SELECTIVE CAPITALISM AND KLEPTOCRACY
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INTERNATIONAL INFLUENCE

Russia has shown an increasing willingness in recent years to exert influence beyond its borders through a combination of hard and soft power. These efforts have had the greatest impact in neighboring countries, where their effect on democratic development can be charitably described as ranging from neutral to negative.

The five-day war between Russia and Georgia in August 2008, which saw Russian forces come within easy striking distance of Georgia’s capital before withdrawing to buffer zones around the Russian-backed separatist enclaves of South Ossetia and Abkhazia, was Moscow’s first major military incursion into a foreign country since the Soviet invasion of Afghanistan in 1979. Understandably, it gave rise to much talk of a “resurgent Russia” eager to reassert direct influence over the more ornery corners of the former Soviet Union, of which Georgia was the shining example. But the invasion was atypical. And while it came as a potent signal that Russia is willing to use military force abroad when it sees a domestically justifiable pretext and suitable international conditions, and that it is capable of dealing effectively with a small opponent, the spectacle of Russian tanks on the outskirts of Tbilisi should not detract attention from the wide-ranging if less spectacular efforts Moscow has made in recent years to exert international influence through nonmilitary means.

Those efforts have taken the forms of multivector diplomacy, political interference, financial leverage, energy blackmail, and strategic communications. And they have unfolded, with considerable interplay and significant variation, in four main arenas: the former Soviet Union, the community of developed democracies, what was once called the Third World, and various international organizations.

The mechanisms of Russian influence in the former Soviet Union are interference in domestic politics, financial leverage, energy blackmail, and strategic communications, all aided by the strong shared legacy of the Soviet experience. Most members of the post-Soviet elite in Central Asia and the Caucasus were educated in the Soviet Union, speak fluent or nearfl uent Russian, and feel far more comfortable in a Russian cultural environment than in any other foreign setting. Millions of ordinary citizens share similar feelings. This common legacy gives rise to myriad formal and informal ties between Russian and post-Soviet elites, and it underlies receptivity to Russian messaging. Independence has also been bittersweet for many, often serving as the perceived handmaiden of greater oppression and impoverishment; nostalgia for the Soviet period is therefore not uncommon. Finally, Russia’s recent economic growth has fueled impressions that Moscow might represent a viable model for emulation.

The most striking example of Russian interference in a domestic political contest in the “near abroad” took place in Ukraine, where the Kremlin provided direct rhetorical and financial support to Viktor Yanukovich in 2004 and sent an army of political consultants to aid his presidential campaign.12 The effort was, in sum, a failure, and it has not been repeated. Subsequent support for pro-Kremlin political forces in the former Soviet Union has been less blatant, in part because political competition is rare in the almost uniformly undemocratic nations of Central Asia and the Caucasus. Nevertheless, Russia has bankrolled political movements for Russian speakers in the Baltic states and provided subtle backing for suitable candidates in Kyrgyzstan’s power struggles since the 2005 ouster of President Askar Akayev.

Moscow is able to bring financial leverage to bear through direct investment, debt adjustments, and control over the flow of migrant labor. Russian direct investment plays a significant role in the economies of Armenia, Kyrgyzstan, Tajikistan, and Uzbekistan. An adjustment of Tajikistan’s sovereign debt to Moscow was instrumental to the conclusion of a 2004 agreement that gave Russia control over the Nurek space-surveillance station and a stake in the Sangtuda hydroelectric plant.13 More recently, a package of financial incentives to Kyrgyzstan totaling more than $2 billion coincided with that country’s February 2009 decision to expel U.S. forces from their air base at Manas. And at moments of conflict with Georgia and Moldova, Russia has sent home large numbers of migrant workers from those countries, squeezing economies that are dependent on remittances.

  Official Position Strategic Industry Link
Sergei Ivanov First Deputy Prime Minister United Aircraft Corporation (UAC) Board Chairman
Viktor Ivanov Aide to the President; Deputy Head of the Presidential Administration; Former Deputy Director of the Federal Security Service (FSB) Chairman of Aeroflot and Almaz-Antei
Viktor Khristenko Minister for Industry and Trade Transneft Board Chairman; Gazprom Board Member; Former Director at Unified Energy System of Russia; Former Director of Jsc Russian Railway
Alexander Kozlov Former Deputy Chief of Administrative Board of the President Deputy Chairman of Gazprom’s Management Committee
Dmitry Medvedev* President of the Russian Federation Former Gazprom Board Chairman
Alexei Miller Former Deputy Minister of Energy Gazprom’s Chief Executive
Elvira Nabiullina Minister for Economic Development Gazprom Board Member
Sergei Naryshkin Chief of Staff of the Presidential Executive Office Sovkomflot Board Chairman; Rosneft Deputy Board Chairman; Former Board Chairman Channel One Television
Igor Sechin Deputy Prime Minister Rosneft Board Chairman
Sergei Sobyanin Deputy Prime Minister and Government Chief of Staff Former TVEL Board Chairman; Channel One Television Board Chairman
Igor Yusufov Special Envoy of the Russian Federation President for International Energy Cooperation; Ambassador at Large of the Russian Federation Ministry of Foreign Affairs; Former Minister of Energy Gazprom Board Member
Viktor Zubkov First Deputy Prime Minister Gazprom Board Chairman
* Dmitry Medvedev served as chairman or deputy chairman of Gazprom from 2000 to 2007, during which time he also held the positions of first deputy chief of staff of the Presidential Executive Office, chief of staff of the Presidential Executive Office, and first deputy prime minister. As president of the Russian Federation since 2008, Medvedev no longer serves as Gazprom chairman.

Russia remains a hub for gas exports from Central Asia and the main supplier of natural gas to Ukraine and Belarus, giving it substantial leverage over those countries. The flow of gas to Ukraine was cut in 2005, ostensibly due to a pricing dispute; however, it occurred after the ascent of Yanukovich’s rival, Viktor Yushchenko, to the presidency, and the move was widely perceived as punishment for Ukraine’s political choice. Moscow turned off the tap to Belarus in 2007 in the course of another pricing dispute, and cut off oil shipments to Lithuania on several occasions in attempts to acquire assets there.14

Finally, Russian-language media remain influential in the former Soviet Union, most notably in Central Asia. Russian state television is available in most of these countries, and Russian-language websites are for many residents a broader and more accessible source of information than those in the vernacular. Interestingly, the fact that viewers and readers are able to consume Russian media directly means that there are fewer opportunities for the Kremlin to design messages specifically for Russian-speaking audiences outside Russia. Nevertheless, those audiences live in media environments where Kremlin spin often drowns out other foreign, and even domestic, voices.

The main mechanisms of Russian influence among the leading developed democracies are multivector diplomacy and strategic communications. Multivector diplomacy is most closely associated with Kazakh president Nursultan Nazarbayev, who has encouraged the competitive courtship of different world powers to maximize his country’s influence and standing. The Russian variant entails maneuvers along both sides of a given international fault line in an approach one might term “being part of the problem in order to be part of the solution.” In Iran, for example, Russia is building the Bushehr nuclear power plant and maintains close ties with the regime while providing on-again-off-again support for international efforts to end Iran’s bid to develop a nuclear weapon. In the Middle East, Russia has ambitious plans to sell arms to Syria (along with Iran) while at the same time taking part in regional peace initiatives.

Russian strategic communications in the developed democracies take the shape of international broadcasting and public relations. Russia Today, a satellite television station with a $30 million annual budget,15 offers programming in English (and Arabic). The channel mixes sophisticated production with a resolutely upbeat tone on Russia’s image and an invariably pro-Kremlin take on political events. The Kremlin has also retained high-profile public relations firms based among its target audiences, most notably during the Group of Eight summit in St. Petersburg in 2006. Finally, the Institute for Democracy and Cooperation, a Russian organization that opened an office in New York in 2008, bills itself as an independent think tank funded by corporate donations. It positions itself as a critic of U.S. democracy and seems designed to advance a pro-Kremlin agenda, although it has maintained a low profile in its first year of operation.

In the developing world beyond the former Soviet bloc, Russia relies on multivector diplomacy, financial leverage, and strategic communications. The first two elements usually go hand in hand, with financial leverage frequently taking the form of weapons sales to countries seen as hostile to the United States and its allies, as in the above-noted cases of Syria and Iran. Venezuela, another country that has strained relations with Washington, signed weapons contracts worth more than $4 billion with Russia in 2005–07.16 Russia has also shown a willingness to engage nonstate partners that are shunned by many other governments, such as Hamas.17 Furthermore, Russia Today broadcasts in Arabic throughout the Arab world, as well as on the internet, and the radio station Voice of Russia is, according to its website, available in 32 languages in 160 countries.

Moscow’s strategy in international institutions is twofold: in institutions where Russia must work with the developed democracies, it has pursued a policy of multivector diplomacy and attempted to frustrate democracy promotion; in regional institutions, it has promoted an alternative framework for cooperation based primarily on national sovereignty and the shared interests of undemocratic ruling elites. In the United Nations, Russia has made its support for sanctions against Iran contingent on the overall state of its relations with the United States and the European Union. In the Organization for Security and Cooperation in Europe (OSCE), which has long vexed Russian and other post-Soviet rulers with observation missions that train an unsparing gaze on flawed elections, Moscow has pushed hard for “reforms” that would shift the OSCE’s focus from democracy to security cooperation, and moved to curtail outside observation of Russian elections.18 In the Shanghai Cooperation Organization (SCO)—which brings together China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan—Russia has worked successfully with China to internationalize the theory behind “sovereign democracy,” promoting absolute sovereignty as a guiding principle in world affairs.19 The practical result tends toward security cooperation between authoritarian states and punitive legislation codifying the sweeping, illiberal interpretation of “extremism” that underpins the SCO’s guiding philosophy.

Three aspects of this broad effort to exert international influence are particularly noteworthy. First, its success has been spotty. Russia has succeeded in establishing mutually convenient arrangements with a number of undemocratic regimes, stoked low-level rhetorical confrontation with the United States and its allies, embroiled itself in a hot conflict with Georgia, and embarked on a public-relations offensive, but it is hard to see how this adds up to vastly expanded influence, or even a coherent foreign policy. Second, Russian efforts have come amid an ascendant antidemocratic zeitgeist in much of the developing world; Russia’s role in this trend is as much follower as leader. And third, the Russian push for influence relies greatly on financial muscle derived from high oil and gas prices. Prices have fallen sharply in recent months as part of the global economic crisis, which has caused Russian stock exchanges to plunge and Russian companies to seek help from the government. How this will affect the Kremlin’s international maneuvers remains to be seen.

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June 4 2009 EVENT
On June 4, 2009, a high level conference in Washington DC launched the "Undermining Democracy: 21st Century Authoritarians" study.
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