The Obama administration seems to believe that Vladimir Putin should not be taken too seriously. The annexation of Crimea and belligerence over Ukraine are, to quote the president and his secretary of state, a sign of “weakness,” the hallmark of a “regional” power stuck in “the old ways of doing things,” leading no bloc of nations and having “no global ideology.” These assumptions may be comforting rationales for a lack of response to the Kremlin’s recent moves, but they misread the game Putin is playing—and underestimate its significance.
One way the Kremlin advances its interests is by making other states reliant on its money and markets, approaching each country according to its unique vulnerability. Britain, for example, has wedded itself to a development strategy of becoming the capital of global finance, so Russia keeps its money flowing into London to help keep the economy purring
The London Stock Exchange, whose regulations are looser than those of the US, is perceived as a more hospitable place for Russian companies, more than seventy of which are listed and traded there, with companies from the former Soviet states raising $82.6 billion in the past two decades. And that’s just the transparent money. Much more is thought to flow from Russia to London through the UK’s network of murky offshore zones such as the British Virgin Islands. According to the British Financial Services Authority, approximately one-third of UK banks appeared willing to endure “money-laundering risk if the immediate reputational and regulatory risk was acceptable,” an attitude which has led London to be nicknamed “the money laundering capital of the world” by the satirical magazine Private Eye. “I’ve regularly told the UK Financial Services Authority to investigate Russian state companies in the UK,” says Vladimir Ashurkov, head of the Moscow-based Anti-Corruption Fund, “but they never do: at one point you realize
it’s a question of political will.”It is true that Russia is relatively weak compared to the Soviet Union, to which its current leader looks back with nostalgia. It faces demographic problems, its economy (the eighth-largest in the world) is flatlining, and its military spending is only a sixth of America’s (though still the third-largest in the world, and growing). But today’s Kremlin has seen something: in the globalization and interdependence of the twenty-first century, it’s how you use your relative weakness that counts.
If Europe’s far-right, pro-Russia parties gain in upcoming national elections, the EU may divide further and find it very difficult to deter Russian aggression in Ukraine and elsewhere.
The UK is addicted to these financial flows not because the amounts are huge, but because clamping down on the Russians would signal that London was willing to surrender its position as global financial capital for larger principles. The Kremlin is aware that the British will not take such a stand. “The UK should not support for now, trade sanctions . . . or close London’s financial center to Russians,” one of the British government’s key security advisers wrote in a strategy memo accidentally leaked to the press during the crisis over Ukraine.
On the continent, it is energy, not money, that is Russia’s great trump card. Since the annexation of Crimea, companies entangled in Russia’s energy market, including Germany’s BASF and Italy’s ENI, have been vocal in opposing EU sanctions against Moscow. But while Russia positions itself as a reliable energy partner to Western European states, it can be far more aggressive in its negotiations with direct neighbors such as Lithuania, where Russia has raised the gas price by four hundred and fifty percent over the last seven years in what many see as geopolitical punishment. “Russia shows a different face to different parts of Europe,” an energy security adviser to a Central European government told me recently. “So when we talk about Russia, we find we’re talking about different Russias, and that makes building a unitary position difficult.” It is a complex game. In the South Stream pipeline project, which aims to deliver Russian gas via Southern and Central Europe, Moscow is setting countries like Bulgaria and Hungary, which would benefit from it, against the European Commission in Brussels, which believes the bilateral deals Russia struck are in breach of EU law. The net effect of all these energy games is to break the political unity of the European Union, and increase Russia’s dominance over the continent.
At the same time, the Kremlin has been busy subverting the multinational bodies it has joined, like the Organization for Security and Cooperation in Europe. Membership in the OSCE was supposed to ensure, among other things, that Russia would abide by fair elections. But in the inner councils, Russian representatives have lobbied the organization to refocus away from election monitoring, threatening to slash funding if it doesn’t. The same is true of the Council of Europe, which Russia joined ostensibly to guarantee human rights but instead has worked with other undemocratic states like Azerbaijan—in what Pieter Omtzigt, a Dutch member of the council’s Parliamentary Assembly, calls “coalitions of the unwilling”—to water down condemnations of their human rights abuses. “The Kremlin is devoting its energies to hollowing out key rules-based institutions,” concludes Chris Walker, executive director of the International Forum for Democratic Studies at the National Endowment for Democracy.
In all these spheres, whether energy, finance, or multinational institutions, we see a similar pattern in the Kremlin’s tactics. Instead of opposing the West as its ancestor did in the Cold War, the new Russia manipulates its systems from inside. “We are minority shareholders in globalization,” I have been told by managers of Russian state investment funds. Which may mean, given the specifics of the development of Russian capitalism, that the best way to imagine the Kremlin’s idea of its position in today’s world is as the violent cousin of Western corporate raiders. After all, “reiding” (as they call it) is how most of the Russian elite made their money—buying into a company and then using any means possible (violence, bribery, blackmail) to take it over. Russia is the great corporate reider of geopolitics today.
Asimilarly subtle, shape-shifting approach informs the Kremlin’s manipulations in the world of ideas and political narratives. For a country that President Obama claims “has no global ideology,” Putin’s Russia cares very much about ideas, carefully controlling media, education, and parties inside the country and investing hundreds of millions of dollars in international broadcasting, intellectual influencers, and think tanks abroad.
The international rolling news network RT (formerly Russia Today), the Kremlin’s answer to the likes of the BBC and Al Jazeera, is the flagship of these efforts. It looks like any English-language news channel, with a similar mix of formatted shows and news reports. Presenters, in-the-field journalists, and output editors are native English speakers: approximately two hundred out of two thousand employees across the English, Arabic, and Spanish channels are expats. However, key editorial decisions are made by Russian producers and editors. “Essentially we are there to make it sound English and check the language,” says a former British employee. “It’s not like a normal channel where you can pitch in editorial ideas. The position on events is decided among a small core of mainly Russian editors.”
When RT first launched in 2005, it featured programs about the joys of Russian culture and countryside. But the ratings were terrible. So gradually RT changed its approach. Instead of focusing on Russia, it chose to climb inside existing Western ideological narratives that were already hostile to the US and “Western hegemony.” Julian Assange had a show on RT, as does the leftist British (pro–Saddam Hussein) politician George Galloway. September 11th conspiracy theories get generous airtime, as do alleged human rights abuses and democratic deficits of Western powers, along with criticism of the EU.
The new approach has paid off. The channel has its fans in the West and has been nominated for an Emmy for its reporting on the Occupy movement in America. And it’s not just the left that’s applauding. Nigel Farage of the right-wing non-parliamentary UK Independence Party is regularly featured in its newscasts. And Larry King, the venerable American interviewer, recently sold the rights for his show to RT and endorses the channel.
Now, thanks to RT, when an international crisis like Ukraine hits, the Kremlin can quickly release a barrage of disinformation to a large audience: whether it’s claiming nonexistent genocides as an excuse for Russia to invade Georgia in 2008, or alleging that Ukraine was being taken over by fascists as an excuse to annex Crimea. A highly successful project, RT reaches an audience of more than two hundred and fifty million, and claims to be the most watched news channel on YouTube, with more than a billion hits. Naturally, its budget has also increased, from an initial $30 million to more than $300 million.
Validating the network’s ideological approach is the excuse that, in the words of managing director Alexey Nikolov, “there is no such thing as objective reporting.” This argument justifies RT’s willingness to broadcast any fringe material, however ridiculous it may be. “The mission of RT is to represent a Russian point of view in the world,” Nikolov says. When pushed as to what exactly a Russian point of view or vision entails, he answers enigmatically: “There’s always a Russian way to look at a situation.”
This radically relativist view, where nothing is true and everything is possible, is also what informs the Kremlin’s drive to form alliances with “conservative” and nationalist elements in the West. When figures such as Pat Buchanan give Putin two cheers, they do so in part because this effort has taken hold. But the idea of Russia as a beacon of religious conservatism, for instance, which has attracted Buchanan and others, is simply bizarre. Only three percent of Russians who claim to be Orthodox go to church weekly, according to the Levada Center; divorce and abortion rates are sky-high, and prostitution is common. The same Russian politicians and TV presenters who now claim to be religious conservatives were all secularists preaching “modernization” just a few years ago, and good Communists before that.
But the Kremlin’s outreach to Western figures like Buchanan uses ideas, rather than genuinely believing in them. The motivation is to sow discord in the West, funding conservatives with one hand while backing the far left at the same time. During the Cold War, one could intellectually engage the pro-Communist arguments of the Kremlin’s Western allies. Today’s Kremlin has climbed into every position and profits from all arguments, seeking only to ramp up the volume and the confusion.
It is no accident that a recurring feature of RT programs is conspiracy theories, ranging from tales of the Bilderberg Group to lurid reporting on how Western media cover up their governments’ crimes. Appealing to the conspiracy mind-set reinforces the Kremlin’s underlying message that the Western model of democratic capitalism is a failure and a sham. In a recent paper titled “The Conspiratorial Mindset in an Age of Transition,” which looked at the rise of conspiracy theories in France, Hungary, and Slovakia, a team of researchers from leading European think tanks showed how supporters of the far-right parties the Kremlin supports in Europe are also the ones most prone to believing in conspiracies, and that this factor is becoming more pronounced as trust in the power of national governments is eroded by globalization and populations turn to outlandish theories to explain crises. In this regard, the Edward Snowden affair has been a godsend for the Kremlin, allowing it to further swell the sense of global paranoia while building coalitions of resentment against the West.
These are not the innovations of a bankrupt state mired in the “old ways,” in President Obama’s words. Rather, the Kremlin is ideologically supple and cleverly maneuvering through a globalized world. But what does Russia want? What are its aims?
Whether or not the Kremlin has a grand global vision, it does have several priorities on its international agenda. Since the annexation of Crimea, President Putin has pegged his domestic popularity to victory in military campaigns in his near abroad, and in order to maintain his standing he might well need to provoke more—with Moldova and Estonia, for instance. Still fully engaged with the West, despite his aggressions, Putin will continue to try to undermine the EU so as to create a continent under Russia’s energy thumb. Globally, Kremlin leaders are encouraging the decline of a rules-based system, which sets the stage for the prosperity of “global reiders” such as themselves.
Over the past few years, we have seen the Kremlin start to build up multinational organizations of autocratic regimes such as the Eurasian Customs Union, and to call for an alternative Internet controlled and regulated by anti-Western regimes. The object may not even be to achieve these plans, but rather to disrupt and delegitimize the Washington-consensus version of globalization.
But since the Kremlin makes no secret of its plans, the West does not have to wonder about its intentions or what steps it must take to counter its increasingly aggressive and self-confident moves.
To stop Russia’s energy blackmail against Europe, alternative energy routes have to be found and the Atlantic Alliance needs to be reinvigorated. Putin has succeeded in part because Obama has been AWOL. “You know that the Polish-US alliance isn’t worth anything,” Polish Foreign Minister Radek Sikorski said in a private conversation leaked in June. “It is downright harmful, because it creates a false sense of security.” These words should cause shame in Washington and provoke a reassessment of its policy objectives.
The core EU-US alliance not only needs to be rehabilitated but supplemented by an approach to the new, successful democracies of the global south. As historian Anne Applebaum points out in a recent “Democracy Works” paper for the Legatum Institute, India, Brazil, and South Africa should all be examples of how liberal democracy can be successful. But during the crisis in Ukraine, Western diplomacy didn’t take the trouble to present its case to these nations, so Russia was able to manipulate residual anticolonial, anti-Western resentment in all three, and all three refused to condemn the annexation of Crimea or back sanctions against Moscow. These “swing states” need to be made stakeholders in the camp of international democracy, and the idea of the “West” needs to be expanded to include them.
Particular attention must also be paid to what is perhaps the strongest weapon in the Kremlin’s armory: the ability to corrupt Western elites, which both stymies geopolitical action and in turn strengthens the Kremlin’s underlying argument that Western democracies have no true values. Once upon a time, for example, Russian and Ukrainian dissidents used to speak of the West generally, and London in particular, as their guiding beacon. Today, by being so ready to take post-Soviet money and ask so few questions, these places are now increasingly perceived as supporting the autocratic, corrupt systems of Moscow. “Don’t you realize you risk creating a global system where corrupt, state-connected companies from Russia win and your companies aren’t able to compete?” asks Vladimir Ashurkov of the Anti-Corruption Fund.
In the 1970s and ’80s, Soviet dissidents would try to catch out the Kremlin by telling it to abide by its own human rights laws (spelled out in detail but ignored in fact), appealing to the communist leadership’s desire to be seen as on the right side of history. Today, it’s time for the West to make the world’s financial capitals abide by their own money laundering laws. This might mean some potential financial loss for London and Wall Street in the short term, but by raising the bar they would also set the standards of the game and define a new kind of globalization that would not allow states such as Putin’s to thrive.
Peter Pomerantsev is a nonfiction writer and TV producer based in London. He is the author of Nothing Is True and Everything Is Possible, a book about working inside Vladimir Putin’s postmodern dictatorship, which will be published in November.
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