Recently, an American friend — an investment banker with a wide range of interests — complained to me about the lack of coverage of Russia in the U.S. media. Over the past few years, she explained, there has been little in-depth information. As a result, when important events such as the recent dismissal of Mayor Yury Luzhkov occur, it is impossible to understand what is going on.
Is it poor journalism, she wondered, a result of the financial crisis in the mainstream media, or Russia-fatigue after years of blanket coverage during the Cold War?
The problem, I think, is different: Nothing of note has happened in Russia for a very long time.
To be sure, there are still natural and man-made disasters, horrendous terrorist attacks and brutal murders of journalists and human rights campaigners. But these are not events that influence the rest of the world.
Although Russia, as a major player in the energy market, occasionally tries to flex its muscles by using natural gas exports as a political weapon, it can’t even get friendless Belarus to do its bidding, to say nothing of its customers in Western Europe. Worse, periodic supply disruptions have prompted Western Europeans to seek other sources of natural gas, such as North Africa and Israel or transportable liquefied natural gas. This will reduce Russia’s role as a supplier and make a mockery of the multibillion-dollar gas pipelines now being built.
Russia still makes its presence felt by occasionally proposing the sale of military or nuclear gear to a rogue state and lending support to mavericks, such as Venezuelan President Hugo Chavez. But when push comes to shove, Russian elites shrink from an open confrontation that could jeopardize their offshore bank accounts or their children’s residency status in Western countries.
While China, India and Brazil — and now even Indonesia, Thailand and Turkey — are starting to play an enhanced role in the world economy and world affairs, Russia, despite occupying one-seventh of the world’s landmass and controlling an enormous nuclear arsenal, has largely become irrelevant. The global financial and economic crisis has essentially knocked Russia out of the BRIC grouping of the world’s most dynamic developing nations and economies of the future.
Russian leaders have all but admitted this — at least in deeds if not in words. To be sure, there is still talk of Russia’s recovering prestige and growing importance in world affairs after the hiatus of the 1990s. But even Prime Minister Vladimir Putin doesn’t seem to believe the official propaganda. While still Russia’s most powerful man, he has allowed his hand-picked successor, President Dmitry Medvedev, to criticize the hallmarks of his era, such as the dominance of state-owned monopolies, overdependence on raw materials exports and technological backwardness.
Medvedev has indeed started to chart a different course. He has gone to the United States and has hosted California Governor Arnold Schwarzenegger as head of a delegation of venture capitalists and high-tech executives in Moscow. He is now fired up with the idea of building Russia’s version of Silicon Valley outside Moscow. But it is clear that sponsoring another white elephant project by pouring billions of rubles of state money down a black hole will do nothing to create a dynamic, entrepreneurial economy that could compete on the world stage. Until Putin’s legacy is overcome, my friend the investment banker will have to wait a lot longer for important news to come out of Russia.
Alexei Bayer, a native Muscovite, is a New York-based economist.