of ASEAN, plus China, Japan, South Korea, India, Mongolia, Pakistan, Australia, Russia, New Zealand, Bangladesh, Norway, and Switzerland. Foreign Minister Sergei Lavrov stated during the 2010 summit the importance of establishing new rules on energy cooperation and proposed the creation of a new “environmental risk insurance fund”.76 He also proposed once again the creation of an international tribunal to deal with piracy.
CONCLUSION

This paper has outlined the main elements of Russian foreign policy, particularly during Dmitry Medvedev’s presidential term. Russia wants to be among the top actors in world politics, which it undoubtedly should be for historical, geographic, economic, military and cultural reasons. However, the severe crisis of 2008-2009 highlighted, at the internal level, Russia’s social, economic and institutional shortcomings, even after more than eight years of strong economic growth. Certainly, the burden of achieving such a status would create social deprivation and economic and institutional problems at home.

President Medvedev sought to mobilize Russian citizens and social forces in an effort to modernize the country in economic, technological and institutional terms. Being fully cognizant of the need for collaboration with other countries to achieve modernization, he made what appeared to be a concerted effort, if not in substance then at least in intention, to make Russian foreign policy friendlier and less confrontational, especially in its relations with the West. This new orientation in foreign policy contrasted with that of Putin, who maintained an arms-length relationship with the West in his second term (2004-2008).

The most remarkable aspect of this policy shift was the redefinition and resetting of relations with the United States, the USSR/Russia’s Cold War adversary. Medvedev openly admitted that the West must be the privileged partner in any effort to modernize the Russian economy as it can provide start-up capital, make productivity-enhancing investments, and participate in technology transfer. The U.S. has the models and value system considered most appropriate for tomorrow’s Russia, Medvedev thought. This so-called new approach coincided with the arrival in the White House of a new President, Barack Obama, who agreed with Medvedev on the need for deeper internal reforms and far-reaching solutions to global problems in cooperation with other countries and international organizations. The two leaders were also able to effectively establish excellent personal relations, a factor which is undoubtedly of great importance in bilateral relations.

Medvedev achieved with this new policy what his predecessor had been unable or unwilling to do: ensuring that Washington took into account Russia’s concerns and interests on issues such as NATO expansion, the postponement of the missile defense shield in Eastern Europe, Russia’s accession to the WTO, and the role Russia wants to play in the post-Soviet space. For its part, Moscow was willing to proactively engage in dialogue and collaboration with the West in all key areas: Afghanistan, the Middle East and Iran’s nuclear program.

Russia still considered the post-Soviet space its own backyard. The Georgian-Russian war of August 2008 sent a clear message to all countries of the Caucasus and Central Asia that Russia would not tolerate them leaving its orbit and that other “colour revolutions” were out of the question. Russia also sought to maintain its nearly complete monopoly over the energy resources of the Caspian Sea and Central Asia. It did whatever was necessary to oppose competitive projects which might break this monopoly, such as the Baku-Tbilisi-Ceyhan and the Baku-Tbilisi-Erzurum pipeline projects. Consequently, Russia managed to delay – if not to wreck – the EU-sponsored Nabucco project.

Russia is in no particular hurry to resolve the “frozen conflicts” in Transnistria (Moldova), Nagorno-Karabakh (Azerbaijan) and Abkhazia and South Ossetia (Georgia). Maintaining the status quo enables Moscow in turn to maintain its sphere of influence and apply pressure on regional flashpoints at will.
Viktor Yanukovych’s election as President of Ukraine in 2010 and the persistently difficult economic situation in that country proved a windfall for Moscow, giving it ample opportunity to regain ground lost after the “orange revolution” of 2004. Not only is the relationship with Ukraine of strategic importance for Russia but it has great sentimental value.

Outside the post-Soviet space, Europe was Russia’s primary area of geopolitical interest. Viewed from this perspective, Russia remains a fully “European power”. Moscow tries to take advantage of the lower priority Washington is giving Europe and the moments of weakness and introspection in its Western neighbor. Such opportunities allow Russia to improve its positions in economic and political spheres. Its proposal for the revision of the security architecture in Europe was a prime example Moscow’s opportunism.

Russia, like many other states, does not consider that the EU is yet mature enough to become an indispensable partner because it is still considered “weak” and of limited utility. It prefers to engage directly with major European countries rather than Europe as a bloc. Consequently, relations with Germany, and to a lesser extent France and Italy, are held to be of particular importance.

There were some attempts at “reconciliation” with Poland following the dramatic events on the 70th anniversary of the Katyn massacre in April 2010, when a plane crashed near the city of Smolensk, Russia, killing the Polish President and many senior government and military leaders. Rapprochement between Moscow and Warsaw could have brought about positive outcomes in broader Russian-EU relations, as Poland has been an EU member since 2004.77

But the reality is that for Russia good relations with the EU are essential, and Medvedev should have therefore paid closer attention to the conclusion of a new agreement with the EU to regulate these mutual relations. This agreement envisaged, in the medium term, a larger free trade zone between the EU and the Russian Federation. Moreover, now that Russia has joined the WTO, and could become a member of the OECD in the future, cooperation in the technological and energy areas should be pushed forward once the dust settles in Ukraine crisis. It should be accompanied by the intensification of academic exchanges and the waiving of the visa requirements for temporary stays, as this would greatly facilitate the contacts between Europeans and Russians. Building a truly strategic relationship with Russia should also be a top priority for the EU, even though experience shows that this is easier said than done.

With China, an emerging global power, Medvedev tried to build a truly strategic relationship and sought to diversify economic and energy relations and neutralize the latent security risk presented by its powerful Asian neighbor. This policy achieved important results in the economic field. China has become a major source of investment capital for Russia, especially in the field of energy development. But in the political field gains were unimpressive. China would rather maintain an independent position and discuss major issues bilaterally with the other superpower, the U.S., than act in concert with Russia, a declining state. Moreover, the rapid rise of China as an economic and political powerhouse in its own right poses a primary strategic challenge for Russia. As Dmitri Trenin, director of the Carnegie Endowment’s Moscow Center wrote in 2009, “a key challenge for Russia’s foreign policy will be to learn to live alongside a China that is strong, dynamic, assertive, and increasingly advanced.”78

Hence, his effort to build a special relationship (both within the BRICS group and in multilateral forums) with the other major economic powers like China, India and Brazil and its renewed focus on Latin America.

For Russia, trying to reconcile improved relations with the West with accelerating the creation of a multi-polar world order in response to what appears to be the present or impending decline of the American power on the world stage was like trying to put a square peg in a round hole.

Since May 7, 2012, which saw the return of Vladimir Putin as Russian president on May 7, 2012 the “bear” pays more attention to East Asia and the Pacific, two regions experiencing a strong period of economic growth. It would also be wise for Putin to achieve a more equitable balance between European Russia and Asiatic Russia, especially in the districts overlooking the Pacific where far-reaching geostrategic rethinking is required.

In the final analysis, Russia should make all efforts to resolve its internal problems, economic, social and institutional. These continue to be the proverbial Achilles’ heel of modern Russia and will adversely affect its efforts to remain a key player on the international scene.

This article appeared at Cesran.org and is reprinted with permission

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