Global Aikido: Russia's Asymmetrical Response to the Ukraine Crisis

October 6, 2014 Topic: Foreign PolicyGrand Strategy Region: RussiaUkraine

Global Aikido: Russia's Asymmetrical Response to the Ukraine Crisis

"As masters of judo teach, it is better to not rely on one’s own strength but to instead use your opponent’s strength against him."

I repeat, such methods of pressure were used in the past as well. But they never were used against such a powerful state. The key issues are not military power nor energy levers, but are instead ideology and the ability to produce a universal narrative. Vladimir Putin has already begun to focus on this, as was clear in his recent remarks at the 2014 BRICS Summit in Brazil.

The world as a whole is growing increasingly tired of the lack of alternatives to the U.S.-centric order. Not everyone likes the Western model of social order and political behavior, yet no one offers any viable alternative. Meanwhile, the complete domination by the United States in world affairs causes growing resentment and rejection of America, even among U.S. allies.

Previous attempts to offer alternatives failed either because the countries that made them did not have enough international clout, or because of their scandalous leaders, like the late Hugo Chavez. Unlike these countries, Russia still has much of the strategic mindset of the USSR, which aspired to be a systemic alternative to the West. This factor manifested itself last year in the Middle East, where many expected that Russia would convert its successful Syria policy into the role that the Soviet Union had played in the region—namely, as a second patron to whom one could defect from the United States. There were, and could be, no such plans last year. Now the situation is changing—and Russia may be at least ready to assume this role.

Acting as a serious troublemaker (Moscow did cross a red line in Crimea), Russia cannot continue to operate within the same global paradigm, wherein the West has an indisputable advantage. To strengthen its position, Moscow will have to oppose America ideologically and must formulate a different vision of the world order. Emphasizing conservatism will not be enough—this is good only for discussions within Western culture. A united “right-left” opposition is needed, in which the conservative defense of national identity would be combined with the Third World’s anti-globalist rhetoric about the injustice of the current system.

No other country but Russia can bring about such an opposition. China values the opportunities provided by globalization, although it is not happy about everything. In addition, it is not good at advancing global-scale ideas—this has long been America’s forte. By virtue of its cultural identity, China’s ideological influence can only spread within the Chinese cultural area. On the other hand, Beijing can tacitly support such an initiative; after all, it hardly misses any opportunity to remind the West that the time of its hegemony has passed. Also, China understands that Russia’s conflict with the West has only postponed a global rivalry between China and the United States, which may unfold and intensify in a few years, probably by 2020. The dispute between Russia and the West has hardly erased Sino-U.S. tensions. That is why Russian-Chinese cooperation may become one of Russia’s most consistent responses to increasing pressure from the United States.

At the global level, new Russian-Chinese cooperation is likely to spur systemic efforts by the two countries—albeit very cautious at first—to erode the global domination of institutions and practices of the Washington Consensus. A gradual weakening of the U.S. dollar in trade settlements among members of the SCO and the BRICS and the development and mutual recognition of national payment systems by them, the establishment by the BRICS of their own development bank,[4] and the creation by Russia and China of an international rating agency to compete with the Big Three—Moody’s, Fitch, and Standard & Poor’s[5]—could be the first signs of a restructuring of the global economy.

In early June, Russian Minister of Finance Anton Siluanov said at the fifth Financial Dialogue between Russia and China in Beijing that the two countries had agreed to establish a joint international rating agency. Earlier, the Chinese Dagong rating agency had announced plans to create a joint venture with American and Russian partners to organize an independent global rating group. The structure is to be called Universal Credit Rating Group. The partners will be Egan Jones Ratings of the United States and RusRating of Russia. The Russian parliament adopted a law on the establishment of a national payment system almost immediately after the banks Rossiya, SMP, and others were hit with U.S. sanctions. Potential international partners include China’s UnionPay, Japan’s JCB, as well as VISA and MasterCard. Brazil and Argentina may also participate in the project.

Russia’s post-Crimea turn towards China may have another unexpected effect with serious consequences: the “nationalization” of the Internet. In addition to the two countries’ close positions on the role of the Internet Corporation for Assigned Names and Numbers (ICANN) and on Internet governance (the need to delegate the governance functions from a private U.S. company to international institutions), the Russian government’s determination to establish a Russian analog of the Great Firewall of China can be a kind of revenge of the Westphalian order on the World Wide Web. As noted by Russian researcher Dmitry Yefremenko, “the famous principle cuius regio eius religio (‘Whose realm, his religion’) in the middle of the 2010s can be reformulated as ‘Whose server, his Internet’.”

The most likely outcome of this conflict will be the acceleration of a process that has long been spoken of in Russia: a departure from the U.S. dollar as the dominant currency in international trade transactions. Russian presidential advisor Sergei Glazyev has long insisted on such measures and has even proposed not using the dollar at all. Now this probability is discussed by Russian businesspeople.[6] As a model, they look to Indian-Iranian transactions, whereby India pays for Iranian oil in rupees. Iran maintains a rupee account with UCO Bank in Kolkata, from where Indian exporters are paid against their shipments of various goods. Russia also had experience with such interaction in Soviet times. The Council for Mutual Economic Assistance, the economic wing of the Warsaw Pact, practiced trade in non-convertible currencies on a mutual offset basis. Another model, clearing, was used between the Soviet Union and Finland, for example. The May 2014 Russia-China gas deal, which contemplates $400 billion in gas supplies over the next 30 years, allows for some renminbi–ruble payments.

Russian-Chinese rapprochement may also have a purely political regional effect—a marked strengthening of the Shanghai Cooperation Organization (SCO). The SCO is already the most representative and influential organization in Central Eurasia. Against a backdrop of ongoing geopolitical changes, it can increase its symbolic capital even further. Until recently, China had continuously delayed admitting India and Pakistan to the SCO. But now, according to Russian diplomats, Beijing is ready to take a more flexible approach because of its growing rivalry with the United States in East Asia. An enlarged SCO (including India, Pakistan, and also possibly Mongolia) could become a serious and highly diversified organization with unique capabilities in a critically important region. If the current negotiations on the Iranian nuclear program succeed and the UN Security Council lifts its sanctions against Tehran, Iran could become a full member as well (it now has observer status). The SCO Charter prohibits countries under international sanctions from enjoying full membership.

Moscow will not be able to retain a monopoly on rule-setting in such a large organization involving such powerful countries. Actually, Russia does not have a monopoly now—China outweighs Russia economically, and if the SCO’s present composition does not change, there will be little room for balancing. But if the SCO admits India, Pakistan, and Iran, the diplomatic process within the organization will become more complicated but will also allow for more potential “coalitions.” In addition, the overall clout of the organization in the world will multiply. Back in 2005, the SCO called on the U.S. to clearly define a timeline for its presence in Central Asia. Now, the organization’s aversion to the U.S. presence in the region has only increased.

Of course, Moscow will also take into account the growing tension between Washington and the latter’s European allies. Many of these allies have resisted strengthening of sanctions against Russia, because those measures will badly affect EU economies. Sanctions have already generated visible rift inside the EU, where businesspeople and even some in the political establishment complain that Washington has totally disregarded European interests while struggling to punish Russia, rather than attempting to resolve the crisis in Ukraine. This comes on top of fury in Germany about comprehensive spying by the U.S. that might have a long-term impact on transatlantic relations. Russia will not be afraid to use these sentiments to advance its interests.

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Over the 15 years of Vladimir Putin's rule, we have learned his political style well enough. Firstly, he never responds immediately and usually takes a break to consider matters; he has strategic patience. Secondly, he does not like to break promises, even if they were given to his opponents. Thirdly, he has a comprehensive view of the world, and he understands the world system and its various interrelationships. Combined with a tactical flair and fast adaptation to changes, this helps him to do without an action strategy, which hardly exists in practice.