Russia of Transformations

Russia of Transformations Finland Eteläinen Makasiinikatu 8 PO BOX 31, FIN-00131 HELSINKI FINLAND www.defmin.fi ISBN: 978-951-25-2432-7 pdf ”The highest and most sharply characteristic trait of our people is a sense of justice, a thirst for it [...]. One needs only to remove the exterior, superficial shell and look more closely and carefully at the kernel itself, without prejudice, and one will see in the people such things as one had never anticipated. There is not much that our wise men can teach the people. I will even say positively, to the contrary: they themselves have yet to learn from them.” Fyodor Dostoyevsky, Notes from the House of the Dead. (1861-1862.) Preamble ........................................................................................................................ 1 Summaries by the thematic working groups: Russia in the 2010s ................................. 4 Russia’s foreign, security and defence policy ............................................................. 7 1. Introduction ........................................................................................................... 9 2. The Russian strategic culture ................................................................................. 9 3. Defending the sovereignty of a superpower: a principle of Russian foreign policy ....................................................................................................... 11 4. Four trends in four geographical directions ......................................................... 18 5. Summary .............................................................................................................. 27 List of sources.............................................................................................................. 29 The Russian defence industry and its development guidelines until 2020 ........... 31 1. Introduction ......................................................................................................... 33 2. Russia’s defence industry in the 2000s ............................................................... 34 3. The objectives of the arms programme ............................................................... 39 4. Critical variables................................................................................................... 42 5. Conclusions ......................................................................................................... 53 Sources ........................................................................................................................ 55 Social stability ............................................................................................................ 61 1. The protest movement 2011–12 and ‘Putinesque’ stability ................................ 62 2. Stability and its background factors .................................................................... 63 3. Possible developments and their effect on Finland ............................................. 73 4. Models for future development ........................................................................... 76 Literature ............................................................................................................. 81 The potential for crisis in Russia and the Commonwealth of Independent States (CIS) ........................................................................................... 83 1. Introduction: from protracted conflict to the gas crisis – the current potential for crisis in Russia and the Commonwealth of Independent States (CIS) ............ 84 2. How Russia views its neighbours: differences and similarities ............................ 85 3. Potential crisis factors in relations between Russia and the CIS countries .......... 87 4. Economic relations between the CIS countries and Russia ................................ 102 5. Conclusions: the significance of the potential for crisis in Russia and the CIS countries, and its effects on Finland and the European Union .................... 108 4 Preamble The reader is holding the second, more comprehensive study on developments in Rus- sia commissioned by the Ministry of Defence. The first, published in 2008, focused on society and domestic politics, the economy, traffic and transport, the environment and energy, and foreign and security policy. At the time, this project represented a new approach. Extensive use was made of expertise outside the defence establishment, while reports submitted for publication were drawn up by thematic working groups, based on the preliminary research question and their own work. From the Finnish security perspective, the ‘Russia of Challenges’ publication demonstrated a clear need to gather knowledge on Russia produced, analysed and processed in a practical manner. Three editions were published. Of these, around 13,000 copies in Finnish and 2,700 in English were downloaded from the internet. Over a period of four years, developments in both Russia and the international community have once again created the need for a survey of Russia by Finnish experts and specialists in various fields. Dmitri Medvedev and Vladimir Putin have exchanged roles at Russia’s highest political level. In the same period, Russia and Georgia have engaged in a brief war, while Barack Obama’s election as US President has failed to reset Russian-US relations. Re- lations with NATO have been strained. Russia’s economy continues to grow, but is de- pendent on trends affecting raw material prices on the global market. Terrorism within the country has not been subdued, and security problems along Russia’s southern bor- ders are an almost every day event. In its defence doctrine, Russia’s military doctrine still rests on nuclear deterrence, while the country continues its vigorous efforts to reform its armed forces. Russia is still heavily investing state resources in military security, its rhetoric in this area having at times hardened. Economic productivity, however, presents obstacles to many of its objectives in this respect. The recent, more-outspoken censure of the country’s political leadership has been particularly worthy of note. Suspected election abuse has provoked strong reactions; President Putin has been the main target of regularly held demonstrations where people have called for his resignation. Correspondingly, the political opposition’s freedom of action has been curtailed, for example by arresting participants in demonstrations. The country’s political leadership is no longer able to monopolise the media; people and organisations active in the social media have been able to get their message across. It is clearer than ever, then, that Russia is going through a period of dramatic change. Finland’s academic community and private sector, as well as its public authorities, of- fer a great deal of expertise on Russia. However, the conclusions drawn, and the process of collecting and analysing information through collaboration between such organisations, have often been inadequate. While knowledge of Russia may have helped to answer the internal needs of organisations, insufficient knowledge has been accumulat- ed. Furthermore, studies of Russia related to so-called ‘hard security’, which are crucial 1 to the defence establishment, have been regrettably few in number. In some instanc- es, there has been reluctance, or at least a dearth of skills, when seeking to exploit op- portunities to improve this situation. For these reasons, it can be seen that this Rus- sia project, which is very timely and has a particular focus on security issues, answers a genuine need for information. The project was coordinated by Terhi Ylitalo and Janne Helin, both Senior Advisors at the Finnish Ministry of Defence. ‘Russia of transformations’ concentrates on four main themes: 1. Russia’s foreign, security and defence policy 2. the war economy, the economy and energy policy 3. social stability 4. the potential for crisis in the Commonwealth of Independent States (CIS) For the defence administration, the war economy, in particular, represents an inter- esting perspective and a somewhat neglected theme. In specific terms, the main challenges in the development of the Russian armed forces can be found in the productivity of the war economy, innovation and expertise, and research and development compe- tencies. In addition, the reform of Russia’s armed forces will depend on strong economic growth, both now and in the years to come. But the defence administration requires more than an analysis of the war economy. Naturally, it also needs an up-to-date analysis of factors critical to Russia’s security, i.e. foreign relations and society, and the potential for crisis in the CIS countries. This publication, Russia of Transformations, summarises the work of the thematic working groups over six months. Such work was challenging: expertise is dispersed, be- ing vested in individuals rather than entire organisations. Although not all experts were able to participate in the group work, they produced sections of text and commented on the output. Various challenges are inevitably associated with this type of approach – it is worth noting that those involved arrived at some highly creative solutions to sup- plement the available expertise. Also noteworthy is the fact that the process consisted of three joint events and the groups’ own meetings, equivalent to around 2-3 days of time spent. We would like to express our gratitude to the experts in various

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