29
Aug

By Anders Åslund

Russia has shown itself to be an international spoiler with its ardent support for Syrian President Bashar al-Assad. The contrast with its benign policy toward Libya in 2011 reflects how Russian foreign policy changed with the return of Vladimir Putin to the Kremlin. On foreign policy, at least, Russia’s former president, Dmitri Medvedev, mattered more than is commonly understood.

Russia has resumed its aggressive anti-American policy of 2007-2008, which culminated in war with Georgia in August 2008. Ironically, this bellicosity harms Russia the most, because it alienates all but international pariahs, such as Syria, Venezuela, and Belarus.

Even in the former Soviet Union, almost all countries are seeking trade and security with anyone but Russia, because Putin is using all sticks and no carrots. His three main policy instruments toward the post-Soviet states are the customs union implied by his proposed “Eurasian Union,” Gazprom, and the Collective Security Treaty Organization (CSTO). Each intimidates Russia’s neighbors, while none benefits them, leaving them with few reasons to cooperate with Russia.

Currently, Putin’s top priority is to persuade as many countries as possible to join the customs union, but so far only Belarus and Kazakhstan have done so. Belarus set a high price, demanding a bailout of no less than $20 billion last year, while geography condemns Kazakhstan to get along with Russia. But the other post-Soviet countries resist, because a customs union with Russia would force them to raise their import tariffs, hindering their trade with other countries.

If Russia were serious about economic integration, it would promote free-trade agreements to facilitate trade in all directions. In fact, in October 2011, Russia initiated such a new multilateral free-trade agreement in the post-Soviet space; but, owing to the Kremlin’s single-minded pursuit of the customs union, only Belarus and Ukraine have ratified it, leaving its relevance in doubt. Read more…

Anders Åslund is senior fellow at the Peterson Institute for International Economics, and author of “The Last Shall Be the First: The East European Financial Crisis, 2008-10”.

As published in www.project-syndicate.org on August 28, 2012.

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