Two global risks: America and Putin

david_gordon_vThe assumed weakness of the United States encouraged Russian president Putin to embark on a foreign expansion policy. First of all, he tries to divide the EU, says David F. Gordon, who is one of the most recognized international political-business-economic risk consultants, the Head of Research at the Washington-based Eurasia Group. (Every January, the Eurasia Group publishes its annual global political risk index, the “Top 10 Risks”, which serves as an important guide for economic, financial, and security policy analysts.)

In his interview to alapblog.hu, Gordon draws attention to the fact that the Russian president may effectively take advantage of the popular discontent with Brussels in countries like Hungary, Latvia, and Cyprus.
Vladimir Putin is very high in the 2014 global risk index of the Eurasia Group, as he is the only politician among the leaders of the substantial countries, who is not subject of any monitoring or control.
At the same time, Putin is getting increasingly dangerous because the United States – previously considered as a superpower – and its president  has lost credibility to the rest of the world and has not managed to show anything whatsoever in the way of a foreign policy.

Zentai Péter: It has surprised me that you did not list the tensions that have been dragging on for so long in the Eurozone (moreover, in the whole European Union) among the global economic, financial, and political threats. Please, explain this.

Our view is that there will not be a “game change” in the European crisis in the next twelve months: it will not worsen – it might stagnate but it will definitely not shake up the world. One reason for that is the convergence between Angela Merkel German chancellor, the most influential European political leader and Mario Draghi, the most influential European financial leader. Furthermore, we must acknowledge that the political system is stronger and the political-social order is more stable in the Member States concerned than we have assumed over the recent years.

Nonetheless, the underlying tensions still exist: the European youth unemployment is incredibly high, the labor movement and immigration around Europe fuel social tensions. This results in the strengthening of antiforeignism and the rise of nationalist parties.  Moreover, the Member States have different, sometimes conflicting visions for the future of the European Union. Still, we think that the European Union will be able to manage all of these issues – at least in 2014. The political foundations are solid.

Russia (or rather, the Kremlin) is very high on the “Top 10 Risks”. Why?

The best term for this is “Putin-risk”. Actually, it is considered to be one of the most serious challenges of the next year.The risk was established because of the combination of Putin’s loss of popularity in Russia and the increasing economic – and soon, financial – pressures on the country.
Putin – realizing this – tries to compensate for both of these challenges by embarking on a foreign expansion policy.

It started a few months ago, when he unexpectedly stepped in the Syrian crisis and later, in the Ukrainian crisis. There is also a chance that he will try to play a more decisive role in the negotiations with Iran and seems to be pretty aggressive in the Central-Eastern European region.

We are talking about a very specific risk factor: Vladimir Putin. Unlike any of the other leaders of the substantial countries, Putin is a single decision maker; he is not controlled by anyone and does not need any consensus for making decisions. Such degrees of freedom are inconceivable in the European democracies. In the United States, Obama faces a lot of opposition in the Congress; Angela Merkel is governing with a coalition. So, in the modern world, decisions are made collectively and the democratic system of checks and balances ensures that politics would not be dominated by one individual. The only exception is Putin’s Russia.
In effect, Putin is the only one among the leaders of the superpowers who can do whatever he wants to.
Thus, Putin is a global risk in himself! He is the absolute ruler of the largest country in the world, of a dominant energy supplier of the global markets.

What does that mean for Europe? How is Putin a threat to Europe?

He tries to take advantage of the problems besetting the Eurozone (and the European Union) and to serve as a counterpoint to the West for countries that are not really in agreement with Brussels or with Western political values and viewpoints.
According to our research, Putin’s attempt to divide the EU is not going to be successful.
However, in Latvia, for instance, we are seeing the reemergence of a strong pro-Russian voice. Some of the people make the Russian model appear to be able to fix social issues.

What do the analysts of the Eurasia Group think about the developments in the Hungarian-Russian relations?

We pay close attention to the issue and take it seriously. The case of Hungary is a very good example of how Russia makes every effort to turn the EU Member States against each other. Countries where political pressures are beginning to build against Brussels are welcoming these ideas. This applies to Hungary, as well as, to Latvia, to Cyprus, and to a couple of other countries. Putin is aware of this general mood and will try to exploit it. However, it is unlikely to play off in the EU because Russia is heading towards a more unstable period. The foreign expansion would not solve the question of the increasing financial pressures or the drop in Putin’s popularity.

I would not say it is all settled. The long-time rival of Russia is your home country, the United States of America, which seems to be weak from a Russian point of view. Putin might exploit this situation, as well. Moreover, the number one risk of the index of the Eurasia Group is the US foreign policy… Is the real risk the United States?

Putin would be definitely less threatening, if the United States did not focus that much on its domestic agenda. Putin looks at Obama with total scone. He regards him as a weak leader and has very little respect for him.

And what is Obama’s opinion about the Russian president?

I can assure you Obama does not like Putin, either.
But to reply to your question about the challenges posed by America, the irony is that – while the country is losing credibility – it is economically gaining strength: the recovery is stronger, the energy revolution is gathering pace, and the industry is more competitive.
Due to the energy revolution, the crude oil and the gas in Middle East and in Russia are losing importance. That is going to put a lot of pressures on the petrol states, such as the Arab countries or Russia.
The changes will give Iran a rational for seeking an arrangement with the West and will encourage Russia to develop new resources in Siberia and in the Arctic.
In the meantime, it is quite obvious that Obama is very weak and losing popularity despite the apparent economic successes. First, most people are very upset with the health care reform he tried to initiate this year and with his flip-flopping on the question of Syria last summer. No one knew what Obama was thinking or what he was going to do about it. Finally, Putin helped him on Syria. Second, the espionage scandal has taken a toll on the U.S. relationship with its Western European alliances. Obama has not made any substantial comments on the event for 7 months. No one knew what he was thinking or what he was going to do about this. Third, Asian countries also question the U.S. security commitments; while tensions are rising between Japan and China.
In this respect, our view is that the United States is doing its utmost to prevent the potential conflict. Its interest is to maintain a good relationship with both Japan and China and regional stability in Asia. This might as well happen spontaneously as the whole regional economy of South Asia is inextricably intertwined.
Nonetheless, this year’s biggest risk is the decline in the foreign policy of the United States. This makes out world more vulnerable. And once again, Vladimir Putin – who is a global risk in himself – might built its expansion policy upon this weakness.