Debate: Is Russia in Decline?

August 22, 2018RM Staff

Russian President Vladimir PutinIs Vladimir Putin’s Russia rising, declining or stagnating, and compared to whom?

The answer to this question is of fundamental importance for the U.S. and the global order. Changes in Russia’s standing shape America’s and other great powers’ policies toward Russia, as well as Russia’s own policies toward other countries. Measuring the dynamics of Russia’s power in the 21st century is also of vital importance to the U.S. because Russia will continue to impact America’s national interests and the global order in profound ways in the foreseeable future for a number of reasons. The alternate positions that Russia can take on a number of issues central to U.S. national security affect the safety and security of America in substantial ways.

This debate, like others in our Contestable Claims section, takes on a crucial question impacting the U.S.-Russia relationship. In the opening argument, Simon Saradzhyan, director of the Russia Matters project, and Nabi Abdullaev, a lecturer at the Moscow School of Social and Economic Sciences and associate director at Control Risks, argue that Russia’s national power has been rising under Putin compared to Russia’s Western competitors, but declining relative to China and India. This, the authors argue, explains Russia’s more aggressive posture toward the West as it “assert[s] its vital national interests in countries or regions that it has traditionally viewed among its so-called ‘privileged interests,’” while also adopting a more accommodating attitude toward China.

In his response to Saradzhyan and Abdullaev, Andrew Kuchins, Senior Fellow at the Center for Eurasian, Russian, and East European Studies, Georgetown University, argues that “Russia is rising and declining simultaneously.” Russia's military power has grown, but "Putin has not created the conditions crucial for sustained economic growth and the development of new commercial technologies." In fact, Kuchins argues, Putin's policies "have for the most part hurt rather than helped Russia’s technological competitiveness and prospects for long-term sustainable economic growth." While "key elements of Russian power grew during Putin’s first two terms as president," Kuchins writes that they have "relatively declined or stagnated at best for the past decade."

DISCUSSION

Measuring National Power: Is Vladimir Putin’s Russia in Decline?

Measuring National Power: Is Vladimir Putin’s Russia in Decline?

May 04, 2018Simon Saradzhyan and Nabi Abdullaev

Executive Summary

As Vladimir Putin embarks on another six-year term as Russia’s president, Western pundits and policymakers are left wondering whether his reelection means that Moscow’s muscular policies toward America and other Western powers will continue or even escalate. But what is the reality of Russian power in the Putin era? Is Russia a rising, declining or stagnating power? How does its standing in the global order compare to other nations, including the United States, China and European powers? This report by Simon Saradzhyan, director of the Russia Matters Project at Harvard’s Belfer Center for Science and International Affairs, and Nabi Abdullaev, a lecturer at the Moscow School of Social and Economic Sciences, seeks to systematically answer these questions, which have been the subject of considerable debate in recent years. While some scholars have expressed the view that 21st-century Russia is in decline, others have dubbed it the No. 2 nation in the post-Cold War world.

Gauging Russia’s performance is important because the country continues to have a profound effect on America’s vital national interests and on the global order in the 21st century. To begin with, Moscow’s possible positions on issues central to U.S. national interests powerfully impact America’s security. The size and reach of Russia’s nuclear arsenal make it the only country that can destroy the U.S. in half an hour. Without Russia’s cooperation, efforts to contain the proliferation of nuclear weapons—whether among countries or non-state actors—are bound to fail. Also, whether Russia enters a full-blown military-political alliance with China will have far reaching consequences for the future of the global order. And the list goes on: Moscow’s cooperation remains essential in preventing Afghanistan from relapsing into a failed state, where the likes of al-Qaeda and ISIS could thrive again, plotting to attack the Western world. Russia has veto power on the U.N. Security Council, which allows Moscow to block any decision the U.S. may want adopted there. Russia’s potential as a spoiler, therefore, is difficult to exaggerate. Russia is also the largest country in the world, and transit through its territory—particularly as Arctic ice melts—can be important not only for the global economy, but also for American security, as the U.S.-led campaign in Afghanistan once showed. Finally, Russia has been the largest supplier to the world’s energy market for much of the past decade, and while the U.S. is increasingly self-sufficient in gas and oil, its European allies are not. Russia’s ability to impact all these issues of vital importance to the U.S. and its allies is to a large extent determined by its national capabilities—specifically, whether they are growing or shrinking. As important, America’s and other great powers’ policies toward Russia, and vice versa, are largely determined by how these countries’ leaders view Russia—as a rising power or a declining one.

To determine whether Russia is rising, declining or stagnating, the authors of this report have measured changes in Russia’s national power by analyzing a broad range of data, including economic output, energy consumption, population, life expectancy, military expenditures, government effectiveness, patents and even tourist visits. For a comparative perspective, Russia’s national power has been measured, first, in terms of the world as a whole and then alongside several categories of “comparands,” including key competitors and peers: five of the West’s leading powers, all four fellow members of the BRICS group, all former Soviet republics except the Baltic states and selected countries whose economies depend heavily on the production of hydrocarbons.1 To quantify their results the authors used variations of three existing models for measuring national power developed by Western and Asian scholars and devised a fourth experimental model. The research period, 1999-2015 or 2016 (depending on the most recent available data), was chosen because it begins after Russia’s economic free fall of the 1990s and corresponds with Putin’s time in office.

Key Findings

  • Contrary to claims of Russia’s imminent demise, two of the three models2 used to measure the country’s power vis-à-vis the world as a whole indicate that it has grown in the 21st century, while the third showed a decline of less than 1 percent. All four methods used to compare Russia to the above-listed comparands show that it has gained on its five Western competitors while remaining behind the U.S. in terms of absolute national power. (One of the methods also showed Russia’s national power to be less than Germany’s in absolute terms.) Russia’s gains, however, were not continuous over the research period and appear to be petering out as its economy struggles to regain the robust rates of growth it enjoyed in the first decade of the century and as Russia’s demographic improvements continue to lag behind the growth rate of the global population.
  • When comparing Russia to its peers—the post-Soviet republics, hydrocarbon-dependent countries and fellow members of the BRICS group—three of the four methods show the country to be neither the top nor bottom performer in terms of the growth of its national power. Significantly, according to most of these measures, Russia has lagged behind China and India both in the rate of growth of national power and in absolute power. The authors posit that Russia’s decline relative to China and its rise relative to its Western competitors could have been among the factors that made Moscow more accommodating toward Beijing, on one hand, and more assertive in its competition with the West in the post-Soviet neighborhood, on the other, emboldening the Russian leadership to stage military interventions in Georgia and Ukraine. If that proposition holds true, then monitoring changes in national power can help to predict nations’ behavior toward their competitors and peers.
  • The authors’ research reaffirms the proposition that the post-Cold War period of global unipolarity is coming to an end and that the world is returning to an era of competition among great powers. Two of the four methods used show that China has overtaken the U.S. in terms of national power, while the other two show that the U.S. has so far retained the No. 1 ranking but that the gap between the two is narrowing. China, however, remains far from becoming the sole dominant global power in the mold of America in the early 21st century or the British Empire in the late 19th. It remains to be seen whether the emerging multi-polar global order will be a new edition of the Concert of Nations among great powers—in which, as Moscow hopes, Russia will play an indispensable role—or will be based on relentless competition among these powers. One thing is clear: Russia’s place in the emerging world order will depend on whether or not it continues to rise.

Results by Research Method

1. The only single-variable approach used by the authors was the Gross Domestic Product Index (GDPI), which measures the ratio of Russia’s GDP to that of the world as a whole and to the GDPs of individual countries (in terms of purchasing power parity, or PPP, in constant 2011 international dollars). This method of measuring national power shows Russia to have gained on the world as a whole in 1999-2016 and on all five of its Western competitors, whose share of global GDP declined by double digits while Russia’s rose by 3 percent. Russia’s performance vis-à-vis its BRICS peers landed it right in the middle of the group in terms of rate of growth. Russia’s share of global GDP was the largest among the hydrocarbon-dependent countries in 2016, but four of the six outperformed Russia in terms of rate of growth, as did all the former Soviet republics except Ukraine. In absolute terms, Russia’s GDP on the index was behind China’s, the United States’, India’s and Germany’s, but ahead of the rest of the comparands.

2. The second model for measuring national power was devised by Chin-Lung Chang of Taiwan’s Fo-guang University and takes into account a nation’s “critical mass” (its population and land mass), GDP and military strength. According to this calculation Russia’s national power grew by 10.31 percent in 1999-2016, a faster rate than all of its Western competitors. A comparison within the BRICS group reveals that Russia lagged behind China and India in terms of rate of growth of power but surpassed South Africa and Brazil. Russia also lagged behind most of its post-Soviet and hydrocarbon peers in terms of rate of growth of power, but its absolute power was greater than that of its post-Soviet and hydrocarbon-producing peers.

3. The variables used in the third model, the Revised Geometric Index of Traditional National Capabilities (RGITNC), include countrywide population, urban population, energy consumption, military expenditures and value-added manufacturing. Under this method, Russia’s national power decreased by 0.98 percent from 1999 to 2016. In comparison, the power of Italy, Germany, Britain, France and the U.S. decreased, respectively, by 34.17 percent, 29.6 percent, 29.6 percent, 26.85 percent and 18.47 percent. The same period saw the power of China and India, Russia’s BRICS peers, grow by 106.53 percent and 29.84 percent, respectively, while the power of Brazil and South Africa declined by 14.42 percent and 4.39 percent, respectively. Most of Russia’s post-Soviet peers also saw their power increase in the research period, as did Russia’s hydrocarbon peers, with the exception of Venezuela, which declined by 38.68 percent. In terms of absolute power, Russia ranked the fourth-most powerful nation, behind the U.S., China and India. 

4. The fourth model for measuring national power is adapted from American intelligence analyst Ray S. Cline’s index of the perceived power of nations. This Experimental Index of National Power (EINP), as the authors have termed it, measures national resources, including territory, population, economic power, military power and technological prowess, along with a nation’s “capability to employ resources,” i.e., government effectiveness. Using this model, Russia’s national power grew by 118 percent between 1999 and 2016. In comparison, U.S. national power declined by 16 percent, while that of Italy, Germany, Great Britain and France—all of which cut their military budgets during this period—declined by 57 percent, 38 percent, 31 percent and 25 percent, respectively. Russia’s national power also expanded faster than any of the few BRICS, ex-Soviet and energy-producing peers for which data is available, including China and India. The dramatic growth in Russia’s national power was largely fueled by an increase in government effectiveness as defined by the World Bank (101 percent).

The authors also attempted to account for soft power, defined here as a nation’s attractiveness in the eyes of other nations. The method they came up with, dubbed the Experimental Index of National Power with Soft Power (EINPSP), was used to measure the national power of the U.S., China and Russia for 2007-2016—the only years for which comparable data was available. While Russia trailed the U.S. and China in the absolute value of its national power, its power grew by 15 percent; America’s, by contrast, declined by 13 percent, while China’s grew 41 percent. However, the results of the EINPSP have been excluded from this report’s final tally because it lacks a sufficient number of countries to make any meaningful comparisons.

Conclusion

While yielding differing results, nearly all the models used by the authors refute the notion that Russia’s national power has been in decline in the 21st century. Russia’s resources—as evidenced by the absolute value of its national power, no matter what method of measurement is applied—ensure that Moscow will remain a global player that affects the Western world and the global order in profound ways for years to come. Paradoxically, the impact on America’s national interests promises to be profound even under drastically different scenarios for Russia’s evolution: The U.S. and its allies would obviously find it difficult to benefit if Russia’s rise transforms it into the kind superpower that the U.S.S.R. once was; a failing Russia, however, would not be good news for the U.S. either, given that America’s adversaries might then be able to tap its resources and capabilities, including the world’s largest nuclear arsenal, with or without the Kremlin’s consent. To be sure, Moscow still faces formidable challenges in maintaining or increasing its national power in the 21st century. Whichever way those trends shift, the rest of the world should be tracking them closely. Both competitors and partners of Russia would do well to shape their policies toward this country based on a realistic assessment of its national power rather than on some far-flung forecasts of its “inevitable collapse.”

The opinions expressed in this report are solely those of the authors.

Download PDF of full report here.

Footnotes

  1. For comparisons in this category the authors have selected six countries that rely on oil and gas for 40 percent or more of their budget revenues.
  2. One is a single-variable method and the other two are modifications of multi-variable methods. Only these three methods were used to measure Russian power vis-à-vis the world as a whole, while all four methods were used to compare Russia to individual countries.
Author

Simon Saradzhyan

Simon Saradzhyan is the director of the Russia Matters project.

Author

Nabi Abdullaev

Nabi Abdullaev is a lecturer at the Moscow School of Social and Economic Sciences and associate director at Control Risks. 

Photo by Mos.ru shared under a CC BY 4.0 license. 

Russian Power Under Putin: Up and Down and Flatline

Russian Power Under Putin: Up and Down and Flatline

August 22, 2018Andrew Kuchins

Measuring Russian power in international relations has always been tricky: German Chancellor Otto von Bismarck in the 19th century wisely observed that Russia is never as strong or as weak as it looks. For those trying to gauge whether the power of the state in contemporary Russia is rising or declining, Simon Saradzhyan and Nabi Abdullaev have contributed one of the most methodologically rigorous analyses available in their recent report “Measuring National Power: Is Vladimir Putin’s Russia in Decline?” Overall, the authors conclude that, since Putin’s ascent to the country’s top office in 1999, Russia has been rising in power relative to the West while declining relative to China and India. The report has three weaknesses, however, that cast some doubt on the claims about Russia’s rise: It underestimates the significance of Russia’s decade-long economic stagnation; it gives too much weight to a single measure of government effectiveness; and it does not find an adequate way to assess the extent to which technological innovation is, or is not, boosting national power.

A few years ago, I argued that Russia is rising and declining simultaneously and I stand by that view. While Moscow’s military power has grown considerably, especially with the reforms begun in 2008 and increased military spending, Putin has not created the conditions crucial for sustained economic growth and the development of new commercial technologies. Moreover, the data behind Abdullaev and Saradzhyan’s report suggest that the two aspects of Russian power that the authors credit as the main drivers of its relative growth—GDP and government effectiveness—have gone through two distinct stages under Putin: a steady rise, followed by protracted flatlining. It is much easier, then, to make the case that key elements of Russian power grew during Putin’s first two terms as president, from 2000 to 2008, but have relatively declined or stagnated at best for the past decade. In addition, I believe the authors fail to accurately capture the reasons behind Russia’s economic growth and stagnation, as well as the increased significance of technological innovation, whose pace has increased exponentially in the past 20 years and whose role in national power will continue to rapidly increase.

A Few Words on Methodology

In their analysis, Abdullaev and Saradzhyan employ three existing frameworks for measuring national power and devise a new one of their own to look at Russia in comparison to four groups of “comparands”: leading Western powers (the U.S., Great Britain, Germany and France), rising powers (China, India, Brazil and South Africa), post-Soviet states (except the Baltics) and states highly dependent on hydrocarbon revenues. Overall, the frameworks are quite sophisticated in measuring various economic, demographic, geographic, social and political factors and they reach fairly consistent conclusions about Russian power since 1999.   

Russian Economic Growth

One of the two main factors identified by the authors as driving the rise in Russia’s national power, as mentioned above, is economic growth. Indeed, whether measuring in nominal dollar terms or according to purchasing power parity, Russian GDP more than doubled from 1999 to 2016. But, while the authors acknowledge that “the growth in-between [of Russian power more broadly] was not continuous and appeared to be petering out toward the end of the research period,” they play down the significantly divergent trend lines in economic growth: Essentially, there was a period of rapid growth from 1999 to 2008, averaging 7 percent a year, that outpaced all other countries in the analysis with the exception of China and, since then, there has been nearly a decade of prolonged stagnation in which Russian economic growth has averaged less than 1 percent a year and underperformed almost every other country in the report. Rather than “petering out,” this is more akin to “a tale of two cities.” It is not incorrect thus to conclude that Russia’s relative power increased during the period under analysis, but had the research period started in 2008 or 2009 the trajectory would likely look quite different. Moreover, while Abdullaev and Saradzhyan’s report is concerned with the past, ongoing stagnation of arguably the most important long-term factor for national power, economic growth, is more problematic than the authors seem to suggest. 

This brings us to the second key factor named by Saradzhyan and Abdullaev, similarly problematic—namely, more than 100-percent growth, according to World Bank measurements, in “government effectiveness.” Like economic growth, this indicator has stagnated for at least the last 10 years, along with the other five that make up the World Bank’s broader metric of “governance” (“voice and accountability,” “political stability/absence of violence,” “regulatory quality,” “rule of law” and “control of corruption”)[1], which the report does not take into account. Of the six governance factors, “government effectiveness” did see the largest increase for Russia, up to the 46th percentile. But most of this increase took place between 2000 and 2006. For the other five indicators—all of which, like government effectiveness have an impact on economic growth—Russia’s comparative ranking has declined or remained stagnant with the average at 22 percent (i.e., 78 percent of nations rank higher). Even including the government effectiveness ranking, Russia averages a dismal 25.5 percent. This is considerably lower than other large emerging market economies including China, India, Brazil, Mexico and others, not to speak of OECD countries. Abdullaev and Saradzhan are correct in noting the symbiotic relationship between economic growth and governance or government effectiveness, but the World Bank data only reinforces the two-stage trend line described above—up, then flat—and the fact that for a decade now Russia’s ranking on the most fundamental assessments of power has declined relative to its Western and non-Western competitors.

While not directly affecting the authors’ findings, their explanation for the reasons behind Russian economic growth under Putin also gave me pause. In their conclusion, the authors note the importance of the 1998 devaluation of the ruble in initially catalyzing the Russian economy, after which “growth was further facilitated by a period of continuously rising oil prices.” They go on to state that “the country’s economic growth in the research period could not have been sustained for more than 10 years straight were it not for the economic reforms pursued by the Russian government during Putin’s first presidential term.” Putin’s economic reforms in 2000-2002, including tax, labor and land reform, did play a role in promoting growth, but probably a secondary role at best by comparison with the reforms of the 1990s. In a forthcoming book, former deputy head of the Russian Central Bank Sergey Aleksashenko argues that the 1990 reforms to liberalize and privatize the Russian economy set the foundation for growth to come. [2] He notes, for example, that private companies accounted for 80 percent of the increase in oil production from 1999 to 2003, providing a big boost to the economy.

The aspect of oil money that is most concerning for Moscow’s power on the international stage is that high global prices for Russia’s main export commodity have not led to sustained economic growth. Economists agree that the dramatic rise of the oil price in 2003-2008 and the ensuing windfall revenue from oil and gas sales were far more powerful in driving Russian economic growth from 1999 to 2008 than other factors. (Aleksashenko likewise notes the burst of foreign investment in 2006-2008 until the global financial crisis.) However, although global oil prices since 2009, albeit through major drops and spikes, have averaged more than $70 a barrel—a historically high price—Russian growth has stagnated. This is precisely what economists Sergei Guriev and Aleh Tsyvinsky predicted in 2010. In their prescient study, they argued that weak institutional foundations and an absence of reforms would undermine growth despite a relatively high oil price.

A Caveat on the Military

Russian military strength has increased even more dramatically than economic output thanks mainly to an increase in spending by a factor of more than 10 since 1999, as well as reforms and other measures resulting in greater power projection.  Granted, Russia’s military power grew more quickly than before precisely at the time when the Russian economy began growing far more slowly. This is due to the lessons drawn from the five-day war with Georgia in August 2008 that revealed a number of the Russian military’s technological and logistical shortcomings, inspiring both major reform as well as increased spending. Already Russia’s ambitious military spending goals have been curtailed because of stagnant growth. As growth is likely to remain stagnant for a prolonged period, Putin’s fourth term will increasingly feel the strains in Russia’s guns vs. butter dilemma.

The Technology and Innovation Conundrum

Abdullaev and Saradzhyan are correct that it is difficult to quantify the impact of technological innovation on national power and to find a good proxy for any such measure. Ultimately, they settled on the number of “triadic” patents (filed at three specific patent offices in Europe, Japan and the U.S.), which rose for Russia from 84.6 in 2000 to 87 in 2015, according to the OECD. This measurement seems to have some obvious limitations. The first concerns the question of quality vs. quantity: One patent among thousands could be the spark for a multi-billion-dollar commercial enterprise or could catalyze production of new goods that revolutionize economies and/or military weapons. And in many cases it is virtually impossible to evaluate the potential impact of any innovation in its early development. A second problem especially applies to technological innovation in military weaponry: This can be government-sponsored research for which there will be no patent desired in order to maintain secrecy.

Aside from notable achievements in the Soviet period in space and military technology, historically Russia has lagged in the fields of technology and innovation from the tsarist era to the present time, especially in commercializing technology and innovation. Russian leaders from Ivan the Terrible to Peter the Great to Stalin and now Putin have each called for Russia to catch up with its competitors in economic efficiency and technology or face falling from the realm of great powers. A renowned historian of science, Loren Graham, attributes this persistent weakness not to a lack of world-class scientists and engineers, but rather to deeply held societal attitudes and weak rule of law, especially property rights. Unfortunately, as Andrei Soldatov and Irene Borogan argue in their excellent book, “The Red Web,” Russian technology companies are today increasingly threatened by the predatory policies of their own government. Although there are a few areas where Russian companies have world-class information technologies, their barriers to growth are increasing rather than decreasing. Compare, for example the extraordinary growth of the leading five U.S. technology companies—Amazon, Apple, Alphabet/Google, Facebook, and Microsoft—which have become the five most valuable companies in the country, with Amazon and Apple being the two most highly valued companies in the world. That is not going to happen in Russia, where stock markets are likely to be dominated for a long time to come by energy and natural resource companies.

In most measurements of technological and innovation capacity, Russia ranks no higher than 30th in the world, and considerably lower in some of those rankings, including in investment into research and development. The state-dominated efforts begun about 10 years ago to jump start Russian technological development, like Skolkovo, RosNano and others, have not proven to be effective, and the poor investment climate and Western sanctions have kept investors away from promising private-sector companies.

In the early 1980s, some leading Russian military thinkers, such as then Chief of the General Staff Nikolai Ogarkov, feared that the Soviet Union was falling too far behind the United States in the information revolution and that this would ultimately constrain Soviet military technological development. This is why he and some military leaders were supportive, in principle, of economic reform. Technological development is moving even faster today, and we should expect its impact on economic growth as well as military capabilities to be even greater.

While difficult to measure, technology and innovation will likely increasingly dominate other more traditional factors of power like geography, demography, the military and others. Vladimir Putin said last year that whichever country dominates artificial intelligence will rule the world. Maybe he is right, maybe not. What is clear, however, is that his policies for nearly 20 years now have for the most part hurt rather than helped Russia’s technological competitiveness and prospects for long-term sustainable economic growth. If Abdullaev and Saradzhyan had started their analysis in 2008, their conclusions would be different, and I fear that if we conduct another similar exercise in 2028 the conclusion will be a relative decline in power for the Russian Federation.

Footnotes

[1] For the World Bank data on governance, see http://info.worldbank.org/governance/WGI/#reports.

[2] Sergei Aleksashenko, “Putin’s Counterrevolution” (forthcoming October 2018, Brookings Institution Press).

Author

Andrew Kuchins

Andrew Kuchins is a Senior Fellow at the Center for Eurasian, Russian, and East European Studies, Georgetown University.

Original photo by NVO shared under a CC BY-SA 3.0 license.

The opinions expressed in this article are solely those of the author.

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Debate: Is Russia in Decline?Is Vladimir Putin’s Russia rising, declining or stagnating? If it is rising or declining, then compared to whom? Answers to these questions are of fundamental importance for the U.S. and the global order.