MARCHING THROUGH RED SQUARE

>From The Economist print edition
May 20th 2010

A pragmatic new foreign policy may be a plus, but it does not mean
that Russia is ready to make any changes at home

ON MAY 9th soldiers from NATO countries, including America, Britain
and Poland, marched across Red Square in Russia’s Victory Day parade.

Beethoven’s "Ode to Joy", the anthem of the European Union, was
played along with the Soviet-era national anthem. Military parades
are symbolic and the Kremlin has long put Russia’s wartime victory
at the centre of its post-Soviet identity. But this parade was meant
to project the image of a self-confident, powerful country seeking
better relations with the West.

A year ago it symbolised Russia’s victory over Georgia and its
American backers. These days Dmitry Rogozin, Russia’s ambassador to
NATO, talks of common values and the trustworthiness of America. And
Radek Sikorski, the Polish foreign minister, praises the openness of
the Kremlin in investigating the Smolensk air crash and says Poland
is an ally.

Russia’s foreign policy has changed-and the change goes beyond
rhetoric.

After 40 years of tedious talks, Russia has signed a maritime border
agreement with Norway. It is using soft power in Ukraine. Perhaps
most significant is the improvement in relations with Poland,
a centuries-old irritant. After years of exploiting differences
between old and new members of the European Union, Vladimir Putin,
Russia’s prime minister, has realised that EU solidarity is more than
mere rhetoric.

Germany’s Angela Merkel made clear two years ago that, if Russia
wanted better relations with the EU, it had to mend fences with
Poland. That required a shift in the Kremlin’s historical discourse
and its taste for Stalin. Mr Putin has been remarkably flexible. Last
year he went to Gdansk to mark the start of the war; this year he
knelt to commemorate victims of the Katyn massacre ordered by Stalin
in 1940. The importance of Poland in the Kremlin’s eyes has grown
along with the prospects of shale gas in the country. Gazprom is now
said to be sweet-talking the Poles into a long-term gas contract. In
the contest between gas interests and Stalin, Stalin loses.

There is no point sulking or being belligerent with the West, the
Kremlin seems to have decided. As Mr Putin has said, Russia should
present a smiling face to the world. A smile, however, does not
alter nature; the Russian shift has occurred without significant
change inside the country. Russia has not become less corrupt or
more democratic. Russian troops remain in part of Georgia; Mikhail
Khodorkovsky, the former Yukos boss, is still in jail.

Russia has not abandoned its claim to a privileged interest in the
neighbourhood.

Dmitry Trenin, head of the Moscow Carnegie Centre, argues that
Russian foreign policy under Mr Putin has always been more defensive
than offensive.

It is shaped more by vested financial and political interests than by
ideology or geopolitics. Russia’s return to business as usual was made
easier by Barack Obama’s reset policy (seen in Moscow as an admission
of past mistakes) and the shelving of NATO expansion. The financial
crisis has also shown up Russia’s vulnerability.

After a decade of rising oil prices and budget surpluses, Russia
is running a deficit and looking to borrow money. The crisis has
exploded a model of economic growth that relied on rising oil and gas
prices. To keep its grip on power, the Kremlin has now come up with
a different idea: modernisation to renew the Russian economy without
changing its political system.

Russia’s new pragmatism is set out in a leaked foreign-ministry
paper. The document is not an example of liberalism and openness,
but it argues that Russia must form modernisation alliances with
leading countries and attract Western technologies while advancing
the interests of Russian companies abroad. In a sign of desperation,
even Armenia is seen as a channel for the transfer of technology to
Russia. Russia’s wish list includes visa-free travel, the adoption
of EU standards and membership of the World Trade Organisation and
the OECD rich-country club.

The EU’s attitude has been cautious and more realistic than many
suppose.

Progress in EU-Russia relations has been painfully slow. Barring
a few appeasers, most governments in Europe, including Germany’s,
have no illusions left about Mr Putin’s Russia: its weak property
rights, high corruption and the symbiosis of state power with
private financial interests. Yet most EU governments also embrace
the idea of modernisation. A large emerging market with a huge
demand for technological catch-up serves the interests of European
companies. Adopting EU standards would also curb Russia’s ability
to impose arbitrary trade sanctions. And many see Russia’s slogan of
modernisation as a chance, however feeble, to push for its political
transformation.

Talk of modernisation has not removed basic disagreements. Mr
Medvedev’s November proposal for a new European security treaty
focuses on hard power and implies a veto on NATO expansion which
is unpalatable to the West. It is being discussed as part of the
so-called Corfu process, but one European politician likens it to a
perpetuum mobile that will go on forever without reaching a conclusion.

> > From Russia’s viewpoint, Mr Medvedev’s scheme has helped to divert
> > attention from Georgia. "[They] stopped discussing Georgia and
started discussing this proposal," Mr Rogozin says. Russia has kept
its military presence not just in Georgia but in other former Soviet
republics. It has just agreed an extension of the Black Sea fleet’s
lease in Sebastopol, in Ukraine.

As the foreign-ministry document asserts, Russia needs to consolidate
the former Soviet space by, for example, pushing the customs union
between Russia, Belarus and Kazakhstan. Brussels has warned Ukraine
that, were it to join this customs union, it would jeopardise its
partnership with the EU.

Russia itself sees the EU as a source of innovation, but not a model
for democracy. Talk of common values and the rule of law causes
heartburn among such Russian officials as Vladimir Chizhov, a smiling
and impenetrable ambassador to the EU. Asked what Russia wants from
the EU, he starts with what it does not want: to have it as a bossy
patron come to modernise Russia. "We see it as a purely utilitarian
initiative," he says.

The main problem is not that Russia defends its own values (it has few)
but that its leaders think the values gap does not exist and the West
is hypocritical to talk of it. Unlike Mikhail Gorbachev’s policy of
openness, which was inseparable from domestic liberalisation, Russia’s
new detente implies no political change at home. The foreign-ministry
document talks of the need to project the image of Russia as a
democratic state with a socially oriented market economy-but says
nothing about the need actually to become one. Russia’s rapprochement
is fragile since it hinges on an idea of modernisation that is unlikely
to succeed without liberalisation. The risk is that when modernisation