In July 2014 BRICS countries agreed to establish a new multilateral international development institution (named the New Development Bank) that is positioned as an alternative to existing World Bank and International Monetary Fund dominated by Western partners and their allies. The new institution will be based in China but it will be governed jointly by all participating states.
BRICS in Russian Foreign Policy
Due to the rapid deterioration of Russia’s relation with the West following the start of the Ukrainian crisis, BRICS has become a key foreign policy priority for Moscow. There are three main reasons for relying on BRICS for Russia right now. First and foremost, having international partners among large and influential countries improves Russia’s position in its current standoff with the West. Second, BRICS countries (most notably China) can be a source of capital that is of importance as the country faces sanctions limiting its access to Western capital markets. Third, BRICS support helps Russia maintain its position in relations with other countries, especially with the CIS, as former Soviet Republics also closely monitor to which extent Russia is isolated so that they can improve their negotiation power on various pressing matters in their bilateral relations with Moscow.
Meanwhile, lack of mutually beneficial substance has long been the main challenge for fostering multilateral cooperation in BRICS. In the first few years of its existence that was acceptable. Starting from the 2009 Yekaterinburg summit, leaders tried to find a platform for multilateral collaboration but diversities in countries’ interests and in their bilateral cooperation patterns with each other made this a challenge. Varying in size and substance, patterns of trade between the countries prevent BRICS members from even starting to look for free trade agreement opportunities or similar options. Global economic and political governance has been one of the issues on BRICS agenda. Expanding the number of members has been another agenda item eventually resulting in inviting the South African Republic. As for the global governance, the only real matter BRICS countries managed to agree on was a shared dissatisfaction with the World Bank and the IMF.
Looking for options for agenda development, Russia initiated BRICS dialogues on several secondary tracks: scholarly cooperation, business council creation, youth dialogues etc. However, the scholarly dialogue mainly grew into an ongoing multilateral brainstorming process aimed at finding new cooperation topics while other tracks have not yet developed to their full potential. Consequently, BRICS did not function as a full-scale international institution but rather as a series of summits that certainly had smaller importance for its participants than multilateral meetings with the US and the EU.
The decision to create a new permanent organization came as a major foreign policy victory for Moscow as it managed to prove to the rest of the world that it is not isolated (or limited to its closest partners and dependents) and that BRICS is more than just an abbreviation as it actually capable of launching projects of global importance. Moreover, the outcome did not come as a result of a bargain where desired foreign policy behavior is essentially bought by Moscow from other countries in exchange for loans, discounted energy prices or other economic favors. All countries agreed to submit to the new fund equal shares of USD 2 billion and make another USD 8 billion available for the fund bringing its total capital to USD 50 billion. Most importantly, the new international agency supports Russia’s recent claim to regain former prominence in the field of international development.
In the past, the Soviet Union was one of the largest international donors assisting various developing nations all over the world. However, the collapse of the USSR and Russia’s following economic difficulties prevented it from continuing that policy in the 1990s. Russia returned into international development in 2000s when it was preparing to host a G8 summit in St. Petersburg in 2006. As a host country, the Russian need to demonstrate certain successes in every domain of the G8 agenda and international development was missing so Moscow started donating aid funds to global organizations. The annual amount of Russian donations usually varied somewhere between USD 500 and 800 million and was almost entirely managed by international organizations. Initially the arrangement was seen as a temporary solution and was to be changed but an influential Finance Ministry that distributed the funds prevented any changes for almost a decade. The situation changed in 2013 when Russia started reviewing its international development policy. A new head of Russia’s Federal Agency for Commonwealth of Independent States, Compatriots Living Abroad and International Humanitarian Cooperation (Rossotrudnichestvo) Konstantin Kosachev suggested turning the agency into a Russian international development agency that would be distributing funds and managing bilateral aid programs. The idea behind the change is to gain more political benefits from the aid distribution as Russian government would distribute the support directly not via an international agency. In April 2014, Russia approved a new international development strategy that puts the emphasis on bilateral projects as opposed to multilateral but the actual policy change has not yet taken place.
Although the annual development aid allocation is likely to remain around USD 500 million the New Development Bank can become a serious booster for it both in terms of funding and international legitimacy if projects supported by Russia are also funded by an international organization. At the same time, Russian leadership understands that being a visible driver of BRICS cooperation it also supports China that also finds benefit in fostering BRICS but prefers to keep its influence subtler.
Rebuilding Russian International Communication
The Ukrainian crisis caused changes in Russia’s international communication policy. President Putin made international audiences outreach a priority back in 2003-2005 when the largest state-owned news agency RIA Novosti and international broadcasting radio station Voice of Russia received new leadership and increased funding and a new international 24/7 news channel Russia Today was established. In the following years Russia launched Russia Beyond the Headlines project (publishing Russia-related supplements to various foreign newspapers all over the world), established Russian World foundation (promoting Russian language and culture abroad) and Rossotrudnichestvo, won the bid to host 2014 Winter Olympics and organized several other international communication projects. The initial target was to address existing misrepresentations of Russia and support its positive image internationally. The strategy was based on a belief that unfavorable international attitudes are a result of the lack of positive information about the country as global media are heavily Western-dominated and tend to report negative news and accidents from abroad thereby creating a rather dim picture of most non-Western countries.
However, the following years demonstrated that Russia’s perception problems are not entirely a function of its communication policy. Moreover, international crises, especially the August 2008 war in South Ossetia, made a far stronger impact on the perception of the country. Gradually increasing dissatisfaction with the image of the country abroad led the country’s leadership to change the communication policy. First, it started to use the newly established media to proactively shape global understanding of the events taking place in the former Soviet Union trying to make these media outlets the world’s main window in the region. Yet again, although the audience of various Russian foreign broadcasting media increased, these media outlets did not manage to influence global public opinion. The new change came early in 2012 when Prime Minister Putin used the term 'soft power' in one of his Presidential campaign articles. The article was partially inspired by the Arab Spring which was described there as almost instigated and directed by the West via “soft power”. Several months after Putin’s re-election, a relatively neutral coverage of the Ukrainian crisis by some of Russian media aimed at foreign audiences led to leadership changes and massive restructuring in RIA Novosti and Voice of Russia that now align their editorial policy with Russia Today. The new face of Russian soft power is more direct and straightforward as media intentionally choose 'framing' and agenda setting that are more beneficial for Russian political goals. It is yet to be seen how long the new approach can last but it generally falls into the logic of Moscow’s foreign policy.
Sanctions Effect
Western reaction to Russia’s inclusion of the Crimean peninsula in the Russian Federation and involvement in the fighting in Eastern Ukraine included several rounds of sanctions aimed against specific individuals, organizations and, most recently, sectors of the economy that are crucial for the country’s economic development. Individuals are forbidden to enter countries that imposed sanctions or possess property or bank accounts there while organizations (large banks most importantly) lost access to capital markets. Some modern equipment for oil extraction and Arctic shelf development cannot be exported to Russia. The countries that have joined the sanctions in one way or another include the European Union members, the US, Canada, Japan. Meanwhile the Russian leadership tries to demonstrate that sanctions (or other means of coercion) will only cause a symmetrical reaction and lead to further escalation of the crisis. Moscow started replying by embargoing food product imports (account for 15-30% of national consumption depending on the product) from the countries that joined the sanctions. Further retaliatory measures are expected if the West continues to impose sanctions. Although at the moment, the public supports the Kremlin and feels united due to rally ‘round the flag effect enhanced by national media, the situation may change if people start feeling effected by the standoff. However, if there is no domestic pressure or the ruling elite manages to channel it into an acceptable direction, Russia can survive intensifying tensions despite the economic downturn they will be causing.
International Security
Current international crisis in Russia’s relations with the West resulting from the situation in Ukraine will have deeper international security consequences for all of its parties. Russian leadership is less effective in strategic planning than in tactical decision-making but the present situation leads it to making decisions that will have long-term consequences. An intensifying crisis and cutting lines of communication with Western partners gives Moscow hardliners more say in both domestic and international affairs. They invest heavily in strengthening the military and security services as they can easily justify the need for that due to the ongoing security crisis and their investment will in turn create security deficit in Eastern Europe including Ukraine that would need to further seek various mutual security arrangements with the EU and NATO. There is an obvious lack of mutual trust and, consequently, understanding between Russia and the EU and the West at all levels starting from junior diplomats to the nation leaders and that creates preconditions for both sides feeling threatened.
