Although there has been a certain thaw in Russia's relations with the West over the past few weeks, it is still safe to say that they have reached their nadir since the breakup of the Soviet Union. We can debate when the serious deterioration in relations began. Some date it to Nato's decision to enlarge eastward in spring 1997. I prefer to date it to the financial collapse in Russia in August 1998, which put an end to hopes of quickly building a vibrant democracy and robust market economy in Russia along Western lines. That event marked the failure of the West's policy toward Russia. For many Russians, it confirmed suspicions that the West was not trying to assist Russia but to turn it into a third-rate power. In the West, and particularly in the United States, we began to take a more sinister view of Russia, in large part because we thought there was something natural about the emergence of democracies and market economies. But no matter when the deterioration began, it is clear that the past year and a half has been plagued by serious troubles: Iraq, Kosovo, the corruption scandals, national missile defense, and now Chechnya.

For the most part, Russia's ire has been directed primarily against the United States. Talk of cooperation with the United States has been replaced by increasingly harsh warnings of the dangers of a unipolar world; senior Russian government officials have at times reverted to Cold-War rhetoric. At the same time, Russia sought to enhance its ties with leading European states, especially France and Germany, hoping to play on differences among the Western allies as a way of countering U.S. influence. Many Russians even saw the Europeans as victims of the United States in Nato's air campaign against Serbia last year - however strange that might seem to us. But the Europeans' sharp reaction to Chechnya - noticeably harsher than the United States' - has changed all that, and Moscow has seen its relations with the West as a whole deteriorate over the past several months.

The transfer of power in Russia presents the opportunity for a new, if not a better, beginning. Rightly or wrongly, the emergence of a new president, almost certainly Mr. Putin, is assumed to carry with it significant consequences for Russia's conduct in the world. The warm words for Mr. Putin from U.S. President Clinton, British Foreign Minister Cook, and other Western leaders in recent days are clearly an effort to put relations back on track.

Russia as a Weak State

Few would argue that Russia remains an important feature of the international environment. Its nuclear arsenal and its possession of vast quantities of fissile material, and the technology and know-how to build weapons of mass destruction alone make Russia a central concern, if not necessarily a major player, in world affairs. So it is right that we focus some of our attention on Russia. As we contemplate Russian foreign policy under likely-President Putin, I would urge that we take a look not only at intentions but capabilities. And that is where I would like to begin before turning to the question of intentions. What can Russia do in the world? How important an actor is it?

It should be clear by now that Russia is no longer a Great Power. Over the past decade, it has endured a socio-economic collapse unprecedented for a major power, let alone a superpower, not defeated in a major war. While Russian statistics must always be treated with great caution, they do highlight basic trends, which are hardly encouraging from Moscow's standpoint. Russia's collapse has been swift and dramatic. In the course of a little more than a decade, the economy controlled by Moscow has fallen in absolute GNP from third in the world (behind the United States and Japan) to sixteenth (behind India, Mexico, and South Korea and just ahead of Argentina). In 1987, Soviet GNP was about 30 percent of U.S. GNP; today, Russia's GNP is roughly 5 percent of the United States'. Russian GNP is now roughly a third of Soviet GNP at its peak (1989). During the same period, Russia has been transformed from a "misindustrialized economy" into a "deindustrialized economy." Between 1990 and 1996, the share of the natural resources sector in industrial production rose from 24% to 51%, while the share of the machine-building sector fell from 31% to 16% and that of light industry from 12% to 2%.

Demographic and public health figures are no better. Over the past decade Russia's population has declined slightly, despite considerable immigration from the rest of the CIS. Public health is in a shambles. Over the past decade, the life expectancy of Russian males has declined from the mid-sixties to 61. Contagious diseases, such as tuberculosis and diphtheria, are making comebacks. According to Harvard demographer Nicholas Eberstadt, "Russia's health profile no longer remotely resembles that of a developed country; in fact, it is worse in a variety of respects than those of many Third World countries." These problems will inevitably have long-term ramifications for the quality of Russia's workforce and its ability to field a capable modern military.

At the same time, Russia has lost its sense of identity and purpose, of its role and place in the world. It is no longer the bearer of a grand idea or engaged in a grand project, such as building socialism, with the power to attract considerable support abroad. Nothing appears on the horizon that could act as the force multiplier Communism did during the Cold War. Russian nationalism, while it might rally domestic forces, is a non-starter internationally for obvious reasons. Capitalism and democracy are already the domain of more successful powers. Moreover, the dismal state of Russia hardly beckons other countries to look to it as a model for their own development.

Finally, not only does the country lack a grand mission, but it has also become abjectly reliant on the West for the resources to rebuild. In the immediate future, it needs Western credits to deal with a mounting debt burden or significant debt relief or most likely both. Over the longer run, it requires technology and capital, available only in the West, to modernize its economy.

This steep socio-economic decline has had dire consequences for two key instruments of foreign policy: the military and the diplomatic corps. The Red Army, once the pride of the country, was on the verge of ruin as a consequence of slashed budgets, neglect, corruption, political infighting, and failed reform, a leading Duma expert wrote in 1998. The military budget had been slashed from over 20 percent of GDP in the late Soviet period to well under 5 percent in recent years, as GDP plummeted. Wage arrears mounted until last fall; military officers have been known to moonlight to earn extra income or make up for unpaid wages. Military commanders have been compelled to cut deals with local political leaders or hire out their troops to ensure adequate supplies of food and energy for their garrisons.

At the same time, funds for research and development have been drastically cut, something that will impinge on Russia's military potential for the next decade or longer, while the machine-building sector, the heart of the military-industrial complex, has witnessed a steep decline. Russian military leaders are concerned about their ability to keep up with the outside world, particularly at a time of rapid technological change. That concern undergirds adamant resistance to any U.S. deployment of a national missile defense system. The Russians understand that the system would not directly endanger their deterrent force, but they are deeply worried about a technological breakthrough that would allow the United States to neutralize that force, arguably Russia's sole claim to Great-Power status.

The Russian diplomatic corps has fared no better. Budget cuts have greatly constrained its activities. The Ministry of Foreign Affairs is only beginning to recover from the loses it took immediately after the breakup of the Soviet Union, when many of its best officers, with excellent linguistic skills and knowledge of the outside world, left for more lucrative jobs in the private sector both in Russia and abroad. Russia, of course, still has a pool of superb diplomats, but most of them were trained during the Soviet period.

Making Less of Little

The declining capabilities alone would have diminished Russia's standing in the world. But Russia has fallen further because extreme political disarray has undermined Moscow's capacity to mobilize and wield these fewer resources effectively for national purposes.

The past decade in Russia has witnessed the privatization, fragmentation, and erosion of state power. With the sell-off of state property, asset stripping, and massive high-level corruption, the central state apparatus in Moscow lost its coherence and discipline. It slowly became the battleground on which rival elite coalitions struggled for both power and property. At the same time, power flowed out to regional elites, who adroitly exploited the disarray in Moscow to consolidate their own control over local politics and economic assets.

As far as foreign policy is concerned, these processes led to the emergence of new foreign policy actors with considerable clout on specific issues. Commercial entities, such as the gas monopoly Gazprom and Russia's leading oil company, Lukoil, have played major roles in setting Russian policy in the Caspian region and toward the CIS. Regional governments have set up foreign representations. Some have directly interfered in Moscow's relations with other states. The best known example is that of the Maritime Province, which delayed for several years the demarcation on its territory of the Russian-Chinese border under the terms of the 1991 USSR-China "Agreement on the Eastern Section of the Soviet-Chinese State Border."

Given the breakdown of government structures, it is not surprising that the government still lacks a well-defined decision-making process for foreign and security policy. There is no obvious place where the more traditional security concerns are coordinated with the increasingly important economic interests of the Russian state. Indeed, it is hardly clear where policy is made in the formal sense. The Security Council, which many have seen - mistakenly - as an analogue to the old Soviet Politburo, does not wield much power. It meets infrequently. Numerous reorganizations have effectively prevented it from playing any serious coordinating role. Suffice it to say, since January 1, 1996, seven men have held the position of Council secretary, with responsibility for organizing its work, and few of them have had much independent political standing or bureaucratic clout. Likewise, the Foreign Ministry is not sufficiently empowered to play this coordinating role. The confusion within the Ministry at the time of the dash by Russian paratroopers to Pristina last May underscores how it can be left out of key policy decisions.

In addition, the rapid turnover at the heads of key foreign and security policy institutions has not facilitated the articulation or implementation of a coherent policy. Since January 1, 1996, Russia has had five Prime Ministers, three Foreign Ministers, three Defense Ministers, two directors of the Foreign Intelligence Service, five Ministers of Finance, three heads of the Border Guards, four directors of the Federal Security Service (FSB), three Ministers of Internal Affairs, and five heads of the Presidential Administration. Until recently, the multiple frailties, both physical and mental, of the one man charged by the Constitution with overseeing Russian foreign policy, Boris Yeltsin, only further impeded the formulation and implementation of foreign policy.

In the end, it has often seemed that Russia did not have so much a foreign policy as a pattern of international behavior formed by multiple actors dealing more or less autonomously on a wide array of issues. Foreign policy in concrete cases became a function of who had assets to bring to bear on the problem. That explains the prominent role of the Ministry of Defense in the Caucasus and Transdnistr in the first years after the breakup of the Soviet Union. That explains the key role of Minatom in Iran, or Gazprom in Belarus and Ukraine, or Lukoil in the Caspian region, or the governor of Primorskiy Kray on the demarcation of the Sino-Russian border over the past few years. The Ministry of Foreign Affairs played most actively on those issues that were most cerebral or farthest removed from domestic politics and economic concerns, such as Nato expansion or relations with countries beyond the CIS. None of this has necessarily advanced national interests, but rather parochial or corporate interests masquerading as Russia's.

Foreign Policy under Putin

Now some would argue that I have painted an overly dismal picture of the state of Russia. I will admit that my view holds few bright spots for Russia. Indeed, last June I first laid out this position in a conference paper, which I entitled "A World without Russia," albeit with a question mark. Large parts of that paper were translated into Russian and published in the Russian press last December. I suspected then that my paper would be used as evidence of the growing anti-Russian sentiment in the West. So you can imagine my surprise when just a few weeks later Mr. Putin released a document that cited many of the indicators of Russia's decline that I did and spoke of the urgent need to rebuild the Russian state so that Russia could maintain its status as a major world power. My immediate thought was to charge Mr. Putin with plagiarism …

But the point is that the Russian political elite is now acutely aware of Russia's strategic weakness and, in particular, of the glaring and growing asymmetries in power between Russia and the United States. In line with Mr. Putin's thinking, the recently adopted national security concept also underscores the threat that internal decline and decay pose to Russia's security. There is nothing new in this, however. For several years, the Russian political elite has been deeply concerned about Russia's deep socio-economic depression. The old national security doctrine, adopted in December 1997, stated quite clearly that "the main [threats to Russia's national security] right now and in the foreseeable future do not have a military orientation and are of a predominantly internal nature and are concentrated in the domestic political, economic, social, environmental, information, and spiritual spheres."

What has changed is the attitude toward the outside world. In 1997, the Russian political elite still saw the outside world, and particularly the West, as relatively benign. Indeed, the 1997 version of the national security doctrine explicitly stated that "Russia is ... interested in fully equal participation in world, European, and Asian economic and political structures. Therefore, in its striving for mutually advantageous cooperation, the Russian Federation will continue to develop constructive partnership with the United States, the EU, China, Japan, India, and other states." In the latest concept, however, the outside world, and the West in particular, looms as a threat. In the opening paragraphs, it sharply contrasts Russia's effort to build a multipolar world in which economic and political factors play an increasingly greater role with the alleged effort of the West led by the United States' to dominate international relations through unilateral actions, often involving the use of force.

In the long term, dealing with these threats will require rebuilding Russia's economy. There is no other way. The Russian elite is well aware of this, and despite mounting concerns about the West, Russia continues to seek integration into the global economy and access to Western money, technology, and markets, which is critical to Russia's economic recovery. Rebuilding is a task for a generation or more. Mr. Putin himself has noted that the Russian economy would have to grow at a rate of 8 percent a year for fifteen years for Russians to obtain the standard of living Spain and Portugal enjoy today. And that would still leave Russia far behind the world's leading economic powers.

So the question arises: What to do in the interim? Two schools of thought have emerged on this matter among centrist politicians and foreign-policy analysts. The first, the neo-isolationists, argues that Russia must avoid conflicts and confrontations abroad at all cost. It would curtail Russia's foreign involvement, particularly in areas and on matters that do not promise either immediate solutions to pressing domestic issues or economic dividends. Russia's focus, for this school, must be on rebuilding the economy and society.

The other school, which enjoys greater support, advocates Russia's active efforts to build a multipolar world. To that end, Russia must play a visible role in world affairs, working with the other major powers to oppose what this school sees as the trend toward a unipolar world while maintaining Russia's position in various parts of the world for future purposes. This school finds instructive the foreign policy of Aleksandr Gorchakov, Russia's Foreign Minister of the mid-nineteenth century. He is being lauded for an approach that seems well suited to Russia's current situation, in this school's view. Despite Russia's stunning defeat in the Crimean War and its deep domestic troubles, Gorchakov - or so this school portrays him - pursued an active, multipolar policy that both maintained Russia's prestige as a major European power and, more importantly, created a breathing space for it to rebuild internally. In other words, acting like a Great Power created the conditions for Russia to rebuild the economic basis needed to back Great-Power pretensions.

In the short run, at least, that does not mean a more activist approach from Russia. The scarcity of resources dictates that Russia's foreign policy remain reactive. Moreover, as has been the case over the past few years, Russia's rhetoric will greatly exceed what it is prepared to do in practice. Nevertheless, Russia will be more vigorous in its efforts to prevent decisions from being made that could restrict its freedom of action in the future. This will be manifested in more vocal criticisms of Nato and Nato expansion, in efforts to undermine the U. S. pipeline strategy in the Caspian region, in greater advocacy of the United Nations, in increasingly harsh rhetoric about the dangers of a unipolar world, and in efforts to build anti-U.S. coalitions in East Asia and even Europe. But, as I have already noted, there will be limits to how far Russia will go in challenging the West, for Putin - and any other Russian president for that matter - understands that Russia needs the West in order to rebuild. The real challenge for Russia is going to be finding the proper mix of competition and cooperation with the West.

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Whether this approach will eventually restore Russia's standing in the world remains to be seen. The rest of the world is not going to stand still, while Russia rebuilds. Far from it. Indeed, what is striking about the world today is that Russia - or more precisely the former Soviet Union - is surrounded by regions, all of which are more dynamic, politically, economically, and demographically, than it is. Even though the Russian economy grew last year - around 2% - and even though it could grow at this rate for the next few years, Russia continues to fall behind the world's leading economic powers. As historian Paul Kennedy has noted, "the historical record suggests that there is a very clear connection in the long run between an individual Great Power's economic rise and fall and its growth and decline as an important military power." In other words, Russia cannot continue to produce 1-2% of global GDP and ever hope to regain its status as a Great Power.

Nevertheless, despite the Russia's obvious weakness and the obstacles to its recovery, Russia is not about to disappear from the world stage. What is more, it is likely to play a role that is well beyond what any objective assessment of its current power would warrant. The rest of the world is simply unwilling to contemplate a world in which Russia remains weak for a prolonged period or does not reemerge as a Great Power. That view attests to the continuing fascination with Russia's ability throughout the modern era to compete militarily with the other Great Powers despite its socio-economic backwardness. And it is based on the recognition that Russia has emerged from other periods of strategic weakness to reclaim its Great-Power status and that those who have underestimated its power or potential - such as Napoleon in the nineteenth century or Hitler in the twentieth - have paid a heavy price.

But perceptions will eventually catch up with reality. Time is running short for Russia to engineer a sustained economic recovery. Putin's first term, the next four years, may be its last chance. If Putin does not do noticeably better than Russia, then we might in fact be facing a world without Russia, without Russian power, and with all the geopolitical and geoeconomic complications that would entail.