Academic journal article Independent Review

A New "Cold War"?

Academic journal article Independent Review

A New "Cold War"?

Article excerpt

The collapse of the Soviet Union changed Russia's international status dramatically; the country lost its global power status overnight and soon afterward suffered international humiliation when the government defaulted on its debts in 1998. Therefore, it should come as little surprise that a Russian nationalist lamented the USSR's demise as a "major geopolitical catastrophe." (1)

Russia enjoyed a substantial economic rebound following the 1998 debacle, however, and its leaders regained confidence. Moreover, Russia was admitted to the Group of 7 (which was therefore renamed the Group of 8). Although President George W. Bush afforded his Russian counterpart a special relationship, Russian leaders soon began to challenge U.S. supremacy in words and deeds.

President Vladimir Putin blamed a "unipolar world" for "an almost uncontained hyper use of force--military force--in international relations ... that is plunging the world into an abyss of permanent conflicts," and he concluded his tirade by saying, "One state and, of course, first and foremost the United States, has overstepped its national borders in every way" (2007c). His successor, Dimitry Medvedev, did not want to be outdone and off, red the following counsel: "The world cannot be run from one capital. Those who refuse to understand this will only create new problems for themselves and others." In this address, the new president also proposed turning Russia into a leading financial center and boosting "the ruble's role as one of the currencies involved in international payments" (Medvedev 2008a). This statement was a prelude to an overt attack on the U.S. dollar's role in the world economy at the June 2009 meeting of Brazil, Russia, India, and China held in Yekaterinburg, Russia (Halpin 2009). (2)

Russia has also taken specific steps in the military sphere; today, Russia's strategic bombers again patrol both U.S. coasts, and its navy conducts exercises in the Caribbean. Moreover, the Kremlin invests heavily in upgrading its strategic nuclear arsenal, a weapons system useful only in a global confrontation. These actions clearly indicate that the brief war with Georgia in August 2008, the maintenance of a military presence in Transdniestria in contravention of an earlier agreement, and the attempt to incite Kyrgyzstan into shutting down U.S. operations at the air base in Manas are not merely efforts to control the "Near Abroad," but integral parts of a strategy to regain a global power status. Indeed, President Medvedev (2009a) seems to believe that Russia never lost this international standing. (3) Putin and Medvedev now behave in a manner similar to that of the leaders of the Soviet Union, and some observers perceive that the world is sliding into a new "cold war."

In this article, I analyze Russia's potential to regain a global power status. Ray Cline (1975) identifies several key features that determine a nation's weight in the international arena: economic strength and technological advancement; demographic vitality and ethnic cohesion; military expenditures and power; and political factors. Overall, with very few exceptions (nuclear arsenal, size of territory, and production of raw materials), present-day Russia possesses no assets that would equip it to play the role of a global power and enable it to challenge the United States.

Economic Performance

Following the 1998 crisis, Russia enjoyed a significant economic turnaround, including a robust economic growth and a very high surplus in the balance of trade (table 1). Anders Aslund (2004) believes that fiscal reforms and partial economic liberalization introduced by Putin brought about the turnaround. Marshall Goldman (2004) and Philip Hanson (2004) stress, respectively, the effect of the ruble's real depreciation and rapidly increasing energy prices. The World Bank (2009) finds that capital inflows and access to low-cost external financing played an important role, too. …

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