February 4 2009 - Financial Times by John Thornhill - In its recent disputes with Georgia and Ukraine, Russia has been crashing around like a bear in a china shop. As a result, the west has been hyperventilating about the dangers of Russia's resurgence and a new cold war. But as the global financial crisis and collapsing commodity prices shake Russia's economy and strain its political system, the west may soon be worrying again about the country's weaknesses rather than its strengths.Just as economic booms amplify a country's assets, so busts magnify their frailties. This crisis is rapidly exposing the design flaws in Vladimir Putin's project: the failure to create impartial state institutions; the elimination of constitutional checks and balances; and a potentially brittle social compact dependent on the Kremlin delivering the economic goods. In such dangerous times it is all the more urgent for the west and Russia to devise new rules of engagement.
First, though, the west must acknowledge it has "lost" Russia and try to understand why. The hopes of the early 1990s that Russia would evolve into an instinctively pro-western partner have evaporated. Opinion polls show anti-western feelings are now deeply rooted in Russian society, irrespective of age, geography or income. Like much of the Muslim world, Russia feels humiliated by the west. It is determined to pursue a separate destiny.
Undoubtedly, the west has contributed to Russia's anti-westernism. In the 1990s the west was guilty of doing both too little and too much to help postSoviet Russia. It did not provide enough financial assistance to transform the Russian economy. Yet the International Monetary Fund, unfairly entrusted with managing the west's relationship with Russia, was heavily implicated in the economic misery of the 1990s - even if that misery was inevitable given the ruination of the Soviet economy and low commodity prices. "We have twice tried to take western theories and apply them in Russia: Marxism and liberalism. We must rely on our own thinking and values now," says Andrei Klimov, a parliamentary deputy.
Nato's embrace of ex-Warsaw Pact countries (contrary to earlier assurances given to Soviet president Mikhail Gorbachev), the western military alliance's bombing of Serbia in 1999 and the subsequent recognition of Kosovo's independence have also antagonised Russia. Worse, the west gave the impression it did not care.
Yet during his eight-year presidency Mr Putin deliberately stoked anti-western sentiments for his own advantage. Rejecting western democratic values meant the Russian leadership could ignore any transparency or account-ability. Instead, the Kremlin has tried to define a separate Russian identity largely in opposition to the west. Ideologues have invented an autocratic version of "sovereign democracy" even if - the Kremlin's critics claim - sovereign democracy is to democracy what electric chair is to chair.
But the third reason for Russia's anti-westernism is perhaps more accidental, the indirect political consequences of the high oil price and fast economic growth. Sergei Guriev, head of the New Economic School in Moscow and co-author of a paper on Russia's attitudes to the west, suggests that cause and correlation have been confused. "There is a sense that Gorbachev and Yeltsin integrated with the west and failed. Putin was anti-western and worked well. By being anti-western, it seems, you live better," he says. "But this is an attribution error."
What lessons will Russians draw from the current crisis? Will they conclude that the west has "infected" Russia and retreat into isolationism? Or will they realise that Russia's fate is inextricably tied to the world economy and engage more fully? Surprisingly perhaps, there are signs that the leadership thinks the latter. Russia's heavy-handed response to Georgia alarmed foreign investors, accelerating a capital outflow that has undermined the rouble and depleted foreign currency reserves. By temporarily shutting off gas to Europe (even if Moscow still blames Kiev), Russia has alienated even traditional allies, such as Germany and Bulgaria. This has perhaps prompted a new realism in Russia about its vulnerabilities, which could lead to a more positive dialogue with the west. According to Yegor Gaidar, former prime minister: "The lower the reserves the higher the quality of the decision-making process."
At some point, the new US administration will engage Moscow on security issues such as missile defence and Nato enlargement. But meanwhile the European Union is right to take the lead on reworking economic and political ties. The EU intermediated between Russia and Georgia. It also helped broker a gas deal between Moscow and Kiev. As Russia's biggest gas customer and trading partner, the EU has no alternative but to engage. José Manuel Barroso, EU Commission president, is leading a delegation to Moscow this week to talk about energy, trade and investment.
Many Russians scorn the EU as a strange animal they do not understand (they are not alone in that). In their view, the EU is overly political, cumbersome and obsessed with process. But that process has its advantages too. It leads to a robust and transparent debate between the EU's 27 members that ultimately leads to a common approach. Britain, Poland and the Baltic states argue that the EU must diversify its energy supplies. Germany, France and Italy suggest it would be folly to isolate Russia.
Russia's leaders say they want a multi-polar world. The EU is its embodiment in all its maddening - but often useful - complexity.
The writer is the FT's Europe edition editor
