Russia’s ‘Revival’ Has Its Limits
Much has been made of how Russia’s recent offensive in Georgia marks its resurgence as a global power. Its invasion came after almost continuous geopolitical reversals for the past 20 years, as evidenced by the following events:
- Military defeat and withdrawal from Afghanistan in 1989
- Collapse of the USSR in 1991
- Military withdrawal from Central Europe and Germany in the early 1990s
- Military defeat in Chechnya in 1994-96 (though this was reversed in the second Chechen War)
- Inability to prevent NATO attack on Yugoslavia in 1999
- Inability to prevent NATO expansion, 1999-present
- The scuppering of the Mir Space Station in 2001
- Acceptance of US military deployments in Central Asia in 2001-02
- Withdrawal from Vietnam’s Cam Ranh naval base in 2002
- Inability to prevent US withdrawal from the Anti-Ballistic Missile Treaty in 2002
- Inability to prevent Iraq war in 2003
- Inability to prevent terror attacks such as Moscow theatre siege and Beslan
- Inability to prevent ‘coloured revolutions’ in Georgia, Ukraine and Kyrgyzstan
- Inability to prevent Kosovo’s independence in 2008
These events – not to mention economic collapse and the debt default of 1998 – left Russia with a deep sense of humiliation. Only under the leadership of Vladimir Putin from 1999 has a sense of stability been restored. The economy is now growing at 7% a year, Russian business leaders are increasing their international profiles, and the central bank has amassed US$500bn of forex reserves, the third-largest such holdings on earth.
However, my own feeling is that Russia’s population decline will reduce its ability to regain superpower status. After the collapse of the USSR, Moscow ruled 149mn people. This number had fallen to 144mn by 2005, as very high death rates (due to alcoholism and reduced living standards) in post-Soviet Russia were accompanied by very low birth rates (due to despair and high rates of abortion). Consequently, the UN forecasts Russia’s population falling to 108mn by 2050 under its medium-variant scenario, a loss of 25%. Under its low variant scenario, the population would fall by 38% to 89mn.
These projections mean that Russia will have a reduced workforce, and a much smaller pool of young men available for military service. By contrast, the populations of Russia’s main geopolitical rivals will rise substantially. The US will have around 400mn people by 2050, Turkey around 100mn, and China 1.4bn. Moreover, the combined five Central Asian ‘stans’ will have almost 80mn by 2050, which will probably make them less willing to be subservient to a shrinking Russia. Of course, larger populations will not mean that the US, Turkey, etc. will expand their militaries accordingly. But bigger populations will mean bigger economies, and thus more resources available to channel towards military-industrial complexes.
The other main reason why I am sceptical that Russia will regain superpower status is its somewhat basic economy. Russia’s rapid growth is overwhelmingly being driven by energy exports. One former US diplomat recently described Russia as ‘Saudi Arabia with trees’. Indeed, as I have mentioned on Risk Watchdog lately, energy prices are at risk of sharper corrections, which could weigh on economic growth in future.
One wild card that might just help Russia is global climate change. A warmer Russia would make frosted and extremely cold areas in Siberia and elsewhere more habitable and suitable for agriculture and development. A new settlement of these areas could conceivably lead to a resurgence of Russia’s birth rates. However, this could take many years to accomplish, by which time Russia’s geopolitical rivals may have become much stronger.
Russia
August 18th, 2008 at 3:42 pm
Watchdog,
An informative piece as ever…
However, surely you’re contention that global climate change will be a ‘wildcard’ for Russia is somewhat short-sighted and narrow-minded? What about the plethora of other detrimental effects that come with global warming?
August 18th, 2008 at 4:13 pm
Greetings,
my comment about global warming benefiting Russia is indeed somewhat speculative. At present, no-one knows which countries (if any) would benefit from global warming. Russia seems to be hoping that the melting of some of the Arctic ice will open a new polar shipping route from the Far East to the Atlantic. However, I imagine you are right that there would be negative aspects of global warming in Russia. Yet political leaders are bound to be more interested in short-term economic gains than long-term concerns. Look at China, for example, where environmental degradation is becoming an increasingly serious problem. These things are probably not irreversible, but could take years to heal.
August 25th, 2008 at 5:35 pm
A nice piece on Russia – I agree that their future is not as bright as many believe. However I think the argument could have been sharpened with some discussion of the effects of the oil and gas windfall.
It is my impression that rising export revenues are stoking a massive consumption boom, apparent in the rapidly rising growth in imports. In fact, imports are growing much faster than exports, and I think it possible that the trade surplus could be all but erased by 2009 or 2010.
August 28th, 2008 at 11:51 am
I find the piece mentally stimulating yet of limited scope and highly speculative -since it’s based on a statistically insignificant short period of population decline.Indeed the significant factor is the sustainability of the current Russian energy driven economic growth and politically the emerging recent indirect military confrontation with the west over Georgia.It is against such background that the future population developments in Great Britain Germany and France point to the need for a cohesive single European policy towards Russian energy dependence – something that will provide both the objective and the measure that Russian integration may be peacefully achieved within the next few decades.In that sense Britain’s interdependent relation status with the USA is the single major obstacle for such a European policy to be shaped
August 28th, 2008 at 6:11 pm
Hello Solon,
thanks for your message. I am not sure that the past decade-and-a-half is a statistically insignificant period of time. It is true that birth rates and death rates can change relatively quickly, but the current population trends will be difficult to reverse. I’d be keen to hear what period of time you’d consider statistically significant.
I agree that a major factor will be how the Russian economy develops, re: the energy sector, and anything beyond. Aside from military-defence companies, I cannot think of any Russian companies that excel in the value-added sector on a worldwide basis (though they may be strong regional players).
As for a cohesive European foreign policy identity, I doubt that this will happen over the next 50 years and beyond. Britain will continue to align overwhelmingly with the US, and the other major European powers will continue to compete with eachother rather than against Russia.
September 10th, 2008 at 7:37 am
Interesting piece. I wonder how long Russia can afford to distract its own people with foreign adventures. It may have $500 billion in Central Bank forex, but isn’t this about the same amount that was removed from the capitalization of its stock market subsequent to being drawn into the Georgian fiasco, which it “won” at the expense of being publicly shamed by its Asian border “partners” with a rejection of its Georgian adventure?
I’d be interested in knowing what you think of a) the prospects of Russia attempting to annex the Crimean peninsula and b) the impact of a closer Russian (military) alliance with Venezuela and Cuba.