Will Biden Avoid Obama’s Russia Trap?

05 August 2021 13:41:59

By Leonid Bershidsky

When US President Joe Biden revives the trope of Russia as a declining power with an economy that produces little except oil and gas, Americans should hope he doesn’t really believe it. That it’s untrue is only half the problem; when US leaders repeat that depiction, they invite trouble, for Russian President Vladimir Putin both hates and loves to be underestimated.

On July 27, Biden said this about Putin:

When I was with Mr. Putin, who has a real problem — he is — he’s sitting on top of an economy that has nuclear weapons and oil wells and nothing else. Nothing else. Their economy is — what? — the eighth smallest in the world now — largest in the world? He knows — he knows he’s in real trouble, which makes him even more dangerous, in my view.

This kind of talk has plenty of history in US political circles. The late Senator John McCain liked to call Russia “a gas station masquerading as a country.” Reality is strikingly different.

Russia has the world’s 11th biggest economy by nominal GDP in US dollars, according to the International Monetary Fund, but the sixth biggest if one accounts for purchasing power parity, only slightly smaller than Germany’s; since Russia is only the ninth most populous nation in the world, that’s actually not bad.

The official Russian statistical agency, Rosstat, recently assessed the full share of oil and gas in the Russian gross domestic product, including their contributions to other sectors, and arrived at 15.2% in 2020, compared with 21.1% in 2018. That’s about twice the sector’s 8% share of US GDP.

Russia is not an export superpower if one discounts oil and gas (which will likely provide reliable revenue long after the 68-year-old Putin dies), but it has a large enough domestic market to sustain one of the world’s biggest and, importantly, most resilient economies. Putin’s economic managers are successfully squeezing more cash out of the domestic economy and less from energy resources. Russia still depends on oil and gas for 27.9% of its federal budget revenue, but this share has shrunk significantly in recent years; in 2020, combined revenues from value-added, excise and corporate income taxes exceeded, for the first time in Russian history, the hydrocarbon contributions to the budget.

In other words, Putin isn’t, by any measure, “in real trouble” on account of the Russian economy, plagued by imbalances, corruption and anemic growth as it certainly is. Why supposed economic desperation would “make him more dangerous” is also unclear; true hardship actually made Soviet and Russian leaders pliable rather than aggressive in the late 1980s and until the 2000s.

So if Biden meant what he said, he’s badly misinformed and drawing lazy conclusions from bad information he’s absorbed. That can lead to nasty consequences.

Putin doesn’t take kindly to public belittlement, as Biden’s former boss Barack Obama discovered to the detriment of US interests. When Obama called Russia a “regional power,” Putin made no secret of finding it “disrespectful”; soon after Obama’s slight, the US was dealing with a Russian intervention in Syria that upset its Middle Eastern plans and showed that Russia could project power well beyond its immediate vicinity. If one believes that Russia interfered successfully with the 2016 US presidential election, as many Democrats seem to do, that projection can reach as far as the White House.

A dynamic, open economy that produces popular consumer goods or household-name software is not, as Putin has convincingly showed, a precondition for geopolitical clout. Punching above one’s economic weight is relatively easy when there’s enough money for innovative weaponry and a cadre of tech desperadoes — and when an authoritarian political system provides for quick, often personally motivated decisions. Underestimating a skilled player like Putin with a huge country at his disposal doesn’t just anger him — it empowers him to lash out, and draw blood, at every opportunity. With Ukraine’s situation still precarious, the US military presence in the Middle East shrinking and much of Africa in turmoil, opportunities to advance Russia’s interests will regularly present themselves. Russia will win some — as in Syria and, arguably, Venezuela — and lose some, as in Libya and the Western Balkans, but it will always present a major threat to Western interests.

Luckily for the US, Biden may not underestimate Russia as much as he’d have people believe, and certainly not as much as Obama.

At the start of his summit with Putin in June, for example, he described the US and Russia as “two great powers” — none of that “regional” business, as some Putin loyalists triumphantly noted. But Biden had an agenda then: He didn’t want the content-poor summit to be a total disaster. And now, with his more recent disparaging remarks, he also had an agenda: to deflect criticism of his deal with German Chancellor Angela Merkel, which allowed the Russian gas pipeline to Germany, Nord Stream 2, to go ahead despite earlier US attempts to block it. Mocking Russia, McCain-style, appears to have done the job as well as mere rhetoric could — the “oil wells and nothing else” comment appears to have displaced the Merkel deal in media headlines.

If one separates actions from words, Biden’s early meeting with Putin, the easing of pressure on Nord Stream 2 and Biden’s refusal to pin blame directly on the Russian government for big recent cyberattacks on US targets are signs that Biden will accord Putin more respect than Obama did, simply as a matter of caution. He doesn’t seem driven to mete out humiliation; rather, he’s at pains to show he’ll respond to hostile actions on Putin’s part. With Putin, that should be a more effective strategy than dismissal: If he knows he’s being taken seriously as a threat, he’ll be more careful in considering opportunities for aggressive action.

Respect for an opponent — even one like Putin who has no concept of fair play — can be a more powerful weapon than slights.