Businessweek Archives

Russia's Peace Prize: Closer Ties To The West


International Outlook

Russia's Peace Prize: Closer Ties to the West

Happily administering bear hugs to his Western counterparts in Cologne at the Group of Eight summit on June 20, Russian President Boris N. Yeltsin was ready to celebrate. By brokering a peace between NATO and Yugoslavian President Slobodan Milosevic, Yeltsin had earned the West's gratitude and restored Russia's image as a force to be reckoned with. At the same time, his daring gambit to dispatch 200 Russian troops to Kosovo ahead of the NATO force had silenced domestic criticism that he was kowtowing to NATO.

Yeltsin's twin public-relations victories could well mark one of the last big political maneuvers of his 8-year-old presidency. By playing his cards the way he did, Yeltsin has shored up his longstanding policy of cooperation with the West--despite growing anti-American sentiment at home. As Russia heads into election season, politicians of every stripe will increase their anti-Western rhetoric. But at least for the next few months--and possibly until the end of his term--Yeltsin seems determined to pursue smoother relations with the West because of the economic and strategic benefits they could bring.

The Russian President flew home from Cologne with a fistful of trophies and is looking for even more. In return for making concessions on the role of the Russian military in Kosovo and renewing his commitment to arms-control talks, Yeltsin won for Russia a permanent seat at the table with the world's seven most powerful economies. The G-7, now formally renamed the G-8, is promising to help Russia restructure some of its $70 billion in Soviet-era debt owed to governments and banks, as well as the $4.5 billion Moscow owes the International Monetary Fund this year.

But Russia's biggest spoil of the war is the promise of much closer ties with Europe. Kosovo made the issue of European security more urgent for both Russia and the European Union. Russians were frightened when NATO began dropping bombs on Serbia, which used to be in the Soviet orbit. European members of NATO supported the bombing, but were shaken by the outbreak of war in Europe and their own inability to launch a military operation without U.S. help.

So even as NATO's bombs were falling, newly appointed European Commission President Romano Prodi wanted to make better cooperation with Russia one of the EU's priorities. On June 3, German Chancellor Gerhard Schroder and other EU leaders approved an EU Common Strategy on Russia. The pact calls for increased cooperation on economic and political issues, from bringing Russia into the World Trade Organization and encouraging development of Russia's pipeline system to creating a stability pact for Kosovo.

Even before Kosovo, Europe and Russia were allied in their opposition to the more hawkish U.S. policy toward China and Iran. Closer cooperation could result in a common policy for the development of Caspian Sea oil, where U.S. policy has sought to marginalize Iran. "More and more, it appears that the U.S. does not know how to engage Russia, but more and more, it appears Russia and Europe are thinking alike," says Alan Rousso, director of the Carnegie Moscow Center think tank.

Yeltsin and his government still have to watch out for an anti-Western backlash at home. Even traditional supporters of Yeltsin are demonizing America and the West. NATO has no right to police the world "and commit murder in the name of human rights," declared Boris Fyodorov, a reform-minded banker and former Finance Minister, recently. It's up to the wily Yeltsin to strengthen Russia's Western ties before he departs the political scene.By Margaret Coker in Moscow, with Richard S. Dunham in Cologne; Edited by Patricia KranzReturn to top

Chilean Band-Aids?

-- President Eduardo Frei is scrambling to reactivate Chile's economy and patch up relations with the military nine months before he leaves office. Frei has unveiled a package of public works projects, housing subsidies, and a debt-relief program, while the central bank cut interest rates from 5.75% to 5%. Frei also shook up his center-left Cabinet, naming an ally of the military, Edmundo Perez Yoma, as Defense Minister. Military leaders are unhappy over the arrest of former dictator Augusto Pinochet in Britain and the reopening of court cases against former commanders in Chile. Critics see Frei's moves as Band-Aids, aimed at easing the way for Ricardo Lagos, a socialist who is the front-runner in December's presidential elections.Return to top


Later, Baby
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus