The rebirth of Russian power

Recent leaders of the lone superpower, the United States, are increasingly criticised for allowing the economies of East Asia to hollow out its industry, siphon off much of its technological superiority and build a dangerous American dependency on imports and financial borrowings from East Asia.

Will they soon be criticised for allowing a much diminished, erstwhile major rival, Russia, to make the most unlikely comeback after the disintegration of the Soviet Union in 1991? Will they be criticised for allowing the American military industrial complex to lag behind the military technology of its old adversary and for being inept in developing and preserving America’s own strategic alliances?

Although President Yelstin is widely disparaged, having left Russia largely defenceless before both domestic and foreign predators, he seems to have been astute in at least two areas. He appears to have maintained qualities of the highest excellence among elite intellectuals guiding the defence technology industry and to have chosen most shrewdly in identifying his successor.

With Yelstin’s stepping down on the eve of the year 2000, Russia entered the 21st century under astute, resolute and energetic leadership. Vladimir Putin, with some good fortune in energy markets, has re-established the financial viability of the Russian economy and has built a global network of practical and productive partnerships.

In contrast, as the lone superpower has become mired in quagmires of its own making in Iraq and Afghanistan, the productive capacity of its economy has further withered and it has become increasingly isolated, with possibly only the United Kingdom and Israel as substantial allies. Even Japan has been drawn into a relationship with Russia that may offer its best prospects of reliable energy supplies in the case of growing tensions in the Middle East.

Moreover, despite its run-down condition, the Russian military retains a major asset in its defence industry, with the Russian Federation inheriting the bulk of the Soviet defence industrial complex after 1991. In his May 2003 State of the Nation Address, Vladimir Putin spoke with confidence of strengthening and modernising Russia’s nuclear deterrent by creating new types of weapons which will “ensure the defence capability of Russia and its allies in the long term”.

Yet some publicly available information suggests that, in critical areas of military technology - ranging across tanks and armoured fighting vehicles, military helicopters, fighter planes, surface to air missile systems, cruise and ballistic missiles and aerospace - Russia is already an established and powerful entity producing state-of-the-art equipment. Indeed, its products often compare favourably in both technology and cost with those of the United States.

As a consequence, Russia is the world’s second largest arms exporter after the United States, with exports increasing 15-fold between 2002 and 2005. Weapons export, after oil and gas, has been a major way for Russia to earn hard currency. Further, it has developed productive military industrial development partnerships with China, India and Israel to overcome problems related to limited development and manufacturing capital.

Even the constraint of capital has become less critical as oil revenue has made the Russian Central Bank one of the five largest dollar reserve holders at over $270 billion. This provides a powerful base from which to resurrect an army, navy and air force that many have written off, while also, if appropriate, exercising discreet pressure on a near bankrupt United States through currency markets.

Perhaps most importantly, Russian arms sales are not just a source of income but a way of spreading influence. Major arms sales are intricate politico-economic deals, where confidence between the buyer and the seller is paramount.

Iran and Venezuela know the vulnerability of states that lose favour with the US and are unable to procure spare parts or upgrades for weapons systems. This has provided opportunities for a non-confrontational Russia to promote itself as respecting national sovereignty and as a more reliable supplier than the US.

In addition, if its technology is comparable or superior and its costs lower it becomes a win-win situation for all parties that will no doubt attract new partners.