Stratfor 13-Feb-14
Russia is facing a confluence of strategic challenges in the former Soviet periphery, an area where the Kremlin has worked hard to expand Russian influence over the past decade. An emerging financial crisis in Kazakhstan and the political crisis in Ukraine are threatening Russia's economic and strategic interests. At the same time, progress in Georgia and Moldova's path toward European integration is eroding Russia's leverage in the region.
What is a Geopolitical Diary? George Friedman explains.
These challenges to Russia's status as a resurgent regional power come at a delicate time because the country faces a growing host of domestic difficulties. Demographic decline, ethnic tensions and a continued dependency on an unreformed extractive industry are looming dark clouds on the horizon for the Kremlin. While not yet threatening Russia's dominance, the current crises in the former Soviet space are a challenge to Moscow's long-term strategy for the region.
Yesterday, the National Bank of Kazakhstan devalued the country's currency, the tenge, by nearly 20 percent in the aftermath of the emerging markets crisis that has been rocking developing economies over the past few weeks. The impact of the devaluation was immediate, with some currency exchanges and shops throughout Kazakhstan shutting down. More important, the devaluation has raised fears of contagion to other regional economies. A financial crisis in the Moscow-led Customs Union -- currently comprising Russia, Kazakhstan and Belarus -- would hamper the expansion efforts of the bloc and perhaps even threaten the cohesion of what has been a cornerstone of Russia's strategy to secure its Central Asian hinterland.
The Kazakh move has also placed additional pressure on the already volatile economic and political situation in Ukraine, where Russia faces yet another strategic threat. Constrained in part by its need to maintain its international image during the Sochi Winter Olympics, Russia has been unsuccessful in helping President Viktor Yanukovich to end the political standoff and defuse the protests that have been reinvigorated by support from the West as well as from independent domestic actors. The ongoing political stalemate in Ukraine has demonstrated that although Russia has significant levers of influence in the country, it is for now unable to unilaterally shape political outcomes.
Farther west and south, Russia faces growing pressure in maintaining its influence in another two traditional strategic focal points: Georgia and Moldova. While those countries are not as essential to Russia's security as Ukraine, they are the key for the Kremlin's strategy of consolidating its southwestern flank. European incentives have contributed to the development of Moldova and Georgia's Western-leaning trajectory in recent years.
While Georgia's current ruling Georgian Dream coalition has been more open to engagement with Russia than the previous administration of President Mikhail Saakashvili, Georgia is developing a strong partnership with NATO and is pursuing a path to European integration that threatens Russia's policy. However, Georgian Prime Minister Irakli Garibashvili has balanced Wednesday's announcement that the United States would finance his country's participation in the NATO Response Force with a public statement that he would be willing to meet with Russian leaders. Similarly, Moldova is building stronger ties to Western institutions.
Also on Wednesday, the European Parliament took a step toward visa liberalization for Moldovans, further incentivizing Moldovan leaders to strengthen cooperation with the European Union. Russia's support for breakaway regions, as well as its past economic pressures on Georgia and Moldova, have not been effective in dissuading the countries from pursuing integration with the West.
Much of Moscow's current assertive foreign policy in its periphery has been driven by concerns that its relatively strong position in the region will come under threat, especially when the United States is able to pay serious attention to the former Soviet periphery. The Putin administration is in the process of addressing the delicate question of restructuring the country's energy sector -- the lifeline of the country's economy -- while also managing the country's looming demographic crisis and growing ethnic tensions, which have the potential to spiral into violence.
The confluence of crises in its periphery may not necessarily signify a definite weakening of Russia's global and regional position -- the European Union, for all its rhetoric, remains weak and internally divided while the United States remains relatively distant -- but it adds to Moscow's growing burden.
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