Stratfor.com, THE states that once comprised the Soviet Union continue to decline on all levels: Temporary economic successes cannot halt a downslide that began during the final years of the socialist republic. Moscow alone is trying to generate momentum towards regional revival through stronger ties with Europe. There appears to be a growing consensus in Moscow that not only is it impossible to retreat further geopolitically, but also that to survive as a regional power and to be able to defend its vast perimeter, Russia must pursue at least a modestly expansionist policy.
Given the weakness of erstwhile Soviet states, including Russia, the door is open for outside powers to step up pressure on the region. The United States, Europe, China, Turkey, Saudi Arabia, Iran and Islamic militant groups are all expanding their political clout there. The future will depend on whether Russia, the only post-Soviet heavyweight, can pull them out of the quagmire.
LOCATION A BURDEN
GEOGRAPHY has been more of a liability than an advantage for the former Soviet Union. To begin with, the fact that the post-Soviet space occupies what might be the world's most strategic location has made it an arena for fighting for thousands of years.
The sheer vastness and the ethnic diversity of the region make foreign relations difficult to manage. The fact that many neighbouring states and distant powers alike have diverse, often conflicting, agendas in the region only adds to that challenge, as does the need to protect thousands of kilometres of borders. On the positive side, it is hard for an outsider to conquer such a vast territory – a fact that Napoleon, Hitler and others learnt too well and too late.
The climate itself threatens the former Soviet republics' chances of ever attaining the standards of productivity and economic efficiency seen in developed countries. Their location in the northern latitudes means that most industries must exert greater effort than more southerly countries to produce or extract a unit of any product. For this reason, Russian and even Caspian oil exploration, extraction, refining and transportation are doomed to be significantly more costly than in the Middle East.
Although Russia has access to three oceans, it lies too far north to succeed as a sea power: most of its seaports and naval bases are iced in for months at a time. Thus, sea powers such as the US and Britain always will have an advantage over the former Soviet republics, including Russia, in naval power and, therefore, in projecting global power.
RICH BUT TROUBLED
THE post-Soviet space is probably the world's richest region in terms of natural resources. Some day, its combined estimated oil and gas resources might surpass those of the Persian Gulf. Ukraine's black soils are unparalleled as arable land; the future of the world's timber and wood-processing industry is tied to vast territories covered with taiga – seemingly endless virgin coniferous forests – in eastern Russia.
And if clean, drinkable water eventually becomes the world's most precious commodity, Russia could draw upon Lake Baikal, the world's deepest lake, in eastern Siberia: It contains more potable water than all of the world's other lakes combined.
Used effectively, any one of these natural resources has the potential to make the state or group of states that owns it a powerful world player. So far, however, the former Soviet republics have done a poor job of taking advantage of them.
Although the high price of oil has helped keep the economies of the oil-rich states in the region afloat for the past several years, little can be said about positive effects of the abundance of natural resources.
Although plentiful minerals and other resources have the potential to attract outside investment and, in turn, boost local economies, they also could attract foreign governments seeking to control those – thus potentially adding to the region's security risks. Conflicts among former Soviet states over resources located along shared borders, such as in the Caspian Sea, are also possible. Tensions already exist among some Central Asian states over scarce resources such as water, electricity and gas.
12 YEARS OF DECLINE
OVERALL, the former Soviet republics have made no meaningful economic or geopolitical advances since the fall of the Soviet Union about 12 years ago. In fact, many of them resemble developing nations.
In Russia, living standards have dropped to Third World levels. For the former Soviet states, shipping ever- increasing volumes of oil to the West is bringing their economic status closer to that of Equatorial Guinea than to that of the United Arab Emirates: The profits are not being used to raise living standards, nor to build up other industrial sectors.
Russia alone has gained a measure of economic security, thanks to the high price of oil, but it remains very vulnerable, since global oil prices are beyond Moscow's control.
Foreign investment, meanwhile, remains too low to spur the economy – a situation that will endure until legal and economic reforms can improve what is now a somewhat chaotic environment. Investment in production, especially in the manufacturing sector, is dropping steadily. Businesses suffer a chronic shortage of capital, and while real production (except in the energy sector) dwindles, imports rise.
All exports other than those of natural resources are falling. Within the decade, the production facilities comprising the bulk of what the former Soviet republics own will become too old to function. The situation is serious, since thus far, virtually no new facilities and equipment have been built to replace them.
It is not only the Russian economy that is in decline. So too is the country's population, which is shrinking by almost one million people every year. The ailing infrastructure; failing social system; rising drug use; growing incidence of Aids, tuberculosis and other diseases and people-trafficking, slavery and other such problems, all contribute to what is a systemic crisis.
The military-industrial complex, too, is being downsized: Next year, the government will reduce spending by half the amount requested by the Defence Ministry and planned by the Cabinet.
The flight of natural and human resources as well as capital – to the tune of US$30 billion (S$52.5 billion) a year, according to Interpol sources – is a steady trend. Corruption and organised crime have reached epic proportions: This year, 93 of the Duma's 450 members were reportedly under criminal investigation at the time of their election, and many had criminal records.
For now, parliamentary immunity has put a halt to all investigations. According to documents circulated within the Duma, Russian officials gain US$40 billion through corruption. There are about 10,000 organised crime groups that, having divided the whole country into various territories, take 'protection' money from state and private enterprises and from foreign businesses.
A source on a Russian legislative committee on internal law enforcement and security says that 16 per cent of police officers are paid by criminal groups to participate in illegal activities, such as extortion and fabricating or closing criminal cases. The situation is mirrored throughout most of the former Soviet republics.
MORE SPLINTERING?
THE Russian Federation runs the risk of breaking up into smaller entities. If Russia eventually loses the war in Chechnya – or if that battle drags on for too long – separatists in other parts of the country likely will rally, eventually spelling the end of the federation.
The potential for secession is developing in Dagestan and in other Muslim-dominated republics in the North Caucasus. There is also a chance that the Kuril Islands and the Kaliningrad region might have to be turned over to other countries.
However, the surest sign that the Russian Federation might split up is the fact that regions with ethnic-Russian majorities show tendencies towards secession. These include Primorsky Krai – which encompasses Vladivostok – Magadan and Sakhalin Island.
Moldova is still not united, Georgia is breaking apart and Azerbaijan is dealing with secessionist movements among its ethnic minorities. In Ukraine, the political divide between the west and the rest remains serious, resulting in the possibility that the country might split apart along the former Russia-Austria border.
Given the region's state of weakness, external players are looking to fill the power vacuum. These include the US, Europe, China, Turkey, Saudi Arabia, Iran and Islamic militants.
The United States has become the most influential foreign power in the region, with Russia now second. China is building influence in Central Asia and is slowly expanding economically and demographically into the Russian Far East. Ankara has made strides in relations with Central Asia, Georgia, Azerbaijan, Ukraine and Moldova.
Although the threat in Russia from Islamic militants is immediate, the US push into the post-Soviet space remains the long-term strategic challenge for Russia, Belarus and Turkmenistan.
Moscow and Washington do not see eye to eye on some key foreign and security policies – including matters such as Iraq – and they likely will have disagreements in the future. Therefore, Nato's eastward expansion and the stationing of US forces in several former Soviet states could undermine Russia's national security. Nevertheless, Moscow's strategic nuclear arsenal, while it exists, guarantees that Washington, Beijing and other world players will not completely write off the country.
Meanwhile, among the other former Soviet states, the struggle to decide between alignment with Russia and the United States is being replaced by the challenge of deciding between a pro-European and a pro-US course. Because of fresh ties with Paris and Berlin and its serious disagreements with Washington on important security and foreign policy matters, Moscow is steering more decidedly towards greater alignment with the European Union; the other former Soviet republics are trying to befriend both camps.
The Russian Federation cannot survive for long under current conditions. The combination of continued economic and social decline, the likelihood of political fragmentation and the growing pressure from external players eventually will lead it to repeat the fate of the original Soviet Union.
WEAK BORDERS
IF RUSSIA loses the war in Chechnya, its disintegration as a federation is all but assured. Russia has not been able to cut off supply lines to Chechen militants from two sources: organised crime groups from the former Soviet republics and Wahhabi Muslim organisations originating in the Middle East. These lines of supply will remain functional until Russia retakes control of some of the predominantly Muslim regions of the former Soviet Union. In particular, Moscow has to regain some control over Georgia and Azerbaijan, through which supplies flow to Chechen militants. Only this would guarantee that Russia would not lose the war in Chechnya.
Russia's long and porous southern border, which lacks natural barriers and defence fortifications, currently cannot be defended: Islamists from the Middle East and Central Asia easily surf through sparsely populated Kazakhstan and directly into Russia, from the Volga region to Siberia. And these groups are working to coordinate their efforts: The Islamic Movement of Turkmenistan was formed recently, along the lines of the Islamic Movement of Uzbekistan. Also, another global Islamist group, Hizb ut-Tahrir, has become the most popular radical group among the Central Asian populace.
Russia's western borders, 130km from St Petersburg and 385km from Moscow, are also protected poorly and penetrated easily by foreign spies, militants and other destabilising elements. And if a major conflict with Nato were to erupt in the future, Russia would not be able to defend its capital, which lies close to the western border.
Given all of these factors, it is likely that whoever is in power in Moscow will try to reverse the decline and restore some degree of influence within the former Soviet Union – not necessarily by depriving the republics of independence but by reinstating some degree of Russian influence and control. Sources indicate that within the Russian national security establishment, a consensus is emerging that not only is there no way to retreat further geopolitically without risking the state's long-term cohesiveness, but also that Russia's borders are not defensible under the current circumstances. The general notion gaining ground is that to survive as a regional power, Russia should pursue at least a modest expansionist policy.
Of course, Russia and the region as a whole still have the potential to regain some ground economically, politically and in terms of self-defence. Russia still has great intellectual potential, as well as a history of spearheading quickly the turnaround of its military-industrial complex – even though its civilian sectors might lag far behind. Russian weapons systems, even some that were merely test versions, rank among the world's best.
REGAINING MIGHT
THE former Soviet states so far have made little effort, overall, to reverse their fortunes, although Russian President Vladimir Putin is trying to lead an effort to regain some of his country's former prominence. His efforts do not imply that the general orientation towards the West and the implementation of market reforms will be reversed – or at least not now, when the major changes being attempted are reining in the oligarchs and building closer ties with Europe. The trick for Moscow lies in reforming or removing the oligarchs without upsetting the recently-obtained re-entrance of foreign capital and technology into the state's economy.
The oligarchs and the so-called New Russians, who have stashed billions of dollars in Western banks and have bought Western properties and businesses, are not helping the economies of their home countries. The rest of the populace in the former Soviet republics lack the capital to make meaningful positive changes in their economies.
The struggle between those who prefer the status quo – the oligarchs are among them – and those who want to see change is beginning to take shape in some of the former Soviet states.
In Russia, it is taking the form of confrontation between oligarchs and Mr Putin, who is supported by some in the national security establishment. The government seems to support the combination of open-market policies and state capitalism to offset what is called the 'wild market' preferred by the oligarchs.
NEW HOPE
THE populace by far supports this fledgling policy, although it is not yet clear how far Mr Putin will pursue it. For many Russians, the struggle for revival ties into a slowly growing perception that external forces, particularly the US, are subjugating the country.
Mr Putin and his inner circle represent a moderate faction of those trying to revive the country as the regional hegemon, but more radical ideas do exist among the opposition in Russia and in other former Soviet republics. Among the radicals, hope for integrating and reviving the former Soviet states lies in Belarusian President Alexander Lukashenko.
Polls by the Russian Federal Security Service – the results of which remain unavailable to the public – indicate that if presidential elections were held in a united Russia and Belarus this year, Mr Lukashenko would win easily – precisely because of his radical approach towards restoring the former might of the old Soviet Union.
