Continue the Unfinished Business of Integrating Russia into the Global Economy

Russian ruble bills and coins. Pixabay/Public domain

Renewed economic interaction would increase the West’s influence, not lessen it.

Editor’s Note: The following is part of a multi-part symposium commissioned by the National Interest and Carnegie Corporation of New York. We asked some of the world’s leading experts about the future of U.S.-Russia relations under President-elect Donald Trump. You can find all of their answers here.

President-elect Trump has an unusual opportunity over the coming months to improve the tone of U.S.-Russian relations, currently at one of their lowest ebbs since the collapse of the Soviet Union. The positive possibilities in the short run are substantial and should be seized. Considerable attention is already being given to the potential for a U.S.-Russian collaboration in the Middle East, particularly with regard to defeating ISIS and developing a peace plan for Syria. But there are many other fronts where U.S.-Russian cooperation could be productively pursued, and they should not be overlooked.

A key area for broader U.S.-Russian cooperation would be in the economic sphere. The West, led by the United States, invested heavily in the development of a market-oriented economy and financial sector for Russia during the 1990s and early 2000s. Those efforts helped to significantly integrate Russia into the global economy and financial system. For example, considerable effort was spent building capacity at the Central Bank of Russia to supervise Russian banks, modernizing the payments system and developing a domestic government securities market, among other areas of work. The resulting increased trade and financial flows helped cement Russia’s ties with western Europe and the United States. As relations deteriorated in recent years, particularly after the Russian seizure of Crimea, Western sanctions effectively penalized Russia for its decision to join the Western-dominated global economy, a decision which left Russia far more vulnerable to the sanctions’ effects.

Renewed economic interaction would increase the West’s influence, not lessen it. Even though Western sanctions have weakened the Russian economy, it is not at all clear that they have forced the Russian government to alter its policies. Economic engagement would give the West more influence in Russia through a variety of soft channels. In addition, the healthier Russian economy that would result would foster the expansion and strengthening of Russia’s fragile middle class. A more empowered, upwardly mobile middle class, in turn, would likely generate new domestic pressure on the Kremlin to move economic concerns up the political agenda. The result, over time, could be a Kremlin leadership with a much stronger self-interest in vibrant economic ties with the West, and greater interest in cooperative international behavior.

A call by the new U.S. president for renewed economic engagement with Russia should not be viewed as an endorsement of Russian foreign-policy actions in Ukraine, Syria or anywhere else. Rather, such a call would be a pragmatic step to promote the well-being of ordinary Russians as well as increase the linkages between Russian economic performance and the country’s ties with the West.

J. Andrew Spindler is the president and CEO of Financial Services Volunteer Corps.

Image: Russian ruble bills and coins. Pixabay/Public domain