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Wednesday, August 29, 2018

Russia in Review: August 21 - 28, 2018

Russia in Review is a weekly intelligence summary (INTSUM) produced by the Institute for the Study of War (ISW). This ISW INTSUM series sheds light on key trends and developments related to the Russian government’s objectives and its efforts to secure them.

Reporting Period: August 21 - 28, 2018 (The previous period's INTSUM is available here.)

Authors: Jack Ulses and Catherine Harris

Key Takeaway: The Kremlin continues to pursue aggressive foreign policy objectives that undermine the global influence of the U.S. despite domestic economic setbacks that stem in part from new U.S. sanctions. The Kremlin will likely increase its efforts to posture as a security guarantor in Afghanistan and Pakistan in order to supplant U.S. regional influence in South Asia. Russia may also seek to cultivate new sources of support among international actors in order to mitigate future economic damage from sanctions. The Kremlin nonetheless is being forced to take action to respond to domestic discontent and may readjust its approach towards long-term economic problems in order to ensure continued strong support for Russian President Vladimir Putin.

The Kremlin is courting Pakistan to undermine U.S. regional influence in South Asia. Russia is vying with several regional actors to court support from Pakistan. Russia and Pakistan held the inaugural Russia-Pakistan Joint Military Consultative Committee (JMCC) in Rawalpindi on August 6 - 7 where they signed an agreement allowing Pakistani servicemen to study at military institutions in Russia. The deal followed a U.S. decision to halt similar training programs for Pakistan. The Kremlin is capitalizing on Pakistan’s desire to replace U.S. support in the long term.[1] Russia is likely also leveraging increased cooperation with Pakistan to shape tentative peace talks with the Afghan Taliban in Moscow that will undermine U.S efforts to stabilize Afghanistan. Russia may also increase its security operations near Afghanistan to posture as a security guarantor in Central Asia. The Kremlin will nonetheless continue to balance its growing relations with Pakistan against its objective to maintain a strategic partnership with India.

U.S. sanctions have not deterred Russia from pursuing an aggressive foreign policy. U.S. sanctions are negatively impacting the domestic economy of Russia. The Russian ruble dropped to its lowest level since 2016. The Kremlin is also attempting to hide financial assets from future sanctions. The Kremlin has nonetheless not been deterred from its aggressive foreign policy agenda. Russia may be setting conditions to support an offensive by Iran and Syrian President Bashar al-Assad to retake Idlib Province in Northern Syria. The Kremlin also continues to support proxy forces in Eastern Ukraine in a likely effort to destabilize the country ahead of the 2019 Ukrainian Presidential Elections. Russia at this time will not likely acquiesce to U.S. demands to get sanctions lifted but rather continue its attempts to counter U.S. financial pressure. Russia may seek to frame additional sanctions as a net negative for Europe in an effort to dissuade additional sanctions by the EU. The Kremlin may also seek to galvanize support for an anti-Western economic bloc that it can use to prop up its domestic economy.[2]

The Kremlin is reacting to domestic discontent that threatens long-term support for Russian President Vladimir Putin. The Kremlin is responding to domestic discontent over a controversial pension reform bill that raises the retirement age close to life expectancy in Russia. Putin announced a proposal to water down the pension reform bill during a televised speech on August 29.[3] The Kremlin previously sought to distance Putin from the controversial bill by directing public backlash for the initial proposal towards Russian Prime Minister Dmitry Medvedev.[4] The Kremlin likely assesses that Putin’s reversal will boost his approval ratings and help candidates from his political party win upcoming local elections in key industrial cities where voters rely heavily on pensions.[5] Russia will still need to acquire new sources of revenue to pay for pensions. The Kremlin may attempt to acquire loans from international organizations such as the BRICS New Development Bank. The Kremlin may similarly respond to domestic pressure against subsequent economic reforms that severely impact quality of life for Russian citizens.

What to Watch

Russia and China may increase bilateral cooperation to reduce U.S. influence in the Middle East and Asian-Pacific Theater. Russian media reported that Russian President Vladimir Putin and Chinese President Xi Jinping will hold a bilateral meeting on the sidelines of the Eastern Economic Forum in Vladivostok on September 3. Chinese troops will also participate in the Russian “Vostok 2018” military exercises held in Russia’s Eastern Military District in early September.[6] Russia has taken steps to transfer LNG supplies to China in an effort to cut transportation costs and promote energy cooperation with China. Russia and China may agree to further boost their energy ties at the Eastern Economic Forum in order to strengthen their relationship amidst U.S. sanctions on Russia and trade tensions between the U.S. and China. 

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[1] “Russian envoy meets Imran Khan at Bani Gala”, The Express Tribune, August 9, 2018, https://tribune(.)com.pk/story/1777055/1-russian-envoy-meets-imran-khan-bani-gala/
[2] Dr. Theodore Karasik, “Russia and China leading eastern economies away from troubled West,” Arab News, August 28, 2018, http://www.arabnews(.)com/node/1363156
[3] [“Full text of the address of Vladimir Putin over pension changes,”] TASS, August 29, 2018, http://tass(.)ru/politika/5500968
[4] “Officials vow to raise the retirement age, the Kremlin fears protests, and labor unions are fuming. This is Russia’s pension reform.,” Meduza, June 18, 2018, https://meduza(.)io/en/feature/2018/06/18/officials-vow-to-raise-the-retirement-age-the-kremlin-fears-protests-and-labor-unions-are-fuming-this-is-russia-s-pension-reform
[5] [“"United Russia" party declared himself president in crisis regions,”] Svoboda, August 22, 2018, https://www.svoboda(.)org/a/29447068.html
[6] “China’s elite troops head to Russia for massive Vostok 2018 war games,” South China Morning Post, August 23, 2018, https://www.scmp(.)com/news/china/diplomacy-defence/article/2161068/chinas-elite-troops-head-russia-massive-vostok-2018-war