Getting Russia into proportion

December 8, 2008

Paul Taylor Great Debate— Paul Taylor is a Reuters columnist. The opinions expressed are his own –It’s time to get Russia back into proportion.Moscow’s resurgence as a major power, determined to be treated with respect and to stamp its influence on its neighborhood, has been one of the big stories of 2008.The sight of Russian tanks rolling into Georgia in August, coupled with a Kremlin drive to extend its control over energy supply routes to Europe, sent shivers through former Soviet satellite countries and drew loud condemnation from Washington.President Dmitry Medvedev’s threat to site short-range missiles in Kaliningrad aimed at Poland if Warsaw deploys part of a planned U.S. missile shield raised the rhetorical stakes.Yet the global financial crisis, the collapse of oil prices, the aftermath of the Georgia war and U.S. President-elect Barack Obama‘s victory have all cast doubt on Russia’s real weight.The credit crunch has hit Russia harder than other emerging economies, hammering confidence in its stocks, bonds and the rouble and forcing the central bank to spend some of its huge foreign currency reserves to stabilize the financial system.Foreign portfolio investors have fled and many Russian investors have parked more of their money in foreign currency abroad, at least partly due to heightened political risk since the military action in Georgia.State gas monopoly Gazprom (GAZP.MM: Quote, Profile, Research, Stock Buzz), feared in many parts of Europe as a predator seeking a stranglehold on the continent’s gas supply, has lost more than two-thirds of its market capitalization since May.SHRINKING POPULATIONWith oil prices down from a peak of $147 a barrel in July to below $50 now, the heavily oil-and-gas-dependent economy looks more vulnerable, especially since Russia needs Western technology to boost its energy extraction.Alexander Shokhin, president of the Russian Union of Industrialists and Entrepreneurs, says that after a 10-year boom, growth will fall to between 0 and 3 percent next year.Russia remains a lucrative market for Western consumer goods, but concerns about state meddling in business, widespread corruption and shortcomings in the rule of law have contributed to its failure to diversify away from hydrocarbons and minerals.Compounding the weakness of its non-energy economy, Russia’s demographics are among the worst in the world, with a life expectancy of just 67 (60 for men) and the combination of a low birth-rate, an aging population and a public health crisis.The Organization for Economic Cooperation and Development (OECD) projects the population could shrink by nearly one-third by 2050 to 100 million from 143 million.Diplomatically, Russia overreached itself after its lightning military victory in Georgia by recognizing the breakaway regions of South Ossetia and Abkhazia as independent.Only Nicaragua followed suit. Major allies such as China and India, fearing the precedent, pointedly declined.The European Union, the main customer for Russian gas, has responded by accelerating efforts to reduce its dependency, planning an alternative supply corridor through Turkey and seeking new suppliers in Africa, the Middle East and Central Asia.Other former Soviet republics, including Azerbaijan, Belarus and Turkmenistan, have sought closer ties with the West.True, the U.S.-led NATO alliance has gone no further toward giving Georgia and Ukraine a roadmap to membership — the issue is off the agenda for now — and it has now resumed some frozen contacts with Russia, as has the EU.But Moscow’s efforts to reshape the security architecture of Europe, sidelining the role of the United States and of the Organization for Security and Cooperation in Europe, loathed by Moscow for its election monitoring, have gained little traction.STATUS QUO POWER?Russian analysts insist the Georgia war was a defensive action responding to pro-Western Georgian President Mikheil Saakashvili’s bid to retake control of South Ossetia by force.”Russia is a status quo power, not a recidivist aggressor on the prowl,” says Dmitry Trenin, head of the Moscow office of Carnegie Endowment for International Peace.Moscow has taken a number of steps recently to suggest it wants peaceful solutions to other “frozen conflicts” in its neighborhood, brokering the first summit talks between Armenia and Azerbaijan over Nagorno-Karabakh, and seeking a deal between Moldova and its breakaway region of Transdniestria.In Ukraine, the biggest former Soviet republic where a democratic “Orange Revolution” in 2004 infuriated the Kremlin, Russia has other political and economic levers it can pull to maintain influence without having to use force.Getting Russia into proportion does not mean ignoring Moscow or its security interests. Its location and the fact it supplies 40 percent of Europe’s gas imports mean it cannot be neglected.The United States and the EU have an interest in binding Moscow rapidly into rule-based international bodies such as the World Trade Organization and the OECD, although they put both processes on hold in reprisal for the Georgia war.Some Western analysts believe a weak Russia could be more dangerous, if mishandled, than a strong one.In NATO circles, some see a risk of the “Weimarisation” of Russia, comparing it to Germany’s economically enfeebled Weimar Republic that was swept away by the rise of Hitler’s Nazi party.Political humiliation and economic instability could lead to a surge of aggressive nationalism.After the collapse of the Soviet Union in 1991, wags branded Boris Yeltsin’s rump Russian Federation “Upper Volta with nukes,” capturing the paradox of a failed state with a ruined economy sitting on a huge arsenal of atomic weapons.When Vladimir Putin succeeded Yeltsin in 2000, he was determined to restore Russia’s power and pride after a decade in which many Russians felt the West ignored their interests by expanding NATO in ex-communist eastern Europe.Today, it sometimes seems that Russophiles and Russophobes in Europe and the United States have become objective allies in exaggerating the importance of or the threat from Moscow.A more self-confident Europe and a less unilateralist America need to find a way of engaging with Russia according to its true weight, without treating it as a giant.


We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see

So Russia invaded Georgia. First, it was Georgia who invaded South Ossetia. Second, we the West, recognized Kosovo. Illegally. Why are we shouting if Russia is doing the same?No double standards please!

Posted by Ron | Report as abusive

Oh, yeah – “0 to 3 percent growth”. It seems not so bad comparing with 9% recession in some other countries, doesn’t it?

Posted by Al | Report as abusive

why dont we recognize Chechnya.

Posted by otari | Report as abusive

It is a good thing that Reuters informs it’s readership that the views contained in this article are that of Paul Taylor, and not of Reuters.Reuters would be blushing in embarrassment.1. Mr. Taylor writes that Russia invaded Georgia.(“The sight of Russian tanks rolling into Georgia in August”)In 1991, South Ossetia was promised independence from the USSR, and the Georgian Republic. However, when Georgia became independent it saw an opportunity to grab some land, and the terminals for two major oil pipelines. South Ossetians still carry Russian Federation passports, which was Putin’s pretext for sending in Russian forces to drive out the Georgian forces. That is the background.It was a Georgian troops, who were trained by 1500 Blackwater ‘advisors’, whose officers were trained by Israelis that made the military incursion in South Ossetia. Add into the mix the 18 months of massive arms shipments to Georgia by the US.2. Taylor: “President Dmitry Medvedev’s threat to site short-range missiles in Kaliningrad aimed at Poland if Warsaw deploys part of a planned U.S. missile shield.”Kaliningrad is Russian territory, acquired by the Red Army after pushing the German Army out of then Konigsberg. Poland is not US territory. Now the US Government feels it is it’s right to dictate to Russia where it can place missile batteries on it’s own soil?3. Taylor: “…the heavily oil-and-gas-dependent (Russian)economy looks more vulnerable, especially since Russia needs Western technology to boost its energy extraction.”This is the embarrassing part. Since the 1950’s, when Russia was known as the Soviet Union, it has researched and developed it’s Deep Well technology. After WWII, the USSR was in a position of economic isolation. It could not acquire resources from countries which were not within it’s sphere of influence. The USSR was forced to provide for itself inasfar as energy was concerned. in 1956, Prof. Vladimir Porfir’yev announced: “Crude oil and natural petroleum gas have no intrinsic connection with biological matter originating near the surface of the earth. They are primordial materials which have been erupted from great depths.”The new petroleum theory was used in the early 1990’s, to drill for oil and gas in a region believed for more than forty-five years, to be geologically barren—the Dnieper-Donets Basin in the region between Russia and Ukraine.Using this method, Russian oil exploration enjoyed success rates of over 60%, compared to US ‘wildcat’ methods which turned out a 10% success rate.The Russian company Petrosov, in the 1980’s drilled in Vietnam’s White Tiger oilfield offshore into basalt rock some 17,000 feet down and extracted 6,000 barrels a day. This was the same oil field that the Americans had declared to be barren.Then there was the Bodra #3 Ultra Deep oil well in West Bengal, India. In 1983, the well was sabotaged. The Indians and Russians to this day believe the saboteurs were American Wall Street interests who were terrified that Deep Drilling technology would expose the limited oil supply myth that the Soviets discovered in the 1950’s. Billions in profits were on the line.Add to the mix that the 2003 arrest of Russian Mikhail Khodorkovsky, of Yukos Oil, took place just before he could sell a dominant stake in Yukos to ExxonMobil after a private meeting with Dick Cheney. Had Exxon got the stake they would have control of the world’s largest resource of geologists and engineers trained in the a-biotic techniques of deep drilling.Big Oil lost out on ‘acquiring’ the deep drilling technology from the Russians.The rest (Iraq) as they say, is history.Source material: 08/abioticoilhttp://www.engdahl.oilgeopo l___Russia/peak_oil___russia.html

Posted by Baron von Lufthoven | Report as abusive

comments Posted by Baron von Lufthovenshame his facts are so wrong, even the history he quotes is very subjective Ossetia has always been Georgian, yes the USSR intervened but it has always been recognised as Georgian even today by international standards

Posted by Billy Hirst | Report as abusive

Russia is the only country which has the ability to annihilate US. This is the real “proportion” of Russian abilities and it makes American money bags nervous.The article of Mr. Tailor shows us this panic mood.

Posted by Iouli Andreev | Report as abusive

Mr. Taylor, In all languages except Orwellian English, proportion means neither too large nor too small. It is significant that the Western English press expresses an appreciation for Russia’s rightful proportions only when Russia’s influence is on the rise. While it was enfeebled and destitute and being poked and prodded by NATO we did not see any articles in Reuters begging for a sense of proportion. You, yourself, might well benefit from getting a sense of proportion And while you’re at it, you might also get a sense of history. 1) With the tacit approval of Washington D.C., Georgia, not Russia, started the hostilities in South Ossetia 2) Kaliningrad is Russian sovereign territory.Here are some proportions for you to ponder. During WWII the Soviet army destroyed 80 percent of the Wehrmacht at the cost of 12 million of its soldiers. For each American soldier killed, 20 Russian soldiers died.Everyone, except perhaps journalists at Reuters, agrees that Russia has its rightful place among nations. Where that place is, is only a contentious issue for some Americans still living in the past.

Posted by Ivan Ivanovich Ivanov | Report as abusive

This article projects hate and exclusion of Russians as a nation. Russians are corrupted, stupid, greedy imperialistic, alcoholics, cannot multiply successfully, want to concur the world?How about trying to understand others nation and share the great American values? Russians gave the world Tchaikovsky and his music is playing in every American mall on Christmas, Berdyaev, Dostoevsky, Solzhenitsyn, Mendeleyev, Brodsky and Gorbachev… It is a time to change a tone and be more responsible in writing. US do not need enemies and can help Russia rather than criticize or compete with weapons. This will be a smart step.

Posted by Tatiana | Report as abusive

There is a general problem with GDP growth forecasts: if you look back, normally they are wrong. Especially for Russia. I remember forecasts of recession in the early 2000s which systematically turned to be wrong, and the economy was booming. Now we are talking about GDP growth in 2009, without any data. Let’s wait and see, the global crisis is just about to begin.About population: actually in Russia there is a kind of “baby-boom”: births soared from 1.2 to 1.7 million in the last 6 years. The problem is death rate. Russia is still loosing population but far slowlier than before, and it is expected to reach a balance in 2010-11 at 138-139 million and then start growing again.In general, I would say that this article is still based on 1990s data and perceptions. The situation has change a lot in Russia.

Posted by Robert | Report as abusive

“Russia is a status quo power, not a recidivist aggressor on the prowl,” says Dmitry Trenin, head of the Moscow office of Carnegie Endowment for International Peace.The bigger question is when/where does the status quo begin. Back when the Soviet Union still existed? If so, then Russia is a recidivist aggressor, not a status quo power.

Posted by Max | Report as abusive

It seems that as time passes, Russia is passing. Little by little Russia is losing her people and her power. Who is to blame? The finger points squarely at a succession of Romanov idiots, Bolshevik boobs and Communist miscreants who have squandered Russia’s true potential. That it has taken so long to bring Russia so low is a testament to the tenacity of the Russian people to continue on and endure under great hardship. Today, Russia’s new neo-capitalist rulers appear to be incapable of breaking the streak of incompetency. They look backwards and repeat the dead mantras of expansion and conquest oblivious to Russian history, a history of failure piled upon failure that has consumed not just the lives of millions of Russians but is now poised to digest Russia’s remaining jewel, her natural resources. When all of the gas and the oil have been consumed perhaps Russia will also be finally irrevocably consumed with them. Perhaps only then will the ancient Russian lands feel the warming light of personal freedom and liberty, I only hope there are still some Russians left to enjoy it.

Posted by James Asbury | Report as abusive

Is Mr. Taylor aware that this is 2008?

Posted by Dave | Report as abusive

As a Chinese,I know the hero city Kaliningrad is Russia’territory but Warsaw is not a US’s state.Your logic seems ludicrous!

Posted by Disdainwestern | Report as abusive

Mikheil Saakashvili is still there, Saddam is not.Economic growthwise Russia is doing better than any of the western economies.Technologically Russia has much more to give than to take.West is careful in dealing with Russia – that itself shows Russia’s weight.This article is overtly biased.

Posted by Partha Ghosh | Report as abusive

There is a palpably condescending tone in Mr. Taylor’s writing style. Yes, we should never exagerate any nation’s strengths or weaknesses. We do so at our own risk. But Russia has withstood an earth-shaking 18 years with relatively little bloodshed. As the London Times put it: “In 1999 Russia was on the verge of social and economic anarchy.” It has struggled mightily with potentially nation-destroying issues. We in the West have lied to them repeatedly about NATO enlargement and a host of other issues in attempting to lock in our Cold War victory. The fact that Russia still “potentially threatens” the likes of Taylor has less to do with it’s arsenal of nuclear warheads and more to do with an ingrained sense of Western entitlement.

Posted by John Landolph | Report as abusive

Why doesn’t Mr. Taylor mention facts like only Russia has space people carries working, and US NASA left with nothing(Shuttles will be scrapped soon) .Or why he does not compare results of international university math olympiads for ex.? Because it will show superiority of Russian education system. And that is just tip of an iceberg.Such columns doesn’t show Reuters us unbiased news agency really

Posted by James Patrick | Report as abusive

I believe that Russia has to be treated from the common sence point of view. As well as any other country.Look at the “problems” mentioned here:- The gas monopoly ambitions can be handled by the proper EU regulations. For example, allowing Gazprom to extend in EU if the same criteria work for the foreign companies in Russia.- In the Georgia situation, stop lying that russians began the war since even georgians admitted that they did not. Be fait and handle the breakaway georgian regions Kosovo was handled.It is difficult because it requires thinking instead of making the black / white picture or selecting the next bad guy. This approach also gives enough space for a dialog.Unfortunately, this article still tries to paint the black / white picture and show that these are the only choices :(

Posted by E.F. | Report as abusive

Im curious, when you eliminate moscow what is the mean income of a family in other Russian cities. I have met several Russians that continue to flee seeking new opportunities, so why do they say their economy is booming. Everyone talks about Russians booming economy, but as someone in the finance world, I know no one trust their bonds, and stocks unless they have inside info which is why most of the income in the country is distributed to a select few. But back to the original question of how the avg family lives in Russia. Rather than spend money on a hopeless conquest of world domination and military power (which proved wrong already once) they should read this article and prove the author and readers like myself wrong. So far they get an E for effort, but helping with the pirates off the Somali the coast seems like a start.

Posted by Edsall Hilty | Report as abusive

It seems people forget that South Ossetia legally IS part of Georgia. So Georgia technically couldn’t invade itself. Russia invaded Georgia. Even now after Russia proclaimed South Ossetia “independent” there is pretty much non-existing support of this “independence” by the other countries.Comparison between Kosovo and S. Ossetia doesn’t make sense only because the West is not just one country but a big chunk of international community consisting of many countries. And only international community can recognize particular country as independent. Recognition by one or two countries is not enough. Consensus of the majority is the key in this case. It was in case of Kosovo, it’s absent in case of South Ossetia. Even non-western countries recognized Kosovo.All Russia’s diplomatic efforts produced zero results. Luck of support even by Russia’s strong ally Belarus shows how isolated Russia is in the international community. It means – Russia is aggressor.The article is right on point.

Posted by Yuri | Report as abusive

This has nothing to do with the Russian people or culture or scientists or technology or food or vodka or you name it. It has only to do with their leaders. Russia excludes itself from the community of nations as long as it is governed by the KGB. The people of this country do not deserve it after all they went through in the soviet times. Sitting barefoot and hungry on a pile of nuclear missiles in Konigsberg/Krolewiec/Kaliningrad? Stealing railway tracks (!) in Poti (Georgia) to take back home? This is proper to Cheka/KGB/FSB and not to Russia.

Posted by qq | Report as abusive

Billy Hirst,Regarding your comment of December 9th, at 8:05am GMT;Please quantify your assertions that my argument is erroneous.”…shame his facts are so wrong, even the history he quotes is very subjective…”What argument do you posit to challenge what I have written?Which “facts” are “so wrong”?In the grown up world, we offer a counter argument in an attempt to expose the other point of view to fallacy, and lack of credibility. We don’t sit there with our thumbs in our armpits and spits across the room at our opponent.That being said, I will address the one assertion you did make.Billy Hirst writes:”Ossetia has always been Georgian, yes the USSR intervened but it has always been recognised as Georgian even today by international standards.”Actually, up until 1922, Ossetia was a part of the Russian “empire”. In 1922, it was divided into North and South Ossetia, with the southern region being absorbed into Georgia SSR. After the fall of the USSR, Georgia declared independence, as did South Ossetia (from being a part of either Russia, or Georgia) on November 28,1991. Also declaring independence at this time was Transnistria, and Abkhazia.The second referendum held for independence on November 12, 2006 in South Ossetia (as a result of the lack of international recognition) showed that 95% of the population voted, and of that 95%, 99% voted YES for independence. This vote was observed by 34 int’l observers from Germany, Austria, Poland, and Sweden.As of today, only the Russian Federation and Nicaragua officially recognize South Ossetia as an independent state.For Georgia to not only not recognize the independence of South Ossetia, when itself declared independence is the height of hypocracy. Not only that, but to unleash a full rocket artillery barrage in conjunction with armoured vehicles accompanied by infantry against a civilian population, and killing 12 CIS peacekeepers and injuring 150 is beyond reprehensible.It is worth noting that Erosi Kitsmarishvili, Georgia’s former ambassador to Moscow and a confidant of Georgian President M. Saakashvili, testified to the Parliament of Georgia that Georgian officials told him in April 2008 that they planned to start a war in Abkhazia, one of two breakaway regions at issue in the war, and had received a green light from the United States government to do so.I am sure that an American can readily identify with what constitutes fighting for one’s independence, and getting other nations to recognize such independence.South Ossetia has a flag, an anthem, a President and a Prime Minister.For the record, I do not have any lineage with either the Russian Federation, Georgia, or South ot North Ossetia, which would interfere with an objective analysis on my part concerning this topic.

Posted by Baron von Lufthoven | Report as abusive

From Foreign Policy:In September, the United States pledged $1 billion in aid to Georgia to help the country recover from its August war with Russia. The money was intended to “help Georgia sustain itself,” Secretary of State Condoleezza Rice said. With several Georgian towns badly damaged by Russian bombing and 20,000 refugees from South Ossetia still unable to return home, there were seemingly many worthy causes for all that cash. So why was $176 million of the aid money earmarked for loans to businesses—including $30 million to a real estate developer for a luxury hotel: the 127,000-square-meter Park Hyatt in downtown Tbilisi, an area that was not at all damaged in the war? The 183-room, five-star hotel will include 70 luxury condominiums, a fine-dining restaurant, conference facilities, and a health spa with juice bar.The Overseas Private Investment Corporation (OPIC), the U.S. government agency facilitating the loan, is also financing a $40 million office building across the street from the Georgian Parliament building and a $10 million renovation of a historic building into a convention center. The loans, OPIC President Robert Mosbacher told Eurasianet, were “a clear, unequivocal signal about the confidence we [the U.S. government] have in the future of this country.”Georgian President Mikheil Saakashvili’s ill-advised military operation in South Ossetia might have been a disaster for many of his people, but thanks to Uncle Sam, it seems to have turned out just fine for Tbilisi’s real estate developers

Posted by Tatiana | Report as abusive

Mr. Taylor,You must be a russophile. Otherwise you would not publish things on Russia. Sort of sadistic love of a favorite prey. Get over it. Take some medicine.Jen

Posted by Jen | Report as abusive

Mr Taylor:Travel budgets are tight in all the news organizations but I recommend you ask your bosses for funds for a two or three-week to Russia. That might cure you of some of your preconceptions. And perhaps you should have a look at an internal memo circulating in the U.S. Department of State urging foreign service officers to “listen more closely.” You obviously listened to your NATO and Washington sources but not to any Russians. If any country has a reason to feel paranoid, it surely is Russia. What exactly is a good reason for NATO to extend its reach to Georgia?As to the soundbite below, have you been to Upper Volta? Maybe your bosses could spring you some additional money for a visit? The comparison is absolutely absurd.”After the collapse of the Soviet Union in 1991, wags branded Boris Yeltsin’s rump Russian Federation “Upper Volta with nukes,” capturing the paradox of a failed state with a ruined economy sitting on a huge arsenal of atomic weapons.

Posted by Andrei | Report as abusive