US-Russian talks offer uncertain path to de-escalation

Significance The December 7 virtual summit between Presidents Joe Biden and Vladimir Putin was an attempt to reduce the risk of imminent conflict. The results, including an agreement to discuss European security, appear to have had some success, but have not led to de-escalation: Moscow shows no sign of pulling back troops massed around Ukraine. Impacts The war risk is not top of the news agenda in Ukraine, and the government seems inclined to downplay it. Closer US-NATO alignment will ease European fears but complicate some decisions. After engagement further afield, NATO will revert to its core function of assuring security in Europe.

Subject Russian NGOs operating in a constricted environment. Significance Russia's NGO sector has been diminished by restrictive legislation and a hostile environment under President Vladimir Putin. 'Foreign agent' regulations hamper the operations of designated NGOs and deter potential supporters, in an environment where the lack of a volunteer culture already means that NGOs find it hard to build solid foundations or extend their reach. NGOs face heightened uncertainty and penalties under arbitrary interpretations of vague rules. Impacts The government will increase funding to socially oriented organisations that align with its goals. Kremlin-approved NGOs will be able to recruit young people who see this as a good and uncontroversial career step. The European Court of Human Rights will rule on petitions from 61 groups on the 'foreign agent law', possibly by the end of 2018.


Subject Russian Naval doctrine Significance The Russian navy's next-generation reconnaissance ships, the Admiral Yury Ivanov-class, are capable of locating gaps in the US Aegis sea-based missile defence system, German newspaper Bild reported on August 6. The first ship was delivered to the fleet on July 26, Russia's Navy Day, at a ceremony attended by President Vladimir Putin and Deputy Prime Minister Dmitry Rogozin, who oversees Russia's military-industrial sector. On the same day the government also released a revised Maritime Doctrine updating the original 2001 text, (revised slightly in 2011). The government is now developing new maritime legislation on the basis of the doctrine. Impacts The new doctrine more explicitly describes NATO as a threat to Russia than previous published military doctrines. Russia's military has reversed its planned East Asia pivot to reinforce its western and northern fronts with NATO. Russia will remain primarily a regional naval power for at least the next decade.


Subject The government's scramble to revise its budget. Significance Prime Minister Dmitry Medvedev has ordered ministries to cut spending further, the government's website announced on January 15. The reductions will be "significantly more drastic" than in previous years, he said. The media reported earlier that the government was planning to cut 10% from the budget expenditure that parliament approved in November and President Vladimir Putin signed into law in December. Impacts Continuing low oil prices will be the main obstacle to a balanced budgetary policy beyond 2016. Reduced fixed capital investment and limited access to credit due to high interest rates will hamper a return to growth. Domestic economic problems will continue to depress trade with other former Soviet states, especially those in the Eurasian Economic Union.


Subject Rosneft's privatisation. Significance The sale of a 19.5% government stake in oil giant Rosneft to the Qatari Investment Authority (QIA) and commodity trader Glencore, announced on December 7, was the year's largest global hydrocarbons acquisition, and the largest foreign investment in Russia since the onset of economic crisis and the imposition of sanctions in 2014. The deal came amid diminishing hopes that the Rosneft privatisation would go through this year, and is being seen as a success for company head Igor Sechin as well as President Vladimir Putin. Rosneft gains new strategic alliances while the government retains control of the company. Impacts The Rosneft share sale points to revived investor interest in Russia. Coinciding with the OPEC deal, the sale strengthens Russian economic ties and political influence in the Middle East. The participation of European entities will increase pressure for EU sanctions to be dropped.


Subject Russia's new national security strategy Significance A new National Security Strategy (NSS) signed off by President Vladimir Putin on December 30 covers a broad range of issues from Russia's place in a dangerous and "imbalanced" world to the economic challenges that the government must tackle. The document accuses the West of backing a "coup" in Ukraine in 2014 and pursuing policies that allowed the Islamic State group (ISG) to emerge. Impacts The characterisation of Western states as hostile will be mirrored in harsher wording in their policy statements on Russia. In an election year, there will be little emphasis on democratic values. Regional and ethnic interests will be subsumed in a 'unitary Russia' narrative.


Subject Israel’s defence diplomacy in Europe. Significance Israel is seeking to capitalise diplomatically and economically on growing tension and security threats in Europe by expanding arms sales and defence cooperation. In addition to reaping economic benefits, the government hopes to use deeper defence ties to protect Israel from the growing Boycott, Divestment, and Sanctions (BDS) movement and actions opposing Jewish settlement construction in the West Bank. Impacts Israeli arms exporters could come into conflict with US defence companies in European markets. Russia’s displeasure with Israeli defence sales in Eastern Europe could encourage arms transfers to Israel’s regional enemies. Demand for the most sophisticated Israeli military technology will rise more sharply.


Significance The surge in fighting that started on January 29 was the worst since early 2015, but seems to have died down for now. The causes are unclear, although it began a day after the first phone call between Russian President Vladimir Putin and Donald Trump since the US president's inauguration. The geopolitics are complicated by local issues such as disputes over trade with the rebel territories. Impacts Unless Kyiv caves in, Russia's refusal to return control of the border to Ukraine will block implementation of the Minsk 2.0 agreement. If Kyiv introduces martial law in eastern regions, this is likely to be seen as the death of the Minsk peace process. The government will be discredited if it cannot stop or regulate trade with rebel areas, but this will not be enough to force an election.


Subject Russian leadership's preparations for possible unrest. Significance Preparations for September elections to the Russian parliament and the accompanying rhetoric suggest that President Vladimir Putin and his government fear a repetition of the unrest that followed the 2011 polls. Across Russia there has been a rise in protests about wage arrears and other economic matters. Because these are apolitical, they have been easier to defuse than overtly political action, which the government is trying to deter with stern laws and policing. Impacts The government will attempt to mitigate the effects of economic crisis and may even offer cosmetic political changes. Despite attempts to demonstrate transparency, the September polls are likely to feature ballot-rigging and other forms of electoral fraud. The crackdown on opposition and expressions of dissent that began in 2012 will intensify.


Subject Impact of 'Panama Papers' revelations on the government. Significance Revelations in the 'Panama Papers' about a network of offshore companies and bank accounts implicate figures close to President Vladimir Putin and confirm long-held suspicions about the extent of high-level corruption. The case undermines the leadership's credibility and authority both at home and abroad. Putin has tried to contain and deny the story, and his public-but-defensive response suggests an unusual degree of concern about the potential reactions from a population suffering falls in real income. Impacts Western sanctions could be extended to more individuals and companies. Greater awareness of corruption may erode support for the government among its core electorate. Economic pressures and social tensions may embolden elite insiders to plot against Putin. Putin will seek to anticipate challenges through dismissals and assertion of his personal power. Media and civil liberties will be further restricted.


Significance Its campaign advertising claims the party is responsible for welfare improvements generated by the government. Functionally, the party looks increasingly like a vehicle for the Kremlin to extend its control of regional executives. Impacts To boost United Russia, President Vladimir Putin has offered additional payments to pensioners and the security services. The poor management of the COVID-19 crisis will have little impact on United Russia's performance. The Kremlin will allow the Communist Alexey Russkikh in Ulyanovsk and Liberal Democrat Mikhail Degtyarev in Khabarovsk to become governors.


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