Executive Summary
1. The end of the Cold War ushered great change for the global security landscape. The fall of the Soviet Union ostensibly represented the end of history: the triumph of free-market capitalism over statist Marxist-Leninism seemingly dispelled any doubt over which system of government reigned supreme. It also marked the dawn of a hegemonic United States. However, the dissolution of the Soviet Union failed to herald improved relations with the West for its replacement. Russia’s expansionist pursuits and assertive rhetoric over the last two decades, including its annexation of Crimea; military adventurism in the Euro-Atlantic area; Russia’s continued involvement in Libya, Syria and wider Middle East to regain its status as a global power player has stirred wide concern amongst Western quarters. Russia’s growing assertiveness is largely contingent upon geostrategic power ebbing away from the West towards the East, driven by the continued rise of China. Thus, the trends affecting and emanating from Russia must be contextualized accordingly. The Kremlin’s relationships with China, the United States, India, and Europe, will continue to mould the global strategic context over the next two decades.
2. Immediately after the Cold War, Russia attempted to repair relations with the United States and become involved in European affairs. Russia envisioned that partnership and cooperation would preserve its economic and political stature through capital and resources procured. However, Russia would come to abandon this strategy after the Kremlin realized Russia would not reap the anticipated rewards implicit in strong relations with West, and that NATO was proceeding to expand into Central and Eastern Europe. The combination of both would sour Russia’s relations with the West and prompt it’s pivot East.
3. The collapse of the Soviet Union marked the ending of the de facto United States-China alliance producing an opportune moment for China-Russia rapprochement to commence. In 1992, the two countries declared that they were pursuing a “constructive partnership”; in 1996, they progressed toward a “strategic partnership”; and in 2001, they signed a treaty of “friendship and cooperation”. Since then, Putin has focused on strengthening relations with China, tethering Russia’s economic resurgence to its rise. Similar national values (non-interference, national unity, rule of law); mutual scepticism towards the liberal international order – at least in part; and shared experiences in United States belligerence have pushed the two countries closer together. “China and Russia are united like a mountain, and our friendship is unbreakable,” Chinese Foreign Ministry spokesperson Zhao Lijian said on 16 June 2021.
4. From the time Putin returned to presidency in 2012, Russia increased its efforts to restore its status as a global power. Although pillars to its grand strategy are diverse in their purview, its key objectives involve building strategic alliances, sowing seeds of discord amongst Western allies and inciting nationalist rhetoric.
● Russia will cooperate with countries with values similar to its own, like China.
● Russian information operations are targeting the West’s ability to differentiate fact from fabrications in an effort to complicate and shroud doubt in decision making. With these actions, Russia is attempting to influence the general public, elections and raise support for populism/radicalism/political parties in the Euro-Atlantic region. Through an array of methods – including cyberattacks, hack-and-leak operations, and online disinformation operations – Russia or Russian sponsored actors are alleged to have interfered in elections in Bulgaria, Czech Republic, Italy, Finland, Macedonia, Netherlands, Poland, Spain, Sweden, United Kingdom, the United States, and Ukraine. Russia has also supported a failed coup in Montenegro to unseat the pro-NATO government.
● Russia will use an array of military and non-military hybrid warfare tools, including influence operations, disinformation campaigns diplomatic pressure, economic sanctions, and energy supply cuts, to safeguard against any potential external threat and undermine Western democracies.
● Russia will continue to intervene in ongoing conflicts to support governments or militant forces hostile to the West. The Central African Republic is one such example, where Russia is providing military and political support for President Faustin-Archange Touadéra in return for permits for Russian companies to mine gold and diamonds.
● Russia will continue to expand its exports for arms as a means to ingratiate itself with foreign governments and support a key comport to its economy. In Southeast Asia, Russia is selling weapons to Cambodia, Indonesia, Laos, Malaysia, Myanmar and Vietnam. In the Middle East, where the United States is withdrawing, Russia is widening its clientele. In 2017, the United Arab Emirates purchased over US$700 million worth of Russian weapons during the International Defense Exhibition and Conference. Egypt has also increased its purchase of Russian arms over the past decade. After the Biden administration temporarily suspended arms sales to Saudi Arabia at the beginning of this year, Riyadh looked to Moscow.
5. One of Russia’s greatest strengths is its utilization of cyber tools for “grey zone operations” and the weaponization of information. The SolarWinds attack is a case in point. This presents a significant threat to the West, given ethical considerations and legal constraints often hamper Western nations ability to operate in this “grey zone.” Commensurate changes to cyber resilience should be made and mechanisms for defending against “grey zone” attacks must be established to counter and prevent asymmetric use of cyber domain.
● Russia is not likely to compete with China and Western nations in technology, which incentivizes it to build asymmetric tools to give itself a competitive advantage. Russia prioritizes the continued development of electromagnetic warfare capabilities as an asymmetric tool to give the nation a technological edge. Most likely, Russia remains the world’s leader in Non-Nuclear Electromagnetic Pulse (NNEMP) weapons. The marriage of NNEMP to drones or cruise missiles, equipped with sensors to follow high-power electric lines and target control centres and transformers, introduces a major new threat to national power grids.
● Russia’s technological advancement are likely to be confined in few areas due to political corruption and a lack of human capital and monetary capital.
● Russia will continue the development of space industry and space technologies.
● The development of narrow artificial intelligence, for military and non-military purposes, seems feasible for Russia and is a priority for the Kremlin. In 2017, Putin acknowledged that the leader in artificial intelligence “will become the ruler of the world”. However, Russia seems reluctant to put full trust into machine intelligence over human intelligence.
● Russia will continue to further develop and deploy hypersonic weapons to demonstrate its superiority. The Russian military currently has three hypersonic missiles: the Avangard, the Kinzhal and the Tsorkin. Together, they improve Russia’s negotiating position for arms control agreements, although the technology itself is not considered to be a “game changer”. The United States, China, France and other major powers have announced plans to develop their own hypersonic weapons, thus Russia’s superiority in hypersonic technology is expected to only be temporary.
6. Russia’s population is expected to decrease over the next 20 years due to low fertility rates, high mortality rates, and imbalances in emigration and immigration. An ageing population will further exacerbate demographic pressures. These trends are likely result in a reduced workforce and diminished productivity.
● Unpopular domestic policies, government corruption and standard of living will entice well-educated young Russians to emigrate. This is obviously detrimental for Russia’s human capital and its capacity to grow and innovate. Subsequently, the Kremlin will tightly control access to information, in part to reverse this emigration trend and foster loyalty to Russia.
● In order to combat population decline, Russia is likely to allow and encourage immigrants to settle. However, the entrance of a greater number of immigrants will alter Russia’s racial mix potentially fanning public discontent.
● Although a shrinking population will limit military recruitment, Russia should be able to find and recruit sufficient personnel to maintain the current size of its military forces.
7. COVID-19 economic fallout, inflation, uncertainty surrounding oil prices, government corruption, lack of institutional reforms, tight monetary and fiscal policies, failure to adhere to market prices plus other headwinds will hamper Russia’s GDP growth rates. However, the IMF has acknowledged that the Russian economy is recovering from the consequences of COVID-19 faster than it expected and has projected its GDP growth for 2021 at 4.4%. In any case, Russian foreign policy is likely to remain unchanged to domestic economic performance.
● Russia exports a significant amount of oil, gas, coal and uranium to the EU, and the EU supplies Russia with manufactured goods. This trade partnership is set to continue, ensuring Russia’s relationship with the EU remains key.
● In order to combat the effects of Western sanctions, Russia will continue to expand its trade with China to foster greater economic growth. In 2020, bilateral trade totalled $107 billion USD and Putin and Xi have announced a new goal of $200 billion in trade by 2024. For Russia, resource-hungry China is a huge, growing and proximate market for its energy, commodity and agricultural exporters, while China provides Russia with competitively priced manufactures and investment.
8. Russia’s vast landmass, its biodiversity and its dependence on natural resources make it highly susceptible to the adverse impacts of climate change. These impacts include ice reduction, melting permafrost, increased flooding, air pollution and resource depletion. The biggest concerns are food and water insecurity, infrastructure coverage, resource exploitation and migration. However, the regime’s freedom from conventional term limits means it can focus on long-term responses to climate change and become a global leader in some areas of environmental policy, if it is incentivized to do so.
● Environmental awareness, technological advancements and infrastructure investment will be critical for Russia to mitigate some of the negative impacts of climate change. However, environmental regulation and management has been relegated by the struggle to sustain the economy, sacrificing long-term concerns for short-term priorities.
● China may contribute strategic investments and technological support to help Russia fight the negative effects of climate change in the short-term.
● Various constraints will hinder Russia’s response to climate change: public awareness differs among regions while Russia fails to adopt meaningful reduction targets; appropriate energy sector reform is unlikely given Russia’s dependence on revenue from hydro-carbon sales; and a dysfunctional private sector in Russia discourages the foreign investment required for development of more environmentally safe technologies.
● Russia has displayed Arctic capabilities and with China’s financial backing can capitalize on the potential new commerce and resource exploration. The melting of the Arctic due to climate change presents commercial opportunities, including passage of the Northern Sea Route becoming a viable alternative to the Suez Canal for Asian and European markets. Estimates say the sea route will be navigable two months a year by 2030 and, one decade later, ships will have 150 days of sailable waters.
● Climate changes in Russia have proven to show negative effects on the country’s economy. The agricultural production of the country suffers economic losses due to its dependency on weather and climate factors. The overall yield of grain crops in Russia is expected to decrease by 17% by 2050, thereby affecting prices of agricultural products on the global market. By 2030, prices of grain crops are estimated to rise significantly: 29% for wheat, 33% for rice and 47% for maize.
9. The COVID-19 crisis has accelerated trends and caused unprecedented challenges for the West, shaking the international order with increased nationalistic sentiments. It also increased uncertainty for Russia regarding key issues such as the future of Putin, despite constitutional change to allow him to remain in power until 2036 as president; Russia-China relations; and Russian approach to the West.
Introduction
“The Secret of Politics? Make a good treaty with Russia.” - Otto Van Bismarck, First Chancellor of Germany.
In 2005, A.C Wilson published a book called New Zealand and the Soviet Union, 1950-1999: A Brittle Relationship. Three decades later, the strain is still there.
Although relations remain doggedly fractious between Russia and the West and areas for co-operation are oft narrowed by conflicting values and interests, this century will usher unique challenges that should compel dramatic change. As the threat of COVID-19 wanes, it is prudent to begin turning our heads to the next crises that awaits and survey emerging opportunities.
The aim of the Strategic Foresight Analysis Report on Russia is to identify trends that are likely to shape the future strategic context in Russia, its relations with the West and the rest of the world, and derive implications for New Zealand into the second half of the 21st century. As aforementioned, Russia’s relationship with the West has been increasingly complex and deteriorating since the beginning of the 21st Century, and the illegal annexation of Crimea was a watershed moment.
New Zealand’s own bilateral relationship with Russia takes cues from its Western security partners, most notably Australia, the United Kingdom, and the United States. Consequentially, Wellington’s ability to craft an independent and unique relationship with Moscow is often restricted by conflicting obligations to remain in line with a Western front. The merits in forging a more independent, unencumbered relationship with Moscow is assessed in this Report.
This report provides a New Zealand perspective on Russia and the security environment to give an analytical base for Wellington’s leadership for future planning, adding to a nascent literature on the subject. The report focuses on the trends and associated implications at a global level while differences in regional aspects are included when necessary. Conversely, Strategic Intentions 2020-2024 published by Ministry of Foreign Affairs and Trade, solely focus on more thematic objectives while provide guiding values for diplomatic missions while the New Zealand Inc China Strategy, published by Ministry of Maori Development in 2012, takes a purely economic angle to assess growing opportunities and threats that reside in Chinese markets. Rather, this SFA paper looks to complement the findings made in the Strategic Defence Policy 2018 and the Defence White Paper 2016, albeit with a greater focus on threats emanating from Russia.