Guns and butter : a case study on Russia's military spending

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Master Thesis in Political Science

Specialization in International Relations

Lucia Ameli

22 June 2018

First Reader:

Lukas Linsi

Second Reader:

Luc Fransen

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Guns and butter

A case study on Russia’s military spending

Author: Lucia Ameli (11974044)

MSc Thesis in Political Science (International Relations)

Universiteit van Amsterdam

First reader: Lukas Linsi

Second reader: Luc Fransen

Word count: 20.522

Cover page: Propaganda poster created by Viktor Koretsky in occasion of the Soviet invasion of Poland in 1939. On the top, a quote by Stalin that translates to: “Our army is the army of the liberation of the working people”. A peasant (Ukrainian or Belarussian) exhanges the socialist fraternal kiss with a Soviet soldier.

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INTRODUCTION

In the past years the fast-growing economies of the BRICS group have attracted much attention on the international scene. Their political importance has risen as a consequence of their economic performance and is often identified as one of the many factors speeding the end of US international hegemony in favour of an international world order based on multipolarity. While asserting a strong international presence, BRICS countries have been able to insert themselves as an important voice in international politics through increased presence on the global markets. Their economies have been characterised by high growth rates and a predisposition to invest massively on economic development – China and India more than the others (Wilson and Purushothaman 2003). One of these countries, however, has hit a period of economic sluggishness and has not yet been able to recover; despite of this, instead of focusing on economic reform, it has turned decisively to a policy of increased military investment. This country is Russia.

In the past ten years Russia has witnessed a dramatic increase in military spending, even though military expenditure worldwide has been falling for the past 20 years. (Stockholm International Peace Research Institute 2017) Russia is now the third largest contributor to the world’s total military budget, just below US and China, even though Russia's investment in military is significantly higher if considering it as a share of GDP (5,4% for Russia in 2016, 2,5% for the US and 1,9% for China) (Stockholm International Peace Research Institute 2017). In the total Russian budget, military expenditure equals approximately the entire budget allocated to "national economy", which includes also energy, transports, and infrastructure (Cooper 2013). In the BRICS group, Russia is the only country to have made such a commitment to defence expenditure; if we analyse BRICS countries’ investment in military spending we notice that, except Russia, all of them have tried to reduce their share of military expenditure over GDP. Total military expenditure rose only when it was coupled by a sustained economic growth (Stockholm International Peace Research Institute 2017; OECD 2018). The Russian case is particularly puzzling not only because it has seen a dramatic increase in military expenditure in a world that seems to go in the complete opposite direction, but also because Russia has increased its spending on defence and military in the past years notwithstanding economic decline and stagnation. Even if the latest research by Cooper (Cooper n.d.) has evidenced that in the next years the military budget of the Russian Federation will likely decrease, forecasts show that it will still take up a substantial part of the country's GDP, and some evidence how these levels of expenditure are unsustainable and should be cut down as soon as possible, way more than is currently forecasted (Goure 2014).

If we abstract the Russian case to the realm of theory, the Russian situation remains an interesting one from two separate points of view: first, because of the liberal assumption that in a globalized world economic

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interdependence deters wars, and therefore military power is losing importance in the face of economic power (Luttwak 1990), which leads us to assume that a country should privilege economic performance over military power. Secondly, because economic development and military expenditure are normally considered mutually exclusive by the literature on the topic (D'Agostino et al 2010; Biswas & Ram 1986; Chen et al 2014; Dash et al 2016); the well-known guns vs butter model, that will be better explained in the next chapter, claims that even though defence is a fundamental element of the nation-state and a public good, it is also true that investment in defence and economic development tend to diverge sharply. In simple words, the amount of butter you produce will always be limited by the number of arms you want to have, because arms cannot be used to produce butter, and butter is unlikely to be used as a way to protect the nation-state from foreign aggression. Theoretically, in today’s globalized world, privileging military spending over economic performance is anachronistic.

So how can we explain the need to maintain a commitment this huge to the military sector, especially when there is a dire need to bring the economy back to its former productivity levels? And why does the Russian case diverge so significantly from the similar economies of the BRICS group? Given the incompatibility between military spending and economic growth, prioritizing military expenditure over economic reform would seem to go against the country’s national interest. There seems to be an historical pattern in Russia’s commitment to profligate spending in foreign policy and defence – Simes notes that “the uniqueness of Russian expansionism lay in its consistency, its determination and its gradual development of a momentum that was claiming the energies and resources of the land without much attention to costs or benefits” (Simes 1981-1982, p. 127). Simes describes a vicious circle in which Imperial Russia would keep investing in the development of the army, supposedly for fear of invasion; it then needed to resort to annexation or external aggression in order to provide the hypertrophic army with a purpose and sufficient economic capabilities to make it self-sustainable.

If anything, this insight into the history of Russia’s defence policy makes the question of why Russia spends more than it can even more interesting. If we assume a rationalist framework, as we will in this research, it becomes evident that the motivation for increased military spending either a) is not rational; or b) cannot be explained fully through a pure economic framework. Turning to the disciplines of international relations and international political economy could instead provide more insight into what makes increasing military expenditure a rational policy solution in Russia’s condition. However, major theories in the International Relations and International Political Economy fields seem to lack a consistent explanation for the Russian case. The first problem with the theoretical framework is that although military expenditure is studied in both disciplines, each of them looks at different factors and uses very different methodologies, which makes it difficult to find where they overlap. The international relations literature rarely deals with the topic of military expenditure specifically. It is usually seen as subordinate issue to conflict, and tightly links the two

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together, making it impossible to isolate the ‘spending’ component from the ‘conflict’ one. This kind of perspective fails to account for variations in military expenditure when the country under examination is not directly involved in conflict or is only marginally affected by it. At the same time the Political Economy literature on military expenditure tends to lack the 'international' element, focusing mostly on the role of military expenditure and of the defence industry on domestic economic development (Karaçay-Çakmak 2009) and the possible effects on domestic politics (Quaile Hill 1978). Moreover, political economists only address the issue of military expenditure from a quantitative perspective and resort to mathematical modelling to make predictive conclusions, rather than exploring in a more qualitative and descriptive way the reasons why increased military expenditure might be a desirable policy solution.

In order to better understand the reasons that might drive a country to increase its military expenditure, this research will analyse trends in Russian military spending from multiple perspectives. With its substantial commitment to defence, Russia makes an interesting case study, considering that its behaviour diverges significantly from its BRICS counterparts. The aim of this research is to approach the issue of military spending from a more qualitative international political economy perspective, favouring for instance the usage of descriptive over inferential statistics and complementing it with qualitative analysis of the public debate surrounding defence expenditure and the social and cultural context that surrounds it. As for our unit of analysis, the rationalist concept of the state is the best tool to analyse variations in military expenditure in the international context, since the defence sector is still primarily managed directly by the state, and the state “retains the optimal economy of scale for generating wealth and violence” (Goldman and Blanken, n.d., p. 19). However, considering the need to provide both an international perspective on the issue and a domestic one, this research will also take into account other major actors related to the military sector, namely the Russian defence industry and the role that the electorate plays in making military expenditure a non-contentious issue in Russian politics. These categories are still relevant for our chosen unit of analysis because they make up large segments of actors that directly influence state behaviour. However, we will not enter into too much detail about the internal dynamics of these groups.

In the rest of this chapter we will first address more in detail the research question and its empirical basis with a section on the trends that have characterized Russia’s military expenditure since 2000. Afterwards we will proceed to give a general understanding of the structure of this research, presenting the hypotheses that will be tested in the three main empirical chapters. The introduction will be closed by a note on the methodology used to answer our research question.

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i. Military Expenditure in Russia

The increasing presence of Russia on the international scene in a military capacity has drawn renewed attention in the public and academic debate. The issue that is usually under the spotlight is whether Russia's ambitions are sustainable and can actually materialize (Fortescue 2017; Hunter Christie 2017; Golts 2014; Persson et al. 2016). In concentrating on for how long Russia will be able to upkeep its commitment to military expenditure, there is a lack of attention to the reasons why would a country decide to invest too much on its military, when there is a consensus view that Russia simply cannot afford it.

The upward trend in military expenditure started with Vladimir Putin in the 2000s. Russia was witnessing a period of strong economic growth (up to 7% of GDP yearly), and at the same time high prices of natural resources flooded the country with petrodollars. This sudden wealth made increased defence expenditure a reasonable investment, considering how neglected the armed forces had been during the period of the post-Soviet transition1_{. (Cooper 2016, p. 130) Increase in expenditure (see Figure 1) led Russia to become, in 2011,}

the third biggest spender worldwide on defence (Stockholm International Peace Research Institute 2017). In 2006 Putin launched an ambitious reform of the military forces that also included a complete modernization of the military arsenal. Between 2000 and 2007 military expenditure would rise around 25% annually, up to peaks of 35.32% (Balashov & Martianova 2016); notwithstanding the sudden drop in 2008, between 2008 and 2009 the budget increase returned to pre-crisis levels (27%), “representing a 10-fold increase in overall defence spending since 2000” (Bryce-Rogers 2013, p. 361). Following the halving of the price in oil of 2009, the growth rate of the military budget slowed down, but kept rising steadily; the Ukrainian crisis in 2014 and the following oil shock in 2015, while putting a strain on the Russian economy, did not manage to interrupt this upward trend until 2017, to the detriment of other budgetary voices, thus showing an inherent character of rigidity in the way the military budget reacts to external shocks (Falt'sman 2017, p. 486).

1_{Bryce-Rogers (2013, p.342) mentions that the situation of the defence sector during the shock-therapy era was so dire that workers}

of the military-industrial complex resorted in 1996 to picketing government buildings in order to ask for their wages to be paid, whereas the ministry of Defence could not even pay wages to its personnel.

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Figure 1: Military expenditure (Cooper 2016, p. 132)

Defence expenditure in Russia continued to go up while the country impacted a period of stagnation and general economic difficulties. After 2008, Russia’s economic growth oscillated around 1% yearly, whereas other BRICS did not suffer as much the consequences of the crisis: China kept its growth rate of 8.9% and India of 7% in the period 2009-2013 (Oxenstierna 2016). However, as evidenced in the following graph (Fig. 2), military expenditure as a share of GDP has risen dramatically notwithstanding the sluggish economic performance.

The military expenditure data presented above comes from re-elaborations and analyses of the Russian federal budget, however it would be imprecise to assess the Russian government's commitment to defence only through the budget. In fact, defence enterprises involved in arms production or generally in “the development of the defence industry” are further supported through state guaranteed credits issued by major Russian banks. For the 2013-2015 budget the total value of these credits reached 431.5 billion roubles, an amount that weighs directly on the country's debt. (Cooper 2013, pp. 28-29)

The level of defence expenditure had been set in a long-term rearmament programme (2011-2020) that had been devised before the onset of the 2008 financial crisis, based on an estimate of a 6% average yearly growth in GDP for the following years (Cooper 2016, p. 132; Interviewee C 2018). However, such a steady upward trend in expenditure cannot only be ascribed to a miscalculation of the country’s possibilities in a period of relative wealth: the federal budget for 2015, approved in 2014, still committed to a considerable increase in the budget (see Figure 1). According to Cooper, this “reflects a very determined commitment by the top civil and military leadership, in the spirit of Militant Russia, to implement the armament programme as fully as possible notwithstanding the economic performance far less favorable than envisaged when the programme was drawn up”. (Cooper 2016, p. 132)

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Figure 2: Military expenditure as a share of GDP in BRICS

Elaboration from SIPRI military expenditure database (Stockholm International Peace Research Institute 2017)

Another thing to be considered is the historical legacy and tradition of defence spending in the Russian Federation. Although the data on military expenditure under the Soviet regime is highly classified and it is impossible to quantify exactly, an estimate by economist Julian Cooper indicates that the share of national GDP devoted to defence in the 1980s was around 15%, whereas the US budget at the time was 5.8% (Cooper 2016, p. 130). If Cooper's estimate is accurate, seeing how both figures have been halved in the following 40 years, while the ratio is more or less the same, would seem to suggest that a high level of expenditure for Russia has a structural character; even more so considering that in the post-Soviet transition period, when military expenditure was slashed to the minimum in order to favour adaptation to the 'shock therapy' of liberalization and privatization, it was still around 3% of GDP (Cooper 2016, p. 130) – a figure that equals military spending in the US and China today (Stockholm International Peace Research Institute 2017), with the exception that both for the US and China it is considered a sustainable but yet adequate level of expenditure, rather than a budget slashed to the minimum.

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After this introduction to the history of military expenditure in Russia in the past two decades, we will now turn to understanding why increased military expenditure can still be considered a desirable and rational policy solution for Russia, in spite of the economic toll on the country. We will analyze three different areas of importance for the Russian government (international politics, economic performance, and national politics) with the aim to demonstrate the positive role that military expenditure plays in all of these domains.

ii. The international context

H1) Does increased military expenditure improve Russia’s positioning in the international political order?

This section will analyse the role of the recent reform of the Russian armed forces in the international political context. The reform of the armed forces is one of the biggest elements that has caused an upward spike in military expenditure in the past decade. The long-awaited modernization of the army should, in principle, improve Russia’s military efficiency and consequently both: a) its practical ability to address threats; and b) its prestige on the international scene. The process of military reform will be researched under the lens of classical offensive realism (Knorr 1973; Krasner 1976), with a focus on the concept of power in the international sphere. In this section we will also analyse how military power is easier to acquire for Russia than economic power, in the absence of tangible perspectives for future economic development; Russia’s necessity to improve its status in international politics will be explained through its condition as a semi-peripheral power in the framework of world-system theory.

iii. The economic dimension

H2) Does increased military expenditure provide a valuable contribution to the improvement of Russia’s economic standing?

The empirical basis for this section will be the increased investment in the Russian military-industrial complex and the process of nationalization it has undergone since 2006. Although in economic modelling military expenditure and economic growth do not seem to be related, it is possible that increased defence spending is seen by Russian authorities as nothing other than an industrial policy for the growth and development of the Russian economy. Considering Russia's structural problems in attracting investment for innovation and research, especially from Russian investors (Robinson 2013; Becker & Vasileva 2016; Interviewee C 2018), it might be argued that state-managed industrial policy is the most effective tool to ensure proper investment in research and development and to bring necessary innovation to the Russian industrial sector through direct government investment. Moreover, the defence sector has notorious spill-over effects on civilian technology and industrial production, which could be seen as a particularly attractive way to modernize the

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Russian economy; even though Herrera & Gentilucci (2013) argue that the impact of technology conversion from the military to the civilian industry is questionable, we will show how the Russian government has in fact tried to facilitate this conversion process, giving credit to the hypothesis that, at least in the government’s opinion, the defence sector should be a stimulus for the modernization of the rest of the economy. In this section we verify whether this hypothesis is applicable by investigating the level of resources spent in R&D and the relationship between state expenditure and the well-being of the military-industrial complex. We will also analyse the health and competitiveness of the arms export industry in order to verify whether the production of arms could actually be considered a way for Russia to specialize its production and reach optimal competitiveness in one specific sector.

iv. The domestic context

H3 – Is military expenditure a useful tool for maintaining a strong electoral consensus towards the current government?

What some studies related to military expenditure have evidenced (Mintz & Ward 1989) is that the choice to invest in defence is actually highly politicized and that variations in the domestic political climate can influence strongly military expenditure, even when the constant participation in conflict would seem to regulate military spending in a very technocratic and need-based way. What Mintz and Ward argue is that it is not uncommon to find a relationship between election cycles and military spending, inducing the authors to conclude that adjustments in military spending can be an important part of political strategies for the maintaining of consensus. In this section I will try to analyse with a more qualitative approach the opinion of the Russian public regarding the country's military power and assess whether the military is so deeply rooted in culture as to have become a fundamental part in the government's agenda, that will discourage the government from strongly reducing expenditure in this sector. I will try to provide some insight on whether the military narrative works towards cementing internal tensions and building a consensus (and therefore political stability) based on antagonizing "others" outside of the Russian borders.

v. The methodological framework

Each of the hypotheses will touch on very different study areas in political science, and will therefore be analysed with multiple methodologies, choosing the most appropriate for the subject at hand, according to the analytic eclecticism approach (Sil and Katzenstein 2010). Although recurring to analytic eclecticism might make difficult to reach a definitive and easily quantifiable answer to out research question, due to the

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impossibility of comparing different areas across multiple frameworks, we believe that it also provides the best tool to achieve a fully-rounded explanation of specific phenomena by presenting them fully integrated in multiple contexts. The whole research is conceived as a case study limited to Russia, presenting data from 2000 on. The date has been chosen as a turning point in Russia’s political history, since the vestiges of the post-Soviet transition seemed to leave space to a fully-grown economic power. In some cases, however, earlier data is used as a means of comparison. In the context of BRICS powers, Russia’s behaviour is a deviant case and therefore particularly relevant to identify important trends that can determine high levels of military spending. Where necessary, I will make use of other 'shadow' case studies to put the Russian situation in comparative perspective. However, the comparative approach will only be used from time to time and we will not analyse in detail the situation of the other BRICS. The choice of these 'shadow' cases will be determined by the matter currently examined: in order to assess the amount of military expenditure in the Russian economy, we will compare the Russian situation to other BRICS countries which are particularly similar to Russia as regards economic variables; in terms of international power, instead, the Russian situation will also be compared with the United States, since its past and current positioning in the world order makes it a counter-power to bigger forces. Of course, in comparing Russia to the US, we will bear in mind the major differences in scale between the two countries.

For the qualitative sections of my thesis I will be building on historical literature and sources such as newspaper articles, pieces of legislation and secondary literature. The research will be complemented by a set of interviews with experts in the field of Russian culture and politics. Of the three interviewees (anonymized as per request), two are university lecturers and the third currently works as researcher for a think tank. Their backgrounds are diverse enough to ensure different points of view on the subject: it ranges from history and political philosophy (Interviewee A) to international relations (Interviewee B) to political economy (Interviewee C). The aim of these interviews is to provide a wider contextualization of the topic of military spending through different subject areas. As already mentioned, using an analytic eclectic approach can be problematic when it comes to bridging different fields of expertise mostly because of the extreme specialization of the literature – by asking experts to reflect on the issue in a broader sense it is easier to understand where the overlap points between issue areas is.

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CHAPTER 1 – Literature review

In this chapter we will start by reviewing the existing literature on military spending, both related to Russia and in more general context, outlining the theoretical framework we will be using in the rest of the research. The literature review is divided in three sections, each of them corresponding to one of the empirical chapters: international order; economic development; domestic politics.

1.1 The international order – power and threats

Russia's ‘militant’ international behaviour finds an adequate reading perspective through offensive realism theory, meaning that in the never-ending quest for security in the international order, increased government commitment to military spending might be considered a solution to protect the state from either direct or potential external aggression, not only in the military sphere but more in general in relations between countries. After all, it has been empirically demonstrated that military power “influences patterns of international cooperation, trade policy, economic development, identity construction, and, of course, war causation and termination” (Beckley 2010, p. 45). One of the core concepts of realism in international relations theory is power and the struggle for its accumulation.

For the purposes of this research, we will start with Krasner's definition of potential power in international relations, that he measures on GDP, per capita income, geographical position and size of the armed forces (Krasner 1976). However, measuring military power through the mere size of the armed forces might be a somewhat outdated framework for modern warfare, which is why we will be complementing Krasner’s definition of military power with Knorr’s definition of ‘putative military power’, which features “three components: military forces, i.e. military strength; military potential, I.e. the capacity to expand or improve military forces; and military reputation i.e. the expectation of other national actors, derived from past experience, that the state concerned has a greater or lesser disposition to resort to military threats when its vital interests are crossed” (Knorr 1973, p. 14 - 15). Knorr’s definition of military power is more fitting in that it evidences the importance of the ‘efficiency’ component in determining military strength, that is to say the ability to use innovation potential to rationalize costs while at the same time maintaining a technological edge (Beckley 2010).

Now that we have defined the concept of power, we can turn back to the analysis of offensive realism. According to Mearsheimer, the father of offensive realism, states tend to continue in the pursuit of power

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until they can reach a hegemonic position either in the world (in unipolar world orders) or in their own region (when the order is multipolar). In order to maintain a regional hegemonic position, states might be prone to use what he calls a “buck-passing strategy”, that involves shifting the focus for potential aggressors on other nearby states and to favour the presence of two more competing powers in the potential aggressor's region. One of these “buck-passing” entails increasing defence capabilities in order to discourage direct aggression (preferably diverting the aggressor's attention towards another state). (Mearsheimer 2001)

Realist theory, therefore, underlines the importance of security considerations in developing the military. Cooper notes that the development of the armed forces in Russia is seen as a necessary policy solution in order to contrast a possible external aggression. The Crimea crisis is perceived as the return of tensions between Russia and the US, and apparently it is a common view in military circles that the US is a potential but very tangible threat to the country’s territory2_{. Moreover, military developments in the US have been}

closely followed in Russia and Cooper argues that decisions by Russia to invest in a specific set of armaments have been particularly influenced by them. (Cooper 2016, p. 139-40) As a matter of fact, Russia is trying to invest on an army that is “20 per cent smaller than that of the US military, but on a budget that is 1/15 that of the US defence budget. Not only is the budget smaller, but the Russian military has far more to change. While the budget has been increasing over time, there have also been pressures for decreasing the amount of funds for military modernization” (Bryce-Rogers 2013, p.362).

This tendency is definitely in line with Lewis Richardson’s formal theory of action-reaction, that looks at variations in military expenditure as a reaction to another country’s increased expenditure, thus creating an arms race (Nincic & Cusack 1979, p. 102). However, the assumption behind this formal model is that military expenditure is a depoliticized issue only subject to external stimulus. Successive research contributions (Organski, Kugler & Fox 1978; Nincic & Cusack 1979; Mintz & Ward 1989) show that external factors tend to be of relative importance if compared to domestic motivation, which is why only analysing Russia’s perceived position of vulnerability, or its reaction to arms build-up in other countries would be reductive. The study by Mintz and Ward on military expenditure in Israel is particularly significant, since they demonstrate how even a country whose security issues are of paramount importance, domestic factors seem to be able to influence military spending to the same extent as possible threats from other nations. In their study they mention as

2_{Cooper reckons that this sort of ideas, although shared by a restricted minority, have probably had their influence}

among less ‘paranoid’ circles. He mentions “conservative, nationalist, and security-orientated circles, notably by adherents of the Izborskii Club, including such figures as Presidential advisor on Eurasian integration, Sergei Glaziev, retired military leader, Leonid Ivashov, Aleksandr Prokhanov, editor of the weekly Zavtra, and the ideologist of neo-Eurasianism, Aleksandr Dugin. From the outset, the Izborskii Club, formed in 2012, has taken the view that a major new global conflict is almost inevitable, with Russia the principal target of aggression. In their view, it is imperative that Russia adopts a “great breakthrough” strategy, a mobilisation project, to prepare the country for this “highly probable” great war, forecast, in their manifesto of October 2012, to occur within 7–10 year”. (Cooper 2016, p. 140)

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relevant domestic reasons the necessity to “stimulate sluggish corporate profits” and mobilize political support ahead of elections (Mintz & Ward 1989: 522). It is therefore necessary to consider external pressure as one but not the only factor influencing military expenditure in Russia, and further examine other possible explanations in the domestic realm, as this research will try to do in the last chapter.

Whereas offensive realism provides a good framework to explain Russia’s need to defend itself against perceived aggression, word-system theory complements it in a more articulate way. Although the concept of core and peripheral powers has an economic sense more than a geographical one, it is broad enough to include considerations that range from a country's position in the world market, its political power in the international arena, more plainly, its geographical position. When making use of Krasner’s definition of power, we will interpret the ‘geographical position’ element as status occupied in the world-system. The division of the world into core and peripheral powers is a major pillar of world-system theory and was first developed by Immanuel Wallerstein. The grey area between the two can be defined as 'semi-periphery'. Semi-peripheral countries have their own very distinct traits, however the major defining characteristic is their constant pull towards the core on the one side ( for instance, semi-peripheral powers are usually regional hegemons) and the periphery on the other (through too much dependence on core economies, that usually materializes in the form of foreign investment; or through the import, adaptation and replication of already refined products from core countries, without being able to develop them further) (Kick and Davis 2001, p. 1563; Morales Ruvalcaba 2013, p. 144). Semi-peripheral states are those that, according to Morales Ruvalcaba (2013), “are subject to much stress and competence, more than any other area of the world-economy”. They usually do not get a place at the negotiation table with core countries and therefore “find it difficult to pursue their ends in political coalitions that might be open to them were they in the same political arena” (Wallerstein 1974). Even economically, they tend towards protectionist and “defensive” policies that can avoid their retrocession towards the periphery (Ruvalcaba 2013, p.145).

The most interesting trait of peripheral countries is that it is generally understood that the semi-peripheral status is not a permanent condition but the result of a process of either “promotion” from the periphery upwards or “relegation” from core downwards (Domingues 2012; Chase-Dunn 1988; Wallerstein 1974). Although the elements that identify Russia as a semi-peripheral power will be later analyzed and tested in detail, the general consensus is that Russia finds itself in a semi-peripheral position because its promotion to core power, that was ongoing during the Soviet era, has been abruptly terminated with the fall of the Soviet Union, and finding itself in a particularly unstable position, Russia is prone to attempt at stabilizing into a core power – which makes the quest for international power such a fundamental issue for Russia, even when security considerations are not into play.

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1.2 Innovation and Economic Development

One key issue in measuring military power is the concept of “transformational potential”. Military expenditure per se is not necessarily a measure of military power; in the era of the digital and informational revolution (Goldman and Blanken generalize this concept to all period of technological revolutions) a great determinant of a country's military power is not merely how much it is able to spend on it but also how ready it is to transform itself to “absorb new technologies and implement accompanying practices”. (Goldman & Blanken n.d., p.13) Countries able to incorporate and adapt to new technologies can improve the efficiency of their armed forces, thus increasing their military power while cutting down expenditures. As noted above, the fact that Russia's military expenditure is disproportionate to the size of its economy in comparison with other world powers should not necessarily be interpreted as a way to surpass other countries' capabilities but can merely be the effect of an outdated and extremely expensive military force whose actual effectiveness is very low because lacking in modern equipment, skilled professional soldiers and efficient logistic and organizational systems. (Beckley 2010, p.48)

The case made by Beckley is that maintaining a technological edge without a proper underlying system of economic development makes it impossible for the country to keep this edge against more developed economies, since “states can purchase advanced technologies from others” but “only developed economies possess the technological industry and skilled workforce necessary to modernize them”. He brings forward a very fitting example, showing how fascist Italy's spending on defence was higher than Britain, France or the United States without having an army that could possibly compete with them. (Beckeley 2010, p. 55)

The question of innovation is strictly linked to the issue of economic development and brings us back to the old 'guns versus butter' dilemma.

“States throughout history have faced the dilemma of balancing the short-term security afforded by large defence budgets against the longer-term security of rising wealth. But this predicament is far less acute for economically developed states that can produce effective militaries while devoting a relatively small percentage of their economic resources to defence. In addition, superior economic efficiency lowers the unit costs of weapons and supplies, thereby providing soldiers more opportunities to train with them, and more opportunities for administrators to test new weapons and determine their feasibility for full deployment. By contrast, underdeveloped states may not be able to afford wasting ammunition and supplies on training and testing or be

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able to pay and retain skilled soldiers in peacetime. For example, the Soviet MiG-21 fighter aircraft received overhauls at triple the rate of many Western aircraft, and Soviet T-62 tank engines reportedly wore out completely after 500 hours or less of use. As a result, the Soviet military was forced to keep its weapons ‘packed away like a family’s best china’, using them only for special exercises once or twice a year”. (Beckeley 2010, p. 58)

Moreover, the security of 'rising wealth' could add to military power in that “economic capacity has been treated as a necessary condition for the ability to inflict significant harm since the advent of the industrial age” (Goldman & Blanken, n.d., p.3). This is furthermore confirmed by Beckley in a research that analysed armed battles in a time period ranging from 1898 to 1987, discovering that “the more economically developed side consistently outfought the poorer side on a soldier-for-soldier basis” (Beckley 2010).

But what if increasing military expenditure were a good way to kickstart the Russian economy again? In a speech to the Federation Council in 2012, “Putin announced that the Russian defence industry should be a driver in economic development”, despite “the Soviet experience and evidence from other countries that high military spending does not guarantee high growth” (Oxenstierna 2016, p. 66). At least publicly, high military expenditure in Russia is justified as a way to kickstart the economy and might therefore be considered a sort of industrial policy for the restructuring of the military-industrial complex. The literature exploring the military spending-economic growth nexus is quite vast, but there is no conclusive evidence that increasing military expenditure can actually lead to stable economic growth. On the contrary, Dunne and Tian (2015) argue that the negative relationship between military expenditure and economic growth is increasingly becoming “a consensus view”. Even though they are cautious against generalizations and underline how separate countries might not fit the model, they also underline that “there is, however, certainly no evidence of any significant positive effects”. This conclusion is further reinforced by Alptekin and Levine (2012), with a study that, although rejecting the hypothesis that increased military spending is detrimental for economic growth and showing a positive relationship between military expenditure and economic growth, conclude that their results are constantly significant only for developed countries and that “although the overall effect is positive, according to Cohen's standards, it is practically negligible”.

Another study underlines that the causality between economic growth and defence spending is nonlinear and, although „Economic growth has a negative impact on military spending and vice versa”, the negative effect is reduced in countries with more developed economies, to the point that countries with very high HDI [Human Development Index] can potentially benefit from “moderate” spending in defence, whereas countries with low HDI benefit more by slashing military costs. (Huang et al. 2017)

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Specific studies on Russia do not seem to leave space for a more optimistic view of the defence-growth nexus. Zhong points out that it cannot be ruled out that “economic growth may causally be prior to military expenditures. For example, a country with a higher growth rate may wish to strengthen its external as well as internal security by increasing military spending” (Zhong et al. 2017). Shah, on the other hand, identifies a positive causal relationship between military expenditure and economic growth – just not in Russia, since data show that historically the impact of defence spending on economic growth has been negative. (Shah et al. 2016)

On the other side, reaching a conclusive argument proves difficult since defence expenditure can spillover to many different sectors. “The defence sector provides a variety of public infrastructure (e.g., dams, communication networks, roads, airports, highways, and other transportation networks), and enhances human capital through education, nutrition, medical care, and training. Moreover, military research and development experience created by arms imports positively affects private production. From the demand-side point of view, defence spending reduces unemployment and increases aggregate demand, thus promoting economic growth. Furthermore, defence spending may favor economic growth since it provides both internal and external security, and therefore enhances private investment and attracts foreign investment. This form is known as military spending growth hypothesis”. (Shah et al. 2016, p. 448) Moreover, an interesting result by Dunne (2012) hypothesizes that for countries involved in conflict there could be a positive impact of defence spending on economic growth in the short term.

1.3 Domestic politics

An increase in military spending cannot be considered a neutral or technocratic policy solution, even in states in a permanent condition of war. On the contrary, military spending can be strongly influenced by domestic politics (Mintz and Ward, 1974). In this research we will touch on the societal advantages in pursuing a policy strongly focused on military development, the most important ones being the ability to create national unity based on patriotism, and the ability to reinforce the authority of the leader. Furthermore, military-based patriotism can increase the level of militarization of the society, thus creating a favourable environment for military development policies.

National unity is a particularly important in a country, such as Russia, that is still very ethnically divided. According to Sperling (2003, p. 239) the cultural landscape is so fragmented that “even ethnic Russians living in Russia lack a sense of unified nationhood, a common understanding of what it means to be Russian, as opposed to Soviet”. Whereas creating an ethnic definition of ‘being Russian’ is made particularly difficult not

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only by the fragmentation of the population inside Russia, but also by the number of ethnic Russians who live outside of the Russian border, political leaders are faced with the need to create a common set of values in order to maintain the power of the central state. (Sperling 2003)

War can play a significant role in the creation of a common identity, for instance through the well-known “rally-around-the-flag phenomenon”, where the polity unifies against external threats (Baum and Potter 2008, p. 45; Interviewee B); but even the military alone can contribute to building a feeling of patriotism in the society, if the military is seen as a source of national pride. Building patriotism through the army also means favouring a citizenship-based approach instead of an ethnic-based one. Since ethnic nationalism is by nature exclusionary (you are either born a Russian or you are not), patriotism built on state institutions has a more inclusive character (Kymlicka 2000) and is more easily applicable to multi-ethnic states – after all, “no one deems themselves unpatriotic” (Sperling 2003, p. 238).

Patriotism can therefore be instrumental in building a sense of community that reinforces central state power. Considering how tightly the state and leaders are linked in Russian politics, it is worth analysing the process through which patriotism and militarisation contribute to create consensus and support through the figure of the political leader, which serves as a proxy for the unity of the state. (Riabov & Riabova 2014) Riabov and Riabova note how “power correlates with the traditional attributes of masculinity (strength, reason, will, responsibility, vigour, fairness)”, which leads prominent political figures to adopt “gendered statements, symbols and actions in trying to bolster their own political authority”. This process of legitimation of power through masculinization can rely heavily on the symbolic value of the military, since “military culture is characterised by its combat, masculine-warrior paradigm […] as an institution comprised primarily of men, its culture is shaped by men. Soldiering is viewed as a masculine role – the profession of war, defence and combat is defined by society as a man’s work. Thus, a deeply entrenched ‘cult of masculinity’ (with accompanying masculine norms, values and lifestyles) pervades military culture” (Dunivin 1994, p. 534). Riabov and Riabova (2014) claim that the militarization of Putin’s image plays a big role in bridging the state to its leader and increasing the authorities’ popularity in the electorate.

Furthermore, the legitimation of the leader’s power, by stressing military characteristics as virtuous components of patriotism, reinforces acceptance of military-related matters in the eye of the public, thus creating a fertile environment for increased military investment in a self-reinforcing circle. Not much research has been conducted on the relationship between public opinion and military spending, since researchers have given more space to the nexus between public opinion and foreign policy. As already mentioned in the introduction of this thesis, we should be wary of treating military spending only as a subset of foreign policy, but nevertheless it can be useful to draw a parallelism in this area since foreign policy decisions can be used as a justification for an increase in military spending. The most recent literature reviewed on the topic seems

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to agree on the fact that public opinion holds considerable power as a counterweight for government initiative in the field of foreign policy and prompts leaders to take into account public opinion in fear of electoral repercussions (Aldritch et al. 2006; Page & Bouton 2006). A study by Hartley and Russett specifically focusing on military expenditure is consistent with these conclusions, showing that military expenditure in the US was consistently affected by swings in public opinion, even if to a lesser extent than practical defence considerations (Hartley & Russett 1992). There is now a general understanding that policymakers are wary of the sentiments of the public when addressing foreign and defence policies, even in states that do not fit the ‘liberal democratic’ paradigm – and this is particularly significant since political leaders have more control over the flow of information related to foreign policy than in any other policy area. (Baum and Potter 2008) In the case of Russia, favourable public opinion could provide a huge support for increased defence spending and provide the necessary momentum for the reform of the Russian military system, which is even more reinforced by the State attempts at controlling streams of information.

We will not delve into the relationship between public opinion and media, albeit the media is an important instrument in the creation of public opinion. We will rather focus on the relationship between public opinion and military spending as a sort of circular process. Public opinion can provide a favourable climate for increased military investment; in return military expenditure has positive effects on numerous factors (military strength; national pride) that contribute to creating a supportive public opinion towards the country leadership, which in turn will want to continue the cycle to maintain political support.

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CHAPTER 2 – The international context

H1) Does increased military expenditure improve Russia’s positioning in the international political order?

In this section we will try and demonstrate how increasing military expenditure was necessary in order to modernize the army, thus improving Russia’s ability to address possible threats and possibly threaten others. Using Krasner’s definition of power (see Chapter 1) we will show how Russia is actually increasing its power in the international order via military development because structural factors hamper its economic potential.

2.1 Building military power

One of the big puzzles of current international affairs is why Russia is pursuing such a proactive foreign policy, where ‘proactive’ can be interpreted as a euphemism for ‘aggressive’. Even though this research focuses on military spending, and we should be wary of equating military spending with foreign policy, the two are undeniably interconnected, and increased military spending has gone hand in hand with a more assertive Russia on the international scene. But, as Yakovlev straightforwardly puts it, “What is Russia trying to defend?” (Yakovlev 2016). If a country feels the necessity to invest in its army, the first instinct is to explain it through the need to defend itself from external aggression – this could easily explain why the state does not seem worried by the unfeasibility of their spending intentions; after all, the ability to defend the country is of paramount importance. Even though Russian media and state officials often further a narrative in which Russia is living in a continued state of threat from other Western powers (notable in this sense Putin’s 2007 speech at the Munich Conference on Security Policy3_{), such an external menace is difficult to see in practical}

terms. Historically, the fear of invasion has been constant in a country too big and too empty to convincingly defend its borders (Interviewee A 2018) – and some believe that indeed past invasions such as the Mongol or Napoleonic ones have prompted in Russians an unnatural and excessive preoccupation with security (Simes 1981-1982, p. 126). However, nowadays there seem to be no actual powers willing to threaten the integrity of Russian’s territory (Interviewee B 2018). On the contrary, it is Russia that constantly pushes and threatens neighbouring territories (the most recent episode would be the Crimean situation).

At the same time, measuring threats is not necessarily easy. The Correlates of War dataset is particularly insightful in this instance because it provides data on ‘incidents’ that did not necessarily present military involvement: other possible ‘incident’ categories include ‘threat to use force’, ‘show of force’, ‘border

3_{(Putin 2007)}

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fortification’ up to ‘declaration of war’. This helps us understand whether there are tensions building up that can give Russia a reason to fear for its security.

Figure 3: Number of interstate incidents involving Russia, 1990 – 2010

Own elaboration from Correlates of War Interstate dispute – incident level dataset (Palmer et al. 2015)

As we can see in Fig. 3 the number of incidents worldwide involving Russia (so not only those directly menacing Russia’s territory) have been decreasing constantly since 2000 – which is particularly interesting if associated to Yakovlev’s opinion that a Russia’s behaviour towards the West has become more aggressive since the mid-2000s (Yakovlev 2016, p.147). The data presented above, instead, presents the mid-2000s as a period of all-time low incidents, except of course for the years 2008-2009, that refer to Russia’s involvement in the Russia-Georgia war. In any case, Russia is ever less involved in (potentially) militarized conflict, so why is the importance of the armed forces not evolving with this trend? Moreover, the countries with which Russia has had conflictual interactions since 2000 are mostly Georgia, Azerbaijan, or Ukraine (Palmer et al. 2015). It is difficult to understand how these countries would pose any sort of threat to a big power such as Russia. At the same time, looking at the possible external threats might be a misleading way of dealing with

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the problem. If Russia feels under threat, it might be because it knows it does not have the ability to defend itself – meaning that the state of its armed forces is not as great as it would have the world believe.

The problems for the Russian military started in the early period of the transition, when the ‘shock therapy’ and the painful conversion to market economy slashed all funding for the defence sector in order to favour a successful liberalization programme. The situation for the armed forces was so bad that “in 1996 employees of the military-industrial complex even took to picketing government buildings for unpaid wages” (Bryce-Rogers 2013, p. 342). Even if in the early 2000s surges in oil prices allowed the government to restore investment to the defence sector, the armed forces were facing deep structural problems that had not been addressed – at least, until they became publicly evident in the course of the 2008 Russia-Georgia war. Bryce-Rogers makes a very detailed account of the performance of the Russian army in that situation:

"Russia’s war against Georgia may represent the first instance of Russian ground, naval and air troops fighting together as a substantial force since the end of World War II. [...] Russian forces faced rather basic problems with coordination, such as lack of interoperability of radios between army and air force units. [...] lack of effective coordination was also due to poor intelligence. Rather than bombing important targets to aid ground troops, the air force all too frequently bombed completely irrelevant targets. It seems as if the forces may have been using outdated Soviet maps to select targets. [...] the Russian military employed rather outdated Soviet methods. [...] Russian technology lacked basic modern navigational systems; as such, it has been argued that the use of tight, simple formations may have been the most appropriate for maintaining the integrity of the troop formation. Even so, these tactics have widely been viewed by many experts as a relic of 20th century warfare that is less effective for the kind of asymmetric warfare that is typical for 21st century conflict. […] the war highlighted three major deficiencies related to Russian military personnel: a shortage of well-trained troops, the nonexistence of sufficient first-line units, and deficiencies within the leadership structure”. (Bryce-Rogers 2013, p. 351-352)

Even though conscription is forbidden by Russian law, 30% of soldiers were indeed conscripts with very poor training: "For example, Russian pilots receive a mere 40 hours of training annually in the air while their NATO counterparts receive 120-150 flight hours of training every year by comparison. [...] less than 20 percent of Russia’s units were battle-ready; the rest were full of only officers without privates. […] According to reports, the tanks required reactive-armor canisters to be filled prior to use; however, this task could not be performed unless an officer of captain ranking was present. However, officers of such level would often be busy with other responsibilities, leaving the ground force tanks entering into battle with empty reactive-armor canisters. In Western militaries, this task would be filled by the NCO instead of a higher-level officer". (Bryce-Rogers 2013, p. 351-353)

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The account does not end with the poor structure of the army, but extends to the condition of the equipment of the Russian forces:

“A mere 10-15 percent of armaments were deemed to be modern in late 2008. [...] Many of the tanks and armored vehicles proved so old that an estimated 60-70 percent broke down over the course of the conflict, many of which impeded the arrival of following forces.” The Russian army lacked basic equipment such as "GPS, night vision, thermal imaging, modern IFF (identification, friend or foe) systems, and were [not] prepared for poor weather conditions". The air force "relied on older bombs and rockets instead of precision-guided munitions; [...] regular radio contact was lacking between different units and that officers occasionally needed to use their personal cell phones to call command posts or their headquarters. [...] various reports tell of Russian soldiers pulling the body armour and helmets off of Georgian soldiers in order to enhance their own protection." (Bryce-Rogers 2013, p. 354)

In short, the Russian army in 2008 maintained the same structure, equipment and technological capacity of the Soviet one. It was completely unprepared to fight 21st_{century wars, and its victory upon Georgia was}

more a question of numbers than actual capacity. The massive dimension of the army had made Russia militarily strong for the past centuries, and it is not by chance that the army’s basic structure is functional to mass mobilization: an army made up only of officers that, in case of mobilization, would command their own team of men. And yet the era of mass mobilization has passed in favour of high-tech warfare, and the Russian army has been immediately rendered obsolete. Moreover, the ability of Russia to rely on mass conscription is rapidly fading. Due to widespread hazing practices4_{and few incentives (also in terms of salary), Russia has}

many difficulties in finding prepared recruits and drafts are often deserted by a very high number of people. Even if a reform of the armed forces were able to solve these problems, the inexistent demographic growth will lead inevitably to a fall in soldiers over the years. In short, “perhaps for the first time in its military history, the Russian Army cannot count on a guaranteed numerical superiority over the enemy, and therefore needs to raise its technological level.” (Bryce-Rogers 2013, p.361)

Add to this the fact that the officers who made up the structure of the Russian army receive outdated preparation in schools that have just “rename[d] the Marxism-Leninism departments at military academies as political science departments, without instructors having to change much in terms of their academic programs and methodologies” (Golts 2014, p.139). There is no particular incentive for officers to pursue further “intellectual development” since the complete absence of meritocracy in the ranks discourages

4_{In regards to hazing, authorities have often turned a blind eye to the conditions of recruits in the army. The practice is} so culturally rooted that it can be traced back through the Soviet army to the tzarist army of Nicholas II, where flogging and humiliation of new recruits was a vestige of serfdom culture, present in Russia until 1861. (Figes 2014, p. 77)

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anything else than being in the good graces of one’s superior officer (Golts 2014, p. 139). In the era of high-tech military warfare, exposing oneself to enemy firepower is completely destructive, which necessarily requires officers that are able to minimize exposure and navigate the strategic and tactical setting of modern warfare – and this needs professionally trained officers, and is definitely incompatible with the current structure of the Russian army. (Beckley 2010, p. 57)

This dismal report of the condition of the Russian army indicates quite clearly that there needed be an all-encompassing state investment to modernize and restructure the army. Even though it had been long postponed, the 2008 war with Georgia showed how unprepared Russia was for any kind of modern warfare – and if Georgia alone can compete with the whole Russian Federation on the military level, it means that virtually every small threat can become potentially dangerous.

Talks about a reform of the armed forces had been underway for long, but no action had ever been taken. Even though president Putin had supported the idea of a military reform at least since 2001, he could not act on it out of fear of losing consensus by firing thousands of workers in the military sector (Golts 2014, p.132). In order for the reform to take place, the Defence ministry had first to be put under civilian control – in 2007, the appointment of Anatoly Serdyukov as defence minister managed to siphon away decisional power from entrenched military elites. (Bryce-Rogers 2013, p. 345) The war with Georgia in 2008 put the dismal conditions of the Russian army under the spotlight and gave the necessary momentum for a reform of the armed forces. Moreover, the fact that the presidency had passed to Medvedev allowed Putin to enact the massive layoff of workers without fear of losing support (Golts 2014, p. 132) The reform’s objectives were to make the army smaller (reducing it to 1 million soldiers), improving its structure, improve training and modernize the equipment. Basically, its main aim was to make the army more effective and at the same time less expensive. (Bryce-Rogers 2013, p. 355)

The reform was a success on its ‘quantitative’ side, as Golts defines it. The number of officers had been slashed down, units were decimated. The logic of mass mobilization had been abandoned in favour of a smaller army (from a potential mobilization of 4 to 8 million people to a maximum of 1 million). However, many problems remain – for instance, the lack of training for soldiers, and the paradox of shrinking the army to 1 million but still making use of drafts instead of moving in the direction of voluntary military service with highly trained professionals. The other problematic part of the military reform is the modernization of the defence industry and the rearmament programmes that can deliver new high-tech equipment. One ambitious objective of the rearmament programme is to replace 80 per cent of total armaments by 2020. Golts’ very critical stance on this intention is that any true reform of the military-industrial complex will necessarily bankrupt many military companies that have always supported politically president Putin. And without a reform of the military-industrial sector, investing in mass production of weapons is “tantamount

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to tossing money to the wind”, especially considering that subcontractors of the military-industrial sector prefer carrying out orders from other private investors rather than working on government contracts, that pay less and cannot ensure the survival of the company. (Golts 2014, p. 141)

It is therefore clear that the state of the Russian military does indeed present an element of great vulnerability in the international context. The reform of the military is seen as a necessary investment to ensure that the army keeps up with new types of warfare and has diverted a number of resources from the Russian budget. However, investing in the modernization of the army also means investing in making it more cost-effective for the future, for instance by laying off the massive number of soldiers and turning to few specialized professional soldiers; the sustained level of military expenditure does indeed constitute a burden on the government’s budget as of now, but it is aimed at reducing it in the future, in a long-term perspective. As shown by forecasts on future budget allocations, the level of military expenditure will start decreasing already in 2019, signalling that the Russian army has managed to achieve a certain degree of modernization that requires less direct investment. The improved capability of the Russian army to address possible threats definitely contributes to increasing the international power of Russia through ‘putative military power’ (Knorr 1973): military strength is enhanced by a more effective structure and armaments; military potential is further enhanced by investment in R&D and military technology (that will be better analysed in Chapter 3); and improved effectiveness of the army increases Russia’s military reputation on the international scene. Unsurprisingly, the Syrian conflict is usually referred to as a “showcase” of the newly acquired military power of the Russian Federation (Interviewee A 2018; Interviewee B 2018) and interestingly enough, most military incidents involving Russia in the past ten years were only categorized under “show of force” (Palmer et al. 2015).

2.2 From military to political power

If we consider power in the international arena as a sum of economic and military power (Krasner 1976), then it appears evident that the increase of military power is tightly linked to an increase in political power. In several instances the current Putin administration has expressed the desire to become an important actor on the international political scene.

“What is a unipolar world? However one might embellish this term, at the end of the day it refers to one type of situation, namely one centre of authority, one centre of force, one centre of decision-making. It is world in which there is one master, one sovereign. And at the end of the day this is pernicious not only for all those within this system, but also for the sovereign itself because it destroys itself from within. And this certainly has nothing in common with democracy.

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Because, as you know, democracy is the power of the majority in light of the interests and opinions of the minority. Incidentally, Russia – we – are constantly being taught about democracy. But for some reason those who teach us do not want to learn themselves. I consider that the unipolar model is not only unacceptable but also impossible in today’s world. And this is not only because if there was individual leadership in today’s – and precisely in today’s – world, then the military, political and economic resources would not suffice. What is even more important is that the model itself is flawed because at its basis there is and can be no moral foundations for modern civilisation.” (Putin 2007)

In his speech at the Munich security conference, while railing against the danger posed to Russia by NATO enlargement, he also made a very insightful point about how Russia perceives the current international world order. His speech is an attempt at challenging US hegemony, stated with the confidence of a country that still had to undergo the 2008 financial crisis – he confidently states that the rising BRIC countries are a force that needs recognition; that their “economic potential […] will inevitably be converted into political influence and strengthen multipolarity”. With his call for finding “a reasonable balance between the interests of all participants in the international dialogue” he is asking for more political power at the international decision-making table. (Putin 2007)

It is particularly interesting to frame this quest for power in the framework of word-system theory, that can help us understand why obtaining an important position in the international political order is such a priority for Russia from both the international political and economic perspective. In Wallerstein’s (1974) categorization of the world in core and peripheral powers, there is a grey area in the middle, the so-called semi-periphery. In the international order, semi-peripheral states struggle to make their voices heard. “Differently from the core states, the semi-peripheral states lack high welfare and socioeconomic development levels, which stop them – at least in the short and medium run – to guarantee global public goods and to determine a totally favourable political climate for their own interests in a global level”. (Morales Ruvalcaba 2013, p.153) This situation is particularly frustrating for Russia since the Soviet period had brought Russia closer to the status of core power: not only it had developed its own economic system, but it had also become ideologically influential in the world-system. However, Russia could never fully evolve into core country due to several structural problems that include “increase of public deficits, the lack of competitiveness of the national economic structures, the coercion of masses, the suppression of certain political rights, the generalized corruption, insecurity, difficulties to “assimilate informationalism” and, finally, the economic dependence on natural resources”; moreover, since the fall of the Soviet Union its position on the world stage has been retreated to a condition that is halfway between core and periphery. (Morales Ruvalcaba 2013, p.160)