Ariel Cohen and Richard Ericson have a new paper discussing Russia’s economic crisis and its relations with the United States. I would encourage reading this paper in full as it hits on all the major factors relevant to Russia’s economic situation though I will warn up front that a fair number of you will take exception to their interpretation of some of those factors. In addition there a couple of points that the authors have either overlooked or simply assumed readers would already be aware of that I think are worth spelling out briefly first.

The first has to do with the recommendations the authors make for US policy. I have no major disagreements with the recommendations themselves, but would argue that executing most of them depend on Putin being out of the picture, among other things.

Another point regards the China factor. As I have previously stated elsewhere on this blog, using transparent governance and/or human rights considerations as a negotiating lever with developing countries has decreasing effect in the face of regimes (China in this case) that are willing to make deals without any sort of lip service to such concerns. While Russia clearly needs more than just China’s business to remain afloat, we shouldn’t underestimate how much time such a dynamic can buy for governments the west considers to be less than cooperative.

My final observation has to do with the role of oil. The authors correctly acknowledge the linkage between the price of oil and the political leverage it affords the Russian state. I would take this a step further and say that one of the few absolutely predictable things for Russia’s near future is its reliance on oil, even if it begins taking steps toward reform now. Given this, as long as the price of oil remains high (”high” defined as whatever critical price point causes the Russian government to be less concerned with cooperation with the west), the tactical points of the authors’ recommendations for US policy will face more resistance from the Russian side. Is it possible to therefore have two strategy sets? One for “low” oil prices and another for “high” oil prices? After all, as the authors themselves note on page 8: “For now, the energy and state security lobbies are stronger than the reformers.”

Access the paper here.

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