Jul 18th 2014

Russia, the U.S., and Preservation of the Status Quo

by Daniel Wagner

 

Daniel Wagner is the founder and CEO of Country Risk Solutions and a widely published author on current affairs and risk management.

Daniel Wagner began his career at AIG in New York and subsequently spent five years as Guarantee Officer for the Asia Region at the World Bank Group's Multilateral Investment Guarantee Agency in Washington, D.C. After then serving as Regional Manager for Political Risks for Southeast Asia and Greater China for AIG in Singapore, Daniel moved to Manila, Philippines where he held several positions - including as Senior Guarantees and Syndications Specialist - for the Asian Development Bank's Office of Co-financing Operations. Prior to forming CRS he was Senior Vice President of Country Risk at GE Energy Financial Services. He also served as senior consultant for the African Development Bank on institutional investment.

Daniel Wagner is the author of seven books: The America-China Divide, China Vision, AI Supremacy, Virtual Terror, Global Risk Agility and Decision Making, Managing Country Risk, and Political Risk Insurance Guide. He has also published more than 700 articles on risk management and current affairs and is a regular contributor to the South China Morning Post, Sunday Guardian, and The National Interest, among many others. (For a full listing of his publications  and media interviews please see www.countryrisksolutions.com).

Daniel Wagner holds master's degrees in International Relations from the University of Chicago and in International Management from the Thunderbird School of Global Management in Phoenix. He received his bachelor's degree in Political Science from Richmond College in London.

Daniel Wagner can be reached at: daniel.wagner@countryrisksolutions.com.

A variety of foreign policy analysts have, over the past several years, gotten into the habit of referring to Russia/U.S. relations as a new Cold War. This is misguided, for a number of reasons. Bilateral relations between the two nations are indeed at a post-1991 low, but the result has not been a declaration by either that their opponent is a mortal enemy, or that they do not or will not collaborate in the political and economic arenas, or that foreign policy is being conducted with the specific purpose of undermining the other. Rather, a desire to broaden spheres of influence (a Cold War term) have taken on renewed importance and define much of what is going on.

Unlike during the Cold War, soft power has assumed a prominent place in the landscape. Both Russia and U.S. of course routinely flex their military muscles throughout the world, but they are also attempting to woo would be allies through trade and investment agreements, dispersal of humanitarian aid, social media, and public opinion. In that regard, they are as formidable foes today as they were at the height of the Cold War. Indeed, Mr. Putin's use of imagery (bare chested on horseback, delivering karate blows, etc.) is as powerful as any projection of military power to the Russian people and Russia's neighbors. I couldn't see Brezhnev doing that.

While the U.S. remains the beacon of freedom, democracy and opportunity to much of the world, its reputation has been tainted by a combination of the disastrous military engagement in Iraq, its handling of the Arab Awakening, and what many perceive as either reckless interventionism (during the Bush II years) or feckless disengagement (during the Obama years). The political gridlock and nepotism in Washington also has many around the world questioning whether America is a political system worth trying to emulate. That has impacted America's ability to be effective in the soft power arena.

Here, Mr. Putin has an advantage. While many around the world may chide him for his overt display of testosterone, it speaks volumes to people who identify with his unabashed bravado and Russia's willingness to challenge the status quo. In the body of global public opinion, Mr. Putin has plenty of admirers, which gives Russia an incentive to continue thumbing its nose as the U.S., and as a member of the BRICS, to thumb its nose at the post World War II political and financial system.

Neither side has much of an incentive to change the bilateral status quo, having determined that a) it is unlikely to achieve much, even if there was a meeting of the minds on the subject (which there is not, nor is there likely to be), and b) there may be more to be gained in the longer term if the rather stark differences between them -- and what they represent -- became more apparent to more people.

The choice appears to be (in the eyes of many) between a) Russia as a former global power, ruled by a strong man (wearing a cape of 'democracy'), which seeks to restore part of its former glory by resurrecting old alliances, flexing its muscles, rejecting the existing world order, and challenging 'the way things are' on a broad scale, and b) the U.S. as a fading superpower (with China nipping at its heels), trying to 'do the right thing' in the world (but really just looking after itself and its interests), paralyzed by its own hubris and political infighting, and having difficulty get much of anything done domestically or internationally.

There is plenty to like and dislike about both. As such, given the fractured and evolving global political landscape, it is hard to predict which side may ultimately prevail -- not in a literal sense, of course, but in terms of which is likelier to achieve its objectives. Swimming against the tide has its own appeal at a time when virtually everything about the world order seems to be up for grabs. By the same token, trying to maintain stability has obvious appeal.

The fissures in bilateral relations between Russia and the U.S. were well under way before the Ukraine Crisis erupted. It has become a convenient rallying point for proponents and opponents on both sides, but has also served as the death knell to the idea that there will a reset of the reset of the reset in bilateral relations between the two countries. The battle lines are clearly drawn, and the stakes are high, which is yet another reason neither has much interest in backing down.

More to the point, having such battle lines drawn seems to suit the powers that be -- in both countries -- rather well, as a convenient rallying point for nationalists to wave the flag, for extremists to promote their causes, and for the people who hold the levers of power to maintain their hold. Russia is a well-ingrained enemy of the U.S., and vice versa. For that reason, not too much effort is required to dust off and re-oil the propaganda machines on both sides of the Atlantic. Both sides have an interest in prolonging the current status quo between them for the foreseeable future.



Daniel Wagner is CEO of Country Risk Solutions and author of the book "Managing Country Risk".

Follow Daniel Wagner on Twitter: www.twitter.com/countryriskmgmt




 


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