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Karen Dawisha on How Putin Views the West, Interview With Renowned Russia Expert and Author of Putin's Kleptocracy

The Huffington Post The Huffington Post 29/10/2015 Samuel Ramani
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Karen Dawisha is the Walter E Havighurst Professor of Political Science at Miami University in Oxford, Ohio. She is a world-renowned Russia expert who has written extensively about Soviet foreign policy, Russia-Middle East relations, and contemporary Russian politics. Her most recent book, published in 2014, is Putin's Kleptocracy: Who Owns Russia?Putin's Kleptocracy was widely praised for its brilliant and in-depth examination of the Kremlin's links to organized crime. But it also caused international controversy by being denied publication by Cambridge University Press on the grounds that it violated Britain's libel laws. I interviewed Karen Dawisha via Skype on October 27, 2015. The transcript of the first part of our interview, dealing with Russia's relations with the West is below:
The causes of Vladimir Putin's antipathy towards the West are a widely debated topic amongst Russian foreign policy experts. Do you think that Putin harbored anti-Western sentiments throughout his career and masked them in the early years of his presidency? Or has his hostility towards the West developed more recently, as a product of changing geopolitical conditions?Karen Dawisha: That's an interesting question. In some ways, Putin might not even be anti-Western now, as from the very beginning, he has been willing to use Western institutions like banks and financial institutions. At the start of his time in power, he had no objection to having senior Russian officials use Western legal institutions to secure contracts. So if he were anti-Western in the Soviet sense, Putin would have obliged Russian officials to cut themselves off from Western institutions. His rhetoric has certainly become a lot more anti-Western over time; his recent Valdai speech was relentless in its effort to split Europe (who wants to do business with Russia) from the United States. With regards to the security aspect, Putin, in his first years in power did not appreciate how much damage the West could do to him in the security field.
Moving NATO closer to Russia's borders has been a negative thing for Russian security. It has been a very positive thing for the new members of NATO, so you can agree or disagree with it as a policy depending on your vantage point. I don't think Putin realized how serious the West was about NATO expansion; and the prospect of Georgia and Ukraine entering NATO was the breaking point for Russia-West relations. Putin saw NATO's overtures to Ukraine and Georgia, as proof that there were no limits to US adventurism, from his point of view. So I think there has been a change in how he views the West at the rhetorical level and to a lesser extent on a substantive level. But when it comes to trade relationships with the West and using Western institutions, I do not think there has been much of a change in perspective over time.
You mentioned that Russia viewed NATO expansion as a negative thing for its security. In what ways in particular, did Putin regard NATO as a threat to Russia?Karen Dawisha: The missile defense issue was a key source of tension between Russia and the West. The Russians were adamantly against NATO missile defense efforts from the very beginning, so on this issue, their view has not changed. As we saw in his Valdai speech last week, now that there is an agreement with Iran and a lesser rationale for missile defense, Putin will continue to reiterate the idea that missiles were always aimed at Russia and how it was unfair.
Russia's aggressive foreign policy has sometimes been linked to regime consolidation concerns, stemming from the consequences of slower economic growth after 2008 relative to Putin's first terms in office. Do you think that Russia, by belligerently opposing American interests, is trying to blame the West for its economic problems to strengthen pro-Kremlin nationalism at home? Karen Dawisha: I think Putin's aggressive foreign policy is closely related to economic conditions. It becomes apparent when you analyze the effect of sanctions, which include sanctions on individuals, sector-specific sanctions and Putin's counter-sanctions. The effect of the price of oil is widely discussed, but it is important to recognize that the devaluation of the ruble was Putin's decision. Putin loves to tell everyone that the ruble devaluation is the West's fault and to wrap it up in an anti-Western package. But if we look specifically at the devaluation, it occurred because the Russian central bank under Putin's guidance and with his approval bet against the ruble. They let the ruble go down and bought foreign currency to push it down even further.
Why did they do that? It is because they couldn't pay their social obligations if the ruble stayed at 30 to a US dollar but they could pay them if the ruble was 60 to a dollar. Now Russians cannot afford to travel, even to popular destinations like Turkey and Egypt. Statistics indicate that there is at least a 25% decline in Russians visiting these countries. That's not the West's fault, that's the ruble. It's the fault of the Russian government. And its not just foreign travel, it affects what people can buy in the marketplace. In particular, what kinds of foreign medicines people can buy in the market. They can buy half of what they used to be able to buy.
Most people didn't buy foreign foodstuffs so fewer people care about these items. But what they do care about is that the Russian economy under Putin became dependent on the importation of basic foodstuffs. Things like German jams started to appear all over Russia, now they are gone. The question people are asking is why there was not more support in the first eight years of the Putin regime for the diversification of the Russian economy. The answer is that the Russian government was making money by maintaining a reliance on oil and gas. So today, the overwhelming majority of the Russian economy's profits come from oil and gas. That was a decision that Putin and his allies made, because its very hard to collect rents on food but easy to collect rents on oil and gas. There are only two points of rent collection in the oil and gas industry: the point in which energy resources come out of the ground and the point in which they come out of the country.
Some of Putin's closest allies, like Rottenberg and Yakunin have entered other sectors now. They are buying orchards because they want to diversify into agriculture. But the sustainability of that is doubtful, as agriculture is not very efficient in terms of rent collection.
During the colored revolutions and Iraq War, Putin rhetorically condemned Western policies but did not use military force. Since the 2008 war in Georgia, Putin has transitioned towards the use of military aggression in the CIS region and abroad. What do you think explains this policy shift?Karen Dawisha: I think it is because it took a lot of time for Putin to develop the Russian military to the point that it could viably launch a Crimea-style campaign. Lets flashback to the August 2000 Kursk disaster. Putin blamed that catastrophe as being the fault of the oligarchs, who were trading in scrap metal and selling old military equipment abroad. The oligarchs undoubtedly did this, but Putin engaged in a fair amount of sales himself too while he was in St. Petersburg. So he is not blameless in that general trend. After 2000, Putin become president and he had to figure out how he was going to deal with the poor state of the Russian military. I don't think he did much about this initially. But I think Russia began to deal with this more seriously around the time of the reset in 2009, when Dmitri Medvedev was president and Putin was prime minister. Putin complained a great deal about America's violation of ABM (anti-ballistic missile agreements). But two nuclear control agreements were signed under Medvedev with the Americans.
Putin during this time was working on escalating Russia's military buildup. What happened in Crimea and even more so in Syria was surprising, not just because of the decision to use military force, but because Russia is ready to use it. Russia is using Syria as a testing ground for new weaponry. Obviously, there are problems. Four Russian cruise missiles have landed in Iran, for example. But they now clearly have developed what the West has, which is high-precision shock-and-awe weaponry. Russia has weapons that can create a huge military and political impact, short of the use of nuclear bombs. And they were developing these armaments at a time when we were asleep at the switch.
It has been frequently speculated that Putin's foreign policy is motivated strongly by the protection of authoritarian allies and his fear that popular protests against kleptocratic regimes, like Viktor Yanukovych's Ukraine, will reverberate back at home. Do you think that regime type and political survival fears are important considerations amongst Kremlin decision-makers?Karen Dawisha: Yes, I think these fears play a big part in shaping his conduct. He is not calling for a Kleptocracy International, but at the same time he is supportive of authoritarian regimes, because he believes they understand how the world works. Regimes with one-man rule, like Assad, Lukashenka, and Yanukovych, gain Putin's backing because he knows that if the leader agrees to what he wants, Russia's interests will be served. There are no checks and balances; Putin just needs to gain the support of one individual.
There is also a money aspect to it, which is understudied. Putin has a tremendous knowledge of Assad's finances, for example. It has been said that Assad has moved his money to Russia. This was supposed to have happened last year. This is a huge move, especially when you think about the amount of effort the United States put into finding Saddam Hussein's money. The US found some of it at least, probably not all of it, but it was a very difficult process. There are also a lot of ambiguities about the terms of trade with kleptocracies. Do they trust gold bars? Do they work with German and Swiss banks? Do they work with agents who have opened their accounts in their own names? There is a vast amount of information about how these regimes work that we are just beginning to explore.
For example, the US Department of Justice recently announced an investigation into Deutsche Bank. And Deutsche Bank laid off 200 workers immediately, in their mirror trades department. Mirror trades have been used in the Islamic world, notably in Iraq under sanctions. The mirror trades that have been investigated at Deutsche Bank have been linked to Rottenberg and a relative of Putin. We do not know who the relative of Putin is; it could be his cousin, the son of his nephew who has been involved in business. But this is how it worked. Rubles were sold in Moscow to Deutsche Bank and Deutsche Bank in Germany puts euros into their account. There is no electronic transaction. It is just an exchange of money amongst trusted people across borders. The fact that this is happening at a very high level in Russia, involving major Western banks, indicates that mirror trades are a huge part of Russia's sanction-busting techniques.
It has been speculated that Russian officials closely aligned with Putin, like Vladimir Yakunin, who are under the shroud of corruption charges, have been kept in their positions and promoted simply to defy the West's sanctions policy. Do you think that Yakunin's prosecution has not occurred because Russia does not want to legitimize the sanctions?Karen Dawisha: I think Putin is being motivated primarily by regime cohesion. He needs to keep everyone in and everyone close to him. He doesn't need anymore top people living in the West. The last thing he wants is for anyone to bolt, or Yakunin to become another Kolesnikov who reveals embarrassing documents. Yakunin is one of the originals; he knows the date in which the operation was launched to seize power and who was part of it. For Putin's regime security, he cannot let Yakunin out, even though his son and grandson are out. It will likely be a long time until he sees them again. The same goes for other politicians too. Even Sergei Lavrov's daughter is in New York; the elites are in the Kremlin, but their children are often outside.
Finally, what do you regard as Russia's endgame in Ukraine? Is it a frozen conflict or do you think Russia will pursue further territorial expansion in Ukraine and beyond?Karen Dawisha: Putin realizes that re-igniting the Ukraine conflict will result in a tremendous loss of life. But in the event of a real war, there will be a scramble to Odessa. Russia could use troops in Moldova and combine them with troops east of Mariupol. Troops in Sevastopol will meet up in Odessa's ports and streets. Strategically, they have a winning strategy to take Odessa. But politically, they have a losing strategy. How would Russia keep Odessa? Odessa never really fell to the Nazis because of all of the underground capabilities, figuratively and literally speaking. But I think Russia has achieved its objectives in Ukraine. Ukraine is not a candidate for NATO or EU membership.
They do not need a push for Ukraine, as they can do something in Georgia without experiencing any losses. Every time there is a problem in Georgia, they move the border with South Ossetia 100 or 1000 feet closer to the pipeline. They have a trigger they can squeeze in Georgia if they need to do anything in Ukraine. They are also building a base in Belarus that could threaten the Baltics. I recently spoke to the president of Lithuania in Vilnius, and Lithuanians are very nervous.

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