Is the West too soft on Putin?

Russian presidential 'elections' lack any element of suspense. By preventing the only credible opposition candidate, Alexei Navalny, from standing, Vladimir Putin won a fourth term with more than 75 percent of the votes cast, 11 percent higher than in the 2012 election. Turnout was also higher than last time, thanks at least in part to blatant ballot stuffing.

According to the Russian constitution, this should be Putin’s last term in office. But he has yet to set out a manifesto for the next six years. What might he do, and how should the West respond? Putin must choose whether to reboot the Russian economy, and claim credit for improving Russians’ standard of living; or to portray Russia as a besieged fortress, in which hardships are inevitable, but the fault of Russia’s enemies.

Oil and gas dominate the Russian economy. Over eight years in office, his predecessor, Boris Yeltsin, faced an average oil price well below $20. Putin was luckier: in his first year in office it averaged $28.50; from 2011 to 2013 it averaged over $100. Thereafter, the oil price fell, and economic stagnation set in. In 2015 and 2016 the economy shrank. Poverty rates have risen every year since 2012.

Russia needs to modernise its economy. But Putin has two reasons to fear reform. First, to free resources for investment, he would have to restrict rent-seeking behaviour by the elite – a dangerous move, especially for a president who might soon become a lame duck. Second, he would have to strengthen the rule of law, to give entrepreneurs and foreign companies more confidence to invest. But that would threaten his personal control.

Because Putin sees economic and political reform as inherently risky, he has chosen to use nationalism, patriotism and paranoia as motivating forces. The annexation of Crimea and the invasion of eastern Ukraine in 2014 were the first fruits of this policy shift. And in his March 1st ‘address to the Federal Assembly’ (the equivalent of an American president’s ‘State of the Union’ address), Putin unveiled a range of new weapons systems able to strike America, and allegedly invulnerable to counter-measures.

The West is likely to face this nationalist, aggressive Putin for the next six years. How should it respond? It needs to work on three key areas: knowledge; defence and deterrence; and outreach.

Even after 18 years, the West does not know enough about Putin’s system. Experts speculate about who influences Putin, and why certain things happen. Did Putin order the 2015 murder of opposition politician Boris Nemtsov? Did he sanction the attempted murder of the former Russian military intelligence officer and British agent Sergei Skripal this month? Since the end of the Cold War, Western intelligence priorities have shifted from Russia to other targets; they need to shift back.

Recent Russian assaults on Western interests reflect weak defences and the break-down of deterrence. NATO, and especially its European members, needs to invest more in military forces. But the West needs different kinds of defence and deterrent capability against non-military attacks that may cause financial, political or even physical damage. Responses may cross the institutional barriers between the EU and NATO; the two organisations should use the next NATO Summit in July 2018 to take their co-operation further, in areas such as combating disinformation and strengthening civil and military cyber security.

Some EU member-states remain excessively dependent on Russian gas supplies. Europe should diversify its sources of supply to reduce Russia’s leverage. The Russian elite loves its flats in London and its villas on the Cote d’Azur. Western governments should be more willing to use anti-money laundering laws against those with inexplicably large assets, and to tell ordinary Russians that Putin’s cronies are looting the country.

None of this means that the West should break off contact with Russia. The Russian state may be an adversary; the Russian people are not. By closing down the British Council in Moscow – responsible for teaching English and organising cultural exchanges – Putin showed his fear that ordinary Russians will be attracted by what the West has to offer. Western countries need to use every possible tool – social media, student scholarships, scientific collaboration and the like – to communicate with Russians outside the regime.

There is a risk that Putin will read congratulatory messages from Western leaders like European Commission President Jean-Claude Juncker and US President Donald Trump as a plea for a return to business as usual. Now is the time for the EU and NATO to show instead their determination to defend Western values and interests, and not to act as though Putin’s rigged re-election puts right all his previous misdeeds. Putin’s re-election will not have shocked him; but Western firmness might come as more of a surprise.

Ian Bond is director of foreign policy at the Centre for European Reform.