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in.rbth.com Business ReportWEDNESDAY APRIL 16, 2014 RUSSIA&INDIA THE ECONOMIC TIMES IN ASSOCIATION WITH ROSSIYSKAYA GAZETA, RUSSIA DIPLOMACY: Economic rapprochement with the West will continue, but there won’t be blank cheques anymore STATISTICS After Crimea gamble, is Russian Ruble/Rupee dollar rates diplomacy heading for a new era? The Crimea standoff has underlined Moscow’s resolve to draw a line with the West over its vital security interests. Moscow will now be increasingly looking East to protect and promote its economic and geopolitical interests. DMITRY BABICH RIBR Stock Market Index oes Russia have a new diplomacy after its unilateral action in Crimea, Dwhich is seen as “occupation” by the Western powers and as “reunification” by a majority of the Russians and their allies abroad? There are two extremes in answering this question. One is to say that Moscow is trying to recover its old Soviet might, probably even beyond the borders of the former Soviet Union. The other extreme is to say that what happened in Crimea was an “unsuccessful improvisation” and things will soon be back to business as usual – with Russia grudgingly accepting the inclusion into the Western sphere of influence of ever new territories of Putin’s approval rating the former Soviet Union to the tune of talks about “expanding the zone of security and prosperity.” The truth, as always, is between the two extremes. Russia does not want isolation and exclu- sion from the international exchange of la- bour, capitals and knowledge, even though its foes in Euro-Atlantic and EU structures are AP happily tr ying to impose on it just this kind Bold Gamble: Russia’s President Vladimir Putin is poised for a tough diplomatic battle after the controversial Crimea reunification. of exclusion, suspending, for example, the right to vote for the Russian delegation at the Parliamentary Assembly of the Council of Europe. But Russia is not ready to pretend, occupation of the east of that countr y.” Gorbachev’s Soviet Union, which is widely unheard of since 2008. In Putin’s eyes, the as it did under Yeltsin, that it does not see So, despite Moscow’s assurances that its believed to have shed its totalitarian garb in Kiev story meant that the West has not learnt how a new belt of hostile regimes is created mission will limit itself to Crimea, there is late 1980s because of Ronald Reagan’s eco- the lessons from the failures of its previous around it by the West. a trend among some scholars and media nomic pressure. “revolutionary” allies – the now unpopular Russians on state power The operation in Crimea indicated, in the figures not to exclude an “Afghan option” In realit y, much of Russia’s desire in the former presidents of Ukraine and Georgia view of Rossyiskaya Gazeta, Russia’s desire for Eastern Europe, with the Ukrainian ur- 1990s and the early 2000s to have a new re- (Viktor Yushchenko and Mikheil Saakashvili). to draw the “contour of security,” i.e. to mark ban guerrillas being allotted the role of the lationship with Western Europe and the US, So, what will Moscow’s new line be? the territories which it considers to be of Afghan mujahideen. The major drawback of a relationship based on trust rather than on Of course, a total “turn to the East,” with vital importance to itself and where it won’t this scenario is that it does not suit any of the the “balance of fear” – much of that desire a 100-percent reorientation of Russia to ignore the creation of stable anti-Russian re- parties involved. It does not suit Russia for was genuine. It was not a result of economic Asian neighbours away from the estranged gimes and unlimited build-up of the West’s many reasons, including the economic ones: hardship or of a calculated strateg y aimed European relatives, is not possible. But there military presence. Ukraine is one such terri- will never be blind trust again, when in return tor y. “But it does not mean that Russia plans for geopolitical concessions Russia got lec- to become a new planetary rival of the US, There are some scholars who In Russia’s relations with the US tures why this or that bitter pill was actually stepping into the shoes of the defunct Soviet don’t exclude an ‘Afghan and European Union, henceforth good for her. Union,” says Fyodor Lukyanov, the editor-in- option’ for Eastern Europe, with security will be seen as an even Economic rapprochement with the EU and chief of “Russia in Global Affairs,” a Moscow- (to a lesser extent) with the US will continue, based monthly magazine on world politics. Ukrainian guerrillas acting as more important criteria than as soon as the current rhetorical tension in Not everyone is convinced, though. the Afghan mujahideen. profi tability. relations subsides. But security will probably On the type of state The first extreme is best exemplified by be seen as an even more impor tant criteria the veterans of cold war politics. For exam- than profitability. President Putin put it in a ple, Zbigniew Brzezinski, former national se- when the guns are speaking, pipelines are at exchanging “money for spheres of influ- metaphorical, but clear way in his speech curity adviser to president James Carter, sug- empty, and safe passage for its gas to the EU ence.” Boris Yeltsin expected Western fears on Crimea’s incorporation: “I simply cannot gested “providing assistance to Ukrainians, is a matter of vital importance for Moscow. of Russia to evaporate as the Soviet bloc’s imagine that we would travel to Sevastopol in the sense of weaponry,” if there is a But this scenario is also dangerous and unac- old bastions – GDR and Poland, Hungary to visit NATO sailors. Of course, most of them “significant local conflict” between Russia ceptable for the EU. As for Ukraine, even the and the Czech republic – changed hands. are wonderful guys, but it would be better to and Ukraine with “implications for the im- most belligerent elements in the new gov- Initially, Putin followed the same line in the have them come and visit us, be our guests, mediate neighbours to the west of Ukraine.” ernment are not delighted by the prospect early years of his rule, acquiescing to the rather than the other way round.” The former US ambassador to Afghanistan of becoming a battlefield for a new cold war expansion of the EU and NATO even into the So, no more blank cheques to Western and an old-time fighter against the Soviet between East and West. territory of the Baltic countries, formerly a partners. This privilege now goes to the presence in that region, Zalmay Khalilzad, As for Russia’s “isolation,” the West’s exag- part of the Soviet Union. But the second – Eastern ones, and, most probably, not to suggested “arming those forces in Ukraine gerated hopes about sanctions may stem and much more violent than in 2004-2005 all of them. That is the gist of Russia’s new which are capable of resisting the Russian from the questionable comparison with – “regime change” in Ukraine set off alarms, diplomacy. PERSPECTIVE general confrontation? Hardly. aren’t any simple oppositions or linear Russia is not the Soviet Union. It dependencies anymore. Big question: Does makes no claims on either world In which areas do our interests domination or ideological dominance. converge? There is the Arctic, where Moscow is drawing a line around what Russian and American interests are not Russia need US? it considers its vital (including Ukraine, so far apart. There is the issue of nucle- certainly), interests, and its actions ar non-proliferation, in which Moscow there will be non-negotiable. But its and Washington, whether they like it or goal in the international arena is not to not, remain the main players and carry simply oppose the US. However, this the primary responsibility. may be the way that Russia reminds But the most important thing is this. others about the line. In everything If Russia and the West divorce, which FYODOR LUKYANOV else, Moscow is not going to turn into is likely based on recent events, it will Foreign policy analyst an automatic opponent of the US. force Moscow to turn to the east even It is notewor thy that against the quicker, [a strategy] which has already background of the very emotional de- been announced at high levels. This, in estern politicians now un- and it will be time to get back to work. bate over Ukraine, chemical weapons and of itself, is the right thing to do, and derstand that, for the first What can we expec t in Russia’s rela- are still being removed from Syria on has even come too late. Wtime, Russia has decided tions with the US? And what do we schedule, and the Kremlin has not We can’t keep looking at the world to ac t as it sees fit, leaving no space actually need? changed its position on settling the through European glasses when the for compromise with Europe or the In Russia, it was thought for quite a Syrian situation politically, or on nucle- main stage has moved to Asia. China US, because Ukraine is so important long time that pursuing normal rela- ar talks with Iran. It is especially wor th sees its place in the world and the to Moscow that it is in no mood for tions with the US was valuable in and noting that Russia is not questioning its capabilities of the other partners as a formalities.

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