EUROPE AND THE GEORGIAN CRISIS – August 20, 2008

The Russia’s invasion of Georgia may be a turning point in the history. However, it is hard to believe those voices, which claim that a new Cold War is coming and that the West will define itself once again in opposition to the Orthodox civilization. Russia is not a match to the West and never will be again. It is a utopian dream of some of Russia’s elites, who believe that their country can become a counterweight to the overwhelming power of the West.

SOME FACTS ABOUT RUSSIA

In 2007, Russia’s Gross Domestic Product measured in purchasing power parity equaled $2.088 trillion, with GDP per capita of $14,700. However, its GDP measured in the official exchange rate, which reflects a country’s real economic power in comparison to its neighbors, equaled merely $1.286 trillion. At the same time, Italy had a GDP at the level of $2,105 trillion (measured in the official exchange rate), with GDP per capita of $30,400, which was almost twice as high as in Russia.

Regardless of Russia’s global ambitions it is still an economic dwarf, which long-term objective can be to overtake the economy of one, perhaps two middle-sized European countries, but no more than that. With the economy of that size, it is impossible for Russia to match military potential of the West and to endure another arm race characteristic for a Cold War. Theoretically, Italy itself would be economically able to build up military capabilities matching those of Russia, should it wanted to do so.

Some may argue that the high oil and natural gas prices will drive up the Russian economy to a very high numbers, but that is very unlikely. Russia ended 2007 with its 9th straight year of growth, averaging 7% annually. However such an annual growth is not characteristic for Russia as an exporter of oil and gas only, but is a feature common to the whole post-communist bloc, including countries with no natural resources whatsoever. For example last year, Estonia’s GDP grew by 7.1%, Latvia’s by 10.2%, Lithuanian’s by 8.8% and Poland’s by 6.5%. All those countries were able to achieve comparable or higher growth rate without depending on oil and natural gas exports at all.

Russia achieved its high rate of growth in the last years mainly because of its energy exports, what coincided with the high oil and natural gas prices at the global markets. Russia is exporting 5.08 million barrels of oil per day and in 2007 exported 182 billion cubic meters of natural gas. From that perspective, Russia must be qualified as an economic underachiever in this sense that its economy has been mainly driven up by the oil and natural gas exports. As a result, Russia has become a sort of economic mono-culture, and is moving in the direction of forming the economy characteristic for countries like Saudi Arabia and other major oil exporters. The consequences of that will be very significant. Russia will be unable to use energy supplies as a political weapon for an extended period of time. Blocking energy supplies to European countries would drastically lower Russia’s GDP and considerably weaken its economy. What we may expect, however, is that Russia may try to cut off the energy supplies in critical periods of the year, during a very severe weather conditions in the winter time. It would be very hard for a chosen country to sustain such an “energy attack” by itself, even over a short (two, three weeks long) period of time. If there would be solidarity among the European Union’s members to share energy supplies during such “energy attacks”, Russia would lose this political weapon as well.

Lastly, there is a major factor, which many analysts seem to forget to take under consideration when predicting future performance of Russia’s economy. Presently, Russia has a population of 140 million people. However, according to the United Nations’ Population Fund, its population is decreasing by one million a year and by 2050 will drop by almost one third to the amount of 100 million people. As a result, the domestic demand for goods and services will dramatically decline and significantly lower Russia’s GDP. Additionally, the price of oil and natural gas may not be as favorable to Russia in the future as it is now. For example, the United States experienced this year, in the first and second quarter, a decrease in domestic oil demand and the Bush Administration announced plans to begin drilling offshore. It has already lowered the oil price at the global markets and has potential of lowering it even more. All Western countries have started seeking energy independence and many of them are developing alternative energy programs, which would lower their dependence on oil and natural gas supplies in the future.

Russia’s lack of considerable economic power will result in incapacity to militarily match the might of the West.

THE MISSILE SHIELD

From the strategic perspective, the recently signed deal placing the U.S. missile defense system in Poland and the Czech Republic may end Russia’s nuclear advantage over Europe as well. The missile shield is designed to protect Europe and the U.S. from countries like Iran, however its role may be redefined should the necessity require. There will be ten interceptors located in Poland, but it should be regarded as an original plan only. If Russia really tried to challenge the West, then the number of the interceptors could be increased to one hundred, four hundred or whatever the case may be. It would be the exact reversal of the situation described by Caspar Weinberger, the Secretary of Defense in Ronald Reagan’s Administration, in his book The Next War, in which he assumed contrary circumstances under which the missile defense shield was developed first by the Russians and therefore deprived the U.S. of its nuclear weapons strategic deterrence.   

WHAT IS THERE FOR EUROPE?

The Russian invasion of Georgia put the European Union in a peculiar situation. Firstly, it proved that there is neither single foreign policy nor any solid grounds for it among all EU members. The tone of the Eastern Policy has been dictated by the economically and militarily weakest countries of the Union, this is by Poland, Latvia, Lithuania and Estonia (joined also by Ukraine, which however is not the member of the EU). The heads of the five mentioned states flew to Tbilisi to support Mikhail Saakashvili without even waiting for Nicolas Sarkozy to finish his negotiations with Dimitri Medvedev. That visit was not coordinated or consulted with the EU’s Presidency at all. Additionally, Lech Kaczynski’s speech during the rally in Tbilisi in which he used very combative words has been received with reserve by the leaders of the Western Europe. The meeting of the foreign ministers of the NATO countries, which was held on August 19, 2008, further proved existence of serious disagreements between Eastern and Western Europe over how to deal with Russia.

There are two different groups formed, the first one is the anti-Russian group consisting of the Central and Eastern European countries and the second one is the pro-Russian group consisting of the Western European countries. There is a basis for a single foreign policy toward Russia among the Central and Eastern Europe’s countries and there is a basis for a single foreign policy among the Western European countries, however those two visions of the policy toward Russia are not compatible. The West favors cooperation, while the East favors Russia’s isolation. If we add to it the problem with the ratification of the Lisbon Treaty, it may result in the division of the EU into two different political blocs. Should that happen (the two-speed Europe, has been already advocated by many Western leaders), the strategic consequences would be far-going. Firstly, the EU would cease to be a security factor for countries of the Central and Eastern Europe, which would have no choice but to closely align themselves with the United States. The Donald Rumsfeld’s vision of the Old and the New Europe would become a reality. Secondly, any division within the EU would diminish political power of countries like Germany or France. The strategic security alliance between Central/Eastern Europe and the United States would elevate the importance of the Eastern bloc, at least on the European continent, and would create a counterbalance to the political standing of Germany and France. As a consequence, the transatlantic divide would be limited only to the disagreements between the Western Europe and the U.S.

The creation of the two-speed Europe would certainly accelerate and tighten cooperation of the Central European countries. For example, the strategic interests of Poland and Lithuania are almost identical, what already lays foundation for far closer cooperation and integration between those two countries than the ones within the EU.

Europe, however, may react differently to the Georgian crisis as well. The Russian aggression may become a long awaited external factor speeding up the European integration. It may also help to redefine the NATO’s purpose. It all will depend on how the European countries react to the crisis in longer term and how the situation in Georgia continues to develop. The acceleration of the integration would require some conscious sacrifice on the part of many European countries. For example, Poland and other Eastern European countries would have to drop their war-like rhetoric toward Russia and seek some workable compromise with the Western Europe. On the other hand, the Western Europe would have to acknowledge that Russia poses a real threat to the Eastern European countries, therefore tightening ties with Russia and seeking strategic partnership with it, is simply dangerous and undesirable under present circumstances.

Russia has made many mistakes by itself, what should help Europe to make the right decision. Russia has seriously damaged its relations not only with the Eastern European countries, but also with the Great Britain (the Litvinenko scandal) and is now undermining its relations with France as it is refusing to implement the peace plan negotiated by Nicolas Sarkozy earlier this month. Its ties with Sweden, which cancelled a mutual military exercises, and with the United States, which did the same, have seriously suffered as well. It amounted to the situation that Carl Bildt, Sweden’s Foreign Minister, indirectly called Vladimir Putin and Dimitri Medvedev the new Hitlers, although Sweden has always been a neutral country. To add insult to injury, Russia decided to invade Georgia during the Olympic Games in Beijing, what was an affront to China.

Finally, Russia’s irresponsible threats that it will launch a nuclear strike against Poland (a statement which prompted the reaction of the U.S. Secretary of Defense, who scoffed at the idea), give strong argument to those, who advocate EU’s closer political and military integration. Until recently, there was no good argument to persuade the Irish to organize a second referendum for the ratification of the Lisbon Treaty. However, the Russian invasion of Georgia and its direct threats against Europe may become such a factor and have the potential of influencing the Irish’s public opinion about the necessity for accelerating the European integration.

Sebastian Aulich