The Inevitable Decline of Putin's Russia

By the end of the 1980s, the Soviet economy was in free fall, due in part to a decades-old arms race it had maintained with America. The crumbling financial system impelled Soviet President Mikhail Gorbachev to implement the first social and economic reforms in decades, rousing his countrymen to act upon their outrage, and in 1991 the government fell and the empire dissolved.

The downfall of the Soviet Union has taken on renewed resonance in 2016, as a similar set of pressures appears to be aligning against America's former Cold War foe, raising questions as to whether it, too, may overtax itself.

Under Vladimir Putin, the Kremlin in the early 2000s consolidated a resurgent Russia's economic power among a few trusted business elites, failing to diversify the economy and lessen its dependence on oil sales. More recently, increasingly authoritarian rule sparked popular dissent, even as a downturn in global oil prices caused the country's finances to plummet. Putin's response was to engineer a wave of nationalism that involved Russia stretching the boundaries of its global influence through land grabs and warlike rhetoric. Domestically, he has set up for his people the spectre of an enemy – namely the West – to blame for both their and Russia's financial problems.

His popularity soared. But his strategy of pursuing adventurism abroad to neutralize opposition at home came at a price.

Recent deployments of forces to Syria and the Ukrainian border have some suggesting Moscow is overextending itself, even as its provocative behaviors draw harsh international sanctions that further stifle its economy and provoke a military response that again has Western hardware amassing at Russia's border.

Putin himself now says that Russia and the West are on a course for a new Cold War.

The Russian president said Friday that a new multimillion-dollar missile shield the U.S. had activated earlier in the week on a former Soviet base in Romania serves as one of a series of "emerging threats" to Russia that he vowed to "neutralize."

On this point, Putin may have played himself into a corner.

Earlier this month, Defense Secretary Ash Carter stood at a podium on an immaculately tended parade ground in Germany just 180 miles from the western edge of the former Soviet empire. His staffers had previously said this would be no normal change-of-command ceremony, and indeed his remarks bore more resemblance to a war strategy than the usual flourish accompanying a transition of the general overseeing of U.S. European Command, based there in Stuttgart.

"Despite the progress we've made together since the end of the Cold War, Russia has in recent years appeared intent to erode the principled international order that has served us, our friends and allies, the international community, and Russia itself so well for so long," Carter said. The setting, the former headquarters of a Nazi tank division, was poetic, subtly invoking the last time Europe saw one country invade another before Russia's latest meddling.

Carter went on to catalogue Moscow's incursions into Ukraine, Georgia and Moldova, its use of conventional as well as cyber warfare, "and most disturbing, Moscow's nuclear saber-rattling."

He cited the $3.4 billion the U.S. allocated this year to strengthen its position in Europe. The funds, four times more than its budget last year, will contribute to America's new posture toward the continent of a steady and open-ended escalation of U.S. military might. Indeed a U.S. brigade will begin a permanent rotation of troops in Poland sometime early next year, and NATO is actively considering new rotations of four battalions of U.S. and European forces directed at, in NATO parlance, it's "eastern flank," likely somewhere in the Baltics.

Add to this the missile shield the U.S. activated on Thursday, estimated to cost $800 million.

"We do not seek a cold, let alone a hot war with Russia. We do not seek to make Russia an enemy," Carter said. "But make no mistake, we will defend our allies, the rules-based international order, and the positive future it affords us."

He can't have been surprised that Russia would react.

A day after Carter's speech, Defense Minister Sergei Shoigu announced that Russia would send roughly 30,000 troops to its western reaches to "counter the expansion of NATO forces in direct proximity to the Russian border."

Some say NATO's actions might force the Russians to realize the limits of their ability to respond militarily.

"[The strategy] needs to be on keeping the peace, on deterring aggression, on containing the aggressive nature of the Russians," says William Taylor, a former Army infantry officer who served as the U.S. ambassador to Ukraine from 2006 to 2009. "But, if by doing that, the Russians spend themselves as they did when they lost the Cold War, that will have a deterrent effect as well."

Putin seemingly acknowledged the precarious state of his country's finances, and the historical precedent, when he insisted Friday he would not be drawn into a spending war with the West like the one around the massively expensive Strategic Defense Initiative missile shield that President Ronald Reagan proposed in 1983, which came to be known publicly as "Star Wars." The Soviets' economy was already struggling at the time, as Russia's is today, due to low oil prices, and it came under increased strain by this new prospective U.S. threat. Instead of repeating history, Putin pledged to adjust current military spending to account for the new priorities.

But others see risks in engaging Moscow militarily, even if a stronger U.S. presence successfully deters Russia in the short term.

"Russia has immense internal problems. We know, we understand that," former Defense Secretary Chuck Hagel said at the Atlantic Council last week. "They're not going to be able to sustain a lot of what's going on now. But in the meantime, there's a lot of damage being done here."

Hagel, Carter's immediate predecessor, opposes the idea of an American troop buildup in Europe, citing the slippery slope of relying on military solutions to political problems. He advocates instead for direct relations with Putin, a man Hagel says only understands negotiations at the highest levels.

"Until that leader-to-leader dialogue begins … then you will continue a proxy war that we are essentially seeing in the Middle East and Syria," he says.

"[If] we continue to build up the eastern flank of NATO – more battalions, more exercises, more ships and more platforms, the Russians will respond," Hagel says. "I'm not sure there's some real strategic thinking here. It's a reaction, it's a tactical ricochet from crisis to crisis."

Oil prices are projected to rise again in 2017, meaning Russia may begin to feel at least some easing of its economic woes. Putin in December said the country had adjusted its spending plan to remain solvent with oil at $50 per barrel. At the time, the price had dipped to $38, and rebounded to close Tuesday at $49.35 per barrel. While some say the U.S. must act swiftly to punish Russia for its transgressions, others see that as futile against this particular enemy.

"If I read Putin right, and he continues to be very popular – if the polls are right, and they probably are pretty good, I just don't think he's going to say, 'We can't afford to build up our military,'" says Melvyn Levitsky, a career diplomat who previously served as the U.S. State Department's officer in charge of U.S.-Soviet bilateral relations and who now teaches at the University of Michigan's Gerald R. Ford School of Public Policy. "He wants to bring back Russia to a point where they're such a major superpower that they're consulted on everything."

Levitsky and Taylor believe the U.S. should remain open to diplomatic rapprochement with Russia, if only to re-establish what each side wants and to cooperate on mutual interests.

"If your main question is, 'Can we bring them to their knees one way or the other?' I think that's doubtful," Levitsky says. "Yes, we could go ahead and punish them more. But is there a point at which they say, 'We give up'? Doubtful."

But that doesn't mean the U.S. shouldn't fulfill its military responsibilities until Russia decides it wants to be readmitted to the group of civilized nations, says Taylor, now with the United States Institute of Peace. "Mr. Putin doesn't have the capability to push this on forever."