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Russian Subsidies to ‘Microstates’ in the Near Abroad Dr

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Russian Subsidies to ‘Microstates’ in the Near Abroad Dr Creating Allies: Russian Subsidies to ‘Microstates’ in the Near Abroad Dr. Randall Newnham, Penn State University [email protected] International Studies Assn. Conference, Las Vegas NV, April 2021 Abstract In recent years Russia has re-emerged as an important international player. Increasingly, Russia strives to dominate the former Soviet space, which it commonly refers to as the ‘near abroad.’ An important tactic in this effort has been the Kremlin’s use of a divide and conquer strategy against its neighbors. If a country defies Moscow, it may find that Russia helps to create a secessionist enclave in that country. This has happened in Moldova (Transnistria), Georgia (Abkhazia and South Ossetia), and most recently in Ukraine (Donetsk and Luhansk ‘People’s Republics’). While Russian military support can play a role in creating these enclaves, how can they be sustained? This paper will focus on the large array of economic subsidies which Russia has used to keep these statelets going, some for over 25 years. In this way the paper will demonstrate the reach of economic power: it can help to literally change the world map, by creating ‘allies’ which a powerful state can use to bolster its role in the world. This shows that, in the right circumstances, the most basic elements of statehood—control over borders and sovereignty—can be affected by economic aid. Introduction and Theory In this section of the paper we will briefly introduce the various ‘microstates’ which Russia has helped to create in the former Soviet space, which Russia often calls the ‘near abroad.’ We will then discuss how this paper will advance research on the role of economic linkage in International Relations, through showing how important various forms of Russian aid have been to the survival of these small states. 1 Transnistria, the first microstate to be created, provides something of a template for the other four statelets considered here. When Moldova broke away from the disintegrating Soviet Union in 1991, it was clear that republic would be dominated by the Moldovan ethnic group. Since Moldovans speak Romanian, some feared they might attempt to reunite the region with that neighboring country. The Moldovan Soviet Socialist Republic consisted of a larger portion on the western bank of the Dniester River, and a smaller portion on the east. The eastern area, while containing some ethnic Moldovans, was dominated by Russians and Ukrainians, who feared becoming a small minority in an independent Moldova. Accordingly, in early 1992 they rebelled, and after a brief war broke away to form what is now officially known as the Pridnestrovian Moldavian Republic. Russia aided this process by hastily sending a ‘peacekeeping’ force, thus protecting Transnistria from any attempts by Moldova to reincorporate the area. The two microstates in Georgia, Abkhazia and South Ossetia, originated about the same time and for similar reasons. As Georgia became independent, activists from the Ossetian and Abkhaz minority groups feared that they would be oppressed by the new government. Both groups had enjoyed special status in the Soviet period, with both having lower-level “Autonomous Soviet Socialist Republics” (ASSRs) within Georgia. Both feared losing that autonomy, and losing cultural and language rights. Accordingly, both rebelled and set up de facto independent states. Here, though, the conflicts ultimately became interstate wars, in 2008, when Georgia fought Russia for control of South Ossetia. At that point both microstates were able to expand their territories, expelling any remaining Georgians. And Russia then recognized these states diplomatically, a step it had never taken for Transnistria. 2 Finally, the two statelets in Ukraine, the Luhansk and Donetsk ‘People’s Republics,’ were more clearly engineered by Moscow from their beginnings in spring 2014. There were already important political divisions between the Donbass region and the rest of Ukraine. Before 2014 that region strongly supported the party of the pro-Russian Ukrainian leader, Viktor Yanukovych.* Also, the region contained many more Russian language speakers than central and western Ukraine.* Yet until 2014 support for secession was vanishingly small in the Donbass.* Then Yanukovych was overthrown, and suddenly demonstrations erupted in the region, often seemingly steered by Russian agents, and sporting suspiciously well-printed flags for the new ‘People’s Republics.’ Here too, as in Transnistria and the Georgian microstates, Russian military aid was instrumental in the initial creation of the states. In the summer of 2014 Ukraine came close to reconquering both regions, until in August the Russian military intervened, preserving and extending the borders of Donetsk and Luhansk. Yet how can these microstates continue to exist, in the case of Transnistria for over 25 years? Why have they not gone the way of Biafra or the Confederate States of America, secessionist enclaves which were soon defeated and absorbed back into their home countries? As we shall see, in addition to direct or indirect military support from Russia, a wide variety of economic instruments has been vital in protecting these states. Russia has given huge sums of outright monetary aid to the microstates. It has opened its market to their products. It has subsidized the statelets’ energy supplies. It has treated their citizens as Russian subjects, giving them the right to work in Russia and to receive Russian social benefits and pensions. All of this aid has been vital to win over the populations of these states, keeping them friendly to Moscow. It has also enabled the microstates’ leaders to continue to defy attempts by Georgia, Moldova, and Ukraine to reincorporate the regions, making that alternative look unattractive by 3 comparison. As we shall see, this successful effort has been important in the Kremlin’s eyes, helping to solidify Russia’s role as a Great Power on the world stage. None of the microstates discussed in this paper has any ability to survive on its own economically. Transnistria, for example, with 469,000 citizens,* makes little sense geographically—it is a thin strip of land, wedged between Moldova and Ukraine, far from its sponsoring country, Russia. It is poor, lacking in natural resources, and has only several large, very outdated Soviet-era factories to sustain it. The other four microstates at least border on Russia, making trade and travel somewhat easier. Yet still none of them are economically viable. Perhaps the most extreme case if that of South Ossetia, which has barely 50,000 inhabitants. Lacking resources, a manufacturing base, and tourist potential, it is hard to see how this tiny enclave could function without large amounts of aid. Abkhazia is somewhat larger (240,000 inhabitants) and has historically been a vacation destination for Russians due to its location on the Georgian coast. This also gives it shipping ports. Donetsk and Luhansk have the largest population of any of the microstates (about 2.3 and 1.4 million, respectively) and have resources of coal and heavy manufacturing facilities. Yet they too would quickly fail without significant outside aid. For all the diversity in these states’ economic positions, all are clearly reliant on outside help, especially since they all have similar problems as unrecognized microstates. How can they hope to raise any funds from the outside world, which does not recognize their existence? Which currency should they use? How can they buy and sell their products, when they are not considered legitimate trading partners by most states? How can they fund the expense of perpetually guarding their insecure borders? After all, each faces a hostile ‘mother country’ (Moldova, Georgia, Ukraine) which would like to reclaim them. And each of those countries 4 does enjoy international recognition. Thus they can legitimately buy weapons, take out loans, and buy and sell products abroad—advantages which make it difficult for the microstates to compete. Why is this paper important to International Relations theory? There has long been a lively debate over the effectiveness of economic aid and economic sanctions in foreign policy. Critics contend that these instruments are rarely effective. If they do sometimes work, it is argued, then mainly in disputes over secondary issues, not those of great importance in world affairs. In their study, often held up as the most comprehensive in the field, Hufbauer et al (2007) estimate that economic leverage works in at most one-third of their cases. Many other studies have focused on specific cases in which economic means seem to have failed, including Western sanctions against Iraq before 2003, Cuba, North Korea, Iran, Libya, and the former Yugoslavia (cites*). Just as sanctions are often criticized as ineffective, so too is economic aid. Is it not possible, critics wonder, for states to simply pocket aid and then do what they please, defying the state providing the funding? Or for states to play the field, taking aid from several states? For example Egypt, from the 1950s to 70s, seemed to be able to manipulate both the US and USSR, taking aid from the two blocs while remaining politically independent from them.* This paper will attempt to add to the literature on economic sanctions and incentives by employing a ‘least likely case study’ approach, as outlined in George (2005). What are the most basic and important aspects of International Relations? If it can be shown that economic aid or sanctions—not only military force--can impact such important areas, that would help to establish that economic ‘weapons’ are, indeed, important instruments of international power. In past works I have attempted to make that case in several different ways. For example, I have looked at cases in which states seem to be willing to bargain away their programs to create Weapons of 5 Mass Destruction (WMDs) in return for economic benefits. Libya gave up its programs during the Qaddafi period (Newnham, 2009).
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