American Missive

“We are not afraid of anything, including the prospect of a new Cold War..,”
—Dmitry Medvedev, on RussiaToday television, Tuesday, August 26, 2008.

ATLANTA— These comments were made in connection with Mr. Medvedev’s signing of Russia’s stunning resolution to recognize the independence of South Ossetia and Abkhazia from Georgia. After making the comment, Mr. Medvedev immediately downplayed it, ultimately concluding that whether a new cold war occurs is largely dependent on the actions of the United States and the West. Nonetheless, the mere suggestion of a new cold war from the lips of the Russian president should be enough to send shivers down every westerners’ spine. Russia is asserting itself again in new and dangerous ways. Will there be a new cold war? I’m not so certain, but the event is startling nonetheless.

With this act, Russia has announced its return to the international stage as a major world player, seeking to establish itself as a counter to US and western hegemony. While this is easily the most dramatic act in their reassertion of power, Russia has taken other dramatic steps to test Western resolve in recent years. They have resumed regular ship patrols in the Arctic and the Mediterranean. Russian bombers have resumed regular patrols throughout the Pacific, including flights off the coast of Alaska and Guam. These are military maneuvers not seen since the collapse of the Soviet Union. They are intended as a symbol of Russia’s expanding military and financial might. They are meant to counter NATO’s continued expansion into Eastern Europe and the continued deployment of the United States’ missile defense shield.

How is Russia able to do this? The Russian economy. In recent years, Russians have been experiencing a period of unparalleled economic growth. The growth has been fueled by oil and energy exports and massive international investment. In 2007 alone, over $100 billion was invested in Russia from abroad, an all-time record for any emerging market country. Growth has continued into this year and the IMF projects GDP growth of over 7% throughout the remainder of the year. Not small stuff, particularly in comparison with the laggard United States economy. This has surely solidified Vladimir Putin’s grip on power, through his front man Dmitry Medvedev. As an example, consider that the incursion into Georgian territory is surprisingly popular in Russia, with polls indicating over 70% of Russians agree the intervention was warranted.

What are we to make of all this? I personally find this very compelling. I speculate that over the course of the next few months and years, this could become significant enough to eclipse the “war on terror” as the primary focus of U.S. foreign policy. The rise of a newly assertive and clearly aggressive Russia gives us good reason to be concerned. Russia is a substantial force and a historic enemy. They have increasingly aligned themselves with the interests of rogue states with strong anti-American sentiment, including Cuba, Venezuela, and Iran. All of this seems to be part of a broader plan to counter-balance American influence.

I remain hopeful, nonetheless, that this will not result in a new cold war, on the basis of two economic arguments (among others that could be made, I’m sure). I am a big supporter of the continued globalization of the world economy. Now, I support it in a broad sense. Specific out-workings of continued globalization may or may not always be beneficial. Nonetheless, I believe the increasing inter-connectedness of world economies over time provides a significant deterrent for large-scale wars. In the case of Russia, it is clear from the articles I referenced above that Russia’s economic growth is being heavily fueled by foreign investment. If Russia continues being aggressive in international policy, I would think it risks scaring foreign investment off of its shores, thereby damaging its long-term economic growth potential.

Second, in the articles referenced above, Russia’s economic growth is not without its problems. Inflation rates have been extremely high in recent months, frequently exceeding 10%. Further, consumer indebtedness is growing. If Russia continues distracting itself with militarization while these problems go untended, then these problems could damage long-term economic growth and ruin the current goodwill of the Russian public.

For the above two economic reasons, I think the United States and the West may avoid a new cold war. I think they are wise to use bold words and to not be intimidate by Russia’s bold actions. Nonetheless, I remain hopeful that this will be resolved through non-military means. Russia’s assertiveness seems to be fueled by its economic growth. It would seem irrational to put that growth at risk by stimulating a new cold war.

Would be curious to know your reactions. Please post below (click on the article title to see the post box).

And let’s hope that despite these tragic and startling recent events, that peace in Eastern Europe is achieved without long-term bloodshed and misery for its people.