Why Russia needs America

September 21, 2009

In the wake of President Obama’s decision to scrap the U.S. missile defence shield in eastern Europe, many are pondering Russia’s response. The relationship will remain in the spotlight this week, when President Medvedev heads to the U.S. for the G20 summit. Although the precise nature of Russia’s reaction remains to be seen, it has a big incentive to improve relations. It badly needs American investment and co-operation to help solve serious economic problems at home.

Critics of Obama’s decision worry that it will “embolden” Russia, causing more aggressive behaviour abroad. Yet they forget that the Bush administration’s antagonistic policies failed to provide security to Russia’s neighbours. These policies didn’t prevent Russia’s war with Georgia, the repeated gas disputes with Ukraine, and a serious cooling of relations with countries such as Poland. Far from being restrained, Russia’s confrontational attitude had a lot to do with its perception that the U.S. was busy encircling the country with missile bases and alliances.

The critics also imply that Russia is preoccupied with external expansion, but that hardly seems appropriate today. Russia’s GDP is set to plummet by 8 percent this year. Russian analysts estimate that the country needs up to $2 trillion to renovate its dangerously clapped-out infrastructure. In major industrial cities, Russia’s dilapidated factories are mulling huge job losses. For the foreseeable future, Russia’s leaders are likely to be preoccupied with thorny domestic problems.

Faced with such daunting challenges, it’s entirely logical that both Medvedev and Putin say they are keen to kick-start American trade and investment. Responding to Obama’s decision — which he described as “brave and correct” — Putin immediately linked it to economic issues. He called for the U.S. to back Russia’s entry into the World Trade Organisation (WTO), and scrap Soviet-era trade restrictions against Russian companies, especially those that regulate technology transfer to Russia.

On the same day, at an investment summit in Sochi, Putin held well-publicized meetings with the CEOs of General Electric, Morgan Stanley and Texas Pacific Group — all major U.S. companies. When it comes to the economic sectors that Russia says it is most eager to develop, American investment will be especially crucial. The crisis has underscored the need for Russia to wean itself off dependence on natural resources, and develop new high-technology sectors, such as IT and nanotechnology, where U.S. companies are at the cutting edge.

This means that the U.S. still has plenty of bargaining chips left as it seeks to gain Russia’s cooperation on global issues. The bigger problem could be persuading U.S. investors to come. No matter how much Russia’s leaders appear to welcome foreign investment, there remain huge obstacles, including corruption and bureaucracy, which they seem largely powerless to deal with.

Nor does the tentative thaw mean an end to diplomatic tensions. Russia’s relations with its immediate neighbours may well remain stormy, potentially causing renewed strains with Washington. Still, it’s hard to argue that by extending his olive branch to Russia, Obama increases the likelihood of such upsets. The evidence of the last few years implies just the opposite. The frostier Russia’s relations have been with the U.S., the more determined Russia has been to resist U.S. encroachment in nearby countries, increasing regional tensions.

Now, Obama’s gesture has opened up the possibility of a fresh start, creating prospects for mutually beneficial economic cooperation. The Russians would be foolish not to jump at that opportunity.

23 comments

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Russia has a long and storied history of doing the things foolish.

Posted by Rick Wood | Report as abusive

We are missing the point here about Russia (I’d still like to call them the Soviets, but they are not.)

They have a big missile pointed towards them in the way of NATO. That’s what scares them. Though not many in the present government over there are old enough, there is still the stigma of WW2 hanging over their head; how a small nation like Germany, properly motivated, really decimated their country. Which was the reason Stalin took so many buffer nations (the Balkans, East Germany, etc.) They lost 20 million people in that conflict and messed up their economy big time. How can they not be wary?

Then here comes the West, after the Cold War, and sets up a missile shield that they probably think is offensive. Do they believe us? Did they believe Adolph back in 1940?

The Russians are not a threat anymore. At least not in Cold War way. We have way more to worry about the Chinese, the Iranians, Korea and the like. Mind you, they are bankrupt and corrupt, but they sure as hell don’t want to lock it up with the West.

Why not invite them into NATO? What would tickle them more and put them at ease than that? It would also open up their borders more and any weirdness they might be contemplating would be easier to identify. Putting the Russians in NATO would be a big threat to Iran, Pakistan and the Chinese. It would scare the hell out of me!

I believe this is where we must go. But it seems our industrial-defense companies still expect us to see a boogie man in the Russians. We wouldn’t have to spend billions of dollars on their hardware, and they’d have to sell something else to someone else.

Dr. Gonzo

Keep your friends close … and your enemies closer. Want to stop Iran from developing a nuke, want to get Korea to behave for once; invite into the fold. Economic imperialism is more cost effective and more persuasive then any threats we might make. And lets be honest, the US is not about to engage in a 3rd war.

Posted by Juls | Report as abusive

surely its America who needs Russia? after all, they purchase large percentages of US debt, not vice versa…if Russia decided tomorrow that they wanted it back, it would be America not Russia on the ‘under-dog’ bench.

Posted by Rob | Report as abusive

Russia don’t need USA, because them reach their economy growht bases in the socialism

Posted by Eric Patton | Report as abusive

Naive author could spend some quality time learning Russian history before appealing to cooperation with that country. Nothing has and nothing will ever change for the country brilliantly called once an Evil Empire. Just give them the technology they want and help them revive their economy – in no time half of the Europe will be under their boot again. I know what I am talking about – I lived there for 33 years (against my will).

Posted by Alex | Report as abusive

Russia has the best refinery gas in the world and provide to the whole of european union. USA is only loser with bernard madoff and allen standford

Posted by Hilbar Choen | Report as abusive

The article seems to confuse technology investment and technology products. Today, there are plenty of places where Russia can source technology products besides the U.S., such as Europe or several countries in APAC. This is an easy one because Russia has plenty of cash. In terms of technology investment, Russia needs make its corporate law enforceable so that long-term investments can be protected. This type of change cannot be ‘imported’ – it has to come from within.

Posted by Sergei | Report as abusive

I second Alex.

Posted by Nina | Report as abusive

I second Alex and Nina.
Author is so naive in his analisis and lack of udersanding of Russian history and mentality.
I would recommend watching/reading some Russian language media for start.

Posted by PwlM | Report as abusive

Alex’s view is completely outdated.
33 years ago that might have been the case.

Things in the world have change a bit since then.
Nations to be feared have changed.

Posted by Alfonso | Report as abusive

It is funny to read about Russia needing American or foreign investment for development. The economies of all the countries of the world are suffocating from overcapacity and consumer demand is not coming back any time soon, so what is anybody going to develop and invest into? US does not need more development and neither does Russia or Japan for that matter. We need to deflate.

Posted by Sammy | Report as abusive

The author’s argument that the Russian Government needs American help to help the Russian People live better sounds hilarious if you have ever lived in Russia. The only thing the Russian Government cares about is the Russian Government. The Russian Government has killed more Russian People than all external forces combined, but always manages to direct the anger of the mobs at a mythical monster which is currently called the “American Jews who rule the world”. Diplomacy my foot.

Posted by Dr Chernobyl | Report as abusive

I agree with Dr. Gonzo.. having been in the US military establishment for about 20 yrs, I have to admit that bringing or at least the offer of allowing Russia admittance to NATO would definitely be something to see.

If Russia completed the process of gaining admittance to NATO, that would certainly shift power in the world. Of course it would also lessen the power that the US would be able to wield within NATO and the US defense crazies would never stand for it. They need someone to make the US general population fear out of stupidity. They have had over 40 years to try to prove that the Russian people are ‘bogey men’.

The Russian people are no more ‘bogey men’ than Americans are ‘bogey men’ to Russians.

But… hey, if politicians would stop telling everyone that someone hates them, politicians would have to do teh really hard work… like fixing the things that have broken down in this country for the past 40 or so years.

And, everyone knows how AMericans never want to fix something or repair something, but we sure as hell can give our money away for war in a ‘new york minute’ and send an new generation of young Americans off to die in stupid wars like we have done in both ‘gulf offenses’. yeah, I called offenses, not wars because it’s a siumple fact of US law that ONLY the US congress can declare WAR. our pres can call it whatever he wants to call it but it’s still war and the last 3 wars we havent gotten anything good from it.

Posted by acer18 | Report as abusive

The Soviet Union may have collapsed.

But the same people are still in charge of Russia. The same government forces control the economy. The same nationalism is portrayed by the media. The same cult of personality is held by a ‘fearless leader’. Reporters still fall out of buldings. And the same old ‘threat diplomacy’ which started back in 1950 is used today.

Those who think Russia should be in NATO have completely lost the point. NATO was created to protect Europe from Russia and it’s allies. And this is why NATO still exists today.

Of course, there is little chance that Russia and NATO will duke it out in Europe. Instead, the battles are subtle. Like Russian anti-air missiles and nuclear material heading to Iran. Or armed terror groups somehow getting their hands on a cashe of sophisticated anti-tank missiles. And of course, the ever present VETO vote in the security council which protects Iran and North Korea from global action.

Georgia was the wake-up call. When Russia just happened to have a whole army on Georgia’s border, ready to respond within 24 hours of initial Georgian movement.

Make no mistake, Russia is not a friend. Any cooperation between it and the West is simply a frosty charade, put on to keep people from thinking the cold war is back.

Posted by Anon | Report as abusive

I understand the russians. their situation repeats everywhere in the world these days.
The recession left us lots of half-broken companies and bad-payers. The already problematic corruption in business is increasing. You can’t trust anyone!
I invite you to register in http://www.company-info.biz where companies from all around the world are trying to create a more transparent B2B environment by ranking each other according to their liability, respect for payments, common business experiences, and so on.
I think it’s a good way to promote fair companies and unmask bad payers, and make your business known at the same time.

It is good to see participation from other continents. If Russia is allowed into NATO, it would not be NATO anymore. We are already living in World War 3: terrorism, rebels, warlords and gangsters.

Is Russia really not part of the WTO ? That would be odd.

Posted by Casper Lab | Report as abusive

I have a question in return: when did Russia ever receive anything in return for its services to US foreign policy? USA and NATO behave like the alpha male who jealously guards its entitlement to the best bits and pieces, and meets any challenge to its position with aggression. Let’s not fool ourselves: Russia does not need anybody when it manages to get organized.
From times immemorial the Germanic nations – these days called “The West” and the Slavic nations are hereditary arch foes. Synergy between the two antagonists simply does not exist. Which does not imply that trade relationship are impossible. In fact, Russia has always been a reliable supplier – even in dire times and shortly before one of the Germanic nations launched an attack. There are plenty examples in history.
I hate to say, that for Russia any alliance with any Germanic nation forebodes a new war. If it keeps its defenses up – it is the only thing that makes sense. Temptations to conquer Russia’s natural resources are simply too big.

Posted by cloggy | Report as abusive

I am also Alex and lived in Russia 35 years and also against my will. Spent 11 years trying to leave the country, hated its politics and hated when they won’t allow me to leave.

BUT.

1. That does not make me a blind. I distinguish between my personal attitude toward the country and my ability to see how the West stupidly breaks its own promises and pushed Russia back toward the its authoritarian past. I blame Daddy Bush, because in early 1990-ies when Russia was well on the way out of its past he made the country suffer economically and basically wanted to show the Slavs their place… I think his Germanic roots and the fact that Bush family had major stake in Nazi economy that was destroyed by Russian military at th eend of WW2 played major role in the emotional make up of such decision on his part, but I have no proof to that.

Russia is a land power, not sea power like England and the US, it is not surrounded by a natural barrier against invasion like sea powers and naturally has a completely different attitude toward the security of its borders. That is their biggst concern, was is and always will be, as log as dichotomy between land powers and sea powers exist.
With Gorbachev trusting Reagan and his promises not to bring NATO closer to Russian borders a new situation was created where Russians dropped their suspicions and opened up almost overnight. But the West stupidly broke its promise for a quick political gain and Russia’s worst nightmare having NATO right on its borders did happen. So, do not blame them for rebuilding their defensive and oversuspicious stance.
They are 100% justified not to trust the West – you hear it from me, a man spent good part of his life fighting and hating commies and who was arrested in 1980 for sending Reagan a congratulatory telegramm from Main Post office in Leningrad (now Saint Petersburg).

Alex Chaihorsky (my real name)
Reno, Nevada.

Posted by Alex Chaihorsky | Report as abusive

I don’t beleive that the US changed their strategy (by deciding against the old system and putting a mobile system in place) with much of a thought to the Russians except maybe what their reaction would be. They changed the strategy to better address what needed to be done against rogue missiles.

The fact the Russians like the idea is a side-effect.

Even if the US were to disappear into a black hole, the remaining NATO members would remain the most powerful military block in the world. Russia, with a large shared border with China to stare at and internal problems galore does not seem an aggressive threat – though it certainly seems to defend its assumed interests aggressively.

Ongoing border and business issues with former members of the old Soviet Empire are my prediction.

The best the Russian military could do in a large conflict is to hold together long enough to fling catastrophic missile damamge on its enemies before collapsing… and who wants to have a lose-lose war unless you have to?

Posted by corvus | Report as abusive

Dear friend,
good and an interesting article from you.
Whatever you said is partially true.
Please go back to second world war history,How Russia,U.K.and America had joined as a powerful allies for elimination of Hitler!s world occupations.
America and U.K.had ignored Russia in the initial stages of world war second, then due to compulsions, they have included Russia into their allies.
Then, power of influences have changed and indirectly shared by stronger economic,social and political set up.
I do not think that,Russia wants America for greater extents.
Of course,Russia is facing some domestic economic pressures on account of poor patronage to modern IT and latest communication sectors.
Russia has huge energy resources,some disciplined labor power,and America have tremendous advantages in IT and Communication latest updates.
Now,American President wants to try of his new,latest approaches for world burning problems with Russia and other super powers.
This is like barter system in old schools of thought,mutual understanding and mutual cooperation in modern school words for both either maintaining or enlarging or for world eyes.

It’s hard to change your ways when everyone involved grew up in the Cold War.

Posted by Matt K | Report as abusive

Let’s remember…..Russia invaded Poland with the Nazi’s. Let’s remember that and if we ignored the Soviet Union…it may have been from these “compulsions:”. And just as a side note…how many of his own people did Stalin kill?

Posted by 300grm | Report as abusive