Home / International / Opinion Tools: Save | Print | E-mail | Most Read | Comment
Energy Resources Fueling Russia's Return to Power
Adjust font size:

By Yu Sui

The pendulum of Russia's influence has been in an upswing for quite a while as its advantage in energy resources swells and economic growth picks up pace. The government is so confident that President Vladimir Putin fired a highly critical salvo at the United States at the 43rd Conference on Security Policy recently in Munich. People are wondering these days just how big Russia's influence is.

The disintegration of the former Soviet Union left Russia in very bad shape for a long time. It was able to pick itself up again only after years of extreme austerity followed by economic recovery powered by energy resources. Its world influence has grown as a result.

Energy resources are Russia's major treasure trove. They account for nearly 50 percent of its gross domestic product (GDP), while exports of oil and natural gas make up 75 percent of its foreign trade value. The rising oil price in the world market has benefited Russia immensely, with oil and natural gas exports earning US$139.5 billion in 2006 alone. Its gold and foreign reserves were valued at US$315.3 billion in early March this year.

Russia has cleared its foreign debt with oil dollars. This is one reason that Russia is so bullish these days.

Russia's oil and natural gas are mainly exported to Europe, with oil pipelines continuing to stretch westward. European countries' reliance on Russian energy resources has made the region a key market that Russia must secure. Of the energy imports of the original 15 European Union member states, Russian crude used total 21 percent and Russian natural gas 41 percent.

Now that EU membership has grown to 27, including central and eastern European countries, the proportion of Russian energy imports is bound to increase. Europe is increasingly dependent on natural gas for generating power, making Russia more valuable than ever. It is likely to supply more than half of Europe's energy demands.

The oil and natural gas pipelines from Russia to central and western Europe have become lifelines that the European economy cannot do without. This is another reason that Russia is so confident these days.

Energy resources are also a formidable weapon for Russia in international power tussles. It now enjoys the upper hand over former Soviet republics Georgia, Ukraine and Moldova because of their dependence on Russian energy resources.

As the first step towards creating an oil and natural gas export network, Russia is pushing hard for a four-nation economic zone with Belarus, Kazakhstan and Uzbekistan.

As some analysts have said, Russia is making energy diplomacy the core of its foreign strategy in hopes of rejuvenation as a super energy-exporting empire. Minister of Industry and Energy Viktor Khristenko announced in October 2005 that Russia would increase its energy exports to Asia six-fold in the next 10 years, adding one more reason to Russia's self-assurance.

No wonder Putin proudly stated the other day that the reliable supply of Russian oil and other energy resources "is a crucial factor in the stable development of the world economy".

Russia has not relied on energy resources alone to revive its economy. Its economic structure is continuing to undergo substantial transformation with domestic demand gaining strength in driving economic growth.

The containment of oligarchy forces that threatened the central government's authority for years played an important role as well.

Russia's influence is still limited since the collapse of the Soviet Union but has been on a steady rise since Putin became president.

The international community tends to view Russia as a regional power, whereas Moscow believes Russia is still a great country in influence in world affairs.

Despite Moscow's confidence, the first limitation on Russia's influence is its security strategy. Relatively speaking, the country has been a giant in military terms but a dwarf economically. The strategic posture Russia maintained before regaining strength was essentially defensive. By combining economic security with military security and by replacing the military power strategy with that of comprehensive strength, it managed to integrate its security strategy with development.

In foreign affairs Russia has been working to make more friends and allies to avoid its past isolation.

Its basic principles are never to allow any of the former Soviet republics to become anti-Russian fronts and to counter any attempt by Western allies to surround it. Another aim is to prevent its becoming a victim of nuclear proliferation.

Somewhat handicapped by weakened national strength and geographical vastness, Russia has been carefully navigating around the world power centers to build a favorable balance of power at the lowest possible cost.

As it regains economic vitality and national strength, Russia can be expected to gradually adjust its foreign policies and security strategy toward an equal balance of offense and defense.

Russia's inherited shortcomings also hinder its international performance. The influential newspaper Kommersant summed up the situation in an October 12, 2006 editorial: "Acutely dwindling population, corruption, ill-balanced economic development and a lack of consistent strategy all prevent it (Russia) from growing stronger, while rising oil prices, abundant natural resources, a powerful military, veto power in the United Nations, and China as a natural ally are helping it become more powerful."

Russia is still among nations suffering from political and economic instability, an unfavorable environment for investment and too many risks in economic activities.

With all these constraints combined with those from the geo-political environment, Russia finds itself still in a rather precarious position.

Western countries led by the US certainly hate to see Russia rise again. But they cannot afford to neglect its unique power so have to cooperate in international affairs. At the same time, they continue to apply the strategy of weakening Russia's comprehensive national strength and squeezing its strategic space.

Russia is the only major power in the world that is self-sufficient in energy. Its proven natural resources account for 21 percent of the world's total, topping the rest of the world not only in sheer quantity but variety as well. This includes an abundance of minerals, forest, land and fresh water.

It is estimated that Russia's natural resources command a total value of some US$300 trillion, of which US$30 trillion is proven. In comparison, the United States has US$10 trillion worth of proven natural resources while Western Europe has only US$2.5 trillion. One of the current challenges for Russian authorities is to turn the great potential into real power.

Russia's prowess in science and technology is not to be overlooked, either. Moscow has made the development of science and technology a priority. It is using the capitalization of human resources, innovation and high-tech to boost the national economy, increase international competitiveness and improve its position in the world market.

Russia is also trying to stop its brain drain by improving necessary conditions for talent to stay. Some Russian experts believe the country has soared to an advanced level in such hi-tech areas as computer software. One indicator, the annual production value of its information industry has grown by more than 30 percent in recent years.

In early 2006 Putin issued a presidential decree to establish a united aviation manufacturing group, saying Russia should play a leading role in such strategic industries as energy resources and aviation manufacturing industry. Russia's military strength remains impressive. The Los Angeles Times once commented that even though the US is the only remaining superpower, Russia is still capable of destroying America several times over.

Putin has been pushing military reform since taking office as a key step towards the ultimate goal of regaining superpower status. Moscow's military development strategy is gradually shifting from all-round retreat following former Soviet disintegration to gradually resuming an overseas presence.

All said, people with a strategic eye are not taking Russia's future for granted.

The author is a senior researcher with Beijing-based Research Center of the Contemporary World.

(China Daily April 5, 2007)

Tools: Save | Print | E-mail | Most Read
Pet Name
China Archives
Related >>
- Bush-Putin Meeting Highlights Complexity of Bilateral Ties
- Russia, US Sign Bilateral WTO Deal
- US, Russian Diplomats Clash at OSCE Meeting
- Russia Criticizes US Plans to Build Missile Defense Shield in Europe
- G8 Chair, WTO Deal Highlight Russia's New Push in Foreign Relations
- World Powers' Relations Feature Cooperation, Competition in 2006
- Why US and Russia Keep Blowing Hot and Cold
- Rice, Ivanov Hold Talks amid Tensions
- Gates: Putin's Approach Reminiscent of Cold War
- Russian FM Refutes US Claims over Missile Defense
Most Viewed >>
> Korean Nuclear Talks
> Reconstruction of Iraq
> Middle East Peace Process
> Iran Nuclear Issue
> 6th SCO Summit Meeting
- China Development Gateway
- Foreign Ministry
- Network of East Asian Think-Tanks
- China-EU Association
- China-Africa Business Council
- China Foreign Affairs University
- University of International Relations
- Institute of World Economics & Politics
- Institute of Russian, East European & Central Asian Studies
- Institute of West Asian & African Studies
- Institute of Latin American Studies
- Institute of Asia-Pacific Studies
- Institute of Japanese Studies