Russia’s future: a giant Iran of Eurasia

This is an audio transcript of the Rachman Review podcast episode: Russia’s future: a giant Iran of Eurasia

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Gideon Rachman
Hello and welcome to the Rachman Review. I’m Gideon Rachman, chief foreign affairs commentator of the Financial Times. In this week’s edition, we’re looking at the future of Russia. My guest is Alexander Gabuev, who until a few months ago was based in Moscow as a senior fellow at the Carnegie Endowment for International Peace. He left Russia shortly after the country invaded Ukraine. Gabuev’s a particular expert on Russian-Chinese relations. But as you’ll hear, he’s also a brilliant analyst of Russia’s internal politics and economics and of the country’s international situation. So with Russia cut off from the west, is the country fated to become a dependency of China?

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Gideon Rachman
Just three weeks before Russia invaded Ukraine, Vladimir Putin visited Beijing and met Xi Jinping.

News clip
Vladimir Putin met with Xi Jinping in Beijing in a choreographed show of solidarity just hours before the opening ceremonies of the Winter Olympics. And they sent a message to the west as well that they are unified in their opposition to Nato expansion.

Gideon Rachman
The Chinese and Russian presidents announced a partnership without limits. But when Russia attacked Ukraine, that meant that the attention of the west was focused not just on Russia, but also on its partner, China. At the recent Nato summit, Jens Stoltenberg, the secretary general of the alliance, made it clear that China is now also a growing concern for Nato.

Jens Stoltenberg
China is not our adversary, but we must be clear-eyed about the serious challenges it represents. And we must continue to stand with our partners to preserve the rules-based international order, a global system based on norms and values instead of brute violence.

Gideon Rachman
All of this is closely watched by my guest this week, Alexander Gabuev, who until he left Moscow, was probably Russia’s leading China watcher. I met Alexander — “Sasha” to his friends — in Helsinki in Finland, close to the Russian border. As he told me, the scenery reminded him of home.

Alexander Gabuev
It reminds you northern Russia rather than Petersburg, because it’s very close with kind of long white nights.

Gideon Rachman
Yeah.

Alexander Gabuev
You can feel nostalgic, a little bit.

Gideon Rachman
I’m sure. Yeah. And yet it’s sort of so near and yet so far.

Alexander Gabuev
Yes.

Gideon Rachman
So you currently can’t go back to Russia. So tell me about the circumstances of why you left, like quite a few of people you must know.

Alexander Gabuev
Yes, many people left. My personal reasons are safety. It’s better be safe than sorry now. And now we’re on this wild territory where everything is possible and nothing is impossible.

Gideon Rachman
I mean, you know a lot of people in the Russian state were people telling you, for your safety, go.

Alexander Gabuev
I wouldn’t comment on this, but many people were unhappy about me telling that the war is Plan A beforehand. And like writing a piece in The Economist about this just a couple of days before the thing started to be set in motion.

Gideon Rachman
So the war starts on February the 24th. When do you leave?

Alexander Gabuev
I left on March 1st. The war was not an intellectual shock, but it was definitely an emotional shock. War starts on Thursday and on Saturday I’m playing with my six-year-old son. And then the prosecutor general’s office issues a warning that working for international organisation might be treason. And then I say, well, they are talking about people like myself. So I went online, I purchased a ticket and I left on March 1st.

Gideon Rachman
And were you certain you would be allowed out of the country?

Alexander Gabuev
I had a story to tell. I was not vaccinated with an internationally recognised vaccine, so my return tickets covered exactly the vaccination period. I was stopped and brought to an interrogation room where there was a kind of young-ish FSB officer who spent 10 minutes with me asking, what are the reasons why I’m going and stuff. And I told him that I’m just going to get a vaccine. Gonna come back soon. And that was okay. But then, because of Pratasevich’s story, one of the opposition leaders in Belarus who was caught on Ryanair flight flying over. So you never feel safe enough unless you leave the borders of Mother Russia. And like, I was okay, if you get arrested, you get arrested. I had a special pack in my luggage that if I’m in prison . . .

Gideon Rachman
You really were taking prison clothes with you, in case you got . . .

Alexander Gabuev
Well, that’s kind of genetic memory. Some people in my family have been in prisons in the 30’s under Stalin. So you don’t want to be unprepared for prison if you’re arrested at the border. I think I was overcautious, but again, it’s better to be safe than sorry. And then everything is possible and nothing is impossible nowadays.

Gideon Rachman
Before we get on to your specialism of Russia-China, which we’re definitely gonna do, but just tell me, you know, life has been made deliberately or otherwise, very difficult even for Russian dissidents who’ve left the country, because you can’t use your credit cards, you can’t get money out of the country. Very hard to get jobs for many people. How are you managing?

Alexander Gabuev
That’s true. I’m covered by Mama Carnegie, for which I’m very grateful. And then people who have foreign employers who really care for them, people who are IT guys who can work from whatever destination, open bank accounts are easier. A lot of people who are dissidents or journalists are really in a tough spot because they don’t have savings. They don’t have access to their savings in Russia and life is really, really difficult.

Gideon Rachman
And so you’ll be able to keep following Russian foreign policy in Russia, China and Europe, one of the leading experts on that. So let me ask you about it. In this situation right now, how closely do you think China is helping Russia?

Alexander Gabuev
I don’t think it’s help. If anything, China is a very selfish, very pragmatic country that looks at this situation for its interests. And then the dilemmas are Russia is of paramount importance, not only because of Xi Jinping-Putin bromance, but because they share a lengthy border. China doesn’t want Russia to become a security challenge, a pro-western country that’s part of the encirclement of China. Trade is beneficial. And then also Russia is very helpful to keep the west’s attention off and be this partner. And at the same time, access to western markets and western technologies is of paramount importance. So there is the balance. China asks a question: “If we throw Vladimir Putin under the bus, does it lead to a fundamental change in the US-China relationship? Does it mean that Huawei is off the sanctions list, that the west stops talking about Xinjiang or Hong Kong?” No, it doesn’t. So sticks are coming China’s way regardless. And then why would we then sacrifice our relationship with Russia? We should know what the west’s red lines are and red lines are direct material help for war aims — munition, arms — or help in circumventing the primary sanctions. And China doesn’t do that. But everything around that, everything that’s not covered by the primary sanctions, there is so much room to play. And then where does Russia go with its oil, with its natural gas, as it cuts off or limits flows to Europe? China is the major destination like India and others is also important. But China is the place to go and that’s where China gets an increasingly commanding position in this relationship. The asymmetry was always there. Before I left, there were a lot of senior people in the system I knew who were concerned and were like, “Yeah, if we don’t make our relationship with the west more pragmatic, if we don’t do structural reforms, that means that we are increasingly dependent on China and 10, 15 years down the road, that’s not necessarily what serves Russia’s interests best”. Now, unfortunately, because Russia’s foreign policy is all of this tunnel vision of fighting with the west and being obsessed about Ukraine, this concern is gone. And then Russia is on a trajectory to become an increasingly junior partner. This relationship that’s reliant on China.

Gideon Rachman
And can they in fact even sell that gas to China because the physical infrastructure isn’t there?

Alexander Gabuev
The physical infrastructure isn’t there. So there is one pipeline that runs from eastern Siberia, and these are two gas fields that have China as the only market. But then to bring gas from Yamal, Russia cannot liquefied. It doesn’t have the technology. So it will need a pipeline to China that Moscow and Beijing are discussing for quite some time. It will be built quite quickly because these are already producing gas fields. They talk about 50 BCM capacity, which is about a third of what Russia used to sell to European Union, but that’s still a lot and that’s a help. The thing is that China will have no need and requirement to buy this gas if this pipeline is built by two buddies of President Putin, Gennady Timchenko and Arkady Rotenberg and comes to China’s border without equal pay clause, is that China can buy it or not whenever it wants. There is no legal obligation, and that gives China tremendous leverage not only over Russia but also over other gas suppliers like Qatar, or if you want to cut off Australian LNG and punish Canberra for kind of anti-China stance, whatever calls to investigate Covid origins, that’s what you’re gonna do. So I think that this is tremendously beneficial to China and I would be very surprised if this pipeline doesn’t materialise very soon.

Gideon Rachman
How quickly could they get it built then?

Alexander Gabuev
I think it takes about three to four years.

Gideon Rachman
Right. So Russia could have a tricky period. But I suppose there’s a period when Europe’s still buying Russian gas for about three years, so they might be okay.

Alexander Gabuev
We’ll see. Gas is not that important for the state budgets, like bulk of their commodity revenues comes from oil. With the prices at the current levels, Russia is in a good fiscal position. Don’t pay attention to GDP recession — that’s important. But Russia’s economy is not about growth, but it’s about managing cash flows. And then it’s enough. The stream of money to the Kremlin’s coffers is just enough to keep the system running, to keep the guys with guns happy, and to keep the population quiet and down.

Gideon Rachman
So you’re not anticipating that these sanctions will bring the regime crashing down any time soon?

Alexander Gabuev
I don’t see any meaningful cracks that will lead to regime’s collapse. Bottom-up pressure, like the largest demonstration in Moscow, was about 1,000 people in a city of 17 million. Where are the defectors? In Belarus in 2021, we had ambassadors resigning. We had a lot of societal pressure. Also from the very top, we have now Alexei Kudrin, who left the country without criticising the war. We have banker Oleg Tinkov who was critical about the war and got his bank taken away from him by a fraction of the price, and we have a kind of council-level Russian diplomat in Geneva stepping down. There are a lot of people I know who are quietly leaving the ranks and seeking jobs elsewhere, but that’s about it. So Russia is transitioning from the economy and country it has been to a giant Iran of Eurasia. That transition will be bumpy, but it will not create fissures that are sufficient for regime change.

Gideon Rachman
And a “giant Iran of Eurasia” you mean, but basically a country that is cut off from the west.

Alexander Gabuev
That is cut off from the west, that has a simplistic economy, that’s more technologically backward. But make no mistake, Iran is a country that is self-sufficient. Yes, quality of life. You don’t want to live in Iran. I don’t want to live in Iran. Russia was a far better place than Iran. But still, people live there. They have indigenously developed technology. They have indigenously developed weapons. And if the expectation is that Russia’s military capabilities will be degraded, they will be unable to produce new system — that’s wrong. Both Iran and North Korea that doesn’t have Russian experience in all manufacturing doesn’t have the capability and pool of intellectual talents are still having pretty advanced military programmes, and that’s exactly what Russia’s gonna have.

Gideon Rachman
So very interesting line of thought and a rather disturbing one because, you know, having Iran cut off from the international system is already quite difficult for the west. It’s a major policy preoccupation having Russia permanently in a situation like that, and now a group of countries such as Russia, Iran, etc.

Alexander Gabuev
In Russia, the view is that on the battlefields of Ukraine, Russia is battling not only Ukraine itself, but also the west, because our boys are being killed by western weapons, through intelligence-sharings for targeting data. And Putin and the Kremlin want to stick it back to the west. The toolkit is pretty narrow. So turning off the gas and engineering an energy crisis amidst the season where the storages need to be filled is one of the motivations why we are seeing what we’ve seen in the gas markets. But then also this giant Iran will be increasingly friendly with China and increasingly willing to do what China asks without violating Russian pride, massaging this great power ego of Russia. But unfortunately, this will be the reality where more weapons will come China’s way, more weapon designs, more support for China’s position on “nine-dash line” and many other issues. So that’s a relationship that’s critical for the west and that’s also very dangerous.

Gideon Rachman
Yes. So, in fact, this is a net win for China.

Alexander Gabuev
There are some downsides, of course, that exacerbates tensions with the west, but tensions are there and they are not because of Russia, but because China will be China. China will be assertive. China will want to be the regional security hegemon. China wants reunification with Taiwan, China doesn’t become democratic. China wants to develop indigenous technology and rival the west in some of the cutting-edge domain of global technology. And yes, there will be IP theft like everything what the west isn’t happy about. China doesn’t want to integrate into the rules written by the Americans, and that will stay. So Russia now is doing the same in a much more assertive, aggressive way to China’s assessment. I’m pragmatic that doesn’t solve Russia’s long-term interests. But so what? It’s very beneficial for China.

Gideon Rachman
And essentially are we then looking at a two-bloc world, a world centred around the US and the west and a world centred around Russia and China, and then a third group of countries which will choose neither pole?

Alexander Gabuev
Yes, the global south, as diverse as this group is, but where countries will try to be both members of quad like India, but also members of Brics. I think that India, since its major challenge going forward is China, will drift closer to the west and then this special relationship with Russia, I don’t know how long it will hold because if five years from now China tells Russia that, hey, India is not a friend of China, why are you still selling your sophisticated weapons to our rival and enemies? Stop it. Russia will be forced to do so. So I think that the Indian military is thinking about that. They are thinking about what kind of capabilities Russia can bring to the table because of sanctions. And then basically the west is rushing for an open door in offering India options to diversify its dependence on Russian hardware. So that unfortunately for the Russian military industrial complex will happen ultimately.

Gideon Rachman
So Russia, part of this picture of Russia becoming increasingly dependent on China. But what about southeast Asia? Where do you think they’ll go in this picture?

Alexander Gabuev
Well, I think that there are tensions and a lot will depend on how durable are the US security commitments. I think that these are some long-term investments and the Pentagon will have some consistency. But China is their giant neighbour. They don’t want to choose, but ultimately China is the reality that they are facing. It’s the largest trading partner, investor, technology provider, a huge market, and China will be there. So I think that they will try not to choose as long as they can. But countries like Cambodia and others will be increasingly more reliant on China and more aligned with the China camp.

Gideon Rachman
And looking at the very long term of the Chinese-Russian relationship, it’s always struck me that China talks about recovering from the sense of humiliation, the land taken away from them, when a lot of the land they lost in the 19th century was to Russia. Is that somewhere at the back of everyone’s mind or not?

Alexander Gabuev
I think that this used to be a concern for Russia for quite a long time. Now, the border is officially delimitated. We don’t have a territorial dispute with the Chinese. Russia is a nuclear superpower and just doing something offensive and kinetic is very dangerous. That’s not the risk calculation on the Chinese side. And then demographically, China is an ageing population and it’s gonna be a shrinking population. So just the demographic potential to populate these areas is not there. Chinese diaspora in the Far East is also shrinking because of downward spiral of the Russian economy, Covid and many other things. So I don’t think that this is a concern. If, and that’s one of the scenarios, decades from now Russia will be less stable, it will be more separatism by ethnic minorities or regions and then Russia basically falls apart. I think that this is a very unlikely scenario, but that’s one of the scenarios people should look into. Then things might turn different, but I ascribe to it like less than 10 per cent weight.

Gideon Rachman
So finally, just looking back, I mean, I’m very intrigued by your description of Russia as this giant new Iran. What’s that gonna be like for the Russian middle classes? I mean, you and I met in 2018 during the World Cup, which felt like a very open moment for Russia. The place was full of foreigners. Russia felt, you know, at least superficially, like a kind of part of the developed world in the same brands. Ordinary Russians were mixing with westerners, could travel back then, but now they face a very, very different reality where they can’t travel to the west. And I guess the kind of little consumer goods that made life more interesting are gonna disappear.

Alexander Gabuev
Some people will leave the country and they’re already leaving. Also, because if your kids will be educated in school that Ukrainians were building a nuclear bomb to threaten Russia and that we need to go and kill Ukrainians because they were a challenge to our national security, I don’t want my kids to be educated that way and then talk at home to their mom and their family about how the real world looks and have this kind of split-screen image. We’ve been there during the Soviet Union. I don’t want my family to be there, but many people don’t have the options that I have, so they will stay. There are a lot of people who don’t support it, but they don’t have the means or opportunities to go outside. And then we have a lot of experience. We lived under the Soviet Union, behind the Iron Curtain. Life is there still. It’s not only about consumer goods. There will be, hopefully literature. Russia is a great culture. But yes, Russia benefited when it was open to the world in the 19th century or early 20th century and recently. The irony and the tragedy is that two decades under Putin were one of the happiest periods in Russian history where the country was relatively free and relatively wealthy per capita. And now, unfortunately, it’s gone.

Gideon Rachman
So what happened? I mean, did something change in Putin’s mind that he moved from this one society that he was building, that he was willing to risk it all?

Alexander Gabuev
I think that these grievances about the west and the wounded ego plus security concerns were mounting over time. But then there was Covid where he was stuck, like his social circle got gradually reduced. He was arguably reading some terrible literature about Russian history that was not very well informed, but that set him on a certain pattern of thinking. And then he saw also window of opportunity where Ukraine was his unfinished business. You have a weak US president, and that was the image after the Afghanistan withdrawal. You have a messy presidency in Ukraine. There is an energy crisis. You believe that you are having a strong military. You underestimate the Ukrainian military and resilience from the society. And if you want to finish this business and make Ukraine part of greater Russia, you think now is the time. It’s going to be tougher and more challenging five years down the road than doing it now. And he embarked on this terrible decision.

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Gideon Rachman
That was Alexander Gabuev of the Carnegie Endowment for International Peace. And that’s it for me for the next three weeks. But the Rachman Review will continue in my absence, so please keep tuning in.

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