by Cathy Gao
Article Subject: Is Russia a rising superpower? Did it ever stop being a dominant player in the international arena?
“What’s the Diagnosis?”
In November of 1982, a small ten-year-old girl by the name of Samantha Smith wrote a letter to Yuri Andropov, then president of the Soviet Union, expressing her fear of a nuclear war and pleading with him to work towards peace. At that time, with the Soviet Union still in Afghanistan and the country’s build-up of SS-20 missiles, U.S. and Soviet relations were at an all time low and America feared the political, economic, and military capabilities of their rival more than ever.
Yet immediately after the collapse of the U.S.S.R in 1991, it became all too common to refer to a country that produced twenty percent of the world’s industrial output by 1980 as a “former superpower”. True, Russia has had its share of problems after the breakup. For almost a decade, the Russian government under Boris Yeltsin tried frantically to transform the former largest centrally planned economy into a capitalist market economy, but the first president’s reforms only plunged a majority of the Russian population into poverty and almost eliminated industrial production in the country.
However, those were the years before 2000, before Vladimir Putin stepped in as president and before the economy began to rapidly expand due to an increase in petroleum prices. Yeltsin may have introduced democracy to the nation but Putin a formerly dysfunctional country back together again, and for the first time in years, the living standards of the Russian population are improving. Assisted by a weak ruble, an increase in service production and industrial output, and most importantly, an rise in petroleum prices, the country’s GDP grew approximately at a rate of 6.7% from 1999 – 2005, a rate which Putin’s strongly centralized government has taken pains to maintain and increase through their control of industrial output.
Since being in office, the prime minister has sought to regain control over Russia’s massive reserves of natural gas and oil to use them as leverage to influence international policies, and so far, it has worked. The power and influence of the few opportunists and businessmen who had amassed vast fortunes during the chaotic period of Yeltsin’s time in office have been curbed, and the most notable example of the government’s assertion of its new-established power was the arrest of former YUKOS petroleum company head Mikhail Khodorkovsky on charges of fraud and tax evasion. Khodorkovsky, until his arrest, was Russia’s richest man and the 16th wealthiest man in the world according to Forbes’s list in 2004. His wealth was estimated at around $15 billion dollars, but shortly after his arrest on October 21, 2003, the Russian government froze ownership of 44% of the company’s share in order to prevent the company’s shareholders from selling a large stake of YUKOS to Exxon Mobil. In the latter part of last year, Anglo-Dutch energy giant Royal Dutch Shell had offered to give control of the $20 billion Sakhalin-2 fields in Russia’s far-east, estimated to contain 1.2 billion barrels of oil and 500 billion cubic meters of natural gas, to the state-owned Gazprom company. Almost two months before, Gazprom was granted complete ownership of the Shtokman gas field, the world’s third largest one, while other international giants such as were turned away.
The recent developments in Russia’s economy due to the increasing demand for oil may yet to be felt so immediately here in the United States, but Russia’s increasing dominance in Europe is impacting all of its neighbors. In a diplomatic argument over oil prices of Ukraine in 2005, Russia cut off supplies to the country, initiating a secondary effect on Poland and Germany. Furthermore, the Russian government has long subsidized prices of oil to Belarus but in December of 2006, it announced that its longtime ally would have to pay full export duty on supplies of Russian crude oil.
Although 80% of Russia’s exports are composed of timber, metals, and natural gas, in addition to petroleum, oil is nevertheless the surest way through which the Kremlin can exert its influence internationally. But even though Russia currently provides a third of Western Europe’s natural gas supplies and has a $150 billion trade surplus which is increasing annually, is it really a superpower?
Used in a 2003 paper published by Goldman Sachs investment bank, BRIC, an acronym referring to the combination of Brazil, Russia, India, and China, suggests that these four countries will surpass most of the current richest countries in the world by 2050 in wealth. Any one of those four countries could perform under expectations stated in the report, but Russia’s steadily declining population and potential workforce and also its disregard for human rights and democracy has grim implications for its future development and role on the international stage.
The world is no longer divided into Communist and Democratic camps of the Cold War era but Russia’s role in the world cannot be ignored, especially since it is now rivaling with Saudia Arabia to be the world’s leading nation in oil exports. The question that remains now is just how big an influence Russia can possibly have and how much of an impact the world is ready for it to make.