Tapping Into West’s Modernization Reservoir

At the beginning of 2008, tensions between Russia and the West increased with each passing month, reaching a peak in August during and after the   Russia-Georgia war. That was followed by a state of suspension with both sides unsure about how events would unfold. This year started with a gas conflict between Russia and Ukraine that greatly increased the West’s distrust of Moscow. That was followed by a gradual relaxation of tensions — a “reset” in relations with the administration of U.S. President Barack Obama, a warming of relations with NATO and the European Union, greater cooperation with the West concerning Iran, a flexible approach to Ukraine and a call to avoid a new flare-up over gas shipments.

President Dmitry Medvedev articulated his main foreign policy principles during the state-of-the-nation address in November. He said, “We must rid ourselves of our exaggerated sense of self-importance.” He was equally direct when he said, “Instead of chaotic action dictated by nostalgia and prejudice, we will carry out an intelligent domestic and foreign policy based on purely pragmatic aims.”

Medvedev, who is firm in his belief that government policies need to be more “pragmatic,” said the effectiveness of foreign policy “should be judged by a simple criterion: Does it contribute to improving living standards in our country?” He ordered the government to “develop clear criteria for assessing the results of Russia’s foreign policy — one that is designed to meet the challenges of modernization and technological advances.”

But developing specific criteria for what constitutes “pragmatic government policies” is complicated because the word “pragmatic” has never been clearly defined in political terms. To make matters worse, the word has been overused so much that it has lost much of its meaning.

One passage of his state-of-the-nation address hearkens back to an earlier speech and also sheds some light on Medvedev’s understanding of pragmatism. He said: “Our relations with other countries should also be focused on the task of modernizing Russia. … We are interested in capital inflows, new technologies and innovative ideas.” Further, the president said the results of diplomacy should be reflected “not only in the form of specific assistance to Russia’s companies abroad and efforts to promote national commercial brands … but it should also be designed to increase the volume of foreign investments we attract and, most important, the influx of new technologies.”

Likewise, in the “Go, Russia!” article Medvedev said: “The modernization of Russian democracy and the establishment of a new economy will only be possible if we use the intellectual resources of post-industrial societies. And we should do so without any complexes, openly and pragmatically.”

There seems to be nothing new in these statements, and yet their tone differs from what we are accustomed to hearing from Russia’s leaders in the post-Soviet period. The task from the early 1990s until only recently has been the integration of Russia into the international community of developed countries. The perception of the conditions for this integration varied because Russia itself was changing. In the mid-1990s, Russia was overly eager to join Western institutions on their terms and conditions. And although Moscow’s policy toward the West changed significantly during Vladimir Putin’s two presidential terms, the general goal of integration remained consistent through the Boris Yeltsin and Putin presidencies — at least up to the last year of Putin’s second term.

Medvedev has referred to the West several times as a rich source of investment and technology — a “reservoir” from which Russia can tap the “intellectual resources of post-industrial societies.” It is clear that the task of making Russia an integral part of that reservoir cannot be compromised based on political factors. The political focus on values, which until recently was the basis of relations with the West, has clearly ended.

The current shift in Russia’s foreign policy is the result of various factors. The first reason is that Russia’s leaders are disappointed with the results of the last 15 years of efforts at integration.

Second, shifts in the global economic balance has weakened the West’s monopoly on the world’s modernization reservoir. For the first time ever, the theme of modernization is not tied exclusively to Europe, but includes the Chinese, South Korean and Singaporean models of development.

The third reason is historical. It is noteworthy that Medvedev referred to the modernization programs adopted by Peter the Great and Josef Stalin, both of which were based on using the West as a reservoir. This approach rationalizes relations with the West, lessens the ideological and emotional components and reduces them to a purely commercial basis. In his “Go, Russia!” article, Medvedev stated, “The issue of harmonizing our relations with Western democracies is not a question of taste, personal preferences or the prerogatives of given political groups.”

Medvedev has a feasible plan to base relations with Europe on business interests alone. Putin’s recent visit to France, where officials discussed a wide range of business deals, became a concrete illustration of Medvedev’s statements. Certain that profits are more important than ideology for Western countries, Medvedev said, “We know that our partners are counting on a rapprochement with Russia to realize their own priorities.” But betting on pragmatism requires that one condition be fulfilled — the ability to guarantee the rules of the game. That can be called a stable investment climate if those guarantees are based on the rule of law. The other option is authoritarian stability, and this is achieved through political agreements with members of the ruling circle.

But whatever hopes that Russia’s leaders might hold, the lines between commerce, state bureaucracy and law enforcement continues to be blurred. This makes it impossible to give investors any reliable guarantees. Even when Western corporations believe that they can still make a profit despite the lack of legal guarantees, injustices such as the death of corporate lawyer Sergei Magnitsky will cause many Western investors to think twice before they increase their Russian exposure.

Russia’s “reservoir philosophy” is aimed at using the resources of the West to boost technological and economic modernization. The problem is that it does not set social modernization as its goal. Russia needs social modernization most of all — without which all attempts of achieving technological modernization are bound to fail.

Fyodor Lukyanov is editor of Russia in Global Affairs.

See also:

Russian Military Struggling to Modernize

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Analysis: Pension Reform Spells Disaster for Asset Management Sector