Putin faces tests at home and on foreign fields

Allegations of Ukrainian “terrorist” attacks in Crimea and continuing military action in Syria suggest that Vladimir Putin is in no mood to seek a quick resolution of the two conflicts. With the G20 group of nations due to meet in China next week, Mr Putin is serving notice that Russia intends to be a key player in any settlements proposed.

Mr Putin will be welcomed as guest of honour in Hangzhou by Chinese president Xi Jinping. This special treatment will be a source of satisfaction to the Russian president after he was cold-shouldered at the last two G20 summits due to the situation in Ukraine. Improving relations between Moscow and Beijing reflect China’s interest in Russian energy resources, Russia’s need for Chinese investment, and both countries’ resistance to what they see as western designs for dominance concealed within the liberal global order.

In recent years, Mr Putin has sought to check US power on the basis that the world’s sole superpower does not adhere to an international order based on respect for sovereignty, non- interference in the internal affairs of states, and the primacy of the United Nations in resolving disputes. Moscow cites the sequence of US-led interventions since 1998 in Kosovo, Afghanistan, Iraq and Libya as evidence that Washington plays by its own rules while insisting on binding international standards to be observed by others.

The 2014 Ukraine crisis signified the point at which Russia felt it was no longer bound by the rules of the post- Cold War settlement. Since the annexation of the Crimea region, Mr Putin has indicated that while his ultimate intentions remain opaque, he is prepared to raise or lower tensions as he sees fit. Although recent escalation of artillery exchanges in the Donbass region and a military build- up in Crimea threaten renewed conflict, Mr Putin has agreed to discuss Ukraine with Angela Merkel and Francois Hollande at the G20 summit.

The pattern evident in the case of Ukraine is that Moscow is prepared to use its military capabilities to improve its diplomatic hand. Russia’s policy of positioning itself as the essential partner in any settlement is also evident in relation to Syria. Mr Putin’s announcement of a military withdrawal last March was purely a tactical gesture which demonstrated the power to alter the course of the conflict without risking being drawn in too deeply. The withdrawal also made it clear to the Assad regime that Moscow would not provide a blank cheque for its survival, though Russia’s recent use of Iranian bases to stage attacks on the rebels in Aleppo shows how Mr Putin has also been able to use the deployment of S- 300 missiles to Iran to further its objectives in Syria.

The Russian president will as a consequence arrive in Hangzhou confident that his judicious use of military force and threats has strengthened his hand.

It is more difficult to discern whether the Kremlin has any clear strategy for exerting its global influence in the longer term. While Mr Putin can play a negative role by intervening in local conflicts, there is little indication that Moscow can offer a positive impact in terms of creating a new Middle East security architecture, for example. The reasons are largely domestic: Russia’s military prowess can only partially compensate for a looming economic crisis caused by the decline in oil and gas prices and continued western sanctions.

At present, the Kremlin is subordinating Russia’s economic development to internal and external security concerns. While this approach will probably suffice to ensure that Mr Putin is re-elected in 2018, the Russian president’s current high approval ratings may start to erode if the economy continues to decline. Although Moscow recognises the need to diversify away from hydrocarbons, Russia’s export revenues are less than half what they were five years ago. Start-ups and small businesses in Russia would normally be expected to lead the drive towards diversification, but such ventures are hampered by high interest rates and the excessive bureaucracy generated by a statist economic system.

Mr Putin also cannot depend on his warm relationship with Mr Xi to offset the external and internal pressures that his regime is confronting.

While Russia and China have found common ground in containing the western alliance, there remains a significant degree of geopolitical rivalry in their relationship. By using its economic muscle in Central Asia, China is threatening to undermine Russia’s traditional status in the post-Soviet republics. Moscow’s attempts to balance growing Chinese influence by corralling the Central Asian states into a Eurasian Economic Union have had only limited success. At the G20 summit in Hangzhou, Mr Putin will have little input into the decisions of an organisation formed in 2008 to oversee global economic governance following the shock of the financial crisis. Russia’s semi- isolation from international economic structures due to ideological objections and western sanctions has brought about this situation – in sharp contrast to China’s resoundingly successful embrace of globalisation. While Mr Putin has so far played an astute game in Ukraine and Syria, his reliance on military power to project Russia’s influence only serves to highlight an increasingly troubled outlook for the country.