U.S. And Russian Relations -- A Commentary

Russia's Woes Spell Trouble For The U.S.
-- Wall Street Journal

Obama shouldn't reward dictatorial Kremlin with goodwill overtures.

Russia faces a particularly nasty version of the global recession (at a minimum), and perhaps an economic "perfect storm." Regardless of how bad its economy gets, two broad political trends, each carrying profound implications for Russia's foreign policy and U.S.-Russian relations, are bound to emerge.

The first will be a growing dissatisfaction with the government, which may lead to a political crisis. The second will be a reactionary retrenchment: increased internal repression and more of its already troubling foreign policy. Managing the relationship with Moscow in the face of these trends is something President-elect Barack Obama and his administration should start thinking about now.

The size and depth of Russia's economic problems -- and thus the amount of political turbulence -- will depend primarily on two variables. The first is the ruble decline. The national currency is steadily depreciating and has reached an all-time low against the euro despite the central bank's having spent $161 billion on its defense since mid-September. The ruble's losing at least 25% to 30% of its value is a given; the key political issue is whether the weakening can be managed into a gradual decline, or whether the depreciation turns into a panicky flight from the currency. (Already last September Russians dumped around 160 billion rubles to buy $6 billion -- the highest demand for dollars since the aftermath of the 1998 financial crisis.)

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My Comment: Russia will be looking inward for the next few years. The financial crisis is now hitting the country, and the plunge in oil prices has made the situation worse. Internal ethnic problems, a backward military, and a perception of weakness will dictate a Russian Government policy to be more focused at home. No foreign adventures for this country in the foreseeable future.

U.s. and Russian relations will be passive at worse. Russia will be necessary as a transit point for Nato supplpies into Afghanistan since Pakistan has proven to be unreliable. Sanctions against Iran and North Korea will require Russian acceptance .... which they probably will give. The only sore point is missile defense in Europe. But I would not be surprised if some accommodations are made on this issue within the first year of President Obama's administration..