Frustrated Leadership: Russia's Economic Alternative to the West
| Published date | 01 May 2016 |
| Author | Seçkin Köstem,Juliet Johnson |
| DOI | http://doi.org/10.1111/1758-5899.12301 |
| Date | 01 May 2016 |
Frustrated Leadership: Russia’s Economic
Alternative to the West
Juliet Johnson and Sec
ßkin K€
ostem
McGill University
Abstract
The Russian government saw the 2008 global financial crisis as both a repudiation of western neoliberalism and as an ideal
opportunity to promote its own international economic leadership. Russia’s alternative vision encompasses multipolarity, finan-
cial nationalism and political illiberalism. These policies are symbiotic. The state uses its control over financial flows to build
and maintain political and economic power at home as well as to project its influence abroad, all justified with a strong dose
of great power nationalism positioning Russia as the Eurasian pole in an emerging multipolar world order. However, the Krem-
lin is doomed to frustration in its quest to assert international economic leadership. The Russian government has the ability to
shake up the existing international order but lacks the credibility, stability, or economic clout to lead the creation of a new
one. This has troubling implications for the future of international economic cooperation and reform, as Russia’s frustrations
have increasingly turned it in reactive and confrontational directions.
Policy Implications
•The west must devise a new strategy towards Russia –one that takes into account Russia’s search for great power status
and Eurasian leadership without at the same time undermining international economic cooperation or forcing Russia’s
smaller neighbors to choose sides.
•To this end, the US should play a more constructive and cooperative role in meaningful reform of the international finan-
cial architecture, especially as regards the International Monetary Fund (IMF).
•Given the mismatch between Russia’s aspirations and capabilities, the Russian government’s attempts to develop the Eura-
sian Economic Union (EEU), build up Brazil, Russia, India, China and South Africa (the BRICS) group, and devise alternative
nonwestern financial institutions should be understood as signs of economic weakness rather than strength.
•China, the US, and the EU should work together to discourage financial nationalism in Russia and protectionism in the
new EEU, policies that are potentially damaging for all sides.
The global financial crisis fundamentally challenged the
western-led international economic order. The insolvency of
major US financial institutions, the worldwide contagion
effects, and the existential crisis of the European project and
the euro revealed the inadequacies of existing financial reg-
ulatory regimes. On a deeper level, the crisis called into
question the ability of the western economic model –liberal
democracy, light-touch regulation, and an international
financial infrastructure guided by institutions like the Inter-
national Monetary Fund (IMF) and fueled by US dollars –to
drive global prosperity and stability. Yet despite widespread
postcrisis dissatisfaction with the international order, con-
crete change at the international level has remained so ane-
mic that Eric Helleiner (2014) has referred to the ‘status quo
crisis’and Colin Crouch (2011) has puzzled over the ‘strange
nondeath of neoliberalism.’
Russian political elites have been among the most critical
of the slow pace of systemic change. The Russian govern-
ment saw the global financial crisis not only as a repudia-
tion of western neoliberalism, but also as an ideal
opportunity to promote its own international leadership and
economic vision. Ever since the Soviet collapse, Russian
leaders had searched for a new global role for Russia. The
financial crisis and its aftermath gave the Russian govern-
ment under Vladimir Putin the chance to advance ideas on
global economic leadership that had long been percolating
in the Russian foreign policy community.
Russia’s alternative vision clusters around two major eco-
nomic themes: multipolarity and a state capitalism laced
with financial nationalism. Multipolarity is an updated inter-
pretation of the realist concept of spheres of influence, with
several ‘pole’powers constructing regional multilateral insti-
tutions and relationships as alternatives to western-domi-
nated, universalist international institutions. Multipolarity
does not rule out cooperation with the west or with western
institutions, but insists that this occurs with the pole powers
on an equal footing and with a mutual respect for their dif-
ferent regional security and economic interests. Advocates
of multipolarity often give it a nationalist or civilizationalist
spin as well, arguing that less powerful states should gravi-
tate towards particular poles based on cultural and historical
affinities.
Global Policy (2016) 7:2 doi: 10.1111/1758-5899.12301 ©2016 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 7 . Issue 2 . May 2016 207
Research Article
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