Opinion The return of Russia

Putin’s goals for the G-20 summit,defined earlier this year,were: the reform of the international currency and financial system,strengthening international financial institutions and financial market regulation,completing the Doha Development Round of multilateral trade negotiations,taking forward the discussions on energy security and climate change,global trade and development assistance. Even after achieving all of these geo-economic goals,Russia would not recover its old geopolitical status of the Cold War era,given China’s economic weight.

Judged on the basis of Putin’s declared agenda for the summit,St Petersburg did not leave much of an imprint on the G-20. The summit made little progress on the reform and restructuring of the international currency and financial system,though it took note of the concerns among emerging economies about the monetary policy of developed countries. There was no palpable movement forward on issues pertaining to energy security and climate change,and none at all on the World Trade Organisation’s Doha Development Round,barring the fact that the G-20 did express a clear view on the future of multilateral trade talks. On development assistance,there was hardly a murmur.

For months,G-20 observers had anticipated that Russia would use the summit to offer a bridge between the G-8,the old club of the 20th century’s most powerful economies,and the BRICS,the new club of the 21st century’s rising powers. Russia was uniquely placed to act,given that it is the only member of both clubs. Would Russia act as an honest broker between the economies of the West (including Japan) and the economies of the South?

Putin may well have recognised that this would be a difficult act to perform. On many key global economic issues,Russia’s loyalty is divided between the West and the South. As an energy exporter,it stands opposite energy importing China and India. As a commodity trader resisting the influx of cheap Chinese manufactures,its interests in the WTO clash with those of many of the developing economies. In its very first year as a member of the WTO,Russia has been at the receiving end of a number of trade policy complaints. On climate change,Russia’s interests are aligned with the West rather than the South. Finally,even as Russia enjoys membership of the BRICS and a friendship with emerging economies,its elite aspires to be part of the European Union. This West-South dilemma has haunted Russian diplomacy from the days of Boris Yeltsin.

Given this ground reality,it would have required a leap of faith and incredible imagination for Russia to have acted as a genuine bridge between the G-8 and BRICS within the G-20. The St Petersburg summit could easily have gone the way of the Seoul and Toronto summits. Lots of caveats over lots of caviar.

Success,however,knocked on a different door. A beleaguered American president arrived in Moscow scouting for ideas to find a way out of a rock and a hard place in Syria. Barack Obama offered a perfect platform for Putin to reassert Russia’s geopolitical relevance.

There are few places in the world where one could easily imagine one was at the centre of the world. Beijing’s Forbidden City is one such place. Washington DC’s Capitol Hill and the Mall below could give you that feeling and there are other capitals around the world where architects have pandered to that sense of global grandeur of their political masters. None matches the grandeur,the mystery and the opulence of the Kremlin. Its occupants must always have felt that the world can be,or ought to be,run from there. However,from the days of Gorbachev,Russia’s leaders must have felt frustrated that they were not,in fact,running the world.

If the G-20 summit had devoted itself purely to the economic agenda,Putin would have remained a frustrated man coming to terms with the marginal role for Russia in the world of geo-economics,where,apart from energy and resources,it holds few other cards. By seizing the Syria opportunity Putin has,in a dramatic manner,overcome Russia’s geo-economic inadequacy by highlighting its geopolitical centrality as a Eurasian power. The mischievous remark by a Russian official about Britain being a “small island” pointedly drew attention not just to Britain’s geopolitical limitations but also to Russia’s geopolitical centrality in the resolution of any issue on the Eurasian landmass.

By focusing on Syria at the G-20 summit,both Russia and the US may have done the group a favour. At a time when critics have been wondering what the relevance of the G-20 was,given the weak track record of the previous two summits,both President Putin and President Obama may have injected new life into the group. If the G-20 were to become the de facto Security Council — both for political and economic issues (remember there has long been a proposal for the creation of a United Nations Economic Security Council) — this group could well become the managing board of global governance.

After Moscow finishes celebrating its return to the global governing board,it must pay attention to the revitalisation of its manufacturing and technological capabilities,and move beyond its dependence on energy exports. Real power in the modern world is determined by a nation’s economic capabilities,not just the nuclear warheads it stores.

The writer is director for geo-economics and strategy,International Institute for Strategic Studies and honorary senior fellow,Centre for Policy Research,Delhi express@expressindia.com