Russia's Rise on the Global Stage -- Journal Report
20 January 2020 - 7:03AM
Dow Jones News
By Thomas Grove
MOSCOW -- Vladimir Putin's efforts to reassert Moscow's global
influence appear to be bearing some fruit. But 20 years after he
first assumed the Russian presidency, his efforts to revitalize the
country's economy have languished.
Mr. Putin recently proposed changes to Russia's constitution
that he could use to retain his grip on power, perhaps in a new
role to tend to his legacy from behind the scenes. As he ushers in
a new government following the resignation of Prime Minister Dmitry
Medvedev, he will be sure to try to maintain tight control,
analysts say.
Meanwhile, as questions mount about America's role around the
world, he is also likely to see to it that Russian military forays
into the Middle East, extension of energy pipelines to strategic
neighbors, and increasingly assertive foreign policy overall
continue as well.
Moscow, in keeping with its long-term goal of returning to
superpower status, has consolidated its military presence in Syria,
where it was the deciding factor in winning the war for President
Bashar al-Assad. Irregular Russian mercenary groups in Libya, the
Central African Republic and possibly Venezuela also give the
Kremlin tools to operate in the shadows abroad.
In China and Europe, Russia uses its oil and natural-gas
reserves to improve ties. The Power of Siberia gas pipeline to
China has been open since last year, and Moscow is using the Nord
Stream 2 project, a natural-gas line being laid from Russia to
Germany beneath the Baltic Sea, as a lever to try to improve
relations with Europe's biggest economy.
The U.S. imposed sanctions last month against companies and
individuals participating in the Nord Stream pipeline's
construction. The effect of those sanctions is as yet unclear, but
Moscow hopes they will be a thorn in the side of U.S.-German
relations, and not Russian-German ties, analysts say.
Moscow increasingly looks to China as a potential partner
against the West, following Western sanctions over Russia's
invasion and annexation of Crimea and covert military operations in
eastern Ukraine. After a decade of upgrades to Russia's armed
forces, Moscow and Beijing are carrying out more military exercises
together and are set to sign a new military cooperation agreement
this year. In 2019, the two countries carried out their first joint
patrol of the Asia Pacific as part of their growing defense
ties.
Trade likewise has grown between China and Russia, due not only
to closer ties in general but to threats of a trade war between the
U.S. and China. Bilateral trade between the two countries rose to a
record $110 billion last year, compared with $84 billion in
2017.
Some analysts look at this growing relationship and say that
Moscow risks becoming dependent on China for its economic and
military power.
The biggest hindrance to Russia's achieving its global ambitions
remains its weak growth. Renewed ambition on the world stage has
done nothing to improve living standards for the vast majority of
Russians. Real income fell in five of the past six years, leading
to increased dissent among many, especially outside the country's
capital and wealthiest city, Moscow.
GDP growth for the first nine months of 2019 was 1.1%, compared
with the year-earlier period. But while some of this weakness is
attributable to sanctions, Russia's reliance on hydrocarbons and
failure to reform its private sector have hamstrung economic
prospects.
Mr. Putin has tied the weak economy to a deepening demographic
crisis, which is expected to cause Russia's population to shrink
starting next year, according to a projection by the United
Nations. The U.N. foresees Russia's population falling by around 7%
by the middle of this century, to 136 million from 146 million last
year.
As part of efforts to stimulate the economy, Moscow has put
forward a meager privatization program through 2022, which looks to
sell off shares in a number of state companies, the largest by far
of which is VTB, Russia's No. 2 bank. But privatization is unlikely
to bring any major source of new revenue into the government's
coffers. Indeed, many analysts see an increasing role for the
government in the economy. Top Russian tech firm Yandex recently
was forced to agree with the government on a new shareholder
structure that would ensure the company's controlling shares don't
fall into foreign hands.
Protests in Moscow last year were the biggest display of
dissatisfaction with the Kremlin in nearly a decade. While various
opposition politicians, including Alexei Navalny, tried to turn the
protests into a sustained movement against the Kremlin, the use of
police force and court cases against protesters helped snuff out
opposition for now.
Mr. Grove is a reporter for The Wall Street Journal in Moscow.
He can be reached at thomas.grove@wsj.com.
(END) Dow Jones Newswires
January 19, 2020 14:48 ET (19:48 GMT)
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