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Western and Eastern Vectors in Russia's Modernization Process

Western and Eastern Vectors in Russia's Modernization Process

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Published by thinkRUSSIA
A policy paper via www.ModernRussia.com - Modernization is not a new but rather a recurrent theme in Russia’s domestic and foreign policy. It has always been linked to two factors: Russia’s material capacities (economic resources, broadly speaking) and its self-perception of being a great power (an issue of identity and status in international relations). This time again these two factors seem intertwined.
A policy paper via www.ModernRussia.com - Modernization is not a new but rather a recurrent theme in Russia’s domestic and foreign policy. It has always been linked to two factors: Russia’s material capacities (economic resources, broadly speaking) and its self-perception of being a great power (an issue of identity and status in international relations). This time again these two factors seem intertwined.

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Published by: thinkRUSSIA on Aug 08, 2011
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11/01/2011

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POLICY PAPER
 
 Western and Eastern Vectors inRussia’s Modernization Process
By Dr. Tomislava Penkova,Research Fellow at the Milan based Institute for International Political Studies(ISPI) and lecturer at the Catholic University of Milan
 August 2011
* Materials disseminated by Ketchum Inc. on behalf of the Russian Federation. Additional information regarding the dissemination of these materials can be obtained at the Department of Justice.
 
 
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Introduction
Modernization is not a new but rather a recurrent theme in Russia’s domestic and foreign policy.It has always been linked to two factors: Russia’s material capacities (economic resources,broadly speaking) and its self-perception of being a great power (an issue of identity and status ininternational relations). This time again these two factors seem intertwined.The country’s unprecedented economic upturn and growing international role stimulated a newmodernization phase. It is a comprehensive process that will take some years to be fullyaccomplished. Its context is largely shaped by the 1990s’ economic structures and setbacks.Today, an adequate infrastructure and resources are required to convert the economy into amodern one and to raise standards of living. As Prime Minister Putin put it, a proper environmentshould be created for attracting long-term ‘smart’ investment and innovative technology to ensurethe competitiveness of national human resource potential. Although at the current stagemodernization is a state-driven process, an important role should be envisioned in the future forthe private sector as well. A fundamental aspect of Russia’s industrial upgrade is not only thepurchase/transfer of foreign new technologies, but also investment in patents/licenses in order tomaintain and develop the acquired technological basis. Therefore the country should increasedomestic investments along with the stabilization of foreign ones, and strive to make economycompetitive.The current modernization agenda shares great similarities with the previous modernizationefforts in terms of Russia’s inherent connection with Europe (seen in general as the West). Thelatter has always been a driving factor in Russia’s attempts to industrialize (see the Partnershipfor Modernization between Brussels and Moscow) and in setting the terms of its place in theEuropean continent.
Modernization and foreign policy
A prerequisite for a secure business climate and stable foreign investments in Russia is theabsence of major tensions between Russia and the West. Modernization and competitiveness aretwo interdependent factors closely linked to foreign policy. Some believe that modernization is anexclusively domestic process but this position implies an isolationist foreign policy. The latter willprevent Russia from creating the most favorable conditions for economic and technologicalsynergies with the West. Russia is not self-sufficient in its modernization path. This ‘benigndependency’ underlines the crucial role foreign policy plays in the process of innovativedevelopment. Modernization is an attempt to end the political loneliness in which the country founditself in the aftermath of the collapse of the USSR. It seeks to re-gain the previous internationalrole and prestige corresponding to Russia’s history and national pride. Modernization is also aboutRussia being recognized and integrated on a par with the Western world and its standards. In thissense identity and the need to strengthen the resource basis (new technologies, competitiveindustry, improved human potential) re-emerge again in the history of Russia’s industrialization.Finally, modernization is about selective imitation and cautious adaptation and convergencetowards Western models but on Russia’s terms and at its own speed. It is a policy of commoninterests
 
with the West, of cooperation and rapprochement and builds up on the
reset
with theUS, NATO and the European Union (EU). Some even argue that although the EU should take anactive part in the modernization of Russia, the lead role ought to be played by the US.Notwithstanding Washington’s active part in projects such as Skolkovo, bilateral relations aremuch broader and complex than Russia’s modernization, which so far is not a priority forWashington.The connection between modernization and Russo-Western relations is twofold. On the one hand,modernization is possible because of the
reset
with the West (it is a consequence). Normalization
 
 
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with the West was indeed a pre-condition for modernization. On the other hand, modernizationmay further strengthen Russo-Western relations (here it is a cause). Russia’s recognition of the needto adapt to innovative advancement and to have a stable foreign policy significantly facilitates itsrequest for an upgrade with regard to the West. In his article “
Go Russia!
” President Medvedevstressed that “harmonizing our relations with Western democracies is not a question of taste,personal preferences or the prerogatives of given political groups. Our current domestic financialand technological capabilities are not sufficient for a qualitative improvement in the quality of life.We need money and technology from Europe, America and Asia”.
The eastern vector
Starting from Medvedev’s statement, is it doable to develop an eastern vector of Russia’smodernization (meaning China and India) along with the western one? A policy such as the EU-Russia Partnership for Modernization has not been launched with any other international actor.Modernization is about rendering Russian economy competitive through injecting hightechnologies, investing in the country’s human potential and attracting foreign capital – a taskthat only the West can fulfil. The eastern vector, instead, may be associated with new aspects of the modernization course stemming from its (successful) outcome; it may be a second phase of Russia’s advancement, but not an alternative source of modernization. This direction mayconstitute a market for Russia’s goods, increased trade relations and interdependence, which willcontribute to strengthening Russia’s influence in regional affairs and raising its status as a leadingeconomic power. Such considerations entail following a European/Western course to implement themodernization strategy, and a more pragmatic Euro-Pacific one to associate Russia with the world’sleading economic powers.The Asian direction of Russia’s foreign policy is a vector that is closely related to the country’saspiration to be an economic power. Premier Putin has affirmed that by 2020 Russia will not onlybe among the wealthiest and most powerful states, but will also be one of the most progressiveand dynamic ones. He also warned against de-industrializing the country by moving productionunits elsewhere (the entire technological and industrial production chain should remain onRussian territory, from research and design to manufacturing). Compared to the Western trend of delocalization to Asia and boosting local markets’ potential, Russia is not yet able to exploreother markets and to shape their growth (it is not a modernization-maker). It rather views thosemarkets as subjects of possible strong trade relations.While courting the West, Russia is aware that Europe is increasingly losing its key role in globalpolitics due to the rapid shift of gravity towards the Asia-Pacific region. Moscow acknowledgesthis weakness by supporting the leading position of BRICS and its gradual transformation from aneconomic power into a politically influential center. In Russia’s view, the BRICS membership is anevidence of its identification as a leading economy together with the other economic giants in thedynamic Asian region; that status enables the Kremlin to claim a greater political influence on theinternational arena. Its participation in the given grouping indicates that potentially part of itsself-constructed identity (of an important economic and political player) lies in Asia, not so muchin the West, and that the eastern and western vectors could be reconciled, not necessarilyopposed. President Medvedev has stressed that Cooperation for Modernization should be the keytheme of Russia’s 2012 presidency of the APEC forum, which suggests an intention to put this issuehigh on the regional agenda. However, such rhetoric is not always substantiated in practice. Russiais more comfortable with its relations with the EU than, for instance, with China, with whichbilateral relations are often fraught with suspicion and efforts to balance each other’s influence inCentral Asia. Moreover, at the same time as the Declaration of the BRICS summit in April 2011upheld Moscow’s WTO bid, it also stated that “the governing structure of the internationalfinancial institutions should reflect the changes in the world economy, increasing the voice andrepresentation of emerging economies and developing countries”. This means that Russia grants

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