Russia Faces Humiliation at the Hands of Tehran

Michael Portillo, The Times Online:

Things are not going well. Iran is a living nightmare for most of the world. Ruled by mullahs and exporting terror, it scares both the secular leaders of Muslim states and those who govern sizeable Muslim minorities. Its president wishes to destroy Israel and sponsors Hezbollah. Iranian fighters attack American and British forces in Iraq.

Now Iran is on its way to acquiring nuclear weapons, having repeatedly lied about its activities and intentions. Yet even when the outside world is largely united by anxiety about Iran, there is little prospect that effective sanctions will be applied against it.

The main reason is Russia. This moment of crisis provides an opportunity for the former superpower to strut the world stage once more. It wields the veto in the UN security council and claims a special locus as an intermediary because of its close ties with Tehran. READ MORE

Just when Iran should be writhing in the vice, it is more defiant than ever, its prestige in the Arab street boosted because Hezbollah survived the Israeli onslaught. The present emergency encourages Russian pretensions to be a global player. Those two facts encapsulate the failure of American foreign policy.

Most Russians I know take it for granted that their country should perform a global role. They may not be nostalgic for the Soviet days, but they believe that their country naturally operates in the top league. That is justified by its history and by its size. Having been given that UN veto, and being still a nuclear weapons state, provide further reasons. Russia’s diplomatic weakness in the years after the Soviet collapse is seen as a humbling aberration. Nothing offends Russians more than being patronised, except being ignored.

One reason for President Vladimir Putin’s political success is that he has restored Russian self-esteem. “We shall not allow the national pride of Russians to be trod upon. We are sure of the power and prosperity of our country,” he told a Kremlin banquet upon taking power. He added that his country had been bound to restore national honour in Chechnya, after being militarily humiliated in the province during the mid 1990s.

Today Putin enjoys a 70% opinion poll approval rating, and well over half of Russians would like to see the constitution changed to let him run for a third consecutive term. Russian GDP per head almost tripled between 2000 and 2004. Real wages have soared and poverty has been halved.

Those improvements explain why he is popular at home, but they are not enough to raise Russia to the premier division again. His country has bounced back somewhat after its economic implosion during the Boris Yeltsin years. The extraordinary recent change in per capita wealth underlines that the economy is massively dependent on energy prices. With oil at $70 per barrel, Russia’s fortunes have been transformed. But it is hard to think of any other industry in which the country excels, except armaments, a relic from Soviet days.

In moments of candour Putin gives the game away, referring to Russia as an “energy superpower”, which is very different from being a superpower. Europe is clamouring to become ever more dependent on Russian gas. A new pipeline will run from close to St Petersburg along the Baltic seabed to Germany. It will bypass Ukraine and Belarus so that if the Russians want to bully their neighbours by switching off supplies, western Europe will not be inconvenienced. Another pipe will carry oil to China and Japan.

So (for now at least) Russia makes the most of being the world’s number one producer of natural gas, and second only to Saudi Arabia as a supplier of oil. However, though Saudi’s resources certainly make it strategically important, its political influence is limited nonetheless. Why should Russia be any different? In any case, is Russia capable of maximising the benefit of its natural wealth? Two-thirds of its gas comes from just three fields that are in decline. Many billions of dollars need to be invested but Russia has failed to create conditions that will attract foreign capital.

Putin shook investor confidence when he dismembered the Yukos oil company after its chief executive, Mikhail Khodorkovsky, was imprisoned on tax evasion charges. Now the great energy companies are controlled by the government nomenklatura. Gazprom is chaired by the first deputy prime minister Dmitry Medvedev, and Rosneft by the Kremlin deputy chief of staff Igor Sechin. Such intimate arrangements between politicians and business usually result in corruption, mismanagement and waste.

In economic size Russia ranks alongside Brazil and well behind India. Its GDP per head puts it about 70th in world charts. Its population fell by half a million in the first six months of 2005 alone. There are more abortions than live births in Russia. The population could halve by the middle of this century, according to government projections. Life expectancy for men has fallen from 63 years a decade ago to 56 now, level-pegging with Bangladesh.

Russia’s relative poverty and its reliance on oil and gas help to explain why it values its blossoming economic links with Iran. Its stake in building Iran’s first nuclear reactor at Bushehr is worth $1 billion, which is more than small change to Moscow. Tehran has lured the Russians into a dependency that distorts their political judgment.

Objectively Russia should be even more worried by Iran’s ambitions than America is. Moscow still needs to be concerned about its Islamic minorities and neighbours. Chechnya is out of the headlines now, but that rebellion in just one of Russia’s potentially separatist provinces shook the Russian Federation to its core.

Moscow is kidding itself if it thinks it has much leverage with Tehran. The Russians offered to carry out uranium enrichment sufficient for the Iranians’ peaceable needs. President Ahmadinejad strung them along, just as he did negotiators representing the European Union. Reinvigorated by the success of his proxy in Lebanon, there is no reason why Ahmadinejad should engage with Moscow any more seriously now. Putin may be enjoying his present opportunity to thwart the Americans. But before too long he too may face humiliation at the hands of the Iranians.

Without any likelihood that Russia will re-emerge as a great power, it and the United States are too easily tempted to resume cold war attitudes. Vice-President Dick Cheney exaggerated when he accused the Russians of using oil and gas as instruments of “intimidation or blackmail” and undermining “the territorial integrity of a neighbour”. Actually Russia had a good case in last year’s dispute with Ukraine, since Kiev was paying vastly less than market price for gas from Russia. But Putin responded to Cheney’s gaffe with almost Soviet imagery by comparing America to a wolf.

America persists in wooing Ukraine and Georgia towards joining Nato. Its motive is presumably political rather than strategic. It aims to underpin their democracy and independence by welcoming them to a western club. But until its articles are changed Nato remains a military alliance in which an attack on any member is treated as an attack on all. Moscow is right to ask against what exactly are these states allied, if not Russia.

Cold war postures can be politically attractive in Russia. They can also be deeply harmful. Russia needs to settle whether it is by nature Eurasian or western. Moscow and St Petersburg have re-established themselves as great European centres of business and culture. But does Russia aspire to be a fully paid up democracy and market economy? Since Russia’s identity crisis is connected to its wounded pride, the West can do much to win it over by common courtesies, such as consulting Moscow on key issues, and by flattery. Such gestures cost nothing. The Russians will have to accept that they will not be a superpower again any day soon. They must watch without grinding their teeth too much as China assuredly achieves that status.

The Iran crisis is not after all an opportunity for Russia to re-establish itself as a global player. It is instead a moment when it must define its national character. Do its lucrative exports to Iran blind it to the need for economic sanctions? Can a country already scarred by civil war and terrorist violence allow an Islamic theocracy close to its southern flank to acquire nuclear weapons?

The best we can hope for is that Russia correctly identifies its strategic interests and then pursues them.