In February 2001, the National Intelligence Council sponsored a conference that examined Russia's evolution and its role within the international system over the next three to five years "Russia in the International System" (full text).

...the likely implications of Russia's near future for the United States

Russian-American relations in the first post-Soviet decade hold three lessons for the United States. The first is what we might call, after the opening sentence of Pride and Prejudice, the truth universally acknowledged: Russia is important but not as important, nor important for the same reasons, as it was during the Cold War. Russia is important because it is a poorly guarded warehouse of dangerous materials, some of which can reach the West and all of which are grouped together under the name "weapons of mass destruction."

Russia is important as well by virtue of where it is situated. An old adage has it that the three most important things in real estate are "location, location, and location." The same is true of geopolitics. Russia either shares borders with, or is near, many countries of consequence. It has been said that Russia is no longer a global power, but rather a regional power. No doubt this is so, but the regions in which Russia is a power include Europe, East Asia, and the Middle East, none of them insignificant.

For the nearby countries, a successful Russia would be both a virtuous model and a good neighbor. A failed Russia would affect and perhaps infect them. From this follows a now familiar conclusion that bears repeating: unlike in the Cold War, the West is now as threatened by Russia's weakness as by its strength--perhaps more threatened.

The definition of success is straightforward. A successful Russia would be a country with a functioning democratic political system and effective free markets. This leads to the second lesson of the first post-Soviet decade: building democracy and free markets is easier said than done. Despite Western efforts, it did not prove possible to construct either in Russia in the first post-Cold War decade. At the outset of that decade it was said, by way of justifying what seemed to be radical reform, that it is not possible to cross a chasm in two leaps. It turned out that post-Soviet Russia could not cross this chasm in one leap either, and as a consequence finds itself, metaphorically, at the bottom of it.

In one way we are better off, where Russia is concerned, for the decade's often discouraging events: we know what Russia needs. It needs appropriate institutions. It needs a rights-protecting state that can administer the rule of law, a financial system, and the combination of the two: property rights.

The absence of all of these is the reason that schemes such as massive American investment in Siberia never get off the ground. Investors invest where and when they think they can make a profit. Without property rights, they know that they will make none.

Here two additional points are worth noting. The first is that corruption per se is not Russia's problem. Corruption is not an insuperable barrier to economic growth, as demonstrated by the countries that have experienced robust corruption and rapid growth simultaneously. Corruption, if it is predictable and sufficiently modest, is simply a tax. Investors are accustomed to dealing with taxes. It is the magnitude and the unpredictability of the corruption, and the absence of secure property rights, that drag down the Russian economy.

The second observation is that the principal source of desperately needed capital investment in Russia is not the United States or the West; it is Russians themselves. Although the ratio of capital flight to capital inflow for Russia in the first post-Soviet decade can never be known, a figure of ten to one--ten dollars leaving the country for every one coming in--seems not unreasonable. So the Russian government does not have to persuade us that Russia is a good place to invest; it has to persuade its fellow Russians. So far it has failed to do so. In the one indubitably free election that has been conducted in Russia since the collapse of the Soviet Union, Russians themselves have voted with their money--against the regime.

If in one way we are better off after a decade, in another way we are worse off: we do not know how to build institutions. Institutions do of course get built, and cultures do change, but they are not built or changed by the deliberate use of foreign policy instruments at the disposal of sovereign states, even one as powerful as the United States. And this means that where Russia is concerned, on what is arguably the most important foreign policy issue the United States faces, we are in the sad position of Nathan Rothschild, the richest man in the world in 1836, who died of an infection that could have been cured easily a century later by commonly available antibiotics, but from which all his wealth could not save him because the remedy had not yet been discovered. The West today, with its unprecedented wealth and power, simply does not know how to solve what is perhaps its most pressing foreign policy problem: helping Russia develop the institutions it needs to become a normal, liberal state.

It should not, however, be thought that we have no influence at all over Russia. To the contrary, the United States has had a profound impact on Russian foreign policy, and it is that impact that is the subject of the third lesson. The international system is a society. It has rules and norms, which were reset with the end of the Cold War and the beginning of the post-Cold War order. Such rules are normally established by the strongest power, and in the post-Cold War period that was and is the United States. In the international system the weak learn from the strong, just as in human societies the young learn from the old.

The great instructional moments for Russia in the post-Cold War era are familiar. Despite what the Russians believed was a commitment to the contrary by the West at the time of German unification, NATO expanded toward their border. Despite what they thought was a commitment to give them a full voice in deliberations about the use of force in Europe, NATO waged war against Yugoslavia over their objections. Now they face the prospects of further NATO expansion toward their borders and of the development of a ballistic missile
defense system in violation of the ABM Treaty, a thirty-year-old agreement that they say is critical for their security. What conclusion is it reasonable to draw, and what conclusion do the Russians seem to have drawn, from these experiences? That conclusion seems, unfortunately, to be one that can be stated by paraphrasing something that Stalin said in launching his program of forced draft industrialization in the late 1920s: we must be strong or we shall be beaten.

Despite the lurid fantasies of some Russians, their country is not going to be attacked, conquered, or occupied by NATO. But it is certainly true that Russia has been and is being ignored where its own definition of its interests is concerned, and being ignored contrary to what Russia believes were Western assurances to the contrary. And it is certainly also true that none of the policies that so offend Russia would have been carried out, or even have been contemplated, but for Russia's unprecedented post-Soviet weakness. And that in turn means that, whether we admit it to ourselves or not, Russian weakness is a fundamental condition of important aspects of post-Cold War American foreign policy. The view of a dismayingly large number of Russians that it has been the American aim all along to weaken Russia is incorrect, but it is not logically inconsistent with the observable facts.

The worth of post-Cold War American initiatives that violate Russians' definition of their interests must be calculated by weighing the benefits, whatever they may be, against the costs that have to be paid in relations with Russia and in Russia's view of the world. The failure to make such calculations would be, and perhaps was, a species of foreign policy incompetence. And this leads to the third lesson of Russian-American relations for the United States.

When public television was established in the United States in the 1960s, it initially had another name--it was "educational television." A member of the Federal Communications Commission was asked what he thought of educational television. He replied: "All television is educational television."

Similarly, for the United States in the post-Cold War era, and in an odd echo of a truism of the Cold War, it is well to remember that whatever the motives behind a particular initiative, all foreign policy is Russian policy.