Russian-EU Relations: From Rhetoric to Partnership? Tassos Fakiolas and Efstathios Fakiolas Argue That Russia and the European Union Are Currently Standing on the Edge of Deciding Whether or Not They Should Develop a Strategic Partnership

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Over the last three centuries, Russia was one of the most influential actors in Eurasian and world affairs. Especially in the immediate aftermath of the Second World War, it proved able to evolve into the sole leading power in Eurasia in military, political, and economic terms. At the same time, on the global stage, it and the United States were the world's super-powers, as they were called. However, in the last decade of the 20th century, following the breakup of the Soviet camp and the disintegration of the Union of Soviet Socialist Republics, the situation changed in a radical and dramatic way.

Specifically, because of negative rates of growth between the years 1990 and 1996, the real level of Russia's gross domestic product (GDP) was estimated to have fallen, in comparison with that of 1989, by 43 per cent. In 1998 Russia was nearly bankrupt. Even with the boost of the past five years, its GDP today represents only 70 per cent of the Soviet Union's. (1) On the whole, with a GDP of nearly $450 billion in market prices and per capita income of around $3000, Russia has an economy equivalent in size to that of the Netherlands or to one-third of China's. Also, it has a level of prosperity that is 20 per cent higher than Romania's and a development status similar to that of Brazil. What is more, in 2002 Russia's GDP amounted to $8490 in purchasing power parity terms, as compared, for example, to $6976 of Romania. More than 80 per cent of all exports are natural resources-based, of which nearly 60 per cent are oil and gas. (2) It is worth noting that 20 years ago the share of fuels, including coal, was less than 53 per cent, while the natural resources-based exports stood at 62 per cent. (3) Clearly, reliance on natural resources, in particular on oil and gas, has not been reduced. Rather, it has heightened substantially. This owes much to the fact that many industrial sectors, like the civil aircraft industry, have shriveled up and practically died out.

Abundant problems

Russia has inherited from the Soviet Union abundant problems, most of which have been either neglected or addressed ineffectively and superficially. Remedying Russian structural weaknesses will require decades and trillions of dollars. Scarcely surprising, Russia's average age of plant and equipment in the manufacturing industry is roughly three times higher than the OECD average of six years. And the scale of capital needed for reequipping and refurbishing infrastructure is not in sight. The country is attracting less than half of one per cent of the world's foreign direct investment. (4)

To this should be added the fact that Moscow can hardly fund competent and efficient armed forces in the long run. Its military command and control system is on the verge of collapse as a result of the combined effect of aging systems and severe economic hardship. It has also shut down its military bases abroad, namely in Cuba and Vietnam. Early in 2003 it announced that it intended to scrap one-Fifth of its fleet just because it was too costly to maintain and modernise it. (5) Under these circumstances, a critical question arises: what are Russia's grand strategic choices?

Russia is no longer a super-power. Nor is it a major leading power in Europe and Asia. New countries like India and Brazil have emerged, upgrading the part they play in the international and regional arenas by capitalising better on their vast human and natural resources. There is no denying that Russia today is not in a position to re-establish the Soviet Union. Nor does it have the choice of restoring the Soviet sphere of influence in one form or another. In reality, if Russia set out to go it alone, the possibility of it enhancing its great power status would be almost nil. (6) Rather, should it seek to stake a claim for a leading role in the world scene, it will have to choose between two basic alternatives: to form a leadership coalition with one of the United States, China, and Japan or to forge a strategic partnership with and integrate itself into the institutions of the European Union. …